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SIRIUS Satellite Radio Reports Strong First Quarter 2007 Results
- First Quarter Revenue Increases 61% to a Record $204 Million
- Subscribers Increase 556,490 to Approximately 6.6 Million
- Satellite Radio Leader with 66% Segment Share of Net Subscriber Additions
- Net Loss Improves 68% Over Last Year
- 2007 Guidance Reiterated
NEW YORK, May 1 /PRNewswire-FirstCall/ -- SIRIUS Satellite Radio
( SIRI) today announced strong first quarter 2007 results, including
a 61% increase in revenue to a record $204 million from the year ago
quarter, strong first quarter subscriber growth of 556,490 driving ending
subscribers to approximately 6.6 million and accounting for 66% of
satellite radio segment share.
(Logo: http://www.newscom.com/cgi-bin/prnh/19991118/NYTH125 )
"2007 is off to a great start," said Mel Karmazin, CEO of SIRIUS.
"SIRIUS once again led the satellite radio segment in net subscriber
additions marking the sixth straight quarter of leadership. At the same
time, we increased revenue by 61% and reduced our net loss by 68% from last
year's first quarter. We are very pleased with our strong operating results
and we are on track to meet our 2007 guidance."
"SIRIUS is excited about the pending merger with XM. The audio
entertainment market has changed dramatically since we received our
licenses in 1997 and consumers now have a dizzying and ever-expanding array
of options to choose from. We believe the merger makes sense for consumers
and stockholders and we are confident that the transaction will be
completed by the end of 2007."
SIRIUS ended first quarter of 2007 with 6,581,045 subscribers, up 61%
from 4,077,747 subscribers at the end of the year-ago quarter. During first
quarter of 2007, SIRIUS added 556,490 net subscribers consisting of 192,978
from the retail channel and 364,674 from the OEM channel. In first quarter
of 2007, SIRIUS captured 66% of satellite radio segment share, marking the
sixth consecutive quarter for leadership.
Total revenue for the first quarter of 2007 increased to $204.0
million, up 61% from $126.7 million for the year-ago quarter. Advertising
revenue was $6.7 million during first quarter 2007 and average monthly
revenue per subscriber (or "ARPU") was $10.46. Average monthly subscriber
churn was 2.3%, and was consistent with previously provided 2007 churn
guidance. SAC per gross subscriber addition was $104 for the first quarter
of 2007.
SIRIUS reported a net loss of ($144.7) million, or ($0.10) per share
for the first quarter of 2007, a 68% improvement from a net loss of
($458.5) million, or ($0.33) per share for the first quarter of 2006. The
adjusted net loss for first quarter 2007 (adjusted to exclude stock-based
compensation) improved to ($120.5) million, or ($0.08) per share, a 31%
improvement from the adjusted net loss for first quarter 2006 of ($174.0)
million, or ($0.13) per share.
2007 OUTLOOK
SIRIUS today reiterated the following guidance for the full year 2007:
-- Total revenue approaching $1 billion
-- More than 8 million subscribers at year-end
-- Average monthly subscriber churn of approximately 2.2 - 2.4%
-- SAC per gross subscriber addition of approximately $95
Other Developments
During 2007, SIRIUS enhanced its exclusive agreements with Lincoln,
Land Rover, Mitsubishi, Audi, MINI and Mercedes Benz USA. Under the new
agreements, SIRIUS will become standard equipment on selected models
leading to a significant increase in the production penetration levels.
SIRIUS announced enhanced programming during the first quarter,
including the 'SIRIUSly Sinatra' channel, the 'Foxxhole' featuring Jamie
Foxx, as well as the launch of every race in the NASCAR Nextel Cup Series,
NASCAR Busch Series and NASCAR Craftsman Truck Series.
RESULTS OF OPERATIONS
The discussion of operating expenses below excludes the effects of
stock- based compensation. SIRIUS believes this presentation improves the
transparency of disclosure and is consistent with the way operating results
are evaluated.
FIRST QUARTER 2007 VERSUS FIRST QUARTER 2006
For the first quarter of 2007, SIRIUS recognized total revenue of
$204.0 million compared to $126.7 million for the first quarter of 2006.
