
Exhibit 99.1


SIRIUS XM RADIO REPORTS SECOND QUARTER 2010 RESULTS

•	Strong Double-Digit Revenue Growth Year Over Year
•	Adjusted EBITDA of $154 million, Up 17% Year Over Year
•	Company Raises Financial Guidance

NEW YORK – August 4, 2010 – SIRIUS XM Radio (NASDAQ: SIRI) today announced second quarter 2010 financial and operating results, including:


	•	$705.6 million of adjusted revenue, up 16% over second quarter 2009 adjusted revenue of $607.8 million; and
	•	$154.3 million in second quarter 2010 adjusted EBITDA, an increase of 17% over second quarter 2009 adjusted EBITDA of $132.2 million.

The discussion of adjusted operating results excludes the effects of stock-based compensation and certain purchase price accounting adjustments. Financial measures and metrics previously reported as “pro forma” have been renamed “adjusted.”

“The sharp subscriber growth and double-digit increase in adjusted revenue and adjusted EBITDA show that we continued to execute on our business plan during the second quarter,” said Mel Karmazin, Chief Executive Officer, SIRIUS XM. “Compared to the year ago quarter, gross additions increased by 46%, deactivations declined by 8%, and customers paid us on average 11% more each month – clearly showing just how much subscribers love our service. Free cash flow in the second quarter 2010 was $108.3 million compared to $12.7 million in the second quarter of 2009. Our business has improved substantially in the past year, and we look forward to a strong second half and 2011.”

SIRIUS XM ended second quarter 2010 with a record-high 19,527,448 subscribers, an increase of more than 1.1 million subscribers compared to the end of second quarter 2009. Net subscriber additions of 583,249 in the second quarter of 2010 improved significantly from a net loss of 185,999 subscribers in the second quarter of 2009. In the second quarter 2010, average revenue per subscriber (ARPU) was $11.81, an increase of 11% from ARPU of $10.66 in the second quarter 2009. The company’s self-pay monthly customer churn rate was 1.8% in the second quarter 2010, as compared with self-pay monthly customer churn of 2.0% in the second quarter 2009.

In June, the company completed the redemption of all of the $114 million of XM’s outstanding 10% Senior PIK Secured Notes due 2011. “We will continue to examine deleveraging opportunities as they arise with the objective of decreasing interest expense and improving free cash flow.” said David Frear, SIRIUS XM’s Chief Financial Officer. “The combination of increased adjusted EBITDA and lower debt has improved our leverage ratio to approximately 4.6x, a historic low for our company.”

On a GAAP basis, net income (loss) attributable to common stockholders for the second quarter of 2010 and 2009 was $15.3 million and ($159.6) million, respectively, or $0.00 and ($0.04) per diluted share, on revenue of $699.8 million and $590.8 million, respectively. The company’s reported net income (loss) attributable to common stockholders included losses on extinguishment of debt in the second quarter of 2010 and 2009 of $31.9 million and $107.8 million, respectively. For the six months ended June 30, 2010 and 2009, net income (loss) attributable to common stockholders was $56.9 million and ($398.5) million, respectively, or $0.01 and ($0.11) per diluted share, on revenue of $1.36 billion and $1.18 billion, respectively.

INCREASED 2010 OUTLOOK

The company is increasing guidance for the full year 2010, projecting adjusted revenue will approach $2.8 billion and free cash flow will approach $150 million. SIRIUS XM continues to target approximately $575 million of adjusted EBITDA in 2010.

As previously announced, SIRIUS XM increased its guidance for net subscriber additions to approximately 1.1 million for the full year.

ADJUSTED RESULTS OF OPERATIONS

Subscriber Data.

