- Net Subscriber Additions of Over 100,000 - Pro Forma Total
Revenue of $630 Million, Up 3% - Pro Forma Adjusted Income from
Operations of $106 Million - An Improvement of $143 Million
Year-Over-Year - EPS, Excluding Charges, ($0.00) vs. ($0.05)
Year-Over-Year - Company Affirms Full-Year 2009 Guidance and Issues
New 2010 Guidance NEW YORK, Nov. 5 /PRNewswire-FirstCall/ -- SIRIUS
XM Radio (NASDAQ:SIRI) today announced third quarter 2009 financial
and operating results, including $106 million in pro forma adjusted
income from operations, marking the company's fourth consecutive
quarter of positive pro forma adjusted income from operations. The
company also announced a 19% decrease in pro forma total cash
operating expenses compared to the same quarter last year. (Logo:
http://www.newscom.com/cgi-bin/prnh/20080819/NYTU044LOGO ) "We are
very pleased with what we accomplished during the third quarter,
especially when considering the macroeconomic issues affecting
consumers and the auto industry," said Mel Karmazin, SIRIUS XM's
CEO. "We managed to grow revenue, grow ARPU, reduce operating
costs, increase adjusted income from operations significantly, and
refinance higher cost debt. We look forward to continuing this
performance. We grew subscribers and improved churn in the quarter,
and we are well positioned to take advantage of an economic
rebound. We expect to grow subscribers, revenue, and cash flow next
year regardless of the magnitude of any recovery." Third quarter
2009 pro forma total revenue was $630 million, up 3% from third
quarter 2008 pro forma total revenue of $613 million. Third quarter
2009 pro forma subscription revenue was $587 million, up 3% from
the third quarter 2008 pro forma subscription revenue of $572
million. Pro forma amounts exclude the effects of stock-based
compensation, purchase accounting adjustments, and assume the
merger of SIRIUS and XM occurred on January 1, 2008. Monthly
average revenue per subscriber (ARPU) was $10.87 in the third
quarter 2009, up 3% from $10.51 in the third quarter 2008. SIRIUS
XM ended the third quarter 2009 with 18,515,730 total subscribers,
a decrease of 2% from the third quarter 2008 pro forma total
subscribers of 18,920,911 and an increase of 102,295 from the
second quarter 2009 subscribers of 18,413,435. Self-pay subscribers
were 15,456,748, up 266,160 from the 15,190,588 self-pay
subscribers in the third quarter 2008 and up 35,405 from the second
quarter 2009. The self-pay monthly customer churn rate was 2.0% in
the third quarter 2009, in-line with the second quarter 2009, and
up from a pro forma 1.7% churn rate in the third quarter 2008.
Ending promotional subscribers were 3,058,982 in the third quarter
2009. In the third quarter 2009, SIRIUS XM achieved positive pro
forma adjusted income from operations of $106 million as compared
to a pro forma adjusted loss from operations of ($37) million in
the third quarter 2008. The third quarter 2009 US GAAP net loss was
($149) million, or ($0.04) per share, and included $138 million, or
($0.04) per share, in net charges for the loss on the
extinguishment of debt and credit facilities resulting from
refinancing of debt at lower cost. Absent these charges, the US
GAAP net loss per share was ($0.00). Third quarter 2009 free cash
flow was $27 million compared to ($98) million of pro forma free
cash flow in the third quarter 2008. 2009 AND 2010 OUTLOOK SIRIUS
XM affirmed its year 2009 guidance of over $400 million in pro
forma full-year adjusted income from operations. The company also
provided guidance for 2010. "We expect the company's cash flow
growth momentum to continue into 2010, and we project full-year
adjusted income from operations to increase approximately 20% next
year," said Mr. Karmazin. Based upon assumed 2010 automobile sales
of 11.3 million units, SIRIUS XM expects to achieve positive
full-year subscriber growth in 2010. The company also expects 2010
revenue growth of mid- to high-single digits, and growth in free
cash flow compared to 2009. "While the near future's macroeconomic
performance is extremely difficult to predict, our business has
reached sufficient scale to allow us to continue to grow cash
flow," Mr. Karmazin added. BALANCE SHEET IMPROVEMENTS As previously
reported, the company took advantage of strong credit markets
during the third quarter by selling $257 million of new 9.75%
Senior Secured Notes due 2015 in order to repay $250 million of 15%
term loans that would have matured in 2011 and 2012. "By
refinancing at more favorable rates and extending maturities,"
noted David Frear, Executive Vice President and Chief Financial
Officer, "the company has dramatically improved its near-term
liquidity and doesn't face any material debt maturities until 2011.
The two financing transactions completed in the second and third
quarters have reset the company's capital structure, allowing us to
execute our business plan without balance sheet constraints." The
company also reported that, in addition to the previously announced
repurchase of $179 million of XM Holdings' 10% notes due in
December 2009, it repurchased nearly $59 million of XM Holdings'
10% Senior PIK Secured Notes due 2011. "These debt repurchases
demonstrate management's commitment to optimize the company's
capital structure on an opportunistic basis," added Mr. Frear.
Based upon the company's current plans, it has sufficient cash,
cash equivalents, and marketable securities to cover its estimated
funding needs through cash flow breakeven, the point at which
revenues are sufficient to fund expected operating expenses,
capital expenditures, working capital requirements, interest
payments and taxes. The company's projections are based on
assumptions, which it believes are reasonable but contain
uncertainties. PRO FORMA RESULTS OF OPERATIONS The discussion of
operating results excludes the effects of stock-based compensation,
purchase accounting adjustments, and assumes the merger of SIRIUS
and XM occurred on January 1, 2008. All results discussed below are
pro forma unless otherwise noted. THIRD QUARTER 2009 VERSUS THIRD
QUARTER 2008 For the third quarter of 2009, SIRIUS XM recognized
total revenue of $630 million compared to $613 million for the
third quarter 2008. This 3%, or $17 million, increase in revenue
was driven by the sale of "Best of" programming, rate increases to
the company's multi-subscription and Internet packages, and the
U.S. Music Royalty Fee introduced this quarter. Total ARPU for the
three months ended September 30, 2009 was $10.87, compared to
$10.51 for the three months ended September 30, 2008. The increase
was driven mainly by the sale of "Best of" programming, increased
rates on the company's multi-subscription and Internet packages,
partially offset by a decline in net advertising revenue per
average subscriber. In the third quarter 2009, the company achieved
positive adjusted income from operations of $106 million, compared
to an adjusted loss from operations of ($37) million for the third
quarter of 2008 (refer to the reconciliation table of net loss to
adjusted income (loss) from operations). The improvement was driven
by the increase in total revenue of $17 million and a $126 million,
or 19%, decrease in expenses included in adjusted income (loss)
from operations. Satellite and transmission costs decreased 26%, or
$6 million, in the three months ended September 30, 2009 compared
to the same period in 2008 due to reductions in maintenance costs,
repeater lease expense, and personnel costs. Programming and
content costs decreased 29%, or $38 million, in the three months
ended September 30, 2009 compared to the same period in 2008, due
mainly to a one-time payment recognized in 2008 to a programming
provider upon completion of the merger with XM, reductions in
personnel and on-air talent costs as well as savings on certain
content agreements. Revenue share and royalties increased 2%, or $3
million, compared to the same period in 2008, due mainly to the
increase in the company's revenues and the statutory royalty rate
for the performance of sound recordings. Customer service and
billing costs decreased 5%, or $3 million, due primarily to
reductions in personnel and customer call center expenses. Cost of
equipment decreased 26%, or $4 million, in the three months ended
September 30, 2009 compared to the same period in 2008 as a result
of a decrease in the company's direct to customer sales and lower
inventory write-downs. Sales and marketing costs decreased 32%, or
$25 million, and decreased as a percentage of revenue to 8% from
13% in the three months ended September 30, 2009 compared to the
same period in 2008. The decrease in Sales and marketing costs was
due to reduced advertising and cooperative marketing spend as well
as reductions to personnel costs and third party distribution
support expenses. Subscriber acquisition costs decreased 17%, or
$23 million, and decreased as a percentage of revenue to 17% from
22% in the three months ended September 30, 2009 compared to the
same period in 2008. SAC per gross addition declined by 7% to $69
from $74 in the year ago period. This improvement was driven by
lower OEM subsidies and lower aftermarket inventory charges as
compared to the three months ended September 30, 2008. Subscriber
acquisition costs also decreased as a result of the 13% decline in
gross additions during the three months ended September 30, 2009
compared to the three months ended September 30, 2008. General and
administrative costs decreased 36%, or $28 million, mainly due to
the absence of certain legal and regulatory charges incurred in
2008 and lower personnel costs. Engineering, design and development
costs decreased 8%, or $1 million, in the three months ended
September 30, 2009 compared to the same period in 2008, due to
lower costs associated with the manufacturing of radios, OEM
tooling and manufacturing, and personnel. Restructuring,
impairments and related costs decreased 66%, or $5 million, due to
fewer restructuring charges associated with the merger with XM.
