XM Satellite Radio Holdings Inc. Announces Second Quarter 2007 Results

XM Satellite Radio Holdings Inc. Announces Second Quarter 2007 Results

Second Quarter Ending Subscribers Exceed 8.25 Million; Revenue Increases 22 Percent and Net Loss Narrows 23 Percent; Largest Quarter Ever for Gross Automotive Subscriber Additions

WASHINGTON, July 26 /PRNewswire-FirstCall/ -- XM Satellite Radio Holdings Inc. (NASDAQ:XMSR) today announced earnings for the three-month period ended June 30, 2007. Revenue for the 2007 second quarter increased 22 percent year over year to $277 million compared to $228 million in the 2006 second quarter. XM's 2007 second quarter net loss narrowed to $176 million, representing a 23 percent improvement compared to the 2006 second quarter net loss of $229 million.

(Logo: http://www.newscom.com/cgi-bin/prnh/20070313/XMLOGO)

XM ended the 2007 second quarter with more than 8.25 million subscribers compared to 6.90 million subscribers in the prior year period.

"During the second quarter, XM's revenue grew and losses narrowed. XM added more automotive gross subscriber additions than during any quarter in the company's history," said Hugh Panero, chief executive officer, XM Satellite Radio. "XM's partners include the nation's largest and fastest- growing automakers and XM is well positioned for this segment to provide sustained subscriber growth as production of XM-equipped vehicles ramps up for the 2008 model year and beyond."

"The regulatory review process for our merger with Sirius Satellite Radio continues to move ahead. We look forward to continuing to work with the Federal Communications Commission and with the Department of Justice to further demonstrate that this merger is in the public interest and should be approved. We anticipate the merger will close in late 2007."

Panero continued, "XM announced earlier this week that I will step down as chief executive officer in August after nearly a decade with the company. XM will be in great hands with Nate Davis as President and Interim CEO. Nate has been an outstanding addition to the senior management team and I am confident he will carry XM to the next level of success."

For the second quarter of 2007, adjusted operating loss (formerly adjusted EBITDA) was $47 million compared to a loss of $46 million in the same period of 2006. The 2007 second quarter adjusted operating loss includes $4 million in expenses related to the company's pending merger with Sirius Satellite Radio.

Net loss per share was 57 cents, including 12 cents per share related to a non-cash impairment charge to our investment in Canadian Satellite Radio.

The primary differences between net loss and adjusted operating loss are non-operating amounts and certain operating non-cash charges. For a full reconciliation of XM's net loss to adjusted operating loss, see the attached financial schedules.

In the 2007 second quarter, XM recorded gross subscriber additions of 942 thousand and net subscriber additions of 338 thousand compared to 926 thousand gross additions and 398 thousand net subscriber additions in the 2006 second quarter.

In the 2007 second quarter, XM's subscriber acquisition costs (SAC), a component of cost per gross addition (CPGA), was $75 compared to $67 in the second quarter of 2006. Second quarter 2007 SAC included $10 for inventory- related charges as well as a $10 increase as a result of continued OEM growth from increased production by our newer automotive partners. CPGA in the 2007 second quarter was $121 compared to $112 in the second quarter of 2006.

As of June 30, 2007, the company had $275 million in cash compared to $218 million at the end of December 31, 2006. As of June 30, 2007, the company had full availability of its $400 million credit facilities resulting in total available liquidity of $675 million.

