SiriusXM Reports Third Quarter 2012 Results

                 SiriusXM Reports Third Quarter 2012 Results

- Subscribers Grow by 446,000 to a Record 23.4 Million

- Record Revenue of $867 Million, Up 14%

- Net Income of $75 Million, After Debt Extinguishment Charge of $107 Million

- Adjusted EBITDA Grows 24% to a Record $245 Million

- Free Cash Flow Grows 159% to $195 Million

PR Newswire

NEW YORK, Nov. 1, 2012

NEW YORK, Nov. 1, 2012 /PRNewswire/ --Sirius XM Radio (NASDAQ: SIRI)  today
announced third quarter 2012 financial and operating results, including
revenue of $867 million, up 14% from third quarter 2011 revenue of $763
million. Net income for the third quarter 2012 and 2011 was $75 million and
$104 million, respectively, including a loss on extinguishment of debt of $107
million in the third quarter of 2012. Adjusted EBITDA for the third quarter
of 2012 was $245 million, up 24% from $197 million in the third quarter of
2011.

(Logo: http://photos.prnewswire.com/prnh/20101014/NY82093LOGO )

"SiriusXM delivered a very strong third quarter for our shareholders, with
446,000 net subscriber additions, double-digit growth, and record levels of
revenue, adjusted EBITDA, and free cash flow. The Company has produced more
free cash flow in the first nine months of this year than in any full year in
its history, and we've used this cash to reduce our debt to its lowest level
since the merger of Sirius and XM," noted Mel Karmazin, Chief Executive
Officer, SiriusXM.

"We're excited about the increase in subscriber guidance to 1.8 million net
additions that we reported earlier this month, as we believe growth in the
fourth quarter will continue. We continue to make investments across our
business, particularly in R&D, customer care, infrastructure, and
programming. We are also investing in new businesses, such as the telematics
service we announced in the third quarter with Nissan, and we believe these
investments will reward our shareholders in the years to come," said Karmazin.

Additional highlights from the third quarter include:

  oRecord subscriber growth. Self-pay net subscriber additions improved by
    2% year-over-year to 371,000, pushing the self-pay subscriber base to an
    all-time high of 19.0 million subscribers. The total paid subscriber base
    rose to a record high 23.4 million subscribers. Strong auto sales helped
    lift total paid and unpaid trial inventory by approximately 115,000 from
    the second quarter of 2012 to 6.2 million.
  oChurn and conversion stable. Self-pay monthly churn was 2.0% in the third
    quarter of 2012, compared to 1.9% reported in the third quarter of 2011.
    New vehicle consumer conversion rate was 44% in the third quarter of 2012,
    unchanged from the third quarter of 2011.
  oFree cash flow grows to record level. Free cash flow was $195 million in
    the third quarter of 2012, an improvement of 159% from the $75 million
    recorded in the third quarter of 2011.

"Following the repurchase of approximately $868 million of our debt in the
third quarter of 2012, SiriusXM ended the quarter with $556 million of cash.
The company's leverage has improved dramatically in the past year, ending the
third quarter at just 2.8x our adjusted EBITDA, down from 4.3x at the end of
the third quarter of 2011," remarked David Frear, SiriusXM's Executive Vice
President and Chief Financial Officer. "By eliminating our two most expensive
debt instruments in the third quarter, we will reduce our interest costs
significantly, and with no debt maturing in the next two years we now have
more flexibility to pursue strategic initiatives," added Frear.

2012 GUIDANCE

"Our increased subscriber guidance of approximately 1.8 million net additions
shows we remain confident about growth in the fourth quarter," said Karmazin.
"We were pleased to raise our subscriber guidance for the third time this
year."

The Company confirmed its 2012 subscriber, revenue, adjusted EBITDA and free
cash flow guidance:

  oNet subscriber growth approaching 1.8 million,
  oRevenue approaching $3.4 billion,
  oAdjusted EBITDA of approximately $900 million, and
  oFree cash flow of approximately $700 million.

