SIRIUS XM Radio Reports Third Quarter 2010 Results

SIRIUS XM Radio Reports Third Quarter 2010 Results

- Adj. Revenue Up 15% Year-Over-Year to a Record $723 Million

- Record Adj. EBITDA of $170 Million, Up 60% Year-Over-Year

- Net Subscriber Additions Exceed 334,000

- Company Raises 2010 Financial Guidance

NEW YORK, Nov. 4, 2010 /PRNewswire-FirstCall/ -- SIRIUS XM Radio (Nasdaq: SIRI) today announced third quarter 2010 financial and operating results, including:

-- Adjusted revenue of $722.5 million in the third quarter 2010, up 15%
from the third quarter 2009 adjusted revenue of $629.6 million;
-- Adjusted EBITDA of $169.7 million in the third quarter 2010, an increase
of 60% over the third quarter 2009 adjusted EBITDA of $106.1 million;
-- Free cash flow of $62.0 million, a 132% increase from $26.7 million in
the third quarter of 2009;
-- Net subscriber additions of 334,727 in the third quarter of 2010
compared to 102,295 in the third quarter of 2009; and
-- Net income (loss) attributable to common stockholders for the third
quarter of 2010 and 2009 was $67.6 million and ($151.5) million,
respectively, or $0.01 and ($0.04) per diluted share.

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The discussion of adjusted operating results, including adjusted revenue and adjusted EBITDA, excludes the effects of stock-based compensation and certain purchase price accounting adjustments. A reconciliation of the non-GAAP items to their nearest GAAP equivalent is contained in the financial supplements included with this release.

"We continued our positive momentum in the third quarter, improved our churn and conversion rates, and attained a record high subscriber count. We delivered record adjusted revenue and adjusted EBITDA, increased our free cash flow, and we are now raising our financial guidance for the full year," said Mel Karmazin, Chief Executive Officer, SIRIUS XM.

Karmazin added, "We will continue to increase and diversify our content offerings with new shows, new celebrity hosts and specialty programming with fantastic appeal to new and existing subscribers. By growing subscribers and revenue, tightly managing costs, and improving our balance sheet, we are positioned well for long term free cash flow growth."

SIRIUS XM ended third quarter 2010 with 19,862,175 subscribers, an increase of more than 1.3 million subscribers compared to the end of the third quarter 2009. Net subscriber additions of 334,727 in the third quarter of 2010 improved from 102,295 subscribers in the third quarter of 2009. In the third quarter 2010, average revenue per subscriber (ARPU) was $11.81, an increase of 6% from ARPU of $11.09 in the third quarter 2009. The company's self-pay monthly customer churn rate was 1.9% in the third quarter 2010, as compared with a self-pay monthly customer churn rate of 2.0% in the third quarter 2009. The conversion rate of trial subscribers into self-pay subscribers climbed to 48.1% in the third quarter 2010, up from 46.2% in the third quarter of 2009. Subscriber acquisition cost (SAC) per gross addition was $59 in the third quarter 2010, a 14% improvement from $69 in the third quarter 2009.

On a GAAP basis, net income (loss) attributable to common stockholders for the third quarter of 2010 and 2009 was $67.6 million and ($151.5) million, respectively, or $0.01 and ($0.04) per diluted share, on revenue of $717.5 million and $618.7 million, respectively. The company's reported net income (loss) attributable to common stockholders included losses on extinguishment of debt in the third quarter of 2010 and 2009 of $0.3 million and $138.1 million, respectively. For the nine months ended September 30, 2010 and 2009, net income (loss) attributable to common stockholders was $124.5 million and ($550.0) million, respectively, or $0.02 and ($0.15) per diluted share, on revenue of $2.08 billion and $1.80 billion, respectively.

In October, XM completed an offering of $700 million of 7.625% Senior Notes due 2018. XM used a portion of the proceeds of the offering to repurchase $489,065,000 aggregate principal amount of its outstanding 11.25% Senior Secured Notes due 2013 pursuant to its previously announced tender offer and consent solicitation.

INCREASED 2010 OUTLOOK

The company projects full-year 2010 adjusted EBITDA of approximately $600 million versus previous guidance of approximately $575 million. The company now expects adjusted revenue for 2010 will exceed $2.8 billion and free cash flow will exceed $150 million. SIRIUS XM expects to end the year with approximately 20.1 million subscribers, consistent with its increase in subscriber guidance on October 1, 2010.

Subscriber Data.

The following table contains actual subscriber data for the three and nine months ended September 30, 2010 and 2009, respectively:

For the Three Months
Ended
September 30,
-------------
2010 2009
---- ----

Beginning subscribers 19,527,448 18,413,435
Gross subscriber additions 1,952,054 1,606,446
Deactivated subscribers (1,617,327) (1,504,151)
Net additions 334,727 102,295
------- -------
Ending subscribers 19,862,175 18,515,730
========== ==========

Retail 7,088,562 7,925,904
OEM 12,630,463 10,488,530
Rental 143,150 101,296
Ending subscribers 19,862,175 18,515,730
========== ==========

Self-pay 16,335,819 15,456,748
Paid promotional 3,526,356 3,058,982
Ending subscribers 19,862,175 18,515,730
========== ==========

Retail (188,884) (309,972)
OEM 529,798 407,131
Rental (6,187) 5,136
------ -----
Net additions 334,727 102,295
======= =======

Self-pay 258,105 35,405
Paid promotional 76,622 66,890
Net additions 334,727 102,295
======= =======

Daily weighted average number of
subscribers 19,610,837 18,393,678
========== ==========

Average self-pay monthly churn
(1) 1.9% 2.0%
=== ===

Conversion rate (2) 48.1% 46.2%
==== ====

For the Nine Months
Ended
September 30,
-------------
2010 2009
---- ----

Beginning subscribers 18,772,758 19,003,856
Gross subscriber additions 5,693,409 4,325,532
Deactivated subscribers (4,603,992) (4,813,658)
Net additions 1,089,417 (488,126)
--------- --------
Ending subscribers 19,862,175 18,515,730
========== ==========

Retail 7,088,562 7,925,904
OEM 12,630,463 10,488,530
Rental 143,150 101,296
Ending subscribers 19,862,175 18,515,730
========== ==========

Self-pay 16,335,819 15,456,748
Paid promotional 3,526,356 3,058,982
Ending subscribers 19,862,175 18,515,730
========== ==========

Retail (637,188) (979,298)
OEM 1,699,511 492,692
Rental 27,094 (1,520)
------ ------
Net additions 1,089,417 (488,126)
========= ========

Self-pay 631,887 (92,838)
Paid promotional 457,530 (395,288)
Net additions 1,089,417 (488,126)
========= ========

Daily weighted average number of
subscribers 19,181,040 18,514,041
========== ==========

Average self-pay monthly churn
(1) 1.9% 2.1%
=== ===

Conversion rate (2) 46.6% 45.0%
==== ====

____________

See accompanying footnotes.

