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

1/04/2007 11:14:00 PM

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Tuesday, January 02, 2007

Sirius Cash Flow Positive Along With Subs of Over 6 Million

January 2, 2007

The markets are closed, but that did not stop Sirius Satellite radio from announcing two important milestones.

Sirius announced subscribers of over 6,024,000 as well as the fact that they had a Cash Flow Positive quarter.

The 6 million subscribers comes in the middle range of the latest guidance Sirius had offered of between 5.9 million and 6.1 million. The numbers are in line with the initial 2006 guidance offered in January of 2006, and shy of the peak guidance of 6.3 million. Sirius had lowered guidance at the beginning of the month citing a weaker retail.

The bigger news comes in the form of reaching Cash Flow Positive for the quarter. This news followes a 3rd quarter in which Sirius announced narrower losses. Should positive trending continue in this sector, investors have a potential of seeing upward movement in the stock price.

Press Release

Source: SIRIUS Satellite Radio

SIRIUS Exceeds 6 Million Subscribers and Achieves First Cash Flow Positive QuarterTuesday January 2, 3:32 pm ET

* Record Year With 2.7 Million Net Subscriber Additions in 2006

* Company To Report Positive Free Cash Flow For Fourth Quarter 2006

NEW YORK, Jan. 2 /PRNewswire-FirstCall/ -- SIRIUS Satellite Radio today announced that it ended 2006 with approximately 6,024,000 subscribers, an 82% increase over the company's 2005 ending subscriber base of 3,316,560. SIRIUS added a record 2.7 million net subscribers in 2006. Based on preliminary financial data, SIRIUS achieved its first ever quarter of positive free cash flow in the fourth quarter of 2006.

Labels: cfbe, sirius, subscribers