THIRD QUARTER 2012 RESULTS

SIRIUS XM RADIO INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                         For the Three Months Ended  For the Nine Months Ended
                         September 30,               September 30,
(in thousands, except    2012          2011          2012           2011
per share data)
Revenue:
Subscriber revenue       $  757,672  $  660,837  $             $ 
                                                     2,188,199      1,922,917
Advertising revenue, net 20,426        18,810        59,881         53,595
of agency fees
Equipment revenue        17,813        15,504        51,183         48,392
Other revenue            71,449        67,399        210,362        205,882
Total revenue            867,360       762,550       2,509,625      2,230,786
Operating expenses:
Cost of services:
Revenue share and        141,834       117,043       409,371        340,713
royalties
Programming and content  69,938        70,509        205,203        210,867
Customer service and     77,768        64,239        212,635        192,667
billing
Satellite and            18,319        19,681        53,980         57,238
transmission
Cost of equipment        6,345         5,888         19,301         19,894
Subscriber acquisition   112,418       107,279       348,014        317,711
costs
Sales and marketing      60,676        55,210        176,457        154,471
Engineering, design and  13,507        14,175        32,468         39,249
development
General and              68,235        58,635        193,786        175,469
administrative
Depreciation and         66,571        65,403        199,481        200,865
amortization
Total operating expenses 635,611       578,062       1,850,696      1,709,144
Income from operations   231,749       184,488       658,929        521,642
Other income (expense):
Interest expense, net of (70,035)      (75,316)      (219,777)      (229,730)
amounts capitalized
Loss on extinguishment
of debt and credit       (107,105)     -             (132,726)      (7,206)
facilities, net
Interest and investment  (321)         292           (3,192)        78,590
(loss) income
Other income (loss)     113           435           (637)          2,235
Total other expense      (177,348)     (74,589)      (356,332)      (156,111)
Income before income     54,401        109,899       302,597        365,531
taxes
Income tax benefit       20,113        (5,714)       3,013,860      (9,907)
(expense)
Net income               $   74,514  $  104,185   $             $  
                                                     3,316,457      355,624
Realized loss on XM
Canada investment        -             -             -              6,072
foreign currency
adjustment, net of tax
Foreign currency
translation adjustment,  -             110           (38)           187
net of tax
Comprehensive income     $   74,514  $  104,295   $             $  
                                                     3,316,419      361,883
Net income per common
share:
Basic                    $         $         $         $    
                         0.01          0.02          0.52           0.06
Diluted                  $         $         $         $    
                         0.01          0.02          0.49           0.05
Weighted average common
shares outstanding:
Basic                    4,034,122     3,747,381     3,870,031      3,742,309
Diluted                  6,577,654     6,507,370     6,848,230      6,500,819





SIRIUS XM RADIO INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
                                      September 30, 2012   December 31, 2011
(in thousands, except share and per   (unaudited)
share data)
ASSETS
Current assets:
Cash and cash equivalents             $           $         
                                        556,270            773,990
Accounts receivable, net              102,963              101,705
Receivables from distributors         87,773               84,817
Inventory, net                        35,823               36,711
Prepaid expenses                      150,397              125,967
Related party current assets          8,221                14,702
Deferred tax asset                    913,010              132,727
Other current assets                  8,271                6,335
Total current assets                  1,862,728            1,276,954
Property and equipment, net           1,601,363            1,673,919
Long-term restricted investments      3,973                3,973
Deferred financing fees, net          32,546               42,046
Intangible assets, net                2,532,455            2,573,638
Goodwill                              1,815,673            1,834,856
Related party long-term assets        50,104               54,953
Long-term deferred tax asset          1,244,996            -
Other long-term assets                11,204               35,657
Total assets                          $           $         
                                      9,155,042           7,495,996
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $           $         
                                        514,479            543,193
Accrued interest                      64,463               70,405
Current portion of deferred revenue   1,426,815            1,333,965
Current portion of deferred credit on 275,567              284,108
executory contracts
Current maturities of long-term debt  4,326                1,623
Related party current liabilities     12,988               14,302
Total current liabilities             2,298,638            2,247,596
Deferred revenue                      158,223              198,135
Deferred credit on executory          6,243                218,199
contracts
Long-term debt                        2,221,685            2,683,563
Long-term related party debt          208,742              328,788
Deferred tax liability                -                    1,011,084
Related party long-term liabilities   19,660               21,741
Other long-term liabilities           85,676               82,745
Total liabilities                     4,998,867            6,791,851
Stockholders' equity:
Preferred stock, par value $0.001;
50,000,000 authorized at September
30, 2012 and December 31, 2011:
Series A convertible preferred stock;
no shares issued and outstanding at   -                    -
September 30, 2012 and December 31,
2011
Convertible perpetual preferred
stock, series B-1 (liquidation
preference of $0.001 per share at
September 30, 2012 and December 31,   6                    13
2011); 6,250,100 and 12,500,000
shares issued and outstanding at
September 30, 2012 and December 31,
2011, respectively
Common stock, par value $0.001;
9,000,000,000 shares authorized at
September 30, 2012 and December 31,
2011; 5,192,364,730 and 3,753,201,929 5,192                3,753
shares issued and outstanding at
September 30, 2012 and December 31,
2011, respectively
Accumulated other comprehensive       33                   71
income, net of tax
Additional paid-in capital            10,618,579           10,484,400
Accumulated deficit                   (6,467,635)          (9,784,092)
Total stockholders' equity            4,156,175            704,145
Total liabilities and stockholders'   $           $         
equity                                9,155,042           7,495,996