Other expenses increased 182%, or $141 million, in the three months
ended September 30, 2009 compared to the same period in 2008 driven
mainly by the loss on extinguishment of debt and credit facilities
of $138 million, and an increase in interest expense of $12
million, partially offset by a decrease of $7 million in loss on
investments. The loss on the extinguishment of debt and credit
facilities was incurred on the full repayment of SIRIUS' Credit
Agreement with Liberty Media. Interest expense increased primarily
due to the issuance of XM's 13% Senior Notes due 2013 and the 7%
Exchangeable Senior Subordinated Notes due 2014 in the third
quarter of 2008. The decrease in loss on investments was
attributable to payments received from SIRIUS Canada in excess of
SIRIUS' carrying value of its investments, partially offset by the
company's share of SIRIUS Canada's and XM Canada's net losses for
the three months ended September 30, 2009 compared to the same
period in 2008. NINE MONTHS ENDED SEPTEMBER 30, 2009 VERSUS NINE
MONTHS ENDED SEPTEMBER 30, 2008 For the nine months ended September
30, 2009, SIRIUS XM recognized total revenue of $1,843 million
compared with $1,793 million for the nine months ended September
30, 2008. This 3%, or $50 million, increase in revenue was
primarily driven by an increase in subscriber revenue resulting
primarily from a 2% growth in weighted average subscribers over the
period as well as revenues from the sale of "Best of" programming,
rate increases to the company's multi-subscription and Internet
packages, and the U.S. Music Royalty Fee introduced in the quarter
ended September 30, 2009. Total ARPU for the nine months ended
September 30, 2009 was $10.67, compared to $10.53 for the nine
months ended September 30, 2008. The increase was driven mainly by
the sale of "Best of" programming, increased rates on the company's
multi-subscription packages and revenues earned on its Internet
packages, partially offset by a decline in net advertising revenue
per average subscriber. The company's adjusted income from
operations increased $515 million to $347 million for the nine
months ended September 30, 2009 from a loss of ($168) million for
the nine months ended September 30, 2008 (refer to the
reconciliation table of net loss to adjusted income (loss) from
operations). This increase was driven by a 3%, or $50 million,
increase in revenue and a 24%, or $465 million, decrease in
expenses included in adjusted income (loss) from operations.
Satellite and transmission costs decreased 25%, or $19 million, in
the nine months ended September 30, 2009 compared to the same
period in 2008 due to reductions in maintenance costs, repeater
lease expense, and personnel costs. Programming and content costs
decreased 19%, or $64 million, in the nine months ended September
30, 2009 compared to the same period in 2008, due mainly to a
one-time payment recognized in 2008 to a programming provider upon
completion of the merger with XM, reductions in personnel and
on-air talent costs as well as savings on certain content
agreements. Revenue share and royalties increased 2%, or $7
million, for the nine months ended September 30, 2009 compared to
the same period in 2008, mainly due to the increase in the
company's revenues and the statutory royalty rate for the
performance of sound recordings. Customer service and billing costs
decreased 2%, or $4 million, for the nine months ended September
30, 2009 compared to the same period in 2008 due to scale
efficiencies over a larger daily weighted average subscriber base.
Cost of equipment decreased 42%, or $20 million, in the nine months
ended September 30, 2009 compared to the same period in 2008 as a
result of a decrease in the company's direct to customer sales,
aftermarket inventory charges and lower inventory write-downs.
Sales and marketing costs decreased 42%, or $109 million, and
decreased as a percentage of revenue to 8% from 15% in the nine
months ended September 30, 2009 compared to the same period in
2008. The decrease was due to reduced advertising and cooperative
marketing spend as well as reductions to personnel costs and third
party distribution support expenses. Subscriber acquisition costs
decreased 38%, or $170 million, and decreased as a percentage of
revenue to 15% from 25% in the nine months ended September 30, 2009
compared to the same period in 2008. This decrease was driven by a
17% improvement in SAC, as adjusted, per gross addition due to
fewer OEM installations relative to gross subscriber additions,
decreased production of certain radios, lower OEM subsidies and
lower aftermarket inventory reserves in the nine months ended
September 30, 2009 as compared to the nine months ended September
30, 2008. Subscriber acquisition costs also decreased as a result
of the 28% decline in gross additions during the nine months ended
September 30, 2009. General and administrative costs decreased 34%,
or $73 million, mainly due to the absence of certain legal and
regulatory charges incurred in 2008 and lower personnel costs.
Engineering, design and development costs decreased 33%, or $14
million, in the nine months ended September 30, 2009 compared to
the same period in 2008, due to lower costs associated with the
manufacturing of radios, OEM tooling and manufacturing, and
personnel. Restructuring, impairments and related costs increased
$23 million mainly due to a loss of $24 million on capitalized
installment payments, offset partially by a decrease in personnel
related restructuring costs. Other expenses increased 187%, or $334
million, in the nine months ended September 30, 2009 compared to
the same period in 2008 driven mainly by the loss on extinguishment
of debt and credit facilities of $264 million, and an increase in
interest expense of $90 million, offset by an increase of $17
million in gain on investments. The loss on the extinguishment of
debt and credit facilities was incurred on the full repayment of
SIRIUS' Credit Agreement with Liberty Media and XM's Amended and
Restated Credit Agreement and its Second-Lien Credit Agreement.