This 61%, or $77.3 million, increase in revenue was driven by a $75.6
million increase in subscriber revenue resulting from the net increase in
subscribers of 2,503,298, or 61%, from March 31, 2006 to March 31, 2007.
The company's adjusted loss from operations decreased $52.7 million to
($84.0) million for the first quarter of 2007 from ($136.7) million for the
first quarter of 2006 (refer to the reconciliation table of net loss to
adjusted loss from operations). This decrease was driven by the increase in
total revenue of $77.3 million, which more than offset a $24.7 million
increase in operating expenses.
Programming and content expenses increased $7.2 million to $57.1
million for the first quarter of 2007 from $49.9 million for the first
quarter of 2006. The increase was primarily attributable to license fees
associated with new programming.
Revenue share and royalties increased $13.6 million to $27.1 million
for the first quarter of 2007 from $13.5 million for the first quarter of
2006. The increase was primarily attributable to an increase in the OEM
subscriber base and higher revenue.
Customer service and billing expenses increased $4.1 million to $21.7
million for the first quarter of 2007 from $17.6 million for the first
quarter of 2006. The increase was primarily attributable to call center
operating costs necessary to accommodate the increase in the company's
subscriber base and transaction fees due to the addition of new
subscribers. Customer service and billing expenses per average subscriber
per month declined 26% to $1.15 for the first quarter of 2007 from $1.55
for the first quarter of 2006.
Sales and marketing expenses were relatively consistent for the first
quarter of 2007 as compared to the first quarter of 2006, despite a 61%
increase in total revenue.
Subscriber acquisition costs decreased $10.9 million to $98.2 million
for the first quarter of 2007 from $109.1 million for the first quarter of
2006. This decrease was primarily attributable to lower commissions and
decreased aftermarket subsidies, as the company continued to reduce
manufacturing and chip set costs, offset by increased OEM hardware
subsidies due to higher production volume.
SAC per gross subscriber addition decreased 8% from $113 for the first
quarter of 2006 to $104 for the first quarter of 2007 primarily due to
lower average commission rates and decreased average subsidy rates as the
company continued to reduce manufacturing and chipset costs.
General and administrative expenses increased $6.0 million to $23.4
million for the first quarter of 2007 from $17.4 million for the first
quarter of 2006. The increase was primarily the result of overhead
expansion to support the growth of the business.
For the first quarter of 2006, the company recorded $4.4 million for
its share of SIRIUS Canada Inc.'s net loss.
SIRIUS reported a net loss of ($144.7) million, or ($0.10) per share,
for the first quarter of 2007, including a ($0.02) per share impact from
stock- based compensation, compared to a net loss of ($458.5) million, or
($0.33) per share, in the year-ago quarter, including a ($0.20) per share
impact from stock-based compensation. The adjusted net loss per share, or
net loss per share excluding stock-based compensation, was ($0.08) in the
first quarter of 2007 as compared to an adjusted net loss per share of
($0.13) in the first quarter of 2006 (refer to the reconciliation table of
net loss per share to adjusted net loss per share).
PENDING MERGER WITH XM
On February 19, 2007, SIRIUS and XM Satellite Radio announced a
definitive agreement under which the companies will be combined in a
tax-free, all-stock merger of equals. XM stockholders will receive 4.6
shares of SIRIUS common stock for each share of XM they own. XM and SIRIUS
stockholders will each own approximately 50 percent of the combined
company.
The transaction is subject to approval by both companies' stockholders,
the satisfaction of customary closing conditions and regulatory review and
approvals, including antitrust agencies and the FCC. The companies expect
the transaction to be completed by the end of 2007.
The companies filed their Merger Agreement with the Securities and
Exchange Commission on a Form 8-K on February 21, 2007.