Subscribers. The improvement was due to the 22% increase in gross subscriber additions, primarily resulting from an increase in new vehicle penetration along with an increase in returning activations, partially offset by an 8% increase in deactivations resulting from higher promotional churn due to an increase in the volume of trial subscriptions.

Average Self-pay Monthly Churn decreased in the three months ended September 30, 2010 due to an improving economy, the success of retention and win-back programs and reductions in non-pay cancellation rates.

Conversion Rate increased in the three months ended September 30, 2010 primarily due to marketing to promotional period subscribers and an improving economy.

Metrics.

The following table contains key operating metrics based on the company's adjusted results of operations for the three and nine months ended September 30, 2010 and 2009, respectively:

Unaudited Adjusted
------------------
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
------------- -------------
(in thousands,
except for per
subscriber
amounts) 2010 2009 2010 2009
---- ---- ---- ----

ARPU (3) $11.81 $11.09 $11.70 $10.74
SAC, per gross
subscriber
addition (4) $59 $69 $59 $63
Customer service
and billing
expenses, per
average
subscriber (5) $1.02 $1.01 $1.00 $1.04
Free cash flow (6) $61,998 $26,724 $43,126 $35,772
Adjusted total
revenue (8) $722,537 $629,607 $2,098,659 $1,842,924
Adjusted EBITDA (7) $169,727 $106,140 $481,799 $347,198

____________

See accompanying footnotes.

ARPU increased in the three months ended September 30, 2010 primarily due to the introduction of the U.S. Music Royalty Fee in the third quarter of 2009, increased revenues from the sale of "Best of" programming, decreases in discounts on multi-subscription and internet packages, and increased net advertising revenue, partially offset by an increase in the number of subscribers on promotional plans.

SAC, Per Gross Subscriber Addition, decreased in the three months ended September 30, 2010 due to lower per radio subsidy rates for certain OEMs and growth in subscriber reactivations and royalties from radio manufacturers compared to the three months ended September 30, 2009, partially offset a 33% increase in OEM production with factory-installed satellite radios.

Customer Service and Billing Expenses, Per AverageSubscriber, increased in the three months ended September 30, 2010 primarily due to higher call volume, partially offset by lower call center expenses as a result of moving calls to lower cost locations.

Free Cash Flow increased in the three months ended September 30, 2010 principally as a result of improvements in our adjusted EBITDA and increases in cash flows from operations resulting from higher collections of amounts due from subscribers and distributors during the three months ended September 30, 2010 as compared to the three months ended September 30, 2009, partially offset by decreases in cash flows from operations resulting from the periodic payment of related party liabilities in the current period compared to a deferral of such payments in the three months ended September 30, 2009 and the routine amortization of prepaid programming costs and release of credit card hold-backs included in other long-term assets in the three months ended September 30, 2009. As a result of these transactions, net cash provided by operating activities increased $33,811 to $150,059 in the three months ended September 30, 2010 compared to the $116,248 provided by operations in the three months ended September 30, 2009. In addition, capital expenditures in the three months ended September 30, 2010 decreased $1,463 to $88,061 compared to $89,524 expended in the three months ended September 30, 2009, primarily due to decreased satellite and related launch vehicle spending.

Adjusted Total Revenue. Set forth below are our adjusted total revenue for the three and nine months ended September 30, 2010 and 2009. Our adjusted total revenue includes the recognition of deferred subscriber revenues acquired in the merger between SIRIUS and XM (the "Merger") that are not recognized in our results under purchase price accounting and the elimination of the benefit in earnings from deferred revenue associated with our investment in XM Canada acquired in the Merger.

Unaudited
---------
For the Three
Months Ended
September 30,
-------------
(in thousands) 2010 2009
---- ----

Revenue:
Subscriber revenue, including
effects of rebates (GAAP) $612,119 $578,304
Advertising revenue, net of
agency fees (GAAP) 15,973 12,418
Equipment revenue (GAAP) 17,823 10,506
Other revenue (GAAP) 71,633 17,428
Total revenue (GAAP) 717,548 618,656
Purchase price accounting
adjustments:
Subscriber revenue 3,176 9,138
Other revenue 1,813 1,813
Adjusted total revenue $722,537 $629,607
======== ========

Unaudited
---------
For the Nine Months
Ended
September 30,
-------------
(in thousands) 2010 2009
---- ----

Revenue:
Subscriber revenue, including
effects of rebates (GAAP) $1,793,258 $1,699,455
Advertising revenue, net of
agency fees (GAAP) 46,296 37,287
Equipment revenue (GAAP) 50,625 31,343
Other revenue (GAAP) 190,914 28,379
Total revenue (GAAP) 2,081,093 1,796,464
Purchase price accounting
adjustments:
Subscriber revenue 12,128 41,022
Other revenue 5,438 5,438
Adjusted total revenue $2,098,659 $1,842,924
========== ==========

For the three months ended September 30, the increase in subscriber revenue was driven by the increase in subscribers as well as an increase in the sale of "Best of" programming and the decreases in discounts on multi-subscription and internet packages, partially offset by an increase in the number of subscribers on promotional plans. The increase in advertising revenue was driven by more effective sales efforts and improvements in the national market for advertising. The increase in equipment revenue was driven by royalties from increased OEM installations. The increase in other revenue was driven by the introduction of the U.S. Music Royalty Fee in the third quarter of 2009.