Interest expense increased due primarily to the issuance of XM's
13% Senior Notes due 2013 and the 7% Exchangeable Senior
Subordinated Notes due 2014 in the third quarter of 2008. The
increase in gain on investments was attributable to payments
received from SIRIUS Canada in excess of SIRIUS' carrying value of
its investment, partially offset by the company's share of SIRIUS
Canada's and XM Canada's net losses for the nine months ended
September 30, 2009 compared to the same period in 2008. Unaudited
------------------------------------------ Three Months Ended Nine
Months Ended September 30, September 30, -----------------
----------------- 2009 2008 2009 2008 ---- ---- ---- ---- (Actual)
(Pro Forma) (Actual) (Pro Forma) Beginning subscribers 18,413,435
18,576,830 19,003,856 17,348,622 Gross subscriber additions
1,606,446 1,843,785 4,325,532 5,997,096 Deactivated subscribers
(1,504,151) (1,499,704) (4,813,658) (4,424,807) ----------
---------- ---------- ---------- Net additions 102,295 344,081
(488,126) 1,572,289 ------- ------- -------- --------- Ending
subscribers 18,515,730 18,920,911 18,515,730 18,920,911 ==========
========== ========== ========== Retail 7,925,904 9,036,420
7,925,904 9,036,420 OEM 10,488,530 9,777,704 10,488,530 9,777,704
Rental 101,296 106,787 101,296 106,787 ------- ------- -------
------- Ending subscribers 18,515,730 18,920,911 18,515,730
18,920,911 ========== ========== ========== ========== Retail
(309,972) (149,417) (979,298) (202,295) OEM 407,131 492,216 492,692
1,744,436 Rental 5,136 1,282 (1,520) 30,148 ----- ----- ------
------ Net additions 102,295 344,081 (488,126) 1,572,289 =======
======= ======== ========= Self-pay 15,456,748 15,190,588
15,456,748 15,190,588 Paid promotional 3,058,982 3,730,323
3,058,982 3,730,323 --------- --------- --------- --------- Ending
subscribers 18,515,730 18,920,911 18,515,730 18,920,911 ==========
========== ========== ========== Self-pay 35,405 361,438 (92,838)
1,317,242 Paid promotional 66,890 (17,357) (395,288) 255,047 ------
------- -------- ------- Net additions 102,295 344,081 (488,126)
1,572,289 ======= ======= ======== ========= Daily weighted average
number of subscribers 18,393,678 18,710,940 18,514,041 18,187,927
========== ========== ========== ========== Unaudited Pro Forma
----------------------------------------- Three Months Ended Nine
Months Ended (in thousands, except September 30, September 30, for
per subscriber --------------- ---------------- amounts) 2009 2008
2009 2008 ---- ---- ---- ---- Average self-pay monthly churn (1)(7)
2.0% 1.7% 2.1% 1.7% Conversion rate (2)(7) 46.8% 47.0% 45.3% 49.2%
ARPU (3)(7) $10.87 $10.51 $10.67 $10.53 SAC, as adjusted, per gross
subscriber addition (4)(7) $69 $74 $63 $76 Customer service and
billing expenses, as adjusted, per average subscriber (5)(7) $1.01
$1.05 $1.04 $1.08 Total revenue $629,607 $612,776 $1,842,924
$1,792,632 Free cash flow (6)(7) $26,724 $(97,594) $35,772
$(577,648) Adjusted income (loss) from operations (8) $106,140
$(36,851) $347,198 $(168,096) Net loss $(181,935) $(217,010)
$(416,090) $(653,867) Unaudited Pro Forma
------------------------------------------ Three Months Ended Nine
Months Ended September 30, September 30, ---------------
---------------- (in thousands) 2009 2008 2009 2008 ---- ---- ----
---- Revenue: Subscriber revenue, including effects of rebates
$587,442 $572,355 $1,740,477 $1,669,700 Advertising revenue, net of
agency fees 12,418 17,867 37,287 54,156 Equipment revenue 10,506
12,856 31,343 38,687 Other revenue 19,241 9,698 33,817 30,089
------ ----- ------ ------ Total revenue 629,607 612,776 1,842,924
1,792,632 Operating expenses: Satellite and transmission 18,676
25,136 57,077 76,336 Programming and content 93,230 131,630 277,614
341,422 Revenue share and royalties 123,531 120,800 362,463 355,251
Customer service and billing 55,795 58,857 173,517 177,159 Cost of
equipment 11,944 16,179 27,988 48,020 Sales and marketing 52,827
78,178 152,039 260,583 Subscriber acquisition costs 109,384 132,477
274,082 444,396 General and administrative 48,481 75,981 142,812
215,440 Engineering, design and development 9,599 10,389 28,134
42,121 Depreciation and amortization 47,997 64,111 145,596 196,051
Share-based payment expense 18,799 29,809 71,301 99,673
Restructuring, impairments and related costs 2,554 7,430 30,167
7,457 ----- ----- ------ ----- Total operating expenses 592,817
750,977 1,742,790 2,263,909 ------- ------- --------- ---------
Income (loss) from operations 36,790 (138,201) 100,134 (471,277)
Other expense (217,610) (77,086) (512,880) (178,777) --------
------- -------- -------- Loss before income taxes (180,820)
(215,287) (412,746) (650,054) Income tax expense (1,115) (1,723)
(3,344) (3,813) ------ ------ ------ ------ Net loss $(181,935)
$(217,010) $(416,090) $(653,867) ========= ========= =========
========= Unaudited Actual
------------------------------------------- For the Three For the
Nine Months Ended Months Ended September 30, September 30, (in
thousands, except ----------------- ----------------- per share
data) 2009 2008 2009 2008 ---- ---- ---- ---- Revenue: Subscriber
revenue, including effects of rebates $578,304 $458,237 $1,699,455
$980,396 Advertising revenue, net of agency fees 12,418 14,674
37,287 31,413 Equipment revenue 10,506 11,271 31,343 25,290 Other
revenue 17,428 4,261 28,379 4,710 ------ ----- ------ ----- Total
revenue 618,656 488,443 1,796,464 1,041,809 Operating expenses
(depreciation and amortization shown separately below) (1): Cost of
services: Satellite and transmission 19,542 19,526 59,435 34,800
Programming and content 78,315 106,037 230,825 222,975 Revenue
share and royalties 100,558 85,592 296,855 177,635 Customer service
and billing 56,529 47,432 175,570 97,218 Cost of equipment 11,944
13,773 27,988 28,007 Sales and marketing 52,530 63,637 152,647
151,237 Subscriber acquisition costs 90,054 86,616 230,773 257,832
General and administrative 56,923 57,310 182,953 148,555
Engineering, design and development 11,252 10,434 32,975 28,091
Impairment of goodwill - 4,750,859 - 4,750,859 Depreciation and
amortization 72,100 66,774 231,624 120,793 Restructuring,
impairments and related costs 2,554 7,430 30,167 7,457 ----- -----
------ ----- Total operating expenses 552,301 5,315,420 1,651,812
6,025,459 ------- --------- --------- --------- Income (loss) from
operations 66,355 (4,826,977) 144,652 (4,983,650) Other income
(expense): Interest and investment income 962 4,940 2,602 9,167
Interest expense, net of amounts capitalized (78,527) (49,216)
(240,062) (83,636) Loss on extinguishment of debt and credit
facilities, net (138,053) - (263,767) - (Loss) gain on investments
(58) (3,089) 457 (3,089) Other income (expense) 1,246 (3,870) 2,505
(3,935) ----- ------ ----- ------ Total other expense (214,430)
(51,235) (498,265) (81,493) -------- ------- -------- ------- Loss
before income taxes (148,075) (4,878,212) (353,613) (5,065,143)
Income tax expense (1,115) (1,215) (3,344) (2,301) --------
---------- -------- ---------- Net loss (149,190) (4,879,427)
(356,957) (5,067,444) Preferred stock beneficial conversion feature
- - (186,188) - --- --- -------- --- Net loss attributable to