Automotive and Retail

During the second quarter of 2007, the company achieved the following in its automotive and retail channels:

- With automotive partnerships representing 60 percent of the U.S.
automotive market, XM had its largest quarter ever in automotive gross
additions with 618 thousand;
- During the second quarter, the total number of vehicles produced with
factory-installed XM surpassed 8 million, including 5.5 million General
Motors vehicles;
- XM and GM launched a satellite radio trial program for GM's Certified
pre-owned Cadillacs and HUMMERs, complementing programs that XM
previously launched with Honda and Acura;
- Hyundai added XM as standard equipment on its all-new Veracruz
crossover and its upcoming premium sports sedan, joining the 2007
Azera, Elantra, Santa Fe and Sonata. During the second quarter, sales
of the Hyundai Sonata ranked in the top five of XM factory-installed
vehicle sales;
- XM will be standard equipment on the upcoming Lexus LX 570 luxury
utility vehicle and Lexus LS 600 h L hybrid sedan, joining the Lexus
LS 460 L sedan;
- XM and Infiniti announced they will offer 2008 Infiniti QX56 buyers
three years of XM Radio and XM NavTraffic, which are featured
prominently in Infiniti's national advertising campaign. XM will be
standard on all 2008 Infiniti models as XM becomes the exclusive
satellite radio provider to Nissan and Infiniti with the 2008 models;
- XM introduced new radios at retail, including the XpressR, the first
satellite radio to offer a split screen to see what's playing on six
channels at once; the entry-level Xpress EZ; and the in-dash XM
CommanderMT receiver for vehicles; and
- The XM Radio Mobile service expanded to more than 30 handset models
from AT&T and Alltel, including the BlackBerry Curve, the Samsung
SGH-a717, and The Wafer by Samsung.

Programming

During the 2007 second quarter, the company made the following announcements:

- XM launched its third season of Major League Baseball, broadcasting
every game for every team to customers nationwide;
- XM announced complete coverage of the Live Earth concerts, totaling
nearly 100 hours of programming across multiple channels;
- XM unveiled the nation's first radio channel dedicated to a
presidential election: "P.O.T.U.S. '08." The channel will formally
launch in September with 24-hour coverage of the 2008 presidential
campaign. As a public service XM will provide the channel for free on
all XM radios;
- XM expanded its college sports line-up with the addition of the Big 12,
making XM the official satellite radio network for all six power
conferences: ACC, Big East, Big Ten, Big 12, Pac-10, and SEC. XM also
signed an agreement with FOX Sports to become the official satellite
radio network of the Bowl Championship Series (BCS) National
Championship Game and other BCS Bowl games; and
- XM and the National Hockey League announced that XM would become the
official satellite radio network of the NHL in the U.S. and Canada
starting July 1.

Pending Merger with Sirius Satellite Radio

The regulatory review process for XM's merger with Sirius continues to move forward with the recent completion of the Federal Communications Commission's (FCC) 45-day initial public comment and reply period. More than 4,000 comments were filed in favor of the merger from individuals as well as from many prestigious organizations and businesses. The volume, diversity and strength of the public comments filed with the FCC during this period demonstrated persuasively that the merger is in the public interest and should be approved.

On July 24, 2007, XM and SIRIUS filed their joint reply comments with the FCC. The filing included detailed programming and pricing plans, including "best of," "family friendly," and "a la carte" packages that will give consumers more choice and better pricing options.

XM and Sirius announced their agreement to combine in a tax-free, all-stock merger on February 19, 2007. The companies filed their Merger Agreement with the Securities and Exchange Commission on February 21, 2007. Under the terms of the agreement, XM shareholders will receive a fixed exchange ratio of 4.6 shares of Sirius common stock for each share of XM. XM and Sirius shareholders will each own approximately 50 percent of the combined company.

The transaction is subject to approval by both companies' shareholders, the satisfaction of customary closing conditions and regulatory review and approvals, including antitrust agencies and the FCC. The companies anticipate the merger will close in late 2007.

Additional details about the merger are available at www.xmmerger.com.

Webcast and Conference Call Information

Gary Parsons, chairman, Hugh Panero, chief executive officer, and Nate Davis, president and chief operating officer, will host an earnings conference call to discuss XM Satellite Radio's 2007 second quarter results today, Thursday, July 26, at 10:00 AM Eastern Time. Prior to the call, you can access XM Radio's second quarter 2007 results on the Company's website at http://www.xmradio.com/. To listen to the conference call via telephone, please call one of the following numbers approximately 10 minutes prior to the planned start of the call:

Call-in number: (877) 265-5808
Local call-in number: (706) 679-7931
Conference ID#: 6562974

The conference call can also be accessed through a live webcast on the Company's website at http://www.xmradio.com/ (click on "Investor Info" link at the bottom of the page). The webcast of the call will also be archived on the Company's Web site.