This communication is being made in respect of the proposed business
combination involving SIRIUS and XM. In connection with the proposed
transaction, SIRIUS plans to file with the SEC a Registration Statement on
Form S-4 containing a Joint Proxy Statement/Prospectus and each of SIRIUS
and XM plan to file with the SEC other documents regarding the proposed
transaction. The definitive Joint Proxy Statement/Prospectus will be mailed
to stockholders of SIRIUS and XM. INVESTORS AND SECURITY HOLDERS OF SIRIUS
AND XM ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER
DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. Investors and security holders will be able to obtain
free copies of the Registration Statement and the Joint Proxy
Statement/Prospectus (when available) and other documents filed with the
SEC by SIRIUS and XM through the web site maintained by the SEC at
www.sec.gov. Free copies of the Registration Statement and the Joint Proxy
Statement/Prospectus (when available) and other documents filed with the
SEC can also be obtained by directing a request to Sirius Satellite Radio
Inc., 1221 Avenue of the Americas, New York, NY 10020, Attention: Investor
Relations or by directing a request to XM Satellite Radio Holdings Inc.,
1500 Eckington Place, NE, Washington, DC 20002, Attention: Investor
Relations.
SIRIUS, XM and their respective directors and executive officers and
other persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information regarding
SIRIUS' directors and executive officers is available in its Annual Report
on Form 10-K for the year ended December 31, 2006, which was filed with the
SEC on March 1, 2007, and its proxy statement for its 2006 annual meeting
of stockholders, which was filed with the SEC on April 23, 2007 and
information regarding XM's directors and executive officers is available in
XM's Annual Report on Form 10-K, for the year ended December 31, 2006 which
was filed with the SEC on March 1, 2007 and its proxy statement for its
2006 annual meeting of stockholders, which was filed with the SEC on April
17, 2007. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the Joint Proxy
Statement/Prospectus and other relevant materials to be filed with the SEC
when they become available.
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
SUBSCRIBER DATA, METRICS
AND OTHER NON-GAAP FINANCIAL MEASURES
(Dollars in thousands, unless otherwise stated)
(Unaudited)
Subscribers:
For the Three Months
Ended March 31,
2007 2006
Beginning subscribers 6,024,555 3,316,560
Net additions 556,490 761,187
Ending subscribers 6,581,045 4,077,747
Retail 4,234,804 3,000,321
OEM 2,323,683 1,049,036
Hertz 22,558 28,390
Ending subscribers 6,581,045 4,077,747
Retail 192,978 534,958
OEM 364,674 225,343
Hertz (1,162) 886
Net additions 556,490 761,187
Metrics:
For the Three Months
Ended March 31,
2007 2006
Gross subscriber additions 988,458 960,610
Deactivated subscribers 431,968 199,423
Average monthly churn (1)(6) 2.3 % 1.8 %
SAC per gross subscriber addition
(2)(6) $ 104 $ 113
Customer service and billing
expenses per average subscriber
(3)(6) $ 1.15 $ 1.55
Total revenue $ 204,037 $ 126,664
Free cash flow (4)(6) $ (146,715) $ (165,537)
Monthly ARPU:
Average monthly subscriber
revenue per subscriber
before effects of Hertz
subscribers and mail-in rebates $ 10.30 $ 10.70
Effects of Hertz subscribers 0.04 0.03
Effects of mail-in rebates (0.24) (0.58)
Average monthly subscriber
revenue per subscriber 10.10 10.15
Average monthly net advertising
revenue per subscriber 0.36 0.65
ARPU (5)(6) $ 10.46 $ 10.80
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
SUBSCRIBER DATA, METRICS
AND OTHER NON-GAAP FINANCIAL MEASURES - CONTINUED
(In thousands, except per share amounts)
(Unaudited)
Adjusted Loss from Operations:
For the Three Months
Ended March 31,
2007 2006
Net loss $ (144,745) $ (458,544)
Depreciation 26,786 24,933
Stock-based compensation 24,260 284,586
Other income and expense 9,145 11,622
Income tax expense 555 753
Adjusted loss from operations (7) $ (83,999) $ (136,650)
Adjusted Net Loss and Adjusted
Net Loss per Share:
For the Three Months
Ended March 31,
2007 2006
Net loss $ (144,745) $ (458,544)
Stock-based compensation 24,260 284,586
Adjusted net loss (8) $ (120,485) $ (173,958)
Net loss per share (basic and diluted) $ (0.10) $ (0.33)