common stockholders $(149,190) $(4,879,427) $(543,145) $(5,067,444)
========= =========== ========= =========== Net loss per common
share (basic and diluted) $(0.04) $(1.93) $(0.15) $(2.76) ======
====== ====== ====== Weighted average common shares outstanding
(basic and diluted) 3,621,062 2,527,692 3,577,587 1,836,834
========= ========= ========= ========= -------------------------
(1) Amounts related to share-based payment expense included in
operating expenses were as follows: Satellite and transmission
$1,086 $1,331 $3,020 $2,887 Programming and content 3,037 3,529
7,418 7,477 Customer service and billing 734 596 2,052 1,137 Sales
and marketing 2,722 3,672 10,081 11,376 Subscriber acquisition
costs - - - 14 General and administrative 8,442 12,904 40,141
36,359 Engineering, design and development 1,653 1,973 4,841 4,167
----- ----- ----- ----- Total share-based payment expense $17,674
$24,005 $67,553 $63,417 ======= ======= ======= ======= September
December 30, 2009 31, 2008 (in thousands, except share and --------
--------- per share data) (Unaudited) ASSETS Current assets: Cash
and cash equivalents $380,372 $380,446 Accounts receivable, net of
allowance for doubtful accounts of $9,872 and $10,860, respectively
87,148 102,024 Receivables from distributors 41,755 45,950
Inventory, net 20,996 24,462 Prepaid expenses 107,350 67,203
Related party current assets 109,172 114,177 Other current assets
64,317 58,744 ------ ------ Total current assets 811,110 793,006
Property and equipment, net 1,694,235 1,703,476 FCC licenses
2,083,654 2,083,654 Restricted investments 3,400 141,250 Deferred
financing fees, net 35,889 40,156 Intangible assets, net 629,288
688,671 Goodwill 1,834,856 1,834,856 Related party long-term assets
114,073 124,607 Other long-term assets 62,438 81,019 ------ ------
Total assets $7,268,943 $7,490,695 ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable and accrued expenses $521,621 $642,820 Accrued interest
65,537 76,463 Current portion of deferred revenue 987,177 985,180
Current portion of deferred credit on executory contracts 247,566
234,774 Current maturities of long-term debt 103,674 399,726
Related party current liabilities 90,869 68,373 ------ ------ Total
current liabilities 2,016,444 2,407,336 Deferred revenue 285,488
247,889 Deferred credit on executory contracts 851,955 1,037,190
Long-term debt 2,874,391 2,851,740 Long-term related party debt
265,659 - Deferred tax liability 906,428 894,453 Related party
long-term liabilities 21,928 - Other long-term liabilities 39,005
43,550 ------ ------ Total liabilities 7,261,298 7,482,158
--------- --------- Commitments and contingencies Stockholders'
equity: Preferred stock, par value $0.001; 50,000,000 authorized at
September 30, 2009 and December 31, 2008: Series A convertible
preferred stock (liquidation preference of $51,370 at September 30,
2009 and December 31, 2008); 24,808,959 shares issued and
outstanding at September 30, 2009 and December 31, 2008 25 25
Convertible perpetual preferred stock, series B (liquidation
preference of $13 and $0 at September 30, 2009 and December 31,
2008, respectively); 12,500,000 and zero shares issued and
outstanding at September 30, 2009 and December 31, 2008,
respectively 13 - Convertible preferred stock, series C junior; no
shares issued and outstanding at September 30, 2009 and December
31, 2008 - - Common stock, par value $0.001; 9,000,000,000 and
8,000,000,000 shares authorized at September 30, 2009 and December
31, 2008, respectively; 3,858,186,839 and 3,651,765,837 shares
issued and outstanding at September 30, 2009 and December 31, 2008,
respectively 3,858 3,652 Accumulated other comprehensive loss, net
of tax (6,598) (7,871) Additional paid-in capital 10,265,752
9,724,991 Accumulated deficit (10,255,405) (9,712,260) -----------
---------- Total stockholders' equity 7,645 8,537 ----- ----- Total
liabilities and stockholders' equity $7,268,943 $7,490,695
========== ========== Unaudited For the Nine Months Ended September
30, ------------------- (in thousands) 2009 2008 ---- ---- Cash
flows from operating activities: Net loss $(356,957) $(5,067,444)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and amortization 231,624 114,923
Impairment of goodwill - 4,750,859 Non-cash interest expense, net
of amortization of premium 32,909 (1,933) Provision for doubtful
accounts 23,879 11,125 Amortization of deferred income related to
equity method investment (2,082) (471) Loss on extinguishment of
debt and credit facilities, net 263,767 - Restructuring,
impairments and related costs 26,954 - Loss on disposal of assets -
4,879 Loss on investments 10,967 3,089 Share-based payment expense
67,553 63,417 Deferred income taxes 3,344 2,301 Other non-cash
purchase price adjustments (142,487) (23,770) Other - 1,643 Changes
in operating assets and liabilities: Accounts receivable (9,002)
1,575 Inventory 3,466 2,952 Receivables from distributors 4,195
9,595 Related party assets 15,539 (1,357) Prepaid expenses and
other current assets 30,188 3,528 Other long-term assets 64,034
37,110 Accounts payable and accrued expenses (68,135) (122,969)
Accrued interest (6,600) (2,810) Deferred revenue 11,569 (4,577)
Related party liabilities 44,424 3,315 Other long-term liabilities
3,958 (1,972) ----- ------ Net cash provided by (used in) operating
activities 253,107 (216,992) ------- -------- Cash flows from
investing activities: Additions to property and equipment (217,335)
(102,705) Sales of property and equipment - 105 Purchases of
restricted and other investments - (3,000) Acquisition of acquired
entity cash - 819,521 Merger related costs - (13,047) Sale of
restricted and other investments - 65,642 --- ------ Net cash (used
in) provided by investing activities (217,335) 766,516 --------
------- Cash flows from financing activities: Proceeds from
exercise of warrants and stock options - 471 Preferred stock
issuance costs, net (3,712) - Long-term borrowings, net 579,936
533,941 Related party long-term borrowings, net 364,964 -
Short-term financings 2,220 - Payment of premiums on redemption of
debt (17,075) (18,693) Payments to minority interest holder -
(61,880) Repayment of long-term borrowings (610,932) (1,082,428)
Repayment of related party long-term borrowings (351,247) - Other -
(98) --- --- Net cash used in financing activities (35,846)
(628,687) ------- -------- Net decrease in cash and cash
equivalents (74) (79,163) Cash and cash equivalents at beginning of
period 380,446 438,820 ------- ------- Cash and cash equivalents at
end of period $380,372 $359,657 ======== ======== FOOTNOTES TO
PRESS RELEASE AND TABLES FOR NON-GAAP FINANCIAL MEASURES (1)
Average self-pay monthly churn represents the monthly average of
self-pay deactivations by the quarter divided by the average
self-pay subscriber balance for the quarter. (2) We measure the
percentage of subscribers that receive our service and convert to
self-paying after the initial promotion period. We refer to this as
the "conversion rate." At the time of sale, vehicle owners
generally receive between three and twelve month prepaid trial
subscriptions and we receive a subscription fee from the OEM.