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


	For the Three Months Ended June 30,						For the Six Months Ended June 30,

	2010			2009			2010			2009

Beginning subscribers		18,944,199			18,599,434			18,772,758			19,003,856
Gross subscriber additions		2,020,507			1,380,125			3,741,355			2,719,086
Deactivated subscribers		(1,437,258	)		(1,566,124	)		(2,986,665	)		(3,309,507	)

Net additions		583,249			(185,999	)		754,690			(590,421	)

Ending subscribers		19,527,448			18,413,435			19,527,448			18,413,435


Retail		7,277,446			8,235,761			7,277,446			8,235,761
OEM		12,100,665			10,081,514			12,100,665			10,081,514
Rental		149,337			96,160			149,337			96,160

Ending subscribers		19,527,448			18,413,435			19,527,448			18,413,435


Self-pay		16,077,714			15,421,414			16,077,714			15,421,414
Paid promotional		3,449,734			2,992,021			3,449,734			2,992,021

Ending subscribers		19,527,448			18,413,435			19,527,448			18,413,435


Retail		(142,757	)		(301,295	)		(448,304	)		(669,326	)
OEM		709,226			123,165			1,169,713			85,561
Rental		16,780			(7,869	)		33,281			(6,656	)

Net additions		583,249			(185,999	)		754,690			(590,421	)


Self-pay		304,043			(14,996	)		373,782			(128,243	)
Paid promotional		279,206			(171,003	)		380,908			(462,178	)

Net additions		583,249			(185,999	)		754,690			(590,421	)


Daily weighted average number of subscribers		19,139,926			18,438,473			18,962,580			18,575,219


Average self-pay monthly churn (1)		1.8	%		2.0	%		1.9	%		2.1	%


Conversion rate (2)		46.7	%		44.3	%		45.9	%		44.5	%



See accompanying footnotes.

Subscribers. The improvement in net additions for the three months ended June 30, 2010 was due to the 46% increase in gross subscriber additions, primarily resulting from an improvement in U.S. auto sales, and the 8% decline in deactivations resulting from improvements in the conversion rate in paid promotional trials and the average self-pay monthly churn.

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

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

Metrics.

The following table contains our key operating metrics based on our adjusted results of operations for the three and six months ended June 30, 2010 and 2009, respectively (in thousands, except for per subscriber amounts):


	Unaudited Adjusted

	For the Three Months Ended June 30,				For the Six Months Ended June 30,

	2010		2009		2010			2009


ARPU(3)	$	11.81	$	10.66	$	11.65		$	10.57
SAC, per gross subscriber addition (4)	$	59	$	57	$	59		$	59
Customer service and billing expenses, per average subscriber (5)	$	1.01	$	1.05	$	1.00		$	1.06
Free cash flow (6)	$	108,331	$	12,694	$	(18,872	)	$	9,048
Adjusted total revenue (8)	$	705,560	$	607,836	$	1,376,122		$	1,213,317
Adjusted EBITDA (7)	$	154,313	$	132,219	$	312,070		$	241,055



See accompanying footnotes.

ARPU increased in the three months ended June 30, 2010 primarily due to the inclusion of the U.S. Music Royalty Fee, increased revenues from the sale of “Best of” programming, rate increases on multi-subscription and internet packages, and increased net advertising revenue.

SAC Per Gross Subscriber Addition increased in the three months ended June 30, 2010 due to the 103% increase in OEM production with factory-installed satellite radios compared to the 46% increase in gross additions, partially offset by lower per radio subsidy rates for certain OEMs and growth in subscriber reactivations and royalties from satellite radio manufacturers.

Customer Service and Billing Expenses Per Average Subscriber decreased in the three months ended June 30, 2010 primarily due to a lower call center expense as a result of moving calls to lower cost locations.

Free Cash Flow increased in the three months ended June 30, 2010 principally as a result of improvements in our adjusted EBITDA as well as increases in trade payables related to subsidies and commissions associated with the increase in our subscriber base and growth in deferred revenue; partially offset by growth in receivables from subscribers, radio manufacturers and distributors and the payment of related party obligations and accrued interest. In addition, capital expenditures in the three months ended June 30, 2010 increased by $13.7 million compared to the three months ended June 30, 2009, primarily due to increased satellite and related launch vehicle spending.

Adjusted Total Revenue. Set forth below are our adjusted total revenue for the three and six months ended June 30, 2010 compared with the three and six months ended June 30, 2009. Our adjusted total revenue includes the recognition of deferred subscriber revenues acquired in the merger of SIRIUS and XM that are not recognized in our post-merger results under purchase price accounting and the elimination of the benefit in earnings from deferred revenue associated with our investment in Canadian Satellite Radio acquired in the merger.