Stock-based compensation 0.02 0.20
Adjusted net loss per share
(basic and diluted) (8) $ (0.08) $ (0.13)
Weighted average common shares
outstanding (basic and diluted) 1,457,011 1,386,982
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
SUBSCRIBER DATA, METRICS
AND OTHER NON-GAAP FINANCIAL MEASURES - CONTINUED
(Dollars in thousands, unless otherwise stated)
(Unaudited)
Condensed Consolidated Statements of
Operations:
For the Three Months
Ended March 31,
2007 2006
Total revenue $ 204,037 $ 126,664
Operating expenses:
Satellite and transmission 7,330 7,301
Programming and content 57,063 49,934
Revenue share and royalties 27,134 13,527
Customer service and billing 21,654 17,618
Cost of equipment 9,292 3,465
Sales and marketing 32,518 32,279
Subscriber acquisition costs 98,237 109,144
General and administrative 23,403 17,367
Engineering, design and development 11,405 12,679
Depreciation 26,786 24,933
Stock-based compensation 24,260 284,586
Total operating expenses 339,082 572,833
Loss from operations (135,045) (446,169)
Other income (expense) (9,145) (11,622)
Loss before income taxes (144,190) (457,791)
Income tax expense (555) (753)
Net loss $ (144,745) $ (458,544)
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
For the Three Months
Ended March 31,
2007 2006
Revenue:
Subscriber revenue, including effects
of mail-in rebates $ 190,796 $ 115,181
Advertising revenue, net of agency fees 6,721 7,338
Equipment revenue 4,671 3,692
Other revenue 1,849 453
Total revenue 204,037 126,664
Operating expenses (excludes depreciation
shown separately below) (1):
Cost of services:
Satellite and transmission 7,986 8,203
Programming and content 59,998 299,734
Revenue share and royalties 27,134 13,527
Customer service and billing 21,853 17,862
Cost of equipment 9,292 3,465
Sales and marketing 38,162 34,481
Subscriber acquisition costs 100,117 119,043
General and administrative 35,343 31,873
Engineering, design and development 12,411 19,712
Depreciation 26,786 24,933
Total operating expenses 339,082 572,833
Loss from operations (135,045) (446,169)
Other income (expense):
Interest and investment income 6,042 9,937
Interest expense, net of amounts
capitalized (15,192) (17,124)
Equity in net loss of affiliate - (4,445)
Other income 5 10
Total other income (expense) (9,145) (11,622)
Loss before income taxes (144,190) (457,791)
Income tax expense (555) (753)
Net loss $ (144,745) $ (458,544)
Net loss per share (basic and diluted) $ (0.10) $ (0.33)
Weighted average common shares outstanding
(basic and diluted) 1,457,011 1,386,982
(1) Amounts related to stock-based compensation included in other
operating expenses were as follows:
Satellite and transmission $ 656 $ 902
Programming and content 2,935 249,800
Customer service and billing 199 244
Sales and marketing 5,644 2,202
Subscriber acquisition costs 1,880 9,899
General and administrative 11,940 14,506
Engineering, design and development 1,006 7,033
Total stock-based compensation $ 24,260 $ 284,586
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
BALANCE SHEET DATA
(In thousands)
As of
March 31, December 31,
2007 2006
(Unaudited)
Cash, cash equivalents and
marketable securities $ 264,122 $ 408,921
Restricted investments 77,850 77,850
Working capital (270,900) (257,799)
Total assets 1,506,147 1,658,528
Long-term debt 1,067,339 1,068,249
Total liabilities 1,928,057 2,047,599
Accumulated deficit (3,978,465) (3,833,720)
Stockholders' deficit (421,910) (389,071)
SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
For the Three Months Ended
March 31,
2007 2006
Cash flows from operating
activities:
Net loss $ (144,745) $ (458,544)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 26,786 24,933
Non-cash interest expense 754 761
Provision for doubtful accounts 2,088 1,777
Non-cash equity in net loss of affiliate - 4,445
(Gain) loss on disposal of assets (4) 221
Stock-based compensation 24,260 284,586
Deferred income taxes 555 753
Changes in operating assets and liabilities:
Accounts receivable 6,639 9,952
Inventory (473) (1,198)
Receivables from distribution partners (7,569) (8,687)
Prepaid expenses and other current assets (9,173) (13,071)
Other long-term assets (2,924) 579
Accounts payable and accrued expenses (47,811) (45,220)
Accrued interest (11,763) (10,460)
Deferred revenue 21,731 44,458
Other long-term liabilities 7,702 7,543