Promotional periods generally include the period of trial service
plus 30 days to handle the receipt and processing of payments. We
measure conversion rate three months after the period in which the
trial service ends. Based on our experience it may take up to 90
days after the trial service ends for subscribers to respond to our
marketing communications and become self-paying subscribers. (3)
ARPU is derived from total earned subscriber revenue and net
advertising revenue, divided by the number of months in the period,
divided by the daily weighted average number of subscribers for the
period. ARPU is calculated as follows (in thousands, except for per
subscriber amounts): Unaudited Pro Forma
---------------------------------------- Three Months Ended Nine
Months Ended September 30, September 30, ---------------
---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Subscriber
revenue $587,442 $572,355 $1,740,477 $1,669,700 Net advertising
revenue 12,418 17,867 37,287 54,156 ------ ------ ------ ------
Total subscriber and net advertising revenue $599,860 $590,222
$1,777,764 $1,723,856 ======== ======== ========== ========== Daily
weighted average number of subscribers 18,393,678 18,710,940
18,514,041 18,187,927 ARPU $10.87 $10.51 $10.67 $10.53 (4) SAC, as
adjusted, per gross subscriber addition is derived from subscriber
acquisition costs and margins from the direct sale of radios and
accessories, excluding share-based payment expense divided by the
number of gross subscriber additions for the period. SAC, as
adjusted, per gross subscriber addition is calculated as follows
(in thousands, except for per subscriber amounts): Unaudited Pro
Forma -------------------------------------- Three Months Ended
Nine Months Ended September 30, September 30, ---------------
--------------- 2009 2008 2009 2008 ---- ---- ---- ---- Subscriber
acquisition cost $109,384 $132,477 $274,082 $444,410 Less:
share-based payment expense granted to third parties and employees
- - - (14) Less/Add: margin from direct sales of radios and
accessories 1,438 3,323 (3,355) 9,333 ----- ----- ------ ----- SAC,
as adjusted $110,822 $135,800 $270,727 $453,729 ======== ========
======== ======== Gross subscriber additions 1,606,446 1,843,785
4,325,532 5,997,096 SAC, as adjusted, per gross subscriber addition
$69 $74 $63 $76 (5) Customer service and billing expenses, as
adjusted, per average subscriber is derived from total customer
service and billing expenses, excluding share-based payment
expense, divided by the number of months in the period, divided by
the daily weighted average number of subscribers for the period.
Customer service and billing expenses, as adjusted, per average
subscriber is calculated as follows (in thousands, except for per
subscriber amounts): Unaudited Pro Forma
------------------------------------------ Three Months Ended Nine
Months Ended September 30, September 30, ----------------
---------------- 2009 2008 2009 2008 ---- ---- ---- ---- Customer
service and billing expenses $56,644 $59,786 $175,928 $180,270
Less: share-based payment expense (849) (929) (2,411) (3,111) ----
---- ------ ------ Customer service and billing expenses, as
adjusted $55,795 $58,857 $173,517 $177,159 ======= ======= ========
======== Daily weighted average number of subscribers 18,393,678
18,710,940 18,514,041 18,187,927 Customer service and billing
expenses, as adjusted, per average subscriber $1.01 $1.05 $1.04
$1.08 (6) Free cash flow is calculated as follows: Unaudited Pro
Forma -------------------------------------- Three Months Ended
Nine Months Ended September 30, September 30, ---------------
--------------- (in thousands) 2009 2008 2009 2008 ---- ---- ----
---- Net cash provided by (used in) operating activities $116,248
$(101,983) $253,107 $(468,078) Additions to property and equipment
(89,524) (32,403) (217,335) (133,548) Merger related costs - 1,796
- (13,047) Restricted and other investment activity - 34,996 -
37,025 --- ------ --- ------ Free cash flow $26,724 $(97,594)
$35,772 $(577,648) ======= ======== ======= ========= (7) Average
self-pay monthly churn; conversion rate; ARPU; SAC, as adjusted,
per gross subscriber addition; customer service and billing
expenses, as adjusted, per average subscriber; and free cash flow
are not measures of financial performance under U.S. generally
accepted accounting principles ("GAAP"). We believe these non-GAAP
financial measures provide meaningful supplemental information
regarding our operating performance and are used by us for
budgetary and planning purposes; when publicly providing our
business outlook; as a means to evaluate period-to-period
comparisons; and to compare our performance to that of our
competitors. We also believe that investors also use our current
and projected metrics to monitor the performance of our business
and to make investment decisions. We believe the exclusion of
share-based payment expense in our calculations of SAC, as
adjusted, per gross subscriber addition and customer service and
billing expenses, as adjusted, per average subscriber is useful
given the significant variation in expense that can result from
changes in the fair market value of our common stock, the effect of
which is unrelated to the operational conditions that give rise to
variations in the components of our subscriber acquisition costs
and customer service and billing expenses. Specifically, the
exclusion of share-based payment expense in our calculation of SAC,
as adjusted, per gross subscriber addition is critical in being
able to understand the economic impact of the direct costs incurred
to acquire a subscriber and the effect over time as economies of
scale are reached. These non-GAAP financial measures are used in
addition to and in conjunction with results presented in accordance
with GAAP. These non-GAAP financial measures may be susceptible to
varying calculations; may not be comparable to other similarly
titled measures of other companies; and should not be considered in
isolation, as a substitute for, or superior to measures of
financial performance prepared in accordance with GAAP. (8) We
refer to net loss before interest and investment income, interest
expense net of amounts capitalized, income tax expense, loss from
redemption of debt, loss on investments, other expense (income),
restructuring and related cost, depreciation and amortization, and
share related payment expense as adjusted income (loss) from
operations. Adjusted income (loss) from operations is not a measure
of financial performance under U.S. GAAP. We believe adjusted
income (loss) from operations is a useful measure of our operating
performance. We use adjusted income (loss) from operations for
budgetary and planning purposes; to assess the relative
profitability and on-going performance of our consolidated
operations; to compare our performance from period-to-period; and
to compare our performance to that of our competitors. We also
believe adjusted income (loss) from operations is useful to
investors to compare our operating performance to the performance
of other communications, entertainment and media companies. We
believe that investors use current and projected adjusted income
(loss) from operations to estimate our current or prospective
enterprise value and to make investment decisions. Because we fund
and build-out our satellite radio system through the periodic
raising and expenditure of large amounts of capital, our results of
operations reflect significant charges for interest and
depreciation expense. We believe adjusted income (loss) from
operations provides useful information about the operating
performance of our business apart from the costs associated with
our capital structure and physical plant. The exclusion of interest
and depreciation and amortization expense is useful given
fluctuations in interest rates and significant variation in
depreciation and amortization expense that can result from the
amount and timing of capital expenditures and potential variations
in estimated useful lives, all of which can vary widely across
different industries or among companies within the same industry.