	Unaudited Adjusted

	For the Three Months Ended June 30,				For the Six Months Ended June 30,

(in thousands)	2010		2009		2010		2009

Revenue:
Subscriber revenue, including effects of rebates	$	605,616	$	576,958	$	1,190,091	$	1,153,034
Advertising revenue, net of agency fees		15,797		12,564		30,323		24,869
Equipment revenue		18,520		10,928		32,802		20,837
Other revenue		65,627		7,386		122,906		14,577

Adjusted total revenue	$	705,560	$	607,836	$	1,376,122	$	1,213,317

For the three months ended June 30, 2010, 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 rate increases on multi-subscription and internet packages. The increase in advertising revenue was driven by improvements in the national market for advertising and increases in our share of the market. 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. Set forth below are our adjusted EBITDA for the three and six months ended June 30, 2010 compared with the three and six months ended June 30, 2009. Adjusted EBITDA is income (loss) from operations, excluding, if applicable: goodwill impairment; restructuring, impairments and related costs; depreciation and amortization; purchase price accounting adjustments and share-based payment expense.


	Unaudited Adjusted

	For the Three Months Ended June 30,				For the Six Months Ended June 30,

(in thousands)	2010		2009		2010		2009

Total revenue	$	705,560	$	607,836	$	1,376,122	$	1,213,317
Operating expenses:
Revenue share and royalties		134,318		117,671		257,857		238,932
Programming and content		83,931		87,707		174,402		184,386
Customer service and billing		57,763		58,054		113,340		117,723
Satellite and transmission		19,235		18,659		38,622		38,401
Cost of equipment		7,805		8,051		15,724		16,044
Subscriber acquisition costs		130,683		80,988		237,728		164,698
Sales and marketing		57,076		48,610		107,018		99,212
Engineering, design and development		9,635		10,123		19,462		18,535
General and administrative		50,801		45,754		99,899		94,331

Total operating expenses		551,247		475,617		1,064,052		972,262

Adjusted EBITDA	$	154,313	$	132,219	$	312,070	$	241,055

For the three months ended June 30, 2010, the increase in adjusted EBITDA was primarily due to an increase in revenues, the increase in our subscriber base and the inclusion of the U.S. Music Royalty Fee, as well as increased advertising and equipment revenue, rate increases on multi-subscription and internet packages, and an increase in the sale of “Best of” programming, partially offset by an increase in expenses, which was primarily driven by higher subscriber acquisition costs related to the 46% increase in gross additions, higher revenue share and royalties expenses associated with growth in revenues subject to revenue sharing and royalty arrangements and additional sales and marketing costs, primarily related to co-operative marketing.

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


	For the Three Months Ended June 30,						For the Six Months Ended June 30,

(in thousands, except per share data)	2010			2009			2010			2009


Revenue:
Subscriber revenue, including effects of rebates	$	601,630		$	561,763		$	1,181,139		$	1,121,151
Advertising revenue, net of agency fees		15,797			12,564			30,323			24,869
Equipment revenue		18,520			10,928			32,802			20,837
Other revenue		63,814			5,574			119,280			10,951

Total revenue		699,761			590,829			1,363,544			1,177,808
Operating expenses (depreciation and amortization shown separately below):
Cost of services:
Revenue share and royalties		107,901			95,831			206,085			196,297
Programming and content		72,019			72,102			150,452			152,511
Customer service and billing		58,414			58,833			114,625			119,041
Satellite and transmission		19,982			19,615			40,100			39,894
Cost of equipment		7,805			8,051			15,724			16,044
Subscriber acquisition costs		110,383			67,651			199,762			140,719
Sales and marketing		56,177			48,693			105,294			100,116
Engineering, design and development		11,247			11,944			22,684			21,723
General and administrative		59,166			66,716			116,746			126,031
Depreciation and amortization		69,230			77,158			139,495			159,524
Restructuring, impairments and related costs		1,803			27,000			1,803			27,614