Adjusted EBITDA. EBITDA is defined as net income (loss) before interest and investment income (loss); interest expense, net of amounts capitalized; income tax expense and depreciation and amortization. Adjusted EBITDA also removes the impact of other income and expense, losses on extinguishment of debt as well as certain non-cash charges, such as, goodwill impairment; restructuring, impairments and related costs; certain purchase price accounting adjustments and share-based payment expense.

Unaudited Adjusted
------------------
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
------------- -------------
(in thousands) 2010 2009 2010 2009
---- ---- ---- ----

Total revenue $722,537 $629,607 $2,098,659 $1,842,924
Operating
expenses:
Revenue share
and royalties 141,981 123,531 399,838 362,463
Programming
and content 88,869 93,230 263,271 277,614
Customer
service and
billing 59,967 55,795 173,307 173,517
Satellite and
transmission 20,023 18,676 58,645 57,077
Cost of
equipment 6,463 11,944 22,187 27,988
Subscriber
acquisition
costs 126,873 109,384 364,600 274,082
Sales and
marketing 52,213 52,827 159,231 152,039
Engineering,
design and
development 10,843 9,599 30,304 28,134
General and
administrative 45,578 48,481 145,477 142,812
------ ------ ------- -------
Total
operating
expenses 552,810 523,467 1,616,860 1,495,726
------- ------- --------- ---------
Adjusted
EBITDA $169,727 $106,140 $481,799 $347,198
======== ======== ======== ========

For the three months ended September 30, 2010, the increase in Adjusted EBITDA was primarily due to an increase in revenues, the increase in our subscriber base, the introduction of the U.S. Music Royalty Fee in the third quarter of 2009, increased advertising and equipment revenue, decreases in discounts on multi-subscription and internet packages, and an increase in the sale of "Best of" programming, partially offset by an increase in the number of subscribers on promotional plans, and an increase in expenses which was primarily driven by higher subscriber acquisition costs related to the 22% increase in gross additions and higher revenue share and royalties expenses associated with growth in revenues subject to revenue sharing and royalty arrangements.

SIRIUS XM RADIO INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months
Ended September 30,
-------------------
(in thousands, except per share data) 2010 2009
---- ----

Revenue:
Subscriber revenue, including effects of
rebates $612,119 $578,304
Advertising revenue, net of agency fees 15,973 12,418
Equipment revenue 17,823 10,506
Other revenue 71,633 17,428
------ ------
Total revenue 717,548 618,656
Operating expenses (depreciation and
amortization
shown separately below):
Cost of services:
Revenue share and royalties 114,482 100,558
Programming and content 78,143 78,315
Customer service and billing 60,613 56,529
Satellite and transmission 20,844 19,542
Cost of equipment 6,463 11,944
Subscriber acquisition costs 105,984 90,054
Sales and marketing 51,519 52,530
Engineering, design and development 12,526 11,252
General and administrative 54,188 56,923
Depreciation and amortization 67,450 72,100

Restructuring, impairments and related
costs 2,267 2,554
----- -----
Total operating expenses 574,479 552,301
------- -------
Income from operations 143,069 66,355
Other income (expense):
Interest expense, net of amounts
capitalized (68,559) (80,864)
Loss on extinguishment of debt and credit
facilities, net (256) (138,053)
Interest and investment (loss) income (4,305) 904
Other income 1,108 1,246
Total other expense (72,012) (216,767)
------- --------
Income (loss) before income taxes 71,057 (150,412)
Income tax expense (3,428) (1,115)
Net income (loss) 67,629 (151,527)
Preferred stock beneficial conversion
feature - -
Net income (loss) attributable to common
stockholders $67,629 $(151,527)
======= =========
Net income (loss) per common share:
Basic $0.02 $(0.04)
===== ======
Diluted $0.01 $(0.04)
===== ======

Weighted average common shares
outstanding:
Basic 3,689,245 3,621,062
========= =========
Diluted 6,369,831 3,621,062
========= =========

For the Nine Months
Ended September 30,
-------------------
(in thousands, except per share data) 2010 2009
---- ----

Revenue:
Subscriber revenue, including effects of
rebates $1,793,258 $1,699,455
Advertising revenue, net of agency fees 46,296 37,287
Equipment revenue 50,625 31,343
Other revenue 190,914 28,379
------- ------
Total revenue 2,081,093 1,796,464
Operating expenses (depreciation and
amortization
shown separately below):
Cost of services:
Revenue share and royalties 320,567 296,855
Programming and content 228,595 230,825
Customer service and billing 175,238 175,570
Satellite and transmission 60,944 59,435
Cost of equipment 22,187 27,988
Subscriber acquisition costs 305,745 230,773
Sales and marketing 156,813 152,647
Engineering, design and development 35,209 32,975
General and administrative 170,935 182,953
Depreciation and amortization 206,945 231,624

Restructuring, impairments and related
costs 4,071 30,167
----- ------
Total operating expenses 1,687,249 1,651,812
--------- ---------
Income from operations 393,844 144,652
Other income (expense):
Interest expense, net of amounts
capitalized (223,230) (246,922)
Loss on extinguishment of debt and credit
facilities, net (34,695) (263,767)
Interest and investment (loss) income (7,197) 3,059
Other income 1,837 2,505
Total other expense (263,285) (505,125)
-------- --------
Income (loss) before income taxes 130,559 (360,473)
Income tax expense (6,060) (3,344)
Net income (loss) 124,499 (363,817)
Preferred stock beneficial conversion
feature - (186,188)
Net income (loss) attributable to common
stockholders $124,499 $(550,005)
======== =========
Net income (loss) per common share:
Basic $0.03 $(0.15)
===== ======
Diluted $0.02 $(0.15)
===== ======

Weighted average common shares
outstanding:
Basic 3,686,312 3,577,587
========= =========
Diluted 6,361,090 3,577,587
========= =========