A replay of the conference call will be available after 11:30 a.m. ET on Thursday, July 26, 2007 until October 26, 2007 via the following numbers:

Playback Numbers: (800) 642-1687
Local playback number: (706) 645-9291
Conference ID#: 6562974

About XM

XM is America's number one satellite radio company with more than 8 million subscribers. Broadcasting live daily from studios in Washington, DC, New York City, Chicago, the Country Music Hall of Fame in Nashville, Toronto and Montreal, XM's 2007 lineup includes more than 170 digital channels of choice from coast to coast: commercial-free music, premier sports, news, talk radio, comedy, children's and entertainment programming; and the most advanced traffic and weather information.

XM, the leader in satellite-delivered entertainment and data services for the automobile market through partnerships with General Motors, Honda, Hyundai, Nissan, Porsche, Subaru, Suzuki and Toyota is available in 140 different vehicle models for 2007. XM's industry-leading products are available at consumer electronics retailers nationwide. For more information about XM hardware, programming and partnerships, please visit http://www.xmradio.com/ .

Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, future events or performance with respect to XM Satellite Radio Holdings Inc. ("XM") are not historical facts and may be forward-looking and, accordingly, such statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in any forward-looking statements. Accordingly, any such statements are qualified in their entirety by reference to the factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2006 filed with the Securities and Exchange Commission. Among the significant factors that could cause our actual results to differ materially from those expressed are: our pending merger with SIRIUS Satellite Radio Inc. ("SIRIUS"), including related uncertainties and risks and the impact on our business if the merger is not completed; any events which affect the useful life of our satellites; our dependence upon third parties, including manufacturers of XM radios, retailers, automakers and programming providers; and our competitive position versus other audio entertainment providers.

Important Additional Information will be Filed with the SEC

This communication is being made in respect of the proposed business combination involving XM and SIRIUS. In connection with the proposed transaction, SIRIUS filed with the SEC a Registration Statement on Form S-4 (Registration No. 333-144845) containing a Joint Proxy Statement/Prospectus and XM and SIRIUS plan to file with the SEC other documents regarding the proposed transaction. The definitive Joint Proxy Statement/Prospectus will be mailed to stockholders of XM and SIRIUS. INVESTORS AND SECURITY HOLDERS OF XM AND SIRIUS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS TO IT) AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders may obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus and other documents filed with the SEC by XM and SIRIUS through the web site maintained by the SEC at http://www.sec.gov/. Free copies of the Registration Statement and the Joint Proxy Statement/Prospectus and other documents filed with the SEC can also be obtained by directing a request to XM Satellite Radio Holdings Inc., 1500 Eckington Place, NE, Washington, DC 20002, Attention: Investor Relations.

XM, SIRIUS and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding XM's directors and executive officers is available in XM's Annual Report on Form 10-K, for the year ended December 31, 2006, which was filed with the SEC on March 1, 2007 and its proxy statement for its 2007 annual meeting of shareholders, which was filed with the SEC on April 17, 2007, and information regarding SIRIUS' directors and executive officers is available in its Annual Report on Form 10- K for the year ended December 31, 2006, which was filed with the SEC on March 1, 2007, and its proxy statement for its 2007 annual meeting of stockholders, which was filed with the SEC on April 23, 2007. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the Joint Proxy Statement/Prospectus and other relevant materials filed with the SEC.