We believe the exclusion of taxes is appropriate for comparability
purposes as the tax positions of companies can vary because of
their differing abilities to take advantage of tax benefits and
because of the tax policies of the various jurisdictions in which
they operate. We believe the exclusion of restructuring and related
costs is useful given the non-recurring nature of these
transactions. We also believe the exclusion of share- based payment
expense is useful given the significant variation in expense that
can result from changes in the fair market value of our common
stock. To compensate for the exclusion of taxes, other income
(expense), depreciation and amortization and share-based payment
expense, we separately measure and budget for these items. There
are material limitations associated with the use of adjusted income
(loss) from operations in evaluating our company compared with net
loss, which reflects overall financial performance, including the
effects of taxes, other income (expense), depreciation and
amortization, restructuring and related costs, and share-based
payment expense. We use adjusted income (loss) from operations to
supplement GAAP results to provide a more complete understanding of
the factors and trends affecting the business than GAAP results
alone. Investors that wish to compare and evaluate our operating
results after giving effect for these costs, should refer to net
loss as disclosed in our unaudited condensed consolidated
statements of operations. Since adjusted income (loss) from
operations is a non- GAAP financial measure, our calculation of
adjusted income (loss) from operations may be susceptible to
varying calculations; may not be comparable to other similarly
titled measures of other companies; and should not be considered in
isolation, as a substitute for, or superior to measures of
financial performance prepared in accordance with GAAP. The
reconciliation of the pro forma unadjusted net loss to the pro
forma adjusted income (loss) from operations is calculated as
follows (see footnotes for reconciliation of the pro forma amounts
to their respective GAAP amounts): Unaudited Pro Forma
-------------------------------------- Three Months Ended Nine
Months Ended September 30, September 30, ---------------
--------------- (in thousands) 2009 2008 2009 2008 ---- ---- ----
---- Reconciliation of Net loss to Adjusted income (loss) from
operations: Net loss $(181,935) $(217,010) $(416,090) $(653,867)
Add back Net loss items excluded from Adjusted income (loss) from
operations: Interest and investment income (962) (5,534) (2,602)
(12,180) Interest expense, net of amounts capitalized 81,707 70,153
254,677 164,380 Income tax expense 1,115 1,723 3,344 3,813 Loss on
extinguishment of debt and facilities, net 138,053 - 263,767 - Loss
(gain) on investments 58 7,549 (457) 16,099 Other (income) expense
(1,246) 4,918 (2,505) 10,478 ------ ----- ------ ------ Income
(loss) from operations 36,790 (138,201) 100,134 (471,277)
Restructuring, impairments and related costs 2,554 7,430 30,167
7,457 Depreciation and amortization 47,997 64,111 145,596 196,051
Share-based payment expense 18,799 29,809 71,301 99,673 ------
------ ------ ------ Adjusted income (loss) from operations
$106,140 $(36,851) $347,198 $(168,096) ======== ======== ========
========= There are material limitations associated with the use of
a pro forma unadjusted results of operations in evaluating our
company compared with our GAAP results of operations, which
reflects overall financial performance. We use pro forma unadjusted
results of operations to supplement GAAP results to provide a more
complete understanding of the factors and trends affecting the
business than GAAP results alone. Investors that wish to compare
and evaluate our operating results after giving effect for these
costs, should refer to results of operations as disclosed in our
unaudited condensed consolidated statements of operations. Since
pro forma unadjusted results of operations is a non-GAAP financial
measure, our calculations may not be comparable to other similarly
titled measures of other companies; and should not be considered in
isolation, as a substitute for, or superior to measures of
financial performance prepared in accordance with GAAP. (9) The
following tables reconcile our GAAP results of operations to our
non-GAAP pro forma unadjusted results of operations (in thousands):
Unaudited For the Three Months Ended September 30, 2009
----------------------------------------- Allocation of Purchase
Share- Price based As Accounting Payment Pro Reported Adjustments
Expense Forma -------- ----------- -------- ----- Revenue:
Subscriber revenue, including effects of rebates $578,304 $9,138 $-
$587,442 Advertising revenue, net of agency fees 12,418 - - 12,418
Equipment revenue 10,506 - - 10,506 Other revenue 17,428 1,813 -
19,241 ------ ----- --- ------ Total revenue 618,656 10,951 -
629,607 Operating expenses (excludes depreciation and amortization
shown separately below) (1) Cost of services: Satellite and
transmission 19,542 331 (1,197) 18,676 Programming and content
78,315 18,117 (3,202) 93,230 Revenue share and royalties 100,558
22,973 - 123,531 Customer service and billing 56,529 115 (849)
55,795 Cost of equipment 11,944 - - 11,944 Sales and marketing
52,530 3,155 (2,858) 52,827 Subscriber acquisition costs 90,054
19,330 - 109,384 General and administrative 56,923 374 (8,816)
48,481 Engineering, design and development 11,252 224 (1,877) 9,599
Depreciation and amortization 72,100 (24,103) - 47,997 Share-based
payment expense - - 18,799 18,799 Restructuring, impairments and
related costs 2,554 - - 2,554 ----- --- --- ----- Total operating
expenses 552,301 40,516 - 592,817 ------- ------ --- ------- Income
(loss) from operations 66,355 (29,565) - 36,790 Other income
(expense) Interest and investment income 962 - - 962 Interest
expense, net of amounts capitalized (78,527) (3,180) - (81,707)
Loss on extinguishment of debt and facilities, net (138,053) - -
(138,053) Loss on investments (58) - - (58) Other income 1,246 - -
1,246 ----- --- --- ----- Total other expense (214,430) (3,180) -
(217,610) -------- ------ --- -------- Loss before income taxes
(148,075) (32,745) - (180,820) Income tax expense (1,115) - -
(1,115) ------ --- --- ------ Net loss $(149,190) $(32,745) $-
$(181,935) ========= ======== === ========= (1) Amounts related to
share-based payment expense included in operating expenses were as
follows: Satellite and transmission $1,086 $111 $- $1,197
Programming and content 3,037 165 - 3,202 Customer service and
billing 734 115 - 849 Sales and marketing 2,722 136 - 2,858
Subscriber acquisition costs - - - - General and administrative
8,442 374 - 8,816 Engineering, design and development 1,653 224 -
1,877 ----- --- --- ----- Total share-based payment expense $17,674
$1,125 $- $18,799 ======= ====== === ======= Unaudited For the
Three Months Ended September 30, 2008