SIRIUS XM RADIO INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                       For the Nine Months Ended September 30,
(in thousands)                         2012                  2011
Cash flows from operating activities:
Net income                             $               $       
                                       3,316,457             355,624
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization          199,481               200,865
Non-cash interest expense, net of      30,786                29,211
amortization of premium
Provision for doubtful accounts        24,953                26,209
Amortization of deferred income        (2,082)               (2,082)
related to equity method investment
Loss on extinguishment of debt and     132,726               7,206
credit facilities, net
Gain on merger of unconsolidated       -                     (84,855)
entities
Loss on unconsolidated entity          4,014                 10,259
investments, net
Loss on disposal of assets             567                   269
Share-based payment expense            46,361                37,574
Deferred income taxes                  (3,017,021)           7,214
Other non-cash purchase price          (220,336)             (203,630)
adjustments
Distribution from investment in        -                     4,849
unconsolidated entity
 Changes in operating assets and
liabilities:
Accounts receivable                    (26,211)              (1,456)
Receivables from distributors          (2,956)               (12,358)
Inventory                              888                   (14,278)
Related party assets                   6,905                 30,300
Prepaid expenses and other current     (26,367)              (11,028)
assets
Other long-term assets                 24,454                23,969
Accounts payable and accrued expenses  (27,384)              (100,502)
Accrued interest                       (5,940)               6,472
Deferred revenue                       52,777                19,653
Related party liabilities              (1,314)               696
Other long-term liabilities            2,774                 (1,547)
Net cash provided by operating         513,532               328,634
activities
Cash flows from investing activities:
Additions to property and equipment    (73,546)              (115,065)
Release of restricted investments      -                     250
Return of capital from investment in   -                     10,117
unconsolidated entity
Net cash used in investing activities  (73,546)              (104,698)
Cash flows from financing activities:
Proceeds from exercise of stock        89,250                9,045
options
Long-term borrowings, net of costs     393,687               -
Payment of premiums on redemption of   (100,615)             (5,020)
debt
Repayment of long-term borrowings      (914,028)             (210,060)
Repayment of related party long-term   (126,000)             -
borrowings
Net cash used in financing activities  (657,706)             (206,035)
Net (decrease) increase in cash and    (217,720)             17,901
cash equivalents
Cash and cash equivalents at beginning 773,990               586,691
of period
Cash and cash equivalents at end of    $              $       
period                                 556,270              604,592





Subscriber Data and Operating Metrics

The following table contains actual subscriber data and key operating metrics
for the three and nine months ended September 30, 2012 and 2011, respectively:

                    Unaudited
                    For the Three Months Ended    For the Nine Months Ended
                    September 30,                 September 30,
                    2012           2011           2012           2011
Beginning           22,919,462     21,016,175     21,892,824     20,190,964
subscribers
Gross subscriber    2,421,586      2,138,131      7,064,282      6,369,846
additions
Deactivated         (1,975,665)    (1,804,448)    (5,591,723)    (5,210,952)
subscribers
Net additions       445,921        333,683        1,472,559      1,158,894
Ending subscribers  23,365,383     21,349,858     23,365,383     21,349,858
 Self-pay          19,041,519     17,534,310     19,041,519     17,534,310
 Paid promotional  4,323,864      3,815,548      4,323,864      3,815,548
Ending subscribers  23,365,383     21,349,858     23,365,383     21,349,858
 Self-pay          370,553        364,004        1,132,777      847,511
 Paid promotional  75,368         (30,321)       339,782        311,383
Net additions       445,921        333,683        1,472,559      1,158,894
Daily weighted
average number of   23,008,693     21,107,540     22,519,544     20,688,641
subscribers
Average self-pay    2.0%           1.9%           1.9%           1.9%
monthly churn
New vehicle
consumer conversion 44%            44%            45%            45%
rate
ARPU                $          $          $         $    11.57
                    12.14          11.66         11.96
SAC, per gross      $        $        $        $     
subscriber addition 51             55            55          55