SIRIUS XM RADIO INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

September 30, December 31,
2010 2009
-------------- -------------
(in thousands, except share and
per share data) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents $316,255 $383,489
Accounts receivable, net 110,391 113,580
Receivables from distributors 78,983 48,738
Inventory, net 18,036 16,193
Prepaid expenses 167,734 100,273
Related party current assets 3,894 106,247
Deferred tax asset 74,332 72,640
Other current assets 8,990 18,620
----- ------
Total current assets 778,615 859,780
Property and equipment, net 1,798,406 1,711,003
Long-term restricted investments 3,396 3,400
Deferred financing fees, net 56,489 66,407
Intangible assets, net 2,644,831 2,695,115
Goodwill 1,834,856 1,834,856
Related party long-term assets 28,937 111,767
Other long-term assets 86,255 39,878
------ ------
Total assets $7,231,785 $7,322,206
========== ==========
LIABILITIES AND STOCKHOLDER'S
EQUITY
Current liabilities:
Accounts payable and accrued
expenses $525,148 $543,686
Accrued interest 78,581 74,566
Current portion of deferred
revenue 1,162,776 1,083,430
Current portion of deferred
credit on executory contracts 266,096 252,831
Current maturities of long-term
debt 5,482 13,882
Related party current liabilities 18,318 108,246
------ -------
Total current liabilities 2,056,401 2,076,641
Deferred revenue 270,820 255,149
Deferred credit on executory
contracts 580,161 784,078
Long-term debt 2,663,142 2,799,702
Long-term related party debt 358,747 263,579
Deferred tax liability 947,667 940,182
Related party long-term
liabilities 25,211 46,301
Other long-term liabilities 60,544 61,052
------ ------
Total liabilities 6,962,693 7,226,684
--------- ---------

Commitments and contingencies
Stockholders' equity:
Preferred stock, par value
$0.001; 50,000,000 authorized at
September 30, 2010 and December
31, 2009:
Series A convertible preferred
stock (liquidation preference of
$0 at September 30, 2010 and
$51,370 at
December 31, 2009); no shares
issued and outstanding at
September 30, 2010 and
24,808,959 shares
issued and outstanding at
December 31, 2009 - 25
Convertible perpetual preferred
stock, series B (liquidation
preference of $13 at September
30, 2010
and December 31, 2009);
12,500,000 shares issued and
outstanding at September 30,
2010
and December 31, 2009 13 13
Convertible preferred stock,
series C junior; no shares
issued and outstanding at
September 30, 2010 and December
31, 2009 - -
Common stock, par value $0.001;
9,000,000,000 shares authorized
at September 30, 2010 and
December 31, 2009; 3,923,840,895
and 3,882,659,087 shares issued
and outstanding
at September 30, 2010 and
December 31, 2009, respectively 3,923 3,882
Accumulated other comprehensive
loss, net of tax (5,823) (6,581)
Additional paid-in capital 10,400,588 10,352,291
Accumulated deficit (10,129,609) (10,254,108)
----------- -----------
Total stockholder's equity 269,092 95,522
------- ------
Total liabilities and
stockholder's equity $7,231,785 $7,322,206
========== ==========

SIRIUS XM RADIO INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine
Months
Ended September
30,
----------------
(in thousands) 2010 2009
---- ----

Cash flows from operating
activities:
Net income (loss) $124,499 $(363,817)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 206,945 231,624
Non-cash interest expense, net of
amortization of premium 32,983 39,769
Provision for doubtful accounts 23,300 23,879
Restructuring, impairments and
related costs 4,071 26,954
Amortization of deferred income
related to equity method investment (2,081) (2,082)
Loss on extinguishment of debt and
credit facilities, net 34,695 263,767
Loss on investments 8,990 10,967
Loss on disposal of assets 927 -
Share-based payment expense 50,944 67,553
Deferred income taxes 6,060 3,344
Other non-cash purchase price
adjustments (184,703) (142,487)
Changes in operating assets and
liabilities:
Accounts receivable (18,890) (9,002)
Receivables from distributors (22,430) 4,195
Inventory (1,843) 3,466
Related party assets (2,654) 15,539
Prepaid expenses and other current
assets 41,794 30,188
Other long-term assets 11,765 64,034
Accounts payable and accrued
expenses (69,629) (68,135)
Accrued interest 5,244 (6,600)
Deferred revenue 92,864 9,032
Related party liabilities (50,940) 46,961
Other long-term liabilities (865) 3,958
---- -----
Net cash provided by operating
activities 291,046 253,107
------- -------

Cash flows from investing
activities:
Additions to property and equipment (257,374) (217,335)
Sale of restricted and other
investments 9,454 -
----- ---
Net cash used in investing
activities (247,920) (217,335)
-------- --------

Cash flows from financing
activities:
Proceeds from exercise of stock
options 4,906 -
Preferred stock issuance, net of
costs - (3,712)
Long-term borrowings, net of costs 637,406 579,936
Related party long-term borrowings,
net of costs 147,094 364,964
Short-term financings - 2,220
Payment of premiums on redemption of
debt (24,321) (17,075)
Repayment of long-term borrowings (820,224) (610,932)
Repayment of related party long-
term borrowings (55,221) (351,247)
------- --------
Net cash used in financing
activities (110,360) (35,846)
-------- -------
Net decrease in cash and cash
equivalents (67,234) (74)
Cash and cash equivalents at
beginning of period 383,489 380,446
Cash and cash equivalents at end of
period $316,255 $380,372
======== ========

Footnotes

Average self-pay monthly churn; conversion rate; ARPU; SAC, per gross subscriber addition; customer service and billing expenses, per average subscriber; and free cash flow are not measures of financial performance under GAAP. We believe these operational and Non-GAAP financial performance 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 believe that investors also use our current and projected metrics to monitor the performance of our business and to make investment decisions.

These operational and Non-GAAP financial performance measures are used in addition to and in conjunction with results presented in accordance with GAAP. These Non-GAAP financial performance 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.

(1) Average self-pay monthly churn represents the monthly average of self-pay deactivations for the quarter divided by the average number of self-pay subscribers for the quarter.

(2) We measure the percentage of vehicle owners and lessees that receive our service and convert to become self-paying subscribers after the initial promotion period. We refer to this as the "conversion rate." At the time satellite radio enabled vehicles are sold or leased, the owners or lessees generally receive trial subscriptions ranging from three to twelve months. 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.