Net cash used in operating activities (133,947) (157,172)
Cash flows from investing activities:
Additions to property and equipment (12,458) (5,496)
Sales of property and equipment 96 52
Purchases of restricted and other investments (310) (2,869)
Purchases of available-for-sale securities - (71,600)
Sales of available-for-sale securities 10,850 104,450
Net cash (used in) provided
by investing activities (1,822) 24,537
Cash flows from financing activities:
Proceeds from exercise of stock options 1,510 1,459
Net cash provided by financing activities 1,510 1,459
Net decrease in cash and cash equivalents (134,259) (131,176)
Cash and cash equivalents at the beginning
of period 393,421 762,007
Cash and cash equivalents at the end of
period $ 259,162 $ 630,831
FOOTNOTES TO PRESS RELEASE AND TABLES FOR NON-GAAP FINANCIAL MEASURES
This press release, including the selected financial information above,
includes the following non-GAAP financial measures: average monthly churn;
SAC per gross subscriber addition; customer service and billing expenses
per average subscriber; free cash flow; average monthly revenue per
subscriber, or ARPU; adjusted loss from operations; adjusted net loss; and
adjusted net loss per share. The definitions and usefulness of such
non-GAAP financial measures are as follows (dollars in thousands, unless
otherwise stated):
(1) SIRIUS defines average monthly churn as the number of deactivated
subscribers divided by average quarterly subscribers.
(2) SIRIUS defines SAC per gross subscriber addition as subscriber
acquisition costs, excluding stock-based compensation, and margins
from the direct sale of SIRIUS radios and accessories divided by the
number of gross subscriber additions for the period. SAC per gross
subscriber addition is calculated as follows:
For the Three Months
Ended March 31,
2007 2006
Subscriber acquisition costs $ 100,117 $ 119,043
Less: stock-based compensation (1,880) (9,899)
Add: margin from direct sale of
SIRIUS radios and accessories 4,621 (227)
SAC $ 102,858 $ 108,917
Gross subscriber additions 988,458 960,610
SAC per gross subscriber $ 104 $ 113
(3) SIRIUS defines customer service and billing expenses per average
subscriber as total customer service and billing expenses, excluding
stock-based compensation, divided by the daily weighted average number
of subscribers for the period. Customer service and billing expenses
per average subscriber is calculated as follows:
For the Three Months
Ended March 31,
2007 2006
Customer service and billing
expenses $ 21,853 $ 17,862
Less: stock-based compensation (199) (244)
Customer service and billing
expenses, as adjusted $ 21,654 $ 17,618
Daily weighted average number
of subscribers 6,295,282 3,782,543
Customer service and billing
expenses, as adjusted, per
average subscriber $ 1.15 $ 1.55
(4) SIRIUS defines free cash flow as cash flow from operating activities,
capital expenditures and restricted and other investment activity.
Free cash flow is calculated as follows:
For the Three Months
Ended March 31,
2007 2006
Net cash used in operating activities $ (133,947) $ (157,172)
Additions to property and equipment (12,458) (5,496)
Restricted and other investment
activity (310) (2,869)
Free cash flow $ (146,715) $ (165,537)
(5) SIRIUS defines ARPU as the total earned subscriber revenue and net
advertising revenue divided by the daily weighted average number of
subscribers for the period. ARPU is calculated as follows:
For the Three Months
Ended March 31,
2007 2006
Subscriber revenue $ 190,796 $ 115,181
Net advertising revenue 6,721 7,338
Total subscriber and net
advertising revenue $ 197,517 $ 122,519
Daily weighted average number
of subscribers 6,295,282 3,782,543
ARPU $ 10.46 $ 10.80
(6) SIRIUS believes average monthly churn; SAC per gross subscriber
addition; customer service and billing expenses per average
subscriber; free cash flow; and ARPU provide meaningful information
regarding operating performance and liquidity and are used for
internal management purposes; when publicly providing the business
outlook; as a means to evaluate period-to-period comparisons; and to
compare the company's performance to that of its competitors. SIRIUS
also believes that investors use current and projected metrics to
monitor performance of the business and make investment decisions.
