Thursday, January 04, 2007

Reader comments about CFBE

January 4, 2007

We got some e-mails regarding the explanations of CFBE and what Sirius and XM are doing along that track. Most people were glad to be aware of what the differences are, and glad to see both companies moving forward in the area of the financials. A few readers took exception to some of the article citing different numbers for debt of the respective companies.

The article was speaking about cash flow, and some aspects of it were in general terms that I could have perhaps been more specific about. One reader disagreed with Sirius having $500 million in debt and XM having $1 Billion in debt. The reader, Joel from New York, stated that Sirius was $1.1 billion in debt and XM $1.3 billion.

The aspect of the debt that I was speaking of was the debt that is not tied to convertibles. Sirius has $500 million in Senior Notes at 9.625% dues 2013. The balance of the debt is convertibles. Below is the outline for Sirius debt:

9.625% Senior Notes due 2013 - $ 500,000,000

3.25% Convertible Notes due 2011 with a conversion price of $5.30 - $230,000,000

2.5% Convertible Notes due 2009 with a conversion price of $4.41 - $300,000,000

3.5% Convertible Notes due 2008 with a conversion price of $1.38 - $52,185,000

8.75% Convertible Subordinated Notes due 2009 with a conversion price of $28.4625 - $1,744,000

Total long-term debt - $ 1,083,929,000

Total NON-CONVERTIBLE DEBT - $500,000,000

XM Satellite Radio

10% senior secured discount convertible notes due 2009 - $99,958,000 - Less: discount - ($18,089,000)

9.75% senior notes due 2014 - $600,000,000

Senior floating rate notes due 2013 - initial interest of 9.6% - $200,000,000

1.75% convertible senior notes due 2009 - $400,000,000

Mortgages - $39,016,000

Capital Leases - $36,435,000

Total Debt - $1,357,120,000

Less: current portion - $14,675,000

Long-term debt, net of current portion - $1,342,645,000

TOTAL NON-CONVERTIBLE DEBT - $875,000,000

My apologies for any confusion this may have caused. I could have been more specific regarding what debt I was referring to, and more accurate and detailed. I was speaking in general terms. Those invested in XM should look at the long term debt in the Q4 financials as there was some payment, and refinancing activity that took place during the quarter.

The point of the article was the difference between CFBE and Operational Cash Flow positive, not an analysis of debt types and terms, however, the receipt of a few e-mails prompted me to clarify the debt picture. As always, thank you for your input.

Labels: cfbe, sirius, xm