(3) ARPU is derived from total earned subscriber revenue, net advertising revenue and other subscription-related revenue, net of purchase price accounting adjustments, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period. Other subscription-related revenue includes the U.S. Music Royalty Fee, which was initially charged to subscribers in the third quarter of 2009. Purchase price accounting adjustments include the recognition of deferred subscriber revenues not recognized in purchase price accounting associated with the Merger. ARPU is calculated as follows (in thousands, except for subscriber and per subscriber amounts):

Unaudited
---------
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2010 2009 2010 2009
---- ---- ---- ----

Subscriber
revenue
(GAAP) $612,119 $578,304 $1,793,258 $1,699,455
Net
advertising
revenue
(GAAP) 15,973 12,418 46,296 37,287
Other
subscription-
related
revenue
(GAAP) 63,554 11,851 168,195 11,851
Purchase price
accounting
adjustments 3,176 9,138 12,128 41,022
----- ----- ------ ------
$694,822 $611,711 $2,019,877 $1,789,615

Daily weighted
average
number of
subscribers 19,610,837 18,393,678 19,181,040 18,514,041
---------- ---------- ---------- ----------
ARPU $11.81 $11.09 $11.70 $10.74
====== ====== ====== ======

(4) Subscriber acquisition cost, per gross subscriber addition (or SAC, per gross subscriber addition) is derived from subscriber acquisition costs and margins from the direct sale of radios and accessories, excluding purchase price accounting adjustments, divided by the number of gross subscriber additions for the period. Purchase price accounting adjustments associated with the Merger include the elimination of the benefit of amortization of deferred credits on executory contracts recognized at the Merger date attributable to an OEM. SAC, per gross subscriber addition, is calculated as follows (in thousands, except for subscriber and per subscriber amounts):

Unaudited
---------
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2010 2009 2010 2009
---- ---- ---- ----

Subscriber
acquisition
costs (GAAP) $105,984 $90,054 $305,745 $230,773
Less: margin from
direct sales of
radios and
accessories
(GAAP) (11,360) 1,438 (28,438) (3,355)
Add: purchase
price accounting
adjustments 20,889 19,330 58,855 43,309
------ ------ ------ ------
$115,513 $110,822 $336,162 $270,727

Gross subscriber
additions 1,952,054 1,606,446 5,693,409 4,325,532
SAC, per gross
subscriber
addition $59 $69 $59 $63
=== === === ===

(5) Customer service and billing expenses, per average subscriber, is derived from total customer service and billing expenses, excluding share-based payment expense and purchase price accounting adjustments associated with the Merger, divided by the number of months in the period, divided by the daily weighted average number of subscribers for the period. We believe the exclusion of share-based payment expense in our calculation of customer service and billing expenses, 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 customer service and billing expenses. Purchase price accounting adjustments associated with the Merger include the elimination of the benefit associated with incremental share-based payment arrangements recognized at the Merger date. Customer service and billing expenses, per average subscriber, is calculated as follows (in thousands, except for subscriber and per subscriber amounts):

Unaudited
---------
For the Three Months
Ended
September 30,
-------------
2010 2009
---- ----

Customer service and billing
expenses (GAAP) $60,613 $56,529
Less: share-based payment
expense, net of purchase
price accounting adjustments (700) (849)
Add: purchase price accounting
adjustment 54 115
--- ---
$59,967 $55,795

Daily weighted average number of
subscribers 19,610,837 18,393,678
---------- ----------
Customer service and billing
expenses, per average
subscriber $1.02 $1.01
===== =====

Unaudited
---------
For the Nine Months
Ended
September 30,
-------------
2010 2009
---- ----

Customer service and billing
expenses (GAAP) $175,238 $175,570
Less: share-based payment
expense, net of purchase
price accounting adjustments (2,157) (2,411)
Add: purchase price accounting
adjustment 226 358
--- ---
$173,307 $173,517

Daily weighted average number of
subscribers 19,181,040 18,514,041
---------- ----------
Customer service and billing
expenses, per average
subscriber $1.00 $1.04
===== =====

(6) Free cash flow is calculated as follows (in thousands):

Unaudited
---------
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
------------- -------------
2010 2009 2010 2009
---- ---- ---- ----

Net cash provided by
operating
activities $150,059 $116,248 $291,046 $253,107
Additions to
property and
equipment (88,061) (89,524) (257,374) (217,335)
Restricted and other
investment activity - - 9,454 -
Free cash flow $61,998 $26,724 $43,126 $35,772
======= ======= ======= =======

(7) EBITDA is defined as net income (loss) before interest and investment income (loss); interest expense, net of amounts capitalized; taxes expense and depreciation and amortization. We adjust EBITDA to remove the impact of other income and expense, loss on extinguishment of debt as well as certain non-cash charges discussed below. This measure is one of the primary Non-GAAP financial measures on which we (i) evaluate the performance of our businesses, (ii) base our internal budgets and (iii) compensate management. Adjusted EBITDA is a Non-GAAP financial performance measure that excludes (if applicable): (i) certain adjustments as a result of the purchase price accounting for the Merger, (ii) goodwill impairment, (iii) restructuring, impairments, and related costs, (iv) depreciation and amortization and (v) share-based payment expense. The purchase price accounting adjustments include: (i) the elimination of deferred revenue associated with the investment in XM Canada, (ii) recognition of deferred subscriber revenues not recognized in purchase price accounting, and (iii) elimination of the benefit of deferred credits on executory contracts, which are primarily attributable to third party arrangements with an OEM and programming providers. We believe adjusted EBITDA is a useful measure of the underlying trend of our operating performance, which provides useful information about our business apart from the costs associated with our physical plant, capital structure and purchase price accounting. We believe investors find this Non-GAAP financial measure useful when analyzing our results and comparing our operating performance to the performance of other communications, entertainment and media companies. We believe investors use current and projected adjusted EBITDA to estimate our current and 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 depreciation expense. The exclusion of depreciation and amortization expense is useful given significant variation in depreciation and amortization expense that can result from the 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 restructuring, impairments and related costs is useful given the nature of these expenses. 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.

