SiriusXM Financials Include 'Record Revenue,' But Net Down 16% In Q3

Q3 Financials

SIRIUSXM RADIO has announced third-quarter 2013 financial and operating results, including record revenue of $962 million, up 11% from the Q3 2012 revenue of $867 million.  Net income for the third quarter of 2013 and 2012 was $63 million and $75 million, respectively, including losses on extinguishment of debt of $108 million and $107 million, respectively.  Earnings per fully-diluted share were $0.01 each in the third quarter of 2013 and 2012.

Income before income taxes was $124 million in the third quarter 2013, an increase of 128% from $54 million in the third quarter of 2012.  Adjusted EBITDA for the third quarter of 2013 reached a record $296 million, up 21% from $245 million in the third quarter of 2012.

"SIRIUSXM had a great quarter, with the 513,000 net subscriber additions and the 373,000 self-pay net additions setting post-merger records for the third quarter.  We also saw double-digit growth in revenue for the seventh consecutive quarter, a new quarterly record for adjusted EBITDA and adjusted EBITDA margin, and significant growth in free cash flow.  With continued growth in new automobile sales and an increasing number of existing self-pay subscribers selling their cars and rotating back into our trial funnel, we are increasing our guidance for net subscriber additions and reducing our guidance for self-pay subscriber additions by equal amounts. We are also pleased to increase revenue guidance for 2013 and introduce new guidance for continued growth in 2014 in both revenue and adjusted EBITDA," noted CEO JIM MEYER.

"We are proud of all we accomplished in the third quarter: strong operating results, significant improvements in our balance sheet, renewals of important long-term programming contracts and the announced acquisition of the connected vehicle unit of AGERO," added MEYER.

Additional highlights of the third quarter include:

• Subscribers Reach Approximately 25.6 million.  Net subscriber additions in the quarter were 513,000, up from 446,000 in the third quarter of 2012.  The total paid subscriber base reached a record 25.6 million, up 9% from the prior-year period.  Self-pay net subscriber additions were 373,000, while the self-pay subscriber base reached a record high of 20.7 million, up 9% from the prior year period. Total paid and unpaid trials grew by 247,000 from the second quarter of 2013 to 6.9 million.

• Adjusted EBITDA and Adjusted EBITDA Margin Achieve New Record Highs.  Adjusted EBITDA climbed 21% from last year's third quarter to a record quarterly figure of $296 million, and those results were accompanied by a record adjusted EBITDA margin of nearly 31%.

• Free Cash Flow Climbs 26% in the Third Quarter.  Free cash flow in the third quarter of 2013 was $245 million, up 26% from $195 million in the third quarter of 2012. Free cash flow per fully-diluted share was 3.9 cents in the third quarter, up 31% from the third quarter of 2012.  For the first nine months of the year, free cash flow climbed 42% to $624 million, and free cash flow per fully-diluted share was 9.7 cents, an increase of 51% over the same period in 2012.

"We have taken significant steps over the past year to improve our balance sheet, lowering our average cost of debt from 9.2% last summer to just 5.5% following the redemption of the 7.625% Senior Notes due 2018.  The new debt we have issued gives our Company greater flexibility to pursue capital returns and other strategic opportunities," said EVP/CFO DAVID FREAR.

"During the third quarter, we repurchased approximately 124 million shares of our common stock for $459 million, bringing our year-to-date purchases to approximately 477 million shares for approximately $1.6 billion.  We have approximately $2.4 billion remaining under our recently increased share repurchase authorization, and we anticipate using $500 million of this authorization to repurchase shares directly from LIBERTY MEDIA in three installments beginning next month.  At the end of the third quarter, and pro forma for the announced redemption of the 7.625% Senior Notes due 2018, our outstanding debt was a very conservative 3.0x trailing adjusted EBITDA," added FREAR.

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