Total operating expenses		574,127			553,594			1,112,770			1,099,514

Income from operations		125,634			37,235			250,774			78,294
Other income (expense):
Interest expense, net of amounts capitalized		(76,802	)		(98,080	)		(154,670	)		(166,058	)
Loss on extinguishment of debt and credit facilities, net		(31,871	)		(107,756	)		(34,437	)		(125,713	)
Interest and investment income (loss)		378			9,323			(2,892	)		2,157
Other (loss) income		(601	)		749			728			1,259

Total other expense		(108,896	)		(195,764	)		(191,271	)		(288,355	)

Income (loss) before income taxes		16,738			(158,529	)		59,503			(210,061	)
Income tax expense		(1,466	)		(1,115	)		(2,633	)		(2,229	)

Net income (loss)		15,272			(159,644	)		56,870			(212,290	)
Preferred stock beneficial conversion feature		—			—			—			(186,188	)

Net income (loss) attributable to common stockholders	$	15,272		$	(159,644	)	$	56,870		$	(398,478	)

Net income (loss) per common share:
Basic	$	0.00		$	(0.04	)	$	0.02		$	(0.11	)

Diluted	$	0.00		$	(0.04	)	$	0.01		$	(0.11	)

Weighted average common shares outstanding:
Basic		3,683,595			3,586,742			3,682,750			3,555,489

Diluted		6,363,955			3,586,742			6,357,507			3,555,489

SIRIUS XM RADIO INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS


	June 30, 2010			December 31, 2009

(in thousands, except share and per share data)	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	258,854		$	383,489
Accounts receivable, net		113,341			113,580
Receivables from distributors		83,208			48,738
Inventory, net		13,726			16,193
Prepaid expenses		193,440			100,273
Related party current assets		5,442			106,247
Deferred tax asset		77,570			72,640
Other current assets		14,591			18,620

Total current assets		760,172			859,780
Property and equipment, net		1,765,347			1,711,003
Long-term restricted investments		3,396			3,400
Deferred financing fees, net		59,224			66,407
Intangible assets, net		2,661,001			2,695,115
Goodwill		1,834,856			1,834,856
Related party long-term assets		28,416			111,767
Other long-term assets		88,520			39,878

Total assets	$	7,200,932		$	7,322,206

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	519,181		$	543,686
Accrued interest		68,541			74,566
Current portion of deferred revenue		1,169,090			1,083,430
Current portion of deferred credit on executory contracts		263,998			252,831
Current maturities of long-term debt		8,280			13,882
Related party current liabilities		12,781			108,246

Total current liabilities		2,041,871			2,076,641
Deferred revenue		275,212			255,149
Deferred credit on executory contracts		647,691			784,078
Long-term debt		2,662,144			2,799,702
Long-term related party debt		357,806			263,579
Deferred tax liability		947,468			940,182
Related party long-term liabilities		26,655			46,301
Other long-term liabilities		61,657			61,052

Total liabilities		7,020,504			7,226,684

Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.001; 50,000,000 authorized at June 30, 2010 and December 31, 2009:
Series A convertible preferred stock (liquidation preference of $51,370 at June 30, 2010 and December 31, 2009); 24,808,959 shares issued and outstanding at June 30, 2010 and December 31, 2009		25			25
Convertible perpetual preferred stock, series B (liquidation preference of $13 at June 30, 2010 and December 31, 2009); 12,500,000 shares issued and outstanding at June 30, 2010 and December 31, 2009		13			13
Convertible preferred stock, series C junior; no shares issued and outstanding at June 30, 2010 and December 31, 2009		—			—
Common stock, par value $0.001; 9,000,000,000 shares authorized at June 30, 2010 and December 31, 2009; 3,885,905,912 and 3,882,659,087 shares issued and outstanding at June 30, 2010 and December 31, 2009, respectively		3,885			3,882
Accumulated other comprehensive loss, net of tax		(5,987	)		(6,581	)
Additional paid-in capital		10,379,730			10,352,291
Accumulated deficit		(10,197,238	)		(10,254,108	)