Subscribers. The improvement was due to the 13% increase in gross subscriber
additions, primarily resulting from an increase in U.S. light vehicle sales,
new vehicle shipments and returning subscriber activations, including
previously owned car activations. This increase in gross additions was
partially offset by the 9% increase in deactivations. The increase in
deactivations was primarily due to an increase in paid promotional trial
deactivations stemming from the increase in volume of paid trials, along with
growth in our subscriber base. Net additions increased 34% driven by an
increase of 106,000 paid promotional subscribers.

Average Self-pay Monthly Churn for the three months ended September30, 2012
and 2011 was 2.0% and 1.9%, respectively.

New Vehicle Consumer Conversion Rate for the three months ended September30,
2012 and 2011 was 44%.

ARPU increased primarily due to the increase in certain subscription rates
beginning in January 2012, an increase in sales of premium services, including
Premier packages, data services and streaming, and an increase in other
revenue due to additional subscribers subject to the U.S. Music Royalty Fee.
The rise in ARPU was partially offset by an increase in subscriber retention
programs and in the number of subscribers on promotional plans and a decrease
in the revenue from the U.S. Music Royalty Fee due to a reduction in the rate
in December 2010.

SAC, Per Gross Subscriber Addition, improved to $51 for the three months ended
September30, 2012 from $55 for the same period in 2011. The decrease was
driven by improved OEM subsidy rates per vehicle and a 13% increase in gross
subscribers compared to the three months ended September30, 2011, partially
offset by higher subsidies related to increased OEM installations occurring in
advance of acquiring a subscriber.

Glossary

Adjusted EBITDA - EBITDA is defined as net income before interest and
investment loss; interest expense, net of amounts capitalized; income tax
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 other 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 of Sirius and XM, (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 value as determined using the Black-Scholes-Merton
model which varies based on assumptions used for the expected life, expected
stock price volatility and risk-free interest rates. 

Adjusted EBITDA has certain limitations in that it does not take into account
the impact to our statements of comprehensive income of certain expenses,
including share-based payment expense and certain purchase price accounting
for the merger of Sirius and XM. 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 as disclosed in our
consolidated statements of comprehensive income. 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
to the adjusted EBITDA is calculated as follows (in thousands):

                         Unaudited
                         For the Three Months Ended  For the Nine Months Ended
                         September 30,               September 30,
                         2012            2011        2012            2011
Net income (GAAP):       $           $        $  3,316,457  $  
                         74,514         104,185                    355,624
Add back items excluded
from Adjusted EBITDA:
Purchase price
accounting adjustments:
Revenues                 1,854           2,292       5,599           8,951
Operating expenses       (73,049)        (68,878)    (220,497)       (205,472)
Share-based payment
expense, net of purchase 17,492          13,983      46,361          37,755
price accounting
adjustments
Depreciation and         66,571          65,403      199,481         200,865
amortization (GAAP)
Interest expense, net of
amounts capitalized      70,035          75,316      219,777         229,730
(GAAP)
Loss on extinguishment
of debt and credit       107,105         -           132,726         7,206
facilities, net (GAAP)
Interest and investment  321             (292)       3,192           (78,590)
loss (income) (GAAP)
Other loss (income)      (113)           (435)       637             (2,235)
(GAAP)
Income tax (benefit)     (20,113)        5,714       (3,013,860)     9,907
expense (GAAP)
Adjusted EBITDA          $            $        $            $  
                         244,617        197,288    689,873         563,741

Adjusted Revenues and Operating Expenses - We define this non-GAAP financial
measure as our actual revenues and operating expenses adjusted to exclude the
impact of certain purchase price accounting adjustments and share-based
payment expense. We use this non-GAAP financial measure to manage our
business, set operational goals and as a basis for determining
performance-based compensation for our employees. The following tables
reconcile our actual revenues and operating expenses to our adjusted revenues
and operating expenses for the three and nine months ended September30, 2012
and 2011:

                    Unaudited For the Three Months Ended September 30, 2012
                                     Purchase Price   Allocation of

(in thousands)      As Reported      Accounting       Share-based    Adjusted

                                     Adjustments      Payment
                                                      Expense
Revenue:
Subscriber revenue  $              $         $        $    
                    757,672         41                 -        757,713
Advertising
revenue, net of     20,426           -                -              20,426
agency fees
Equipment revenue   17,813           -                -              17,813
Other revenue       71,449           1,813            -              73,262
Total revenue       $              $           $        $    
                    867,360         1,854               -        869,214
Operating expenses
Cost of services:
Revenue share and   141,834          37,199           -              179,033
royalties
Programming and     69,938           10,431           (1,736)        78,633
content
Customer service    77,768           -                (512)          77,256
and billing
Satellite and       18,319           -                (938)          17,381
transmission
Cost of equipment   6,345            -                -              6,345
Subscriber          112,418          21,712           -              134,130
acquisition costs
Sales and marketing 60,676           3,707            (2,931)        61,452
Engineering, design 13,507           -                (1,753)        11,754
and development
General and         68,235           -                (9,622)        58,613
administrative
Depreciation and    66,571           -                -              66,571
amortization (a)
Share-based payment -                -                17,492         17,492
expense
Total operating     $              $            $        $   
expenses            635,611         73,049             -         708,660
(a) Purchase price accounting adjustments included 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 of Sirius and XM. The increased depreciation and amortization for the
three months ended September 30, 2012 was $13,000.





                     Unaudited For the Three Months Ended September 30, 2011
                                      Purchase Price  Allocation of

(in thousands)       As Reported      Accounting      Share-based    Adjusted

                                      Adjustments     Payment
                                                      Expense
Revenue:
Subscriber revenue   $             $         $        $   
                     660,837          479               -          661,316
Advertising revenue, 18,810           -               -              18,810
net of agency fees
Equipment revenue    15,504           -               -              15,504
Other revenue        67,399           1,813           -              69,212
Total revenue        $             $          $        $   
                     762,550          2,292             -          764,842
Operating expenses
Cost of services:
Revenue share and    117,043          32,293          -              149,336
royalties
Programming and      70,509           12,034          (1,275)        81,268
content
Customer service and 64,239           -               (402)          63,837
billing
Satellite and        19,681           -               (735)          18,946
transmission
Cost of equipment    5,888            -               -              5,888
Subscriber           107,279          20,620          -              127,899
acquisition costs
Sales and marketing  55,210           3,931           (2,165)        56,976
Engineering, design  14,175           -               (1,291)        12,884
and development
General and          58,635           -               (8,115)        50,520
administrative
Depreciation and     65,403           -               -              65,403
amortization (a)
Share-based payment  -                -               13,983         13,983
expense (b)
Total operating      $             $           $        $  
expenses             578,062          68,878            -          646,940
(a) Purchase price accounting adjustments included 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 of Sirius and XM. The increased depreciation and amortization for the
three months ended September 30, 2011 was $15,000.
(b) Amounts related to share-based payment expense included in
operating expenses were as follows:
Programming and      $            $         $        $    
content              1,275              -          -         1,275
Customer service and 402              -               -              402
billing
Satellite and        735              -               -              735
transmission
Sales and marketing  2,165            -               -              2,165
Engineering, design  1,291            -               -              1,291
and development
General and          8,115            -               -              8,115
administrative
Total share-based    $             $         $        $   
payment expense      13,983             -           -         13,983





                   Unaudited For the Nine Months Ended September 30, 2012
                                  Purchase Price    Allocation of