------------------------------------------------ Purchase
Allocation Price of Predecessor Accounting Share- Financial Adjust-
based As Inform- ments Payment Pro Reported ation (a) Expense Forma
-------- ----- ----- ------- ----- Revenue: Subscriber revenue,
including effects of rebates $458,237 $95,684 $18,434 $- $572,355
Advertising revenue, net of agency fees 14,674 3,193 - - 17,867
Equipment revenue 11,271 1,585 - - 12,856 Other revenue 4,261 4,242
1,195 - 9,698 ----- ----- ----- --- ----- Total revenue 488,443
104,704 19,629 - 612,776 Operating expenses (excludes depreciation
and amortization shown separately below) (1) Cost of services:
Satellite and transmission 19,526 6,644 638 (1,672) 25,136
Programming and content 106,037 15,991 13,912 (4,310) 131,630
Revenue share and royalties 85,592 24,198 11,010 - 120,800 Customer
service and billing 47,432 12,249 105 (929) 58,857 Cost of
equipment 13,773 2,406 - - 16,179 Sales and marketing 63,637 17,268
2,081 (4,808) 78,178 Subscriber acquisition costs 86,616 33,366
12,495 - 132,477 General and administrative 57,310 33,209 777
(15,315) 75,981 Engineering, design and development 10,434 2,611
119 (2,775) 10,389 Impairment of goodwill 4,750,859 - (4,750,859) -
- Depreciation and amortization 66,774 10,828 (13,491) - 64,111
Restructuring, impairments and related costs 7,430 - - - 7,430
Share-based payment expense - - - 29,809 29,809 --- --- --- ------
------ Total operating expenses 5,315,420 158,770 (4,723,213) -
750,977 --------- ------- ---------- --- ------- Loss from
operations (4,826,977) (54,066) 4,742,842 - (138,201) Other income
(expense) Interest and investment income 4,940 594 - - 5,534
Interest expense, net of amounts capitalized (49,216) (14,130)
(6,807) - (70,153) Loss on extinguishment of debt and facilities,
net - - - - - Loss on investments (3,089) (4,460) - - (7,549) Other
expense (3,870) (1,048) - - (4,918) ------ ------ --- --- ------
Total other expense (51,235) (19,044) (6,807) - (77,086) -------
------- ------ --- ------- Loss before income taxes (4,878,212)
(73,110) 4,736,035 - (215,287) Income tax expense (1,215) (508) - -
(1,723) ------ ---- --- --- ------ Net loss $(4,879,427) $(73,618)
$4,736,035 $- $(217,010) =========== ======== ========== ===
========= (1) Amounts related to share-based payment expense
included in operating expenses were as follows: Satellite and
transmission $1,331 $305 $36 $- $1,672 Programming and content
3,529 586 195 - 4,310 Customer service and billing 596 228 105 -
929 Sales and marketing 3,672 770 366 - 4,808 Subscriber
acquisition costs - - - - - General and administrative 12,904 1,634
777 - 15,315 Engineering, design and development 1,973 510 292 -
2,775 ----- --- --- --- ----- Total share-based payment expense
$24,005 $4,033 $1,771 $- $29,809 ======= ====== ====== === =======
------------------------------ (a) Includes impairment of goodwill.
Unaudited For the Nine Months Ended September 30, 2009
---------------------------------------- Allocation of Purchase
Share- Price based As Accounting Payment Pro Reported Adjustments
Expense Forma -------- ----------- ------- ----- Revenue:
Subscriber revenue, including effects of rebates $1,699,455 $41,022
$- $1,740,477 Advertising revenue, net of agency fees 37,287 - -
37,287 Equipment revenue 31,343 - - 31,343 Other revenue 28,379
5,438 - 33,817 ------ ----- --- ------ Total revenue 1,796,464
46,460 - 1,842,924 Operating expenses (excludes depreciation and
amortization shown separately below) (1) Cost of services:
Satellite and transmission 59,435 1,013 (3,371) 57,077 Programming
and content 230,825 54,708 (7,919) 277,614 Revenue share and
royalties 296,855 65,608 - 362,463 Customer service and billing
175,570 358 (2,411) 173,517 Cost of equipment 27,988 - - 27,988
Sales and marketing 152,647 9,986 (10,594) 152,039 Subscriber
acquisition costs 230,773 43,309 - 274,082 General and
administrative 182,953 1,252 (41,393) 142,812 Engineering, design
and development 32,975 772 (5,613) 28,134 Depreciation and
amortization 231,624 (86,028) - 145,596 Share-based payment expense
- - 71,301 71,301 Restructuring, impairments and related costs
30,167 - - 30,167 ------ --- --- ------ Total operating expenses
1,651,812 90,978 - 1,742,790 --------- ------ --- --------- Income
(loss) from operations 144,652 (44,518) - 100,134 Other income
(expense) Interest and investment income 2,602 - - 2,602 Interest
expense, net of amounts capitalized (240,062) (14,615) - (254,677)
Loss on extinguishment of debt and facilities, net (263,767) - -
(263,767) Gain on investments 457 - - 457 Other income 2,505 - -
2,505 ----- --- --- ----- Total other expense (498,265) (14,615) -
(512,880) -------- ------- --- -------- Loss before income taxes
(353,613) (59,133) - (412,746) Income tax expense (3,344) - -
(3,344) ------ --- --- ------ Net loss $(356,957) $(59,133) $-
$(416,090) ========= ======== === ========= (1) Amounts related to
share-based payment expense included in operating expenses were as
follows: Satellite and transmission $3,020 $351 $- $3,371
Programming and content 7,418 501 - 7,919 Customer service and
billing 2,052 359 - 2,411 Sales and marketing 10,081 513 - 10,594
Subscriber acquisition costs - - - - General and administrative
40,141 1,252 - 41,393 Engineering, design and development 4,841 772
- 5,613 ----- --- --- ----- Total share-based payment expense
$67,553 $3,748 $- $71,301 ======= ====== === ======= Unaudited For
the Nine Months Ended September 30, 2008
--------------------------------------------------- Purchase
Allocation Price of Predecessor Accounting Share- Financial Adjust-
based As Inform- ments Payment Pro Reported ation (a) Expense Forma
-------- ----- ----- ------- ----- Revenue: Subscriber revenue,
including effects of rebates $980,396 $670,870 $18,434 $-
$1,669,700 Advertising revenue, net of agency fees 31,413 22,743 -
- 54,156 Equipment revenue 25,290 13,397 - - 38,687 Other revenue
4,710 24,184 1,195 - 30,089 ----- ------ ----- --- ------ Total
revenue 1,041,809 731,194 19,629 - 1,792,632 Operating expenses
(excludes depreciation and amortization shown separately below) (1)
Cost of services: Satellite and transmission 34,800 46,566 638
(5,668) 76,336 Programming and content 222,975 117,156 13,912
(12,621) 341,422 Revenue share and royalties 177,635 166,606 11,010
- 355,251 Customer service and billing 97,218 82,947 105 (3,111)
177,159 Cost of equipment 28,007 20,013 - - 48,020 Sales and
marketing 151,237 126,054 2,081 (18,789) 260,583 Subscriber
acquisition costs 257,832 174,083 12,495 (14) 444,396 General and
administrative 148,555 116,444 777 (50,336) 215,440 Engineering,
design and development 28,091 23,045 119 (9,134) 42,121 Impairment
of goodwill 4,750,859 - (4,750,859) - - Depreciation and
amortization 120,793 88,749 (13,491) - 196,051 Restructuring,
impairments and related costs 7,457 - - - 7,457 Share-based payment