XM SATELLITE RADIO HOLDINGS INC.
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

Three Months ended Six Months ended
June 30, June 30,
(in thousands, except 2007 2006 2007 2006
share and per share
data)

Revenue:
Subscription $245,778 $202,165 $482,264 $390,267
Activation 4,766 3,942 9,419 7,521
Merchandise 5,658 4,928 10,955 8,479
Net ad sales 10,153 8,982 17,631 15,500
Other 10,921 7,869 21,118 14,085
Total revenue 277,276 227,886 541,387 435,852
Operating expenses:
Cost of revenue
(excludes
depreciation &
amortization, shown
below):
Revenue share &
royalties 49,723 37,923 97,149 72,200
Customer care &
billing operations(1) 30,749 26,395 58,677 48,850
Cost of merchandise 12,694 10,254 30,970 18,247
Ad sales(1) 5,480 4,460 8,866 7,815
Satellite &
terrestrial(1) 13,472 11,571 27,354 24,620
Broadcast &
operations:
Broadcast(1) 6,885 5,169 13,429 11,022
Operations(1) 9,683 8,805 19,399 17,692
Total broadcast &
operations 16,568 13,974 32,828 28,714
Programming &
content(1) 41,827 42,253 85,779 79,896
Total cost of
revenue 170,513 146,830 341,623 280,342
Research &
development
(excludes
depreciation &
amortization, shown
below)(1) 8,159 8,518 15,469 19,499
General &
administrative
(excludes
depreciation &
amortization, shown
below)(1) 35,869 18,672 70,053 36,301
Marketing (excludes
depreciation &
amortization, shown
below):
Retention &
support(1) 10,618 7,443 20,374 15,490
Subsidies &
distribution 63,855 56,696 107,457 112,169
Advertising &
marketing 43,244 42,096 76,053 76,022
Marketing 117,717 106,235 203,884 203,681
Amortization of GM
liability 6,504 7,440 13,008 16,753
Total marketing 124,221 113,675 216,892 220,434
Depreciation &
amortization 46,506 41,847 93,387 81,729
Total operating
expenses(1) 385,268 329,542 737,424 638,305
Operating loss (107,992) (101,656) (196,037) (202,453)
Other income
(expense):
Interest income 4,238 6,376 7,781 12,949
Interest expense (32,423) (29,317) (60,032) (62,553)
Loss from de-
leveraging
transactions - (82,345) (2,965) (100,724)
Loss from impairment
of investments (35,824) (18,926) (35,824) (18,926)
Equity in net loss
of affiliate (2,752) (4,206) (8,177) (13,090)
Minority interest (3,266) - (4,962) -
Other income (expense) 413 (212) 856 4,422
Net loss before
income taxes (177,606) (230,286) (299,360) (380,375)
Benefit from
deferred income
taxes 1,859 1,177 1,175 2,045
Net loss (175,747) (229,109) (298,185) (378,330)
8.25% Series B and C
preferred stock
dividend
requirement - (1,814) - (3,963)
8.25% Series B
preferred stock
retirement loss - (755) - (755)
Net loss attributable
to common stockholders $(175,747) $(231,678) $(298,185) $(383,048)
Net loss per common
share - basic and
diluted $(0.57) $(0.87) $(0.97) $(1.47)
Weighted average
shares used in
computing net loss
per common share -
basic and diluted 306,425,375 266,098,554 306,154,565 259,866,408

Reconciliation of Net
loss to Adjusted
operating loss:
Net loss as reported $(175,747) $(229,109) $(298,185) $(378,330)
Add back Net loss
items excluded from
Adjusted operating
loss:
Interest income (4,238) (6,376) (7,781) (12,949)
Interest expense 32,423 29,317 60,032 62,553
Benefit from
deferred income
taxes (1,859) (1,177) (1,175) (2,045)
Loss from
de-leveraging
transactions - 82,345 2,965 100,724
Loss from impairment
of investments 35,824 18,926 35,824 18,926
Equity in net loss
of affiliate 2,752 4,206 8,177 13,090
Minority interest 3,266 - 4,962 -
Other (income)
expense (413) 212 (856) (4,422)
Operating loss (107,992) (101,656) (196,037) (202,453)
Depreciation &
amortization 46,506 41,847 93,387 81,729
Stock-based
compensation(1) 14,080 13,914 28,211 25,975
Adjusted operating
loss(2) $(47,406) $(45,895) $(74,439) $(94,749)