Total stockholders’ equity		180,428			95,522

Total liabilities and stockholders’ equity	$	7,200,932		$	7,322,206

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


	For the Six Months Ended June 30,

(in thousands)	2010			2009

Cash flows from operating activities:
Net income (loss)	$	56,870		$	(212,290	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		139,495			159,524
Non-cash interest expense, net of amortization of premium		22,294			31,322
Provision for doubtful accounts		15,756			16,278
Restructuring, impairments and related costs		1,803			27,614
Amortization of deferred income related to equity method investment		(2,137	)		(1,388	)
Loss on extinguishment of debt and credit facilities, net		34,437			125,713
Loss on investments		6,065			6,353
Loss on disposal of assets		(18	)		—
Share-based payment expense		33,083			49,878
Deferred income taxes		2,633			2,229
Other non-cash purchase price adjustments		(120,706	)		(85,223	)
Changes in operating assets and liabilities:
Accounts receivable		(14,296	)		8,483
Receivables from distributors		(26,655	)		12,277
Inventory		2,467			(3,424	)
Related party assets		(701	)		11,629
Prepaid expenses and other current assets		10,245			24,052
Other long-term assets		10,947			34,476
Accounts payable and accrued expenses		(76,144	)		(106,041	)
Accrued interest		(4,796	)		997
Deferred revenue		105,004			22,504
Related party liabilities		(54,978	)		14,060
Other long-term liabilities		319			(2,164	)

Net cash provided by operating activities		140,987			136,859

Cash flows from investing activities:
Additions to property and equipment		(169,313	)		(127,811	)
Sale of restricted and other investments		9,454			—

Net cash used in investing activities		(159,859	)		(127,811	)

Cash flows from financing activities:
Preferred stock issuance, net of costs		—			(3,712	)
Long-term borrowings, net of costs		637,406			384,876
Related party long-term borrowings, net of costs		147,094			316,340
Payment of premiums on redemption of debt		(24,065	)		(16,572	)
Repayment of long-term borrowings		(810,977	)		(427,871	)
Repayment of related party long-term borrowings		(55,221	)		(100,867	)

Net cash (used in) provided by financing activities		(105,763	)		152,194

Net (decrease) increase in cash and cash equivalents		(124,635	)		161,242
Cash and cash equivalents at beginning of period		383,489			380,446

Cash and cash equivalents at end of period	$	258,854		$	541,688

Footnotes to Adjusted Results of Operations

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 self-pay subscriber balance for the quarter.

(2)	We measure the percentage of vehicle owners and lessees that receive our service and convert to self-paying 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 between three and twelve month trial subscriptions. 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. Based on our experience it may take up to 90 days after the trial service ends for vehicle owners and lessees to respond to our marketing communications and become self-paying subscribers.

(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 amounts recognized on account of the U.S. Music Royalty Fee since the third quarter of 2009. Purchase price accounting adjustments include the recognition of deferred subscriber revenues not recognized in purchase price accounting. ARPU is calculated as follows (in thousands, except for subscriber and per subscriber amounts):


	Unaudited

	For the Three Months Ended June 30,				For the Six Months Ended June 30,

	2010		2009		2010		2009

Subscriber revenue (GAAP)	$	601,630	$	561,763	$	1,181,139	$	1,121,151
Net advertising revenue (GAAP)		15,797		12,564		30,323		24,869
Other subscription-related revenue (GAAP)		56,694		—		104,641		—
Purchase price accounting adjustments		3,986		15,195		8,952		31,883

	$	678,107	$	589,522	$	1,325,055	$	1,177,903

Daily weighted average number of subscribers		19,139,926		18,438,473		18,962,580		18,575,219

ARPU	$	11.81	$	10.66	$	11.65	$	10.57

(4)

SAC, per gross subscriber addition is derived from subscriber acquisition costs and margins from the direct 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 include the elimination of the benefit of amortization of deferred credits on executory contracts recognized at the merger date attributable to third party arrangements with 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 June 30,						For the Six Months Ended June 30,

	2010			2009			2010			2009

Subscriber acquisition costs (GAAP)	$	110,383		$	67,651		$	199,762		$	140,719
Less: margin from direct sales of radios and accessories (GAAP)		(10,715	)		(2,877	)		(17,078	)		(4,793	)
Add: purchase price accounting adjustments		20,300			13,337			37,966			23,979