Adjusted EBITDA has certain limitations in that it does not take into account the impact to our statement of operations of certain expenses, including share-based payment expense and certain purchase price accounting for the Merger. We endeavor to compensate for the limitations of the Non-GAAP measure presented by also providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the Non-GAAP measure. Investors that wish to compare and evaluate our operating results after giving effect for these costs, should refer to net income (loss) as disclosed in our consolidated statements of operations. Since adjusted EBITDA is a Non-GAAP financial performance measure, our calculation of adjusted EBITDA 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 net income (loss) to the adjusted EBITDA is calculated as follows (in thousands):

Unaudited
---------
For the Three Months
Ended
September 30,
-------------
2010 2009
---- ----

Net income (loss) (GAAP): $67,629 $(151,527)
Add back items excluded from Adjusted
EBITDA:
Purchase price accounting adjustments:
Revenues 4,989 10,951
Operating expenses (66,438) (64,619)
Share-based payment expense, net of
purchase price
accounting adjustments 18,390 18,799
Depreciation and amortization (GAAP) 67,450 72,100
Restructuring, impairments and related
costs (GAAP) 2,267 2,554
Interest expense, net of amounts
capitalized (GAAP) 68,559 80,864
Loss on extinguishment of debt and
credit facilities, net (GAAP) 256 138,053
Interest and investment income (loss)
(GAAP) 4,305 (904)
Other (loss) income (GAAP) (1,108) (1,246)
Income tax expense (GAAP) 3,428 1,115

Adjusted EBITDA $169,727 $106,140
======== ========

Unaudited
---------
For the Nine Months
Ended
September 30,
-------------
2010 2009
---- ----

Net income (loss) (GAAP): $124,499 $(363,817)
Add back items excluded from Adjusted
EBITDA:
Purchase price accounting adjustments:
Revenues 17,566 46,460
Operating expenses (193,904) (177,006)
Share-based payment expense, net of
purchase price
accounting adjustments 53,277 71,301
Depreciation and amortization (GAAP) 206,945 231,624
Restructuring, impairments and related
costs (GAAP) 4,071 30,167
Interest expense, net of amounts
capitalized (GAAP) 223,230 246,922
Loss on extinguishment of debt and
credit facilities, net (GAAP) 34,695 263,767
Interest and investment income (loss)
(GAAP) 7,197 (3,059)
Other (loss) income (GAAP) (1,837) (2,505)
Income tax expense (GAAP) 6,060 3,344

Adjusted EBITDA $481,799 $347,198
======== ========

(8) The following tables reconcile our actual revenues and operating expenses to our adjusted revenues and operating expenses:

Unaudited For the Three Months Ended September
30, 2010
----------------------------------------------
As Purchase
(in thousands) Reported Price
--------- Accounting
Adjustments
-----------

Revenue:
Subscriber revenue,
including effects
of rebates $612,119 $3,176
Advertising
revenue, net of
agency fees 15,973 -
Equipment revenue 17,823 -
Other revenue 71,633 1,813
------ -----
Total revenue $717,548 $4,989
======== ======
Operating expenses

Cost of services:
Revenue share and
royalties 114,482 27,499
Programming and
content 78,143 13,955
Customer service
and billing 60,613 54
Satellite and
transmission 20,844 272
Cost of equipment 6,463 -
Subscriber
acquisition costs 105,984 20,889
Sales and marketing 51,519 3,506
Engineering, design
and development 12,526 93
General and
administrative 54,188 170
Depreciation and
amortization (a) 67,450 -
Restructuring,
impairments and
related costs 2,267 -
Share-based
payment expense
(b) - -
Total operating
expenses $574,479 $66,438
======== =======

(a) Purchase price
accounting
adjustments
included in the
tables above
exclude the
incremental
depreciation and
amortization
associated with
the $785,000
stepped up basis
in property,
equipment and
intangible assets
as a result of the
Merger. The
increased
depreciation and
amortization for
the three months
ended September
30, 2010 was
$16,000.

(b) Amounts related
to share-based
payment expense
included in
operating expenses
were as follows:

Programming and
content $3,148 $81
Customer service
and billing 646 54
Satellite and
transmission 1,042 51
Sales and marketing 2,732 80
Engineering, design
and development 1,683 93
General and
administrative 8,610 170

Total share-based
payment expense $17,861 $529
======= ====

Unaudited For the Three Months Ended September
30, 2010
----------------------------------------------
(in thousands) Allocation of Adjusted
Share-based --------
Payment
Expense
--------

Revenue:
Subscriber revenue,
including effects
of rebates $- $615,295
Advertising
revenue, net of
agency fees - 15,973
Equipment revenue - 17,823
Other revenue - 73,446
--- ------
Total revenue $- $722,537
=== ========
Operating expenses

Cost of services:
Revenue share and
royalties - 141,981
Programming and
content (3,229) 88,869
Customer service
and billing (700) 59,967
Satellite and
transmission (1,093) 20,023
Cost of equipment - 6,463
Subscriber
acquisition costs - 126,873
Sales and marketing (2,812) 52,213
Engineering, design
and development (1,776) 10,843
General and
administrative (8,780) 45,578
Depreciation and
amortization (a) - 67,450
Restructuring,
impairments and
related costs - 2,267
Share-based
payment expense
(b) 18,390 18,390
Total operating
expenses $- $640,917
=== ========

(a) Purchase price
accounting
adjustments
included in the
tables above
exclude the
incremental
depreciation and
amortization
associated with
the $785,000
stepped up basis
in property,
equipment and
intangible assets
as a result of the
Merger. The
increased
depreciation and
amortization for
the three months
ended September
30, 2010 was
$16,000.

