Investor Relations

SiriusXM Reports 2012 Results

- Subscribers Grow to a Record 23.9 Million
- Record Revenue of $3.4 Billion, Up 13%
- Net Income of $3.5 Billion Includes an Income Tax Benefit of $3.0 Billion
- Adjusted EBITDA Reaches a Record $920 Million, Up 26%
- Free Cash Flow Grows 71% to a Record $709 Million

NEW YORK, Feb. 5, 2013 /PRNewswire/ -- Sirius XM Radio (NASDAQ: SIRI) today announced fourth quarter and full year 2012 financial and operating results, including 2012 revenue of $3.4 billion, up 13% from 2011 revenue of $3.0 billion.  Net income for 2012 and 2011 was $3.5 billion and $427 million, respectively, or $0.51 and $0.07 per diluted share, respectively.  Net income for 2012 included a $3.0 billion income tax benefit and $133 million loss on extinguishment of debt.  Adjusted EBITDA in 2012 was $920 million, up 26% from $731 million in 2011.

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"Thanks to the outstanding team at SiriusXM, we capped a great 2012 with a strong fourth quarter, adding more than 500,000 net new subscribers and attaining outstanding revenue, adjusted EBITDA, and free cash flow.  SiriusXM also returned capital to shareholders for the first time in the history of satellite radio through a $327 million special cash dividend in December.  We are confident in our guidance for growth in 2013 and continue to be sharply focused on enhancing shareholder value, including through our recently announced common stock repurchase program that we are initiating this year," said Jim Meyer, Chief Executive Officer, SiriusXM.

"We continue to broaden our Internet capabilities to expand the user experience and strengthen our in-vehicle technologies.  We are thrilled to announce that our personalized radio feature, MySXM, is now in public beta testing and will be available to our Internet subscribers in the near future.  We are committed to ensuring SiriusXM's long-term leadership in audio and data services, particularly in vehicles, and we will do that by continuing to innovate and improve our technology, programming, and customer care," noted Meyer.

Additional 2012 highlights include:

  • Record post-merger subscriber growth.  Net subscriber additions of 2.0 million in 2012 were higher than in any year since 2007, before the 2008 merger of Sirius and XM. Self-pay net subscriber additions improved by 36% year-over-year to nearly 1.7 million, resulting in an all-time high self-pay subscriber base of nearly 19.6 million.  The total paid subscriber base rose to a record high 23.9 million. Total paid and unpaid trials were 6.1 million at year-end 2012.
  • Churn and conversion remains stable.  Self-pay monthly churn was 1.9% in 2012, unchanged from 2011.  New vehicle consumer conversion rate was 45% in 2012, also unchanged from 2011.
  • Free cash flow grows to record level.  Free cash flow was $709 million in 2012, an increase of 71% from $416 million in 2011.  This figure represents the highest annual free cash flow attained in the history of the Company.

FOURTH QUARTER 2012 HIGHLIGHTS

Revenue in the fourth quarter of 2012 was up 14% to $892 million from $784 million in the fourth quarter of 2011. Net income for the fourth quarters of 2012 and 2011 was $156 million and $71 million, respectively, or $0.02 and $0.01 per diluted share, respectively. Adjusted EBITDA was $230 million for the fourth quarter of 2012, up 38%.

Additional fourth quarter 2012 highlights include:

  • Ramping self-pay subscriber growth.  Self-pay net subscriber additions improved by 41% to approximately 529,000 in the fourth quarter of 2012 from approximately 374,000 in the fourth quarter of 2011.
  • Self-pay churn improves.  Self-pay monthly churn was 1.8% in the fourth quarter of 2012, an improvement from 1.9% in the fourth quarter of 2011 and 2.0% in the third quarter of 2012.  New vehicle consumer conversion rate was 44% in the fourth quarter of 2012, unchanged from the fourth quarter of 2011.
  • Substantial free cash flow improvement.  Free cash flow grew by 40% to $269 million in the fourth quarter of 2012, a record amount for a single quarter, from $192 million in the fourth quarter of 2011.

"In 2012, we took significant steps to strengthen SiriusXM's balance sheet.  We paid down more than $1 billion of short maturity, high-coupon debt and replaced it with $400 million of 10 year, 5.25% debt and a $1.25 billion undrawn revolving credit facility.  We ended the year with more than $520 million of cash after paying a special cash dividend in December that totaled $327 million.  With debt to adjusted EBITDA falling from 4.1x at December 2011 to under 2.7x at December 2012, we are below our leverage target and have ample liquidity to pursue strategic opportunities and return capital to stockholders through our $2 billion stock buyback program," remarked David Frear, SiriusXM's Executive Vice President and Chief Financial Officer.

2013 GUIDANCE

The Company affirmed its 2013 subscriber, revenue, adjusted EBITDA and free cash flow guidance:

  • Self-pay net subscriber additions of approximately 1.6 million,
  • Total net subscriber additions of approximately 1.4 million,
  • Revenue of over $3.7 billion,
  • Adjusted EBITDA of over $1.1 billion, and
  • Free cash flow approaching $900 million.

STOCK REPURCHASE PROGRAM

As SiriusXM commences its previously announced $2 billion share repurchase program, the Company expects to repurchase shares of common stock from time to time on the open market and in privately negotiated transactions.  Liberty Media Corporation, the beneficial owner of approximately 50.2% of the Company's stock, is no longer required to participate in the share repurchase program on a pro rata basis and has indicated it may or may not do so in the future.

2012 RESULTS











SIRIUS XM RADIO INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME





















For the Three Months Ended December 31,


For the Twelve Months Ended December 31,


(in thousands, except per share data)

2012


2011


2012


2011



(Unaudited)


(Unaudited)






Revenue:









Subscriber revenue

$           774,466


$           672,498


$      2,962,665


$       2,595,414


Advertising revenue, net of agency fees

22,438


20,077


82,320


73,672


Equipment revenue

22,273


22,658


73,456


71,051


Other revenue

73,238


68,505


283,599


274,387


Total revenue

892,415


783,738


3,402,040


3,014,524


Operating expenses:









Cost of services:









Revenue share and royalties

141,641


130,436


551,012


471,149


Programming and content

73,795


70,367


278,997


281,234


Customer service and billing

82,346


67,052


294,980


259,719


Satellite and transmission

18,635


18,663


72,615


75,902


Cost of equipment

12,465


13,201


31,766


33,095


Subscriber acquisition costs

126,683


116,771


474,697


434,482


Sales and marketing

72,446


68,302


248,905


222,773


Engineering, design and development

16,374


14,186


48,843


53,435


General and administrative

68,120


63,270


261,905


238,738


Depreciation and amortization

66,814


67,015


266,295


267,880


Total operating expenses

679,319


629,263


2,530,015


2,338,407


Income from operations

213,096