Three Months ended Six Months ended
Footnotes: June 30, June 30,
(1) These captions include non-cash
stock-based compensation expense
as follows: 2007 2006 2007 2006
(in thousands)
Customer care & billing operations $497 $268 $937 $354
Ad sales 460 520 816 948
Satellite & terrestrial 491 511 1,010 972
Broadcast 606 577 1,206 1,058
Operations 351 419 729 1,002
Programming & content 2,061 2,126 4,227 4,018
Research & development 1,716 1,780 3,442 3,237
General & administrative 5,829 6,017 11,878 11,078
Retention & support 2,069 1,696 3,966 3,308
Total stock-based compensation $14,080 $13,914 $28,211 $25,975

(2) Adjusted operating loss (formerly Adjusted EBITDA) is net loss
before interest income, interest expense, income taxes, depreciation
and amortization, loss from de-leveraging transactions, loss from
impairment of investments, equity in net loss of affiliate, minority
interest, other income (expense) and stock-based compensation. This
non-GAAP measure should be used in addition to, but not as a
substitute for, the analysis provided in the statement of
operations. We believe Adjusted operating loss is a useful measure
of our operating performance and improves comparability between
periods. Adjusted operating loss is a significant basis used by
management to measure our success in acquiring, retaining and
servicing subscribers because we believe this measure provides
insight into our ability to grow revenues in a cost-effective
manner. We believe Adjusted operating loss is a calculation used as
a basis for investors, analysts and credit rating agencies to
evaluate and compare the periodic and future operating performances
and value of our company and similar companies in our industry.

Because we have funded the build-out of our system through the
raising and expenditure of large amounts of capital, our results of
operations reflect significant charges for depreciation,
amortization and interest expense. We believe Adjusted operating
loss provides helpful information about the operating performance of
our business apart from the expenses associated with our physical
plant or capital structure. We believe it is appropriate to exclude
depreciation, amortization and interest expense due to the
variability of the timing of capital expenditures, estimated useful
lives and fluctuation in interest rates. We exclude income taxes due
to our tax losses and timing differences, so that certain periods
will reflect a tax benefit, while others an expense, neither of
which is reflective of our operating results. Because of the variety
of equity awards used by companies, the varying methodologies for
determining stock-based compensation expense and the subjective
assumptions involved in those determinations, we believe excluding
stock-based compensation expense enhances the ability of management
and investors to compare our core operating results with those of
similar companies in our industry.

Equity in net loss of affiliate represents our share of losses in a
non-US affiliate in a similar business and over which we exercise
significant influence, but do not control. Management believes it is
appropriate to exclude this loss when evaluating the performance of
our own operations. Additionally, we exclude loss from de-leveraging
transactions, loss from impairment of investments, minority interest
and other income (expense) because these items represent activity
outside of our core business operations and can distort period to
period comparisons of operating performance.

There are limitations associated with the use of Adjusted operating
loss in evaluating our company compared with net loss, which
reflects overall financial performance. Adjusted operating loss does
not reflect the impact on our financial results of (1) interest
income, (2) interest expense, (3) income taxes, (4) depreciation and
amortization, (5) loss from de-leveraging transactions, (6) loss
from impairment of investments, (7) equity in net loss of affiliate,
(8) minority interest, (9) other income (expense) and (10) stock-
based compensation, which are included in the computation of net
loss. Users that wish to compare and evaluate our company based on
our net loss should refer to our unaudited Condensed Consolidated
Statements of Operations. Adjusted operating loss does not purport
to represent operating loss or cash flow from operating activities,
as those terms are defined under United States generally accepted
accounting principles, and should not be considered as an
alternative to those measurements as an indicator of our
performance. In addition, our measure of Adjusted operating loss may
not be comparable to similarly titled measures of other companies.