(b) Amounts related
to share-based
payment expense
included in
operating expenses
were as follows:

Programming and
content $- $3,229
Customer service
and billing - 700
Satellite and
transmission - 1,093
Sales and marketing - 2,812
Engineering, design
and development - 1,776
General and
administrative - 8,780

Total share-based
payment expense $- $18,390
=== =======

Unaudited For the Three Months Ended September
30, 2009
----------------------------------------------
As Purchase
(in thousands) Reported Price
--------- Accounting
Adjustments
-----------

Revenue:
Subscriber
revenue,
including effects
of rebates $578,304 $9,138
Advertising
revenue, net of
agency fees 12,418 -
Equipment revenue 10,506 -
Other revenue 17,428 1,813
------ -----
Total revenue $618,656 $10,951
======== =======
Operating expenses

Cost of services:
Revenue share and
royalties 100,558 22,973
Programming and
content 78,315 18,117
Customer service
and billing 56,529 115
Satellite and
transmission 19,542 331
Cost of equipment 11,944 -
Subscriber
acquisition costs 90,054 19,330
Sales and
marketing 52,530 3,155
Engineering,
design and
development 11,252 224
General and
administrative 56,923 374
Depreciation and
amortization (a) 72,100 -
Restructuring,
impairments and
related costs 2,554 -
Share-based
payment expense
(b) - -
--- ---
Total operating
expenses $552,301 $64,619
======== =======

(a) Purchase price
accounting
adjustments
included in the
tables above
exclude the
incremental
depreciation and
amortization
associated with
the $785,000
stepped up basis
in property,
equipment and
intangible assets
as a result of
the Merger. The
increased
depreciation and
amortization for
the three months
ended September
30, 2009 was
$24,000.

(b) Amounts
related to share-
based payment
expense included
in operating
expenses were as
follows:

Programming and
content $3,037 $165
Customer service
and billing 734 115
Satellite and
transmission 1,086 111
Sales and
marketing 2,722 136
Engineering,
design and
development 1,653 224
General and
administrative 8,442 374

Total share-based
payment expense $17,674 $1,125
======= ======

Unaudited For the Three Months Ended September
30, 2009
----------------------------------------------
(in thousands) Allocation of Adjusted
Share-based --------
Payment
Expense
--------

Revenue:
Subscriber
revenue,
including effects
of rebates $- $587,442
Advertising
revenue, net of
agency fees - 12,418
Equipment revenue - 10,506
Other revenue - 19,241
--- ------
Total revenue $- $629,607
=== ========
Operating expenses

Cost of services:
Revenue share and
royalties - 123,531
Programming and
content (3,202) 93,230
Customer service
and billing (849) 55,795
Satellite and
transmission (1,197) 18,676
Cost of equipment - 11,944
Subscriber
acquisition costs - 109,384
Sales and
marketing (2,858) 52,827
Engineering,
design and
development (1,877) 9,599
General and
administrative (8,816) 48,481
Depreciation and
amortization (a) - 72,100
Restructuring,
impairments and
related costs - 2,554
Share-based
payment expense
(b) 18,799 18,799
------ ------
Total operating
expenses $- $616,920
=== ========

(a) Purchase price
accounting
adjustments
included in the
tables above
exclude the
incremental
depreciation and
amortization
associated with
the $785,000
stepped up basis
in property,
equipment and
intangible assets
as a result of
the Merger. The
increased
depreciation and
amortization for
the three months
ended September
30, 2009 was
$24,000.

(b) Amounts
related to share-
based payment
expense included
in operating
expenses were as
follows:

Programming and
content $- $3,202
Customer service
and billing - 849
Satellite and
transmission - 1,197
Sales and
marketing - 2,858
Engineering,
design and
development - 1,877
General and
administrative - 8,816

Total share-based
payment expense $- $18,799
=== =======

Unaudited For the Nine Months Ended September 30,
2010
--------------------------------------------------
(in As Purchase
thousands) Reported Price
--------- Accounting
Adjustments
-----------

Revenue:
Subscriber
revenue,
including
effects of
rebates $1,793,258 $12,128
Advertising
revenue,
net of
agency fees 46,296 -
Equipment
revenue 50,625 -
Other
revenue 190,914 5,438
------- -----
Total
revenue $2,081,093 $17,566
========== =======
Operating
expenses

Cost of
services:
Revenue
share and
royalties 320,567 79,271
Programming
and content 228,595 42,805
Customer
service and
billing 175,238 226
Satellite
and
transmission 60,944 897
Cost of
equipment 22,187 -
Subscriber
acquisition
costs 305,745 58,855
Sales and
marketing 156,813 10,692
Engineering,
design and
development 35,209 427
General and
administrative 170,935 731
Depreciation
and
amortization
(a) 206,945 -
Restructuring,
impairments
and related
costs 4,071 -
Share-based
payment
expense (b) - -
Total
operating
expenses $1,687,249 $193,904
========== ========

(a) Purchase
price
accounting
adjustments
included in
the tables
above
exclude the
incremental
depreciation
and
amortization
associated
with the
$785,000
stepped up
basis in
property,
equipment
and
intangible
assets as a
result of
the Merger.
The
increased
depreciation
and
amortization
for the
nine months
ended
September
30, 2010
was
$52,000.

(b) Amounts
related to
share-
based
payment
expense
included in
operating
expenses
were as
follows:

Programming
and content $7,760 $369
Customer
service and
billing 1,931 226
Satellite
and
transmission 2,960 236
Sales and
marketing 7,930 344
Engineering,
design and
development 4,905 427
General and
administrative 25,458 731

Total share-
based
payment
expense $50,944 $2,333
======= ======

Unaudited For the Nine Months Ended September 30,
2010
--------------------------------------------------
(in thousands) Allocation of Adjusted
Share-based --------
Payment
Expense
--------

Revenue:
Subscriber
revenue,
including
effects of
rebates $- $1,805,386
Advertising
revenue, net
of agency
fees - 46,296
Equipment
revenue - 50,625
Other revenue - 196,352
--- -------
Total revenue $- $2,098,659
=== ==========
Operating
expenses

Cost of
services:
Revenue share
and royalties - 399,838
Programming
and content (8,129) 263,271
Customer
service and
billing (2,157) 173,307
Satellite and
transmission (3,196) 58,645
Cost of
equipment - 22,187
Subscriber
acquisition
costs - 364,600
Sales and
marketing (8,274) 159,231
Engineering,
design and
development (5,332) 30,304
General and
administrative (26,189) 145,477
Depreciation
and
amortization
(a) - 206,945
Restructuring,
impairments
and related
costs - 4,071
Share-based
payment
expense (b) 53,277 53,277
Total
operating
expenses $- $1,881,153
=== ==========

(a) Purchase
price
accounting
adjustments
included in
the tables
above exclude
the
incremental
depreciation
and
amortization
associated
with the
$785,000
stepped up
basis in
property,
equipment and
intangible
assets as a
result of the
Merger. The
increased
depreciation
and
amortization
for the nine
months ended
September 30,
2010 was
$52,000.