expense - - - 99,673 99,673 --- --- --- ------ ------ Total
operating expenses 6,025,459 961,663 (4,723,213) - 2,263,909
--------- ------- ---------- --- --------- Loss from operations
(4,983,650) (230,469) 4,742,842 - (471,277) Other income (expense)
Interest and investment income 9,167 3,013 - - 12,180 Interest
expense, net of amounts capitalized (83,636) (73,937) (6,807) -
(164,380) Loss on extinguishment of debt and facilities, net - - -
- - Loss on investments (3,089) (13,010) - - (16,099) Other expense
(3,935) (6,543) - - (10,478) ------ ------ --- --- ------- Total
other expense (81,493) (90,477) (6,807) - (178,777) ------- -------
------ --- -------- Loss before income taxes (5,065,143) (320,946)
4,736,035 - (650,054) Income tax expense (2,301) (1,512) - -
(3,813) ------ ------ --- --- ------ Net loss $(5,067,444)
$(322,458) $4,736,035 $- $(653,867) =========== =========
========== === ========= (1) Amounts related to share-based payment
expense included in operating expenses were as follows: Satellite
and transmission $2,887 $2,745 $36 $- $5,668 Programming and
content 7,477 4,949 195 - 12,621 Customer service and billing 1,137
1,869 105 - 3,111 Sales and marketing 11,376 7,047 366 - 18,789
Subscriber acquisition costs 14 - - - 14 General and administrative
36,359 13,200 777 - 50,336 Engineering, design and development
4,167 4,675 292 - 9,134 ----- ----- --- --- ----- Total share-based
payment expense $63,417 $34,485 $1,771 $- $99,673 ======= =======
====== === ======= ------------------------------ (a) Includes
impairment of goodwill. (10) The following table reconciles our
GAAP Net loss per common share (basic and diluted) to our non-GAAP
Net loss per common share (basic and diluted) excluding the
following charges: (a) preferred stock beneficial conversion
feature, (b) loss on extinguishment of debt and credit facilities,
net, and (c) loss on impairment of goodwill. Unaudited
----------------------------------------- Three Months Ended Nine
Months Ended September 30, September 30, (per share data includes
------------------ ----------------- basic and diluted) 2009 2008
2009 2008 ---- ---- ---- ---- Net loss per common share $(0.04)
$(1.93) $(0.15) $(2.76) Less: Preferred stock beneficial conversion
feature - - (0.05) - --- --- ----- --- Net loss per common share
excluding preferred stock beneficial conversion feature (0.04)
(1.93) (0.10) (2.76) Less: Loss on extinguishment of debt and
credit facilities, net (0.04) - (0.07) - ----- --- ----- --- Net
loss per common share excluding loss on extinguishment of debt and
credit facilities, net and preferred stock beneficial conversion
feature (0.00) (1.93) (0.03) (2.76) Less: Impairment of goodwill -
(1.88) - (2.59) --- ----- --- ----- Net loss per common share,
excluding charges $(0.00) $(0.05) $(0.03) $(0.17) ====== ======
====== ====== About SIRIUS XM Radio SIRIUS XM Radio is America's
satellite radio company delivering to subscribers commercial-free
music channels, premier sports, news, talk, entertainment, and
traffic and weather. SIRIUS XM Radio has content relationships with
an array of personalities and artists, including Howard Stern,
Martha Stewart, Oprah Winfrey, Rosie O'Donnell, Jamie Foxx, Barbara
Walters, Opie & Anthony, Bubba the Love Sponge®, Bob Edwards,
Chris "Mad Dog" Russo, Jimmy Buffett, The Grateful Dead, Willie
Nelson, Bob Dylan and Tom Petty. SIRIUS XM Radio is the leader in
sports programming as the Official Satellite Radio Partner of the
NFL, Major League Baseball®, NASCAR®, NBA, NHL®, and PGA TOUR® and
major college sports. SIRIUS XM Radio has arrangements with every
major automaker. SIRIUS XM Radio products are available at
shop.sirius.com and shop.xmradio.com, and at retail locations
nationwide, including Best Buy, RadioShack, Wal-Mart and
independent retailers. SIRIUS XM Radio also offers SIRIUS Backseat
TV, the first ever live in-vehicle rear seat entertainment
featuring Nickelodeon, Disney Channel and Cartoon Network; XM
NavTraffic® service for GPS navigation systems delivers real-time
traffic information, including accidents and road construction, for
more than 80 North American markets. This communication contains
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements include,
but are not limited to, statements about the benefits of the
business combination transaction involving SIRIUS and XM, including
potential synergies and cost savings and the timing thereof, future
financial and operating results, the combined company's plans,
objectives, expectations and intentions with respect to future
operations, products and services; and other statements identified
by words such as "will likely result," " are expected to,"
"anticipate," "believe," "plan," "estimate," "intend," "will,"
"should," "may," or words of similar meaning. Such forward-looking
statements are based upon the current beliefs and expectations of
SIRIUS' and XM's management and are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and generally
beyond the control of SIRIUS and XM. Actual results may differ
materially from the results anticipated in these forward-looking
statements. The following factors, among others, could cause actual
results to differ materially from the anticipated results or other
expectations expressed in the forward-looking statement: our
substantial indebtedness; the businesses of SIRIUS and XM may not
be combined successfully, or such combination may take longer, be
more difficult, time-consuming or costly to accomplish than
expected; the useful life of our satellites; our dependence upon
automakers and other third parties; our competitive position versus
other forms of audio and video entertainment; and general economic
conditions. Additional factors that could cause SIRIUS' and XM's
results to differ materially from those described in the
forward-looking statements can be found in SIRIUS' Annual Report on
Form 10-K for the year ended December 31, 2008 and XM's Annual
Report on Form 10-K for the year ended December 31, 2008, which are
filed with the Securities and Exchange Commission (the "SEC") and
available at the SEC's Internet site (http://www.sec.gov/). The
information set forth herein speaks only as of the date hereof, and
SIRIUS and XM disclaim any intention or obligation to update any
forward looking statements as a result of developments occurring
after the date of this communication. E-SIRI Contact Information
for Investors and Financial Media: Investors: William Prip 212 584
5289 Hooper Stevens 212 901 6718 Media: Patrick Reilly 212 901 6646
http://www.newscom.com/cgi-bin/prnh/20080819/NYTU044LOGODATASOURCE:
SIRIUS XM Radio CONTACT: Investors: William Prip, +1-212-584-5289,
, or Hooper Stevens, +1-212-901-6718, ; or Media: Patrick Reilly,
+1-212-901-6646, Web Site: http://www.sirius.com/
Copyright
Sirius XM (NASDAQ:SIRI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Sirius XM (NASDAQ:SIRI)
Historical Stock Chart
From Apr 2023 to Apr 2024