	$	119,968		$	78,111		$	220,650		$	159,905

Gross subscriber additions		2,020,507			1,380,125			3,741,355			2,719,086

SAC, per gross subscriber addition	$	59		$	57		$	59		$	59

(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, 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 include the elimination of the benefit associated with 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 June 30,						For the Six Months Ended June 30,

	2010			2009			2010			2009

Customer service and billing expenses (GAAP)	$	58,414		$	58,833		$	114,625		$	119,041
Less: share-based payment expense, net of purchase price accounting adjustments		(729	)		(905	)		(1,457	)		(1,561	)
Add: purchase price accounting adjustment		78			126			172			243

	$	57,763		$	58,054		$	113,340		$	117,723

Daily weighted average number of subscribers		19,139,926			18,438,473			18,962,580			18,575,219

Customer service and billing expenses, per average subscriber	$	1.01		$	1.05		$	1.00		$	1.06


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


	Unaudited

	For the Three Months Ended June 30,						For the Six Months Ended June 30,

	2010			2009			2010			2009

Net cash provided by operating activities	$	178,675		$	69,988		$	140,987		$	136,859
Additions to property and equipment		(70,348	)		(56,671	)		(169,313	)		(127,811	)
Merger related costs		—			(623	)		—			—
Restricted and other investment activity		4			—			9,454			—

Free cash flow	$	108,331		$	12,694		$	(18,872	)	$	9,048


(7)	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 Canadian Satellite Radio, (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 our operating performance. 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. 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 that investors use current and projected adjusted EBITDA to estimate our current or 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 adjusted results of operations reflect significant charges for depreciation expense. We believe adjusted EBITDA provides useful information about the operating performance of our business apart from the


	costs associated with our physical plant. 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 (see footnote 8 for reconciliation of the adjusted amounts to their respective GAAP amounts) (in thousands):


	Unaudited

	For the Three Months Ended June 30,						For the Six Months Ended June 30,

	2010			2009			2010			2009

Net income (loss) (GAAP):	$	15,272		$	(159,644	)	$	56,870		$	(212,290	)
Add back items excluded from Adjusted EBITDA:
Purchase price accounting adjustment		(59,058	)		(40,177	)		(114,889	)		(76,878	)
Depreciation and amortization		69,230			77,158			139,495			159,524
Restructuring, impairments and related costs		1,803			27,000			1,803			27,614
Share-based payment expense, net of purchase price accounting adjustments		16,704			31,003			34,887			52,501
Interest expense, net of amounts capitalized		76,802			98,080			154,670			166,058
Loss on extinguishment of debt and credit facilities, net		31,871			107,756			34,437			125,713
Interest and investment income (loss)		(378	)		(9,323	)		2,892			(2,157	)
Other (loss) income		601			(749	)		(728	)		(1,259	)
Income tax expense		1,466			1,115			2,633			2,229

Adjusted EBITDA	$	154,313		$	132,219		$	312,070		$	241,055


(8)	The following tables reconcile our adjusted results of operations to our actual results of operations:


	Unaudited For the Three Months Ended June 30, 2010

(in thousands)	As Reported		Purchase Price Accounting Adjustments			Allocation of Share-based Payment Expense			Adjusted


Revenue:
Subscriber revenue, including effects of rebates	$	601,630	$	3,986		$	—		$	605,616
Advertising revenue, net of agency fees		15,797		—			—			15,797
Equipment revenue		18,520		—			—			18,520
Other revenue		63,814		1,813			—			65,627

Total revenue		699,761		5,799			—			705,560
Operating expenses (depreciation and amortization shown separately below) (1)
Cost of services:
Revenue share and royalties		107,901		26,417			—			134,318
Programming and content		72,019		13,702			(1,790	)		83,931
Customer service and billing		58,414		78			(729	)		57,763
Satellite and transmission		19,982		303			(1,050	)		19,235
Cost of equipment		7,805		—			—			7,805
Subscriber acquisition costs		110,383		20,300			—			130,683
Sales and marketing		56,177		3,661			(2,762	)		57,076
Engineering, design and development		11,247		148			(1,760	)		9,635
General and administrative		59,166		248			(8,613	)		50,801
Depreciation and amortization (2)		69,230		—			—			69,230
Restructuring, impairments and related costs		1,803		—			—			1,803
Share-based payment expense		—		—			16,704			16,704