(b) Amounts
related to
share-based
payment
expense
included in
operating
expenses were
as follows:

Programming
and content $- $8,129
Customer
service and
billing - 2,157
Satellite and
transmission - 3,196
Sales and
marketing - 8,274
Engineering,
design and
development - 5,332
General and
administrative - 26,189

Total share-
based payment
expense $- $53,277
=== =======

Unaudited For the Nine Months Ended September 30,
2009
--------------------------------------------------
(in As Purchase
thousands) Reported Price
--------- Accounting
Adjustments
-----------

Revenue:
Subscriber
revenue,
including
effects of
rebates $1,699,455 $41,022
Advertising
revenue, net
of agency
fees 37,287 -
Equipment
revenue 31,343 -
Other revenue 28,379 5,438
------ -----
Total revenue $1,796,464 $46,460
========== =======
Operating
expenses

Cost of
services:
Revenue share
and
royalties 296,855 65,608
Programming
and content 230,825 54,708
Customer
service and
billing 175,570 358
Satellite and
transmission 59,435 1,013
Cost of
equipment 27,988 -
Subscriber
acquisition
costs 230,773 43,309
Sales and
marketing 152,647 9,986
Engineering,
design and
development 32,975 772
General and
administrative 182,953 1,252
Depreciation
and
amortization
(a) 231,624 -
Restructuring,
impairments
and related
costs 30,167 -
Share-based
payment
expense (b) - -
--- ---
Total
operating
expenses $1,651,812 $177,006
========== ========

(a) Purchase
price
accounting
adjustments
included in
the tables
above
exclude the
incremental
depreciation
and
amortization
associated
with the
$785,000
stepped up
basis in
property,
equipment
and
intangible
assets as a
result of
the Merger.
The
increased
depreciation
and
amortization
for the nine
months ended
September
30, 2009 was
$86,000.

(b) Amounts
related to
share-based
payment
expense
included in
operating
expenses
were as
follows:

Programming
and content $7,418 $501
Customer
service and
billing 2,052 359
Satellite and
transmission 3,020 351
Sales and
marketing 10,081 513
Engineering,
design and
development 4,841 772
General and
administrative 40,141 1,252

Total share-
based
payment
expense $67,553 $3,748
======= ======

Unaudited For the Nine Months Ended September 30,
2009
--------------------------------------------------
(in thousands) Allocation of Adjusted
Share-based --------
Payment
Expense
--------

Revenue:
Subscriber
revenue,
including
effects of
rebates $- $1,740,477
Advertising
revenue, net
of agency fees - 37,287
Equipment
revenue - 31,343
Other revenue - 33,817
--- ------
Total revenue $- $1,842,924
=== ==========
Operating
expenses

Cost of
services:
Revenue share
and royalties - 362,463
Programming and
content (7,919) 277,614
Customer
service and
billing (2,411) 173,517
Satellite and
transmission (3,371) 57,077
Cost of
equipment - 27,988
Subscriber
acquisition
costs - 274,082
Sales and
marketing (10,594) 152,039
Engineering,
design and
development (5,613) 28,134
General and
administrative (41,393) 142,812
Depreciation
and
amortization
(a) - 231,624
Restructuring,
impairments
and related
costs - 30,167
Share-based
payment
expense (b) 71,301 71,301
------ ------
Total operating
expenses $- $1,828,818
=== ==========

(a) Purchase
price
accounting
adjustments
included in
the tables
above exclude
the
incremental
depreciation
and
amortization
associated
with the
$785,000
stepped up
basis in
property,
equipment and
intangible
assets as a
result of the
Merger. The
increased
depreciation
and
amortization
for the nine
months ended
September 30,
2009 was
$86,000.

(b) Amounts
related to
share-based
payment
expense
included in
operating
expenses were
as follows:

Programming and
content $- $7,919
Customer
service and
billing - 2,411
Satellite and
transmission - 3,371
Sales and
marketing - 10,594
Engineering,
design and
development - 5,613
General and
administrative - 41,393

Total share-
based payment
expense $- $71,301
=== =======

About SIRIUS XM Radio

SIRIUS XM is America's satellite radio company, broadcasting more than 135 channels of commercial-free music, and premier sports, news, talk, entertainment, traffic, weather, and data services to 19.9 million subscribers in cars, trucks, boats and aircraft, and through a wide range of mobile devices.

SIRIUS XM offers an array of content from some of the biggest names in entertainment, as well as from professional sports leagues, major colleges, and national news and talk providers. SIRIUS XM programming is also available at sirius.com and xmradio.com, and on Apple iPhone and iPod touch, BlackBerry and Android-powered mobile devices using the SIRIUS XM Premium Online App.

SIRIUS XM has arrangements with every major automaker and its radio products are available at retail locations nationwide, as well as shop.sirius.com and shop.xmradio.com.

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 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," "will continue," "is anticipated," "estimated," "intend," "plan," "projection," "outlook" or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of SIRIUS 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 dependence upon automakers and other third parties, the substantial indebtedness of SIRIUS and XM; the useful life of our satellites; and our competitive position versus other forms of audio and video entertainment. 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, 2009 and its Quarterly Report on Form 10-Q for the period ending June 30, 2010 and XM's Annual Report on Form 10-K for the year ended December 31, 2009 and its Quarterly Report on Form 10-Q for the period ending June 30, 2010, 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
william.prip@siriusxm.com

Hooper Stevens
212 901 6718
hooper.stevens@siriusxm.com

Media:

Patrick Reilly
212 901 6646
patrick.reilly@siriusxm.com

SOURCE SIRIUS XM Radio

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SIRIUS XM Radio

CONTACT: Investors: William Prip, +1-212-584-5289, william.prip@siriusxm.com or Hooper Stevens, +1-212-901-6718, hooper.stevens@siriusxm.com; or Media: Patrick Reilly, +1-212-901-6646, patrick.reilly@siriusxm.com

Web Site: http://www.sirius.com

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