SIRIUS believes the exclusion of stock-based compensation expense in
the calculations of SAC per gross subscriber addition and 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 SIRIUS common stock, the effect of which is
unrelated to the operational conditions that give rise to variations
in the components of subscriber acquisition costs and customer service
and billing expenses. Specifically, the exclusion of stock-based
compensation expense in the calculation of SAC per gross subscriber
addition is critical in being able to understand the economic impact
of the direct costs incurred to acquire a subscriber and the effect
over time as economies of scale are reached.
These non-GAAP financial measures are used in addition to and in
conjunction with results presented in accordance with GAAP. These non-
GAAP financial measures may be susceptible to varying calculations;
may not be comparable to other similarly titled measures of other
companies; and should not be considered in isolation for, or superior
to measures of financial performance prepared in accordance with GAAP.
(7) SIRIUS refers to net loss before taxes; other income (expense) -
including interest and investment income, interest expense, loss from
redemption of debt and equity in net loss of affiliate; depreciation;
impairment charges; and stock-based compensation expense as adjusted
loss from operations. Adjusted loss from operations is not a measure
of financial performance under GAAP. The company believes adjusted
loss from operations is a useful measure of its operating performance.
The company uses adjusted loss from operations for budgetary and
planning purposes; to assess the relative profitability and on-going
performance of consolidated operations; to compare performance from
period to period; and to compare performance to that of its
competitors. The company also believes adjusted loss from operations
is useful to investors to compare operating performance to the
performance of other communications, entertainment and media
companies. The company believes that investors use current and
projected adjusted loss from operations to estimate the current or
prospective enterprise value and make investment decisions.
Because the company funds and builds-out its satellite radio system
through the periodic raising and expenditure of large amounts of
capital, results of operations reflect significant charges for
interest and depreciation expense. The company believes adjusted loss
from operations provides useful information about the operating
performance of the business apart from the costs associated with the
capital structure and physical plant. The exclusion of interest
expense and depreciation is useful given fluctuations in interest
rates and significant variation in depreciation expense that can
result from the amount and timing of capital expenditures and
potential variations in estimated useful lives, all of which can vary
widely across different industries or among companies within the same
industry. The company believes the exclusion of taxes is appropriate
for comparability purposes as the tax positions of companies can vary
because of their differing abilities to take advantage of tax benefits
and because of the tax policies of the various jurisdictions in which
they operate. The company also believes the exclusion of stock-based
compensation expense is useful given the significant variation in
expense that can result from changes in the fair market value of the
company's common stock. Finally, the company believes that the
exclusion of equity in net loss of affiliate (SIRIUS Canada, Inc.) is
useful to assess the performance of its core consolidated operations
in the continental United States. To compensate for the exclusion of
taxes, other income (expense), depreciation, impairment charges and
stock-based compensation expense, the company separately measures and
budgets for these items.
There are material limitations associated with the use of adjusted
loss from operations in evaluating the company compared with net loss,
which reflects overall financial performance, including the effects of
taxes, other income (expense), depreciation, impairment charges and
stock-based compensation expense. The company uses adjusted loss from
operations to supplement GAAP results to provide a more complete
understanding of the factors and trends affecting the business than
GAAP results alone. Investors that wish to compare and evaluate the
operating results after giving effect for these costs, should refer to
net loss as disclosed in the unaudited consolidated statements of
operations. Since adjusted loss from operations is a non-GAAP
financial measure, the calculation of adjusted loss from operations
may be susceptible to varying calculations; may not be comparable to
other similarly titled measures of other companies; and should not be
considered in isolation, as a substitute for, or superior to measures
of financial performance in accordance with GAAP.
