Investor Relations

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

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.

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"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:

  • Record 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.
  • Churn 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.
  • Free 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:

  • Net subscriber growth approaching 1.8 million,
  • Revenue approaching $3.4 billion,
  • Adjusted EBITDA of approximately $900 million, and
  • Free 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 September 30,


For the Nine Months Ended September 30,

(in thousands, except per share data)

2012


2011


2012


2011

Revenue:








Subscriber revenue

$    757,672


$    660,837


$   2,188,199


$   1,922,917

Advertising revenue, net of agency fees

20,426


18,810


59,881


53,595

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 royalties

141,834


117,043


409,371


340,713

Programming and content

69,938


70,509


205,203


210,867

Customer service and billing

77,768


64,239


212,635


192,667

Satellite and transmission

18,319


19,681


53,980


57,238

Cost of equipment

6,345


5,888


19,301


19,894

Subscriber acquisition costs

112,418


107,279


348,014


317,711

Sales and marketing

60,676


55,210


176,457


154,471

Engineering, design and development

13,507


14,175


32,468


39,249

General and administrative

68,235


58,635


193,786


175,469

Depreciation and amortization

66,571


65,403


199,481


200,865

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 amounts capitalized

(70,035)


(75,316)


(219,777)


(229,730)

Loss on extinguishment of debt and credit facilities, net

(107,105)


-


(132,726)


(7,206)

Interest and investment (loss) income

(321)


292


(3,192)


78,590

Other income (loss)