XM SATELLITE RADIO HOLDINGS INC.
SELECTED FINANCIAL AND OPERATING METRICS

As of
(in thousands) June 30, 2007 December 31, 2006
SELECTED BALANCE SHEET DATA (unaudited)

Cash and cash equivalents(1) $275,392 $218,216
Restricted investments 196 2,098
System under construction 142,935 126,049
Property and equipment, net 774,185 849,662
DARS license 141,387 141,387
Investments 44,650 80,592
Total assets(2) 1,812,958 1,840,618
Total subscriber deferred revenue 479,147 427,193
Total deferred income 137,591 140,695
Long-term debt, net of current portion 1,476,720 1,286,179
Total liabilities(2) 2,410,157 2,238,498
Stockholders' deficit(2) (3) (659,861) (397,880)

Three Months ended June 30,
SELECTED OPERATING METRICS 2007 2006

Subscriber Data (in thousands,
except percentages):
OEM and Rental Car Company Gross
Subscriber Additions 618 518
Aftermarket and Data Gross
Subscriber Additions 323 409
Total Gross Subscriber Additions(4) 942 926

OEM and Rental Car Company Net
Subscriber Additions 295 230
Aftermarket and Data Net
Subscriber Additions 43 168
Total Net Subscriber Additions(5) 338 398

Conversion Rate (6) 52.7% 54.5%
Churn Rate (7) 1.84% 1.83%

Aftermarket Subscribers 4,476 4,046
OEM Subscribers 3,047 2,212
Subscribers in OEM Promotional
Periods 649 573
XM Activated Vehicles with Rental
Car Companies 40 42
Data Services Subscribers 40 27
Total Ending Subscribers(8) 8,252 6,900

Percentage of Ending Subscribers
on Annual and Multi-Year Plans(9) 43.6% 42.3%
Percentage of Ending Subscribers
on Family Plans(9) 23.5% 20.7%

Revenue Data (monthly average):
Subscription Revenue per
Aftermarket, OEM & Other
Subscriber $10.37 $10.38
Subscription Revenue per
Subscriber in OEM Promotional
Periods $6.18 $6.29
Subscription Revenue per XM
Activated Vehicle with Rental
Car Companies $7.07 $5.55
Subscription Revenue per
Subscriber of Data Services $33.96 $29.93

Average Monthly Subscription
Revenue per Subscriber ("ARPU")(10) $10.15 $10.08
Net Ad Sales Revenue per
Subscriber(11) $0.42 $0.45
Activation, Equipment and Other
Revenue per Subscriber $0.88 $0.83
Total Revenue per Subscriber $11.45 $11.36

Expense Data:
Subscriber Acquisition Costs
("SAC") (12) $75 $67
Cost Per Gross Addition ("CPGA")(13) $121 $112

(Certain totals may not add due to the effects of rounding)

Footnotes:
(1) In addition to the Cash and cash equivalents available to the
Company, the Company has a $250 million credit facility with a
group of banks and a $150 million credit facility with GM.

(2) Total assets does not equal Total liabilities plus Stockholders'
deficit because of minority interest, which is not included in
this table.

(3) We have not declared or paid any dividends on our Class A common
stock since our date of inception.

(4) Gross Subscriber Additions are paying subscribers newly activated
in the reporting period. OEM subscribers include both newly
activated promotional and non-promotional subscribers.

(5) Net Subscriber Additions represent the total net incremental paying
subscribers added during the period (Gross Subscriber Additions
less Disconnects).

(6) We measure the success of our OEM promotional programs based on the
percentage of new promotional subscribers that elect to receive the
XM service and convert to self-paying subscribers after the initial
promotion period. We refer to this as the "conversion rate."

(7) Churn Rate represents the percentage of self-paying Aftermarket,
OEM & Other Subscribers who discontinued service during the period
divided by the monthly weighted average ending subscribers. Churn
Rate does not include OEM promotional period deactivations or
deactivations resulting from the change-out of XM-enabled rental
car activity.