Total operating expenses		574,127		64,857			—			638,984

Income (loss) from operations	$	125,634	$	(59,058	)	$	—		$	66,576

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


Programming and content	$	1,662	$	128	$	—	$	1,790
Customer service and billing		651		78		—		729
Satellite and transmission		968		82		—		1,050
Sales and marketing		2,643		119		—		2,762
Engineering, design and development		1,612		148		—		1,760
General and administrative		8,365		248		—		8,613

Total share-based payment expense	$	15,901	$	803	$	—	$	16,704

(2) Purchase price accounting adjustments included in the tables above exclude the incremental depreciation and amortization associated with the $785 million stepped up basis in property, equipment and intangible assets as a result of the merger with XM. The increased depreciation and amortization for the three months ended June 30, 2010 was $17 million.


	Unaudited For the Three Months Ended June 30, 2009

(in thousands)	As Reported		Purchase Price Accounting Adjustments			Allocation of Share-based Payment Expense			Adjusted


Revenue:
Subscriber revenue, including effects of rebates	$	561,763	$	15,195		$	—		$	576,958
Advertising revenue, net of agency fees		12,564		—			—			12,564
Equipment revenue		10,928		—			—			10,928
Other revenue		5,574		1,812			—			7,386

Total revenue		590,829		17,007			—			607,836
Operating expenses (depreciation and amortization shown separately below) (1)
Cost of services:
Revenue share and royalties		95,831		21,840			—			117,671
Programming and content		72,102		17,701			(2,096	)		87,707
Customer service and billing		58,833		126			(905	)		58,054
Satellite and transmission		19,615		354			(1,310	)		18,659
Cost of equipment		8,051		—			—			8,051
Subscriber acquisition costs		67,651		13,337			—			80,988
Sales and marketing		48,693		3,173			(3,256	)		48,610
Engineering, design and development		11,944		247			(2,068	)		10,123
General and administrative		66,716		406			(21,368	)		45,754
Depreciation and amortization (2)		77,158		—			—			77,158
Restructuring, impairments and related costs		27,000		—			—			27,000
Share-based payment expense		—		—			31,003			31,003

Total operating expenses		553,594		57,184			—			610,778

Income (loss) from operations	$	37,235	$	(40,177	)	$	—		$	(2,942	)

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


Programming and content	$	1,891	$	205	$	—	$	2,096
Customer service and billing		779		126		—		905
Satellite and transmission		1,177		133		—		1,310
Sales and marketing		3,072		184		—		3,256
Engineering, design and development		1,821		247		—		2,068
General and administrative		20,961		407		—		21,368

Total share-based payment expense	$	29,701	$	1,302	$	—	$	31,003


	Unaudited For the Six Months Ended June 30, 2010

(in thousands)	As Reported		Purchase Price Accounting Adjustments			Allocation of Share-based Payment Expense			Adjusted


Revenue:
Subscriber revenue, including effects of rebates	$	1,181,139	$	8,952		$	—		$	1,190,091
Advertising revenue, net of agency fees		30,323		—			—			30,323
Equipment revenue		32,802		—			—			32,802
Other revenue		119,280		3,626			—			122,906

Total revenue		1,363,544		12,578			—			1,376,122
Operating expenses (depreciation and amortization shown separately below) (1)
Cost of services:
Revenue share and royalties		206,085		51,772			—			257,857
Programming and content		150,452		28,850			(4,900	)		174,402
Customer service and billing		114,625		172			(1,457	)		113,340
Satellite and transmission		40,100		626			(2,104	)		38,622
Cost of equipment		15,724		—			—			15,724
Subscriber acquisition costs		199,762		37,966			—			237,728
Sales and marketing		105,294		7,186			(5,462	)		107,018
Engineering, design and development		22,684		334			(3,556	)		19,462
General and administrative		116,746		561			(17,408	)		99,899
Depreciation and amortization (2)		139,495		—			—			139,495
Restructuring, impairments and related costs		1,803		—			—			1,803
Share-based payment expense		—		—			34,887			34,887