(8) SIRIUS refers to adjusted net loss and adjusted net loss per share as
net loss per share excluding impairment charges and stock-based
compensation expense. Adjusted net loss and adjusted net loss per
share are not measures of financial performance under GAAP. The
company believes adjusted net loss and adjusted net loss per share are
useful to investors to compare its operating performance to the
performance of other communications, entertainment and media
companies. The company believes the exclusion of impairment charges is
appropriate for comparability purposes as the existence, amount and
timing of impairment charges can vary from period to period and can
vary widely across different industries or among companies within the
same industry. The company also believes the exclusion of stock-based
compensation expense is useful given the significant variation in
expense that can result from changes in the fair market value of the
company's common stock.
There are material limitations associated with the use of adjusted net
loss and adjusted net loss per share in evaluating the company
compared with net loss and net loss per share, which reflects overall
financial performance, including the effects of impairment charges and
stock-based compensation expense. The company uses adjusted net loss
and adjusted net loss per share to supplement GAAP results to provide
a more complete understanding of the factors and trends affecting the
business than GAAP results alone. Investors that wish to compare and
evaluate the operating results after giving effect for these costs,
should refer to net loss and net loss per share as disclosed in the
unaudited consolidated financial statements of operations. Since
adjusted net loss and adjusted net loss per share are non-GAAP
financial measures, the calculation of adjusted net loss and adjusted
net loss per share 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.
About SIRIUS
SIRIUS, "The Best Radio on Radio," delivers more than 130 channels of
the best programming in all of radio. SIRIUS is the original and only home
of 100% commercial free music channels in satellite radio, offering 69
music channels. SIRIUS also delivers 65 channels of sports, news, talk,
entertainment, traffic, weather and data. SIRIUS is the Official Satellite
Radio Partner of the NFL, NASCAR, NBA and NHL, and broadcasts live play-by-
play games of the NFL, NBA and NHL, as well as live NASCAR races. All
SIRIUS programming is available for a monthly subscription fee of only
$12.95.
SIRIUS Internet Radio (SIR) is a CD-quality, Internet-only version of
the SIRIUS radio service, without the use of a radio, for the monthly
subscription fee of $12.95. SIR delivers more than 75 channels of talk,
entertainment, sports, and 100% commercial free music.
SIRIUS products for the car, truck, home, RV and boat are available in
more than 25,000 retail locations, including Best Buy, Circuit City,
Crutchfield, Costco, Target, Wal-Mart, Sam's Club, RadioShack and at
shop.sirius.com.
SIRIUS radios are offered in vehicles from Audi, Bentley, BMW,
Chrysler, Dodge, Ford, Infiniti, Jaguar, Jeep(R), Land Rover, Lexus,
Lincoln, Mercury, Maybach, Mazda, Mercedes-Benz, MINI, Mitsubishi, Nissan,
Rolls Royce, Scion, Toyota, Volkswagen, and Volvo. Hertz also offers SIRIUS
in its rental cars at major locations around the country.
Click on www.sirius.com to listen to SIRIUS live, or to purchase a
SIRIUS radio and subscription.
Any statements that express, or involve discussions as to,
expectations, beliefs, plans, objectives, assumptions, future events or
performance with respect to SIRIUS Satellite Radio Inc. are not historical
facts and may be forward-looking and, accordingly, such statements involve
estimates, assumptions and uncertainties which could cause actual results
to differ materially from those expressed in any forward-looking
statements. Accordingly, any such statements are qualified in their
entirety by reference to the factors discussed in our Annual Report on Form
10-K for the year ended December 31, 2006 filed with the Securities and
Exchange Commission. Among the key factors that have a direct bearing on
our operational results are: our pending merger with XM Satellite Radio
Holdings, Inc. ("XM"), including related uncertainties and risks and the
impact on our business if the merger is not completed; any events which
affect the useful life of our satellites; our dependence upon third
parties, including manufacturers of SIRIUS radios, retailers, automakers
and programming providers; and our competitive position versus other audio
entertainment providers.
E-SIRI
Contact Information for Investors and Financial Media:
Paul Blalock
SIRIUS
212.584.5174
pblalock@siriusradio.com
Hooper Stevens
SIRIUS
212.901.6718
hstevens@siriusradio.com
SOURCE SIRIUS Satellite Radio