(in thousands)     As Reported    Accounting        Share-based     Adjusted

                                  Adjustments       Payment
                                                    Expense
Revenue:
Subscriber revenue $            $          $         $   
                   2,188,199     161                 -           2,188,360
Advertising
revenue, net of    59,881         -                 -               59,881
agency fees
Equipment revenue  51,183         -                 -               51,183
Other revenue      210,362        5,438             -               215,800
Total revenue      $            $            $         $  
                   2,509,625     5,599               -           2,515,224
Operating expenses
Cost of services:
Revenue share and  409,371        108,069           -               517,440
royalties
Programming and    205,203        32,565            (4,342)         233,426
content
Customer service   212,635        -                 (1,327)         211,308
and billing
Satellite and      53,980         -                 (2,411)         51,569
transmission
Cost of equipment  19,301         -                 -               19,301
Subscriber         348,014        69,328            -               417,342
acquisition costs
Sales and          176,457        10,535            (7,343)         179,649
marketing
Engineering,
design and         32,468         -                 (4,467)         28,001
development
General and        193,786        -                 (26,471)        167,315
administrative
Depreciation and   199,481        -                 -               199,481
amortization (a)
Share-based        -              -                 46,361          46,361
payment expense
Total operating    $            $    220,497   $         $  
expenses           1,850,696                          -          2,071,193
(a) Purchase price accounting adjustments included 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 of Sirius and XM. The increased depreciation and amortization for the
nine months ended September 30, 2012 was $41,000.





                    Unaudited For the Nine Months Ended September 30, 2011
                                     Purchase       Allocation of
                                     Price
(in thousands)      As Reported                     Share-based    Adjusted
                                     Accounting
                                                    Payment
                                     Adjustments    Expense
Revenue:
Subscriber revenue  $              $          $        $   
                    1,922,917        3,513          -            1,926,430
Advertising
revenue, net of     53,595           -              -              53,595
agency fees
Equipment revenue   48,392           -              -              48,392
Other revenue       205,882          5,438          -              211,320
Total revenue       $              $          $        $  
                    2,230,786        8,951          -            2,239,737
Operating expenses
Cost of services:
Revenue share and   340,713          93,359         -              434,072
royalties
Programming and     210,867          36,645         (4,745)        242,767
content
Customer service    192,667          18             (1,077)        191,608
and billing
Satellite and       57,238           313            (1,867)        55,684
transmission
Cost of equipment   19,894           -              -              19,894
Subscriber          317,711          64,086         -              381,797
acquisition costs
Sales and marketing 154,471          10,961         (5,654)        159,778
Engineering, design 39,249           31             (3,407)        35,873
and development
General and         175,469          59             (21,005)       154,523
administrative
Depreciation and    200,865          -              -              200,865
amortization (a)
Share-based payment -                -              37,755         37,755
expense (b)
Total operating     $               $           $        $  
expenses            1,709,144       205,472         -            1,914,616
(a) Purchase price accounting adjustments included 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 of Sirius and XM. The increased depreciation and amortization for the
nine months ended September 30, 2011 was $45,000.
(b) Amounts related to share-based payment expense included in
operating expenses were as follows:
Programming and     $           $        $        $     
content             4,718             27           -            4,745
Customer service    1,059            18             -              1,077
and billing
Satellite and       1,848            19             -              1,867
transmission
Sales and marketing 5,627            27             -              5,654
Engineering, design 3,376            31             -              3,407
and development
General and         20,946           59             -              21,005
administrative
Total share-based   $             $        $        $   
payment expense     37,574          181           -             37,755

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. Purchase
price accounting adjustments include the recognition of deferred subscriber
revenues not recognized in purchase price accounting associated with the
merger of Sirius and XM. ARPU is calculated as follows (in thousands, except
for subscriber and per subscriber amounts):

                          Unaudited
                          For the Three Months Ended  For the Nine Months
                          September 30,               Ended September 30,
                          2012           2011         2012         2011
Subscriber revenue (GAAP) $            $         $         $  
                          757,672       660,837     2,188,199    1,922,917
Add: net advertising      20,426         18,810       59,881       53,595
revenue (GAAP)
Add: other
subscription-related      60,095         58,168       176,569      174,341
revenue (GAAP)
Add: purchase price       41             479          161          3,513
accounting adjustments
                          $            $         $         $  
                          838,234       738,294     2,424,810    2,154,366
Daily weighted average    23,008,693     21,107,540   22,519,544   20,688,641
number of subscribers
ARPU                      $         $       $       $     
                          12.14          11.66        11.96     11.57

Average self-pay monthly churn - is defined as the monthly average of self-pay
deactivations for the period divided by the average number of self-pay
subscribers for the period.