Total operating expenses		1,112,770		127,467			—			1,240,237

Income (loss) from operations	$	250,774	$	(114,889	)	$	—		$	135,885


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

Programming and content	$	4,612	$	288		$	—		$	4,900
Customer service and billing		1,285		172			—			1,457
Satellite and transmission		1,919		185			—			2,104
Sales and marketing		5,198		264			—			5,462
Engineering, design and development		3,222		334			—			3,556
General and administrative		16,847		561			—			17,408

Total share-based payment expense	$	33,083	$	1,804		$	—		$	34,887


	Unaudited For the Six Months Ended June 30, 2009

(in thousands)	As Reported		Purchase Price Accounting Adjustments			Allocation of Share-based Payment Expense			Adjusted


Revenue:
Subscriber revenue, including effects of rebates	$	1,121,151	$	31,883		$	—		$	1,153,034
Advertising revenue, net of agency fees		24,869		—			—			24,869
Equipment revenue		20,837		—			—			20,837
Other revenue		10,951		3,626			—			14,577

Total revenue		1,177,808		35,509			—			1,213,317
Operating expenses (depreciation and amortization shown separately below) (1)
Cost of services:
Revenue share and royalties		196,297		42,635			—			238,932
Programming and content		152,511		36,592			(4,717	)		184,386
Customer service and billing		119,041		243			(1,561	)		117,723
Satellite and transmission		39,894		681			(2,174	)		38,401
Cost of equipment		16,044		—			—			16,044
Subscriber acquisition costs		140,719		23,979			—			164,698
Sales and marketing		100,116		6,831			(7,735	)		99,212
Engineering, design and development		21,723		548			(3,736	)		18,535
General and administrative		126,031		878			(32,578	)		94,331
Depreciation and amortization (2)		159,524		—			—			159,524
Restructuring, impairments and related costs		27,614		—			—			27,614
Share-based payment expense		—		—			52,501			52,501

Total operating expenses		1,099,514		112,387			—			1,211,901

Income (loss) from operations	$	78,294	$	(76,878	)	$	—		$	1,416


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

Programming and content	$	4,381	$	336		$	—		$	4,717
Customer service and billing		1,318		243			—			1,561
Satellite and transmission		1,934		240			—			2,174
Sales and marketing		7,358		377			—			7,735
Engineering, design and development		3,188		548			—			3,736
General and administrative		31,699		879			—			32,578

Total share-based payment expense	$	49,878	$	2,623		$	—		$	52,501

###

About SIRIUS XM Radio

SIRIUS XM Radio is America’s satellite radio company delivering to subscribers commercial-free music channels, premier sports, news, talk, entertainment, and traffic and weather.

SIRIUS XM Radio has content relationships with an array of personalities and artists, including Howard Stern, Martha Stewart, Oprah Winfrey, Rosie O’Donnell, Jamie Foxx, Barbara Walters, Opie & Anthony, Bubba the Love Sponge®, Bob Edwards, Chris “Mad Dog” Russo, Jimmy Buffett, The Grateful Dead, Willie Nelson, Bob Dylan and Tom Petty. SIRIUS XM Radio is the leader in sports programming as the Official Satellite Radio Partner of the NFL, Major League Baseball®, NASCAR®, NBA, NHL®, and PGA TOUR® and major college sports.

SIRIUS XM Radio has arrangements with every major automaker. SIRIUS XM Radio products are available at shop.sirius.com and shop.xmradio.com, and at retail locations nationwide, including Best Buy, RadioShack, Wal-Mart and independent retailers.

SIRIUS XM Radio also offers SIRIUS Backseat TV, the first ever live in-vehicle rear seat entertainment featuring Nickelodeon, Disney Channel and Cartoon Network; XM NavTraffic® service for GPS navigation systems delivers real-time traffic information, including accidents and road construction, for more than 80 North American markets.

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 XM’s Annual Report on Form 10-K for the year ended December 31, 2009, 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