(8) Subscribers are those who are receiving and have agreed to pay for
our service, including those who are currently in promotional
periods paid in part by vehicle manufacturers, as well as XM
activated radios in vehicles for which we have a contractual right
to receive payment for the use of our service. Radios that are
revenue generating are counted individually as subscribers.
Aftermarket subscribers consist primarily of subscribers who
purchased their radio at retail outlets, distributors, or through
XM's direct sales efforts. OEM subscribers are self-paying
subscribers whose XM radio was installed by an OEM and are not
currently in OEM promotional programs. OEM promotional subscribers
are subscribers who receive a fixed period of XM service where XM
receives revenue from the OEM for the trial period following the
initial purchase or lease of the vehicle. In situations where XM
receives no revenue from the OEM during the trial period, the
subscriber is not included in XM's subscriber count. At the time of
sale, some vehicle owners receive a three month prepaid trial
subscription. Promotional periods generally include the period of
trial service plus 30 days to handle the receipt and processing of
payments. The automated activation program provides activated XM
radios on dealer lots for test drives but XM does not include these
vehicles in their subscriber count. XM's OEM partners generally
indicate the inclusion of three months free of XM service on the
window sticker of XM-enabled vehicles. XM, historically and
including the 2006 model year, receives a negotiated rate for
providing audio service to rental car companies. Beginning with the
2007 model year, XM has entered into marketing arrangements which
govern the rate which XM receives for providing audio service on
certain rental fleet vehicles. Data services subscribers are those
subscribers that are receiving services that include stand-alone XM
WX Satellite Weather service, stand-alone XM Radio Online service
and stand-alone NavTraffic service. Stand-alone XM WX Satellite
Weather service packages range in price from $29.99 to $99.99 per
month. Stand-alone XM Radio Online service is $7.99 per month.
Stand-alone NavTraffic service is $9.95 per month.

(9) XM receives a range of $9.99 - $11.87 per month for its audio
service for annual and multi-year plans and $6.99 per month for a
family plan.

(10) Subscription Revenue includes monthly subscription revenues for our
satellite audio service and data services, net of any promotions or
discounts.

(11) Net Ad Sales Revenue includes sales of advertisements and program
sponsorships on the XM system, including barter recorded at fair
value, net of agency commissions.

(12) SAC - As noted in our Form 10-K for the year ended December 31,
2006, we have revised our calculation of SAC to allow for the
direct calculation of this metric using certain line items from our
Results of Operations and Key Metrics tables. Subscriber
acquisition costs include Subsidies & distribution and the negative
gross profit on merchandise revenue. Subscriber acquisition costs
are divided by gross additions to calculate what we refer to as
"SAC." The previously reported amount under the prior
definition for the three months ended June 30, 2006 was $64.

(13) CPGA - As noted in our Form 10-K for the year ended December 31,
2006, we have revised our calculation of CPGA to allow for the
direct calculation of this metric using certain line items from our
Results of Operations and Key Metrics tables. CPGA costs include
the amounts in SAC, as well as Advertising & marketing. These costs
are divided by the gross additions for the period to calculate
CPGA. CPGA costs do not include marketing staff (included in
Retention & support) or the amortization of the GM guaranteed
payments (included in Amortization of GM liability). The
previously reported amount under the prior definition for the three
months ended June 30, 2006 was $112.

First Call Analyst:
FCMN Contact: david.butler@xmradio.com

Photo: NewsCom:

http://www.newscom.com/cgi-bin/prnh/20070313/XMLOGO
AP Archive:

http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com
Source: XM Satellite Radio

CONTACT: Nathaniel Brown, +1-212-708-6170, nathaniel.brown@xmradio.com,
or Chance Patterson, +1-202-380-4318, chance.patterson@xmradio.com, both of XM
Satellite Radio

Web site:

http://www.xmradio.com/
http://www.xmmerger.com/

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