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 of Sirius and XM, 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 of Sirius and XM 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    For the Nine Months Ended
                      September 30,                 September 30,
                      2012           2011           2012          2011
Customer service and
billing expenses      $   77,768  $   64,239  $  212,635  $  192,667
(GAAP)
Less: share-based
payment expense, net
of purchase price     (512)          (402)          (1,327)       (1,077)
accounting
adjustments
Add: purchase price
accounting            -              -              -             18
adjustments
                      77,256         63,837         211,308       191,608
Daily weighted
average number of     23,008,693     21,107,540     22,519,544    20,688,641
subscribers
Customer service and  $          $          $         $     
billing expenses, per 1.12          1.01          1.04         1.03
average subscriber

Free cash flow - is derived from cash flow provided by operating activities,
capital expenditures and restricted and other investment activity. Free cash
flow is calculated as follows (in thousands):

                        Unaudited
                        For the Three Months Ended  For the Nine Months Ended
                        September 30,               September 30,
                        2012             2011       2012          2011
Cash Flow information
Net cash provided by    $  219,809     $        $  513,532  $  328,634
operating activities                     115,144
Net cash used in        (24,602)         (39,767)   (73,546)      (104,698)
investing activities
Net cash used in        (507,267)        888        (657,706)     (206,035)
financing activities
Free Cash Flow
Net cash provided by    $  219,809     $        $  513,532  $  328,634
operating activities                     115,144
Additions to property   (24,602)         (39,767)   (73,546)      (115,065)
and equipment
Restricted and other    -                -          -             10,367
investment activity
Free cash flow          $  195,207     $       $  439,986  $  223,936
                                         75,377

New vehicle consumer conversion rate - is defined as the percentage of owners
and lessees of new vehicles that receive our service and convert to become
self-paying subscribers after the initial promotion period. 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. The metric
excludes rental and fleet vehicles.

Subscriber acquisition cost, per gross subscriber addition - or SAC, per gross
subscriber addition, is derived from subscriber acquisition costs and margins
from the sale of radios and accessories, excluding share-based payment expense
and purchase price accounting adjustments, divided by the number of gross
subscriber additions for the period. Purchase price accounting adjustments
associated with the merger of Sirius and XM 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 Ended  For the Nine Months Ended
                        September 30,               September 30,
                        2012           2011         2012          2011
Subscriber acquisition  $  112,418   $          $  348,014  $  317,711
costs (GAAP)                           107,279
Less: margin from
direct sales of radios  (11,468)       (9,616)      (31,882)      (28,498)
and accessories (GAAP)
Add: purchase price     21,712         20,620       69,328        64,086
accounting adjustments
                        $  122,662   $          $  385,460  $  353,299
                                       118,283
Gross subscriber        2,421,586      2,138,131    7,064,282     6,369,846
additions
SAC, per gross          $        $       $        $     
subscriber addition     51              55         55           55

Sirius XM Radio Inc. is the world's largest radio broadcaster measured by
revenue and has 23.4 million subscribers. SiriusXM creates and broadcasts
commercial-free music; premier sports talk and live events; comedy; news;
exclusive talk and entertainment; and the most comprehensive Latin music,
sports and talk programming in radio. SiriusXM is available in vehicles from
every major car company in the U.S., from retailers nationwide, and online at
siriusxm.com. SiriusXM programming is also available through the SiriusXM
Internet Radio App for Android, Apple, and BlackBerry smartphones and other
connected devices. SiriusXM also holds a minority interest in SiriusXM Canada
which has more than 2 million subscribers.

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, our 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," "believe," "intend," "plan,"
"projection," "outlook" or words of similar meaning. Such forward-looking
statements are based upon the current beliefs and expectations of our
management and are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are difficult to
predict and generally beyond our control. 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 statements: our competitive position versus other forms of
audio entertainment; our dependence upon automakers; general economic
conditions; failure of our satellites, which, in most cases, are not insured;
our ability to attract and retain subscribers at a profitable level; royalties
we pay for music rights; the unfavorable outcome of pending or future
litigation; failure of third parties to perform; and our substantial
indebtedness. Additional factors that could cause our results to differ
materially from those described in the forward-looking statements can be found
in our Annual Report on Form 10-K for the year ended December 31, 2011, which
is 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 we disclaim any intention or
obligation to update any forward looking statements as a result of
developments occurring after the date of this communication.

Follow SiriusXM on Twitter orlike the SiriusXM page on Facebook.

E-SIRI

Contact Information for Investors and Financial Media:

Investors:

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

Media:

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

SOURCE Sirius XM Radio

Website: http://www.siriusxm.com
 
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