SIRIUS XM Radio today announced full year 2009 results, including pro forma 2009 revenue of $2.53 billion, up 4% over 2008 pro forma revenue of $2.44 billion, and pro forma adjusted income from operations of $463 million, versus ($136) million in 2008.

“2009 was a notable year of firsts for SIRIUS XM: The first full year of positive pro forma adjusted income from operations and the first full year of positive free cash flow in the company’s history,” said Mel Karmazin, the Chief Executive Officer of SIRIUS XM. “We demonstrated considerable operating momentum in the fourth quarter – the addition of over 250,000 subscribers, ARPU growth, revenue growth, improved SAC, and continued operating cost reductions. These gains position us to deliver on our 2010 guidance.”

In the fourth quarter 2009, the Company’s pro forma average revenue per subscriber (ARPU) grew to $10.92 from $10.65 in the fourth quarter of 2008. The average self-pay monthly customer churn rate was 2.0% in the fourth quarter of 2009, as compared with 1.8% in the fourth quarter of 2008.

Fourth quarter of 2009 pro forma revenue was $684 million, up 6% from fourth quarter 2008 pro forma revenue of $644 million. Subscriber acquisition costs (SAC) per gross subscriber addition was $64 in the fourth quarter of 2009, an improvement of 9% over the $70 in SAC per gross subscriber addition in the fourth quarter of 2008.

In the fourth quarter of 2009, SIRIUS XM achieved pro forma adjusted income from operations of $115 million as compared with $32 million in the fourth quarter of 2008. Free cash flow in the quarter of 2009 was $150 million compared to $26 million in the fourth quarter of 2008. The pro forma fourth quarter 2009 net loss was ($25) million as compared with ($248) million in the fourth quarter of 2008. On a GAAP basis, the fourth quarter 2009 net income was $14 million compared to a loss of ($246) million in the 2008 quarter.

“The $599 million improvement in full-year pro forma adjusted income from operations illustrates the strength of our business model and also demonstrates the economic benefit generated by the SIRIUS-XM merger in July 2008,” said David Frear, the Company’s Executive Vice President and Chief Financial Officer. “With over $380 million in cash, positive free cash flow and continued growth in adjusted income from operations, our financial condition has never been stronger,” Frear added.

2010 OUTLOOK

Looking to 2010, the company expects full-year revenue of over $2.7 billion. Free cash flow is expected to remain positive in 2010.

“We expect to add over 500,000 net subscribers this year, exceeding the company’s previous subscriber high of 19 million at the end of 2008. We also expect this year’s adjusted income from operations to be up approximately 20% to $550 million,” said Karmazin.

PRO FORMA RESULTS OF OPERATIONS

The discussion of operating results below is based upon pro forma comparisons as if the merger between SIRIUS and XM occurred on January 1, 2007 and excludes the effects of stock-based compensation and purchase accounting adjustments associated with the merger between SIRIUS and XM.

FOURTH QUARTER 2009 VERSUS FOURTH QUARTER 2008

For the fourth quarter of 2009, SIRIUS XM recognized total revenue of $684 million compared to $644 million for the fourth quarter 2008. This 6%, or $40 million, increase in revenue was driven by the U.S. Music Royalty Fee introduced in the third quarter of 2009, the sale of “Best of” programming, and rate increases to the company’s multi-subscription and Internet packages.

Total ARPU for the three months ended December 31, 2009 was $10.92, compared to $10.65 for the three months ended December 31, 2008. The increase was driven mainly by the sale of “Best of” programming and increased rates on the company’s multi-subscription and Internet packages, partially offset by a decline in net advertising revenue per average subscriber.

In the fourth quarter of 2009, the company maintained positive pro forma adjusted income from operations of $115 million compared to a pro forma adjusted income from operations of $32 million for the fourth quarter of 2008 (refer to the reconciliation table of net loss to adjusted income (loss) from operations). The improvement was driven by the increase in total revenue of $40 million and a $44 million, or 7%, decrease in expenses included in pro forma adjusted income from operations.

Satellite and transmission costs increased 10%, or $2 million, in the three months ended December 31, 2009 compared to the same period in 2008 due to non-cash repeater lease charges and an increase in in-orbit insurance expense, partially offset by reductions in repeater maintenance and personnel costs.

Programming and content costs decreased 12%, or $12 million, in the three months ended December 31, 2009 compared to the same period in 2008 due mainly to reductions in personnel and on-air talent costs as well as savings on certain content arrangements.

Revenue share and royalties increased 1%, or $2 million, in the three months ended December 31, 2009 compared to the same period in 2008, due mainly to the increase in the company’s revenues and the statutory royalty rate for the performance of sound recordings offset in part by a reduction in the revenue share rate paid to an automaker.

Customer service and billing costs decreased 12%, or $8 million, in the three months ended December 31, 2009 compared to the same period in 2008 due primarily to reductions in personnel and customer call center expenses.

Cost of equipment decreased 33%, or $6 million, in the three months ended December 31, 2009 compared to the same period in 2008 as a result of a decrease in the company’s direct to customer sales and lower inventory write-downs.

Sales and marketing costs decreased 2%, or $2 million, and decreased as a percentage of revenue to 12% from 13% in the three months ended December 31, 2009 compared to the same period in 2008. The decrease in Sales and marketing costs was due to reduced personnel costs and third party distribution support expenses.

Subscriber acquisition costs decreased 4%, or $5 million, and decreased as a percentage of revenue to 19% from 21% in the three months ended December 31, 2009 compared to the same period in 2008. SAC per gross addition declined by 9%, to $64, from $70 in the year ago period. This improvement in the 2009 quarter was driven by lower OEM subsidies, chipset costs and aftermarket acquisition costs, partially offset by higher aftermarket inventory related charges as compared to the three months ended December 31, 2008. Subscriber acquisition costs also decreased despite the 10% increase in gross additions during the three months ended December 31, 2009 compared to the three months ended December 31, 2008.

General and administrative costs decreased 24%, or $12 million, mainly due to the absence of certain legal and regulatory charges incurred in 2008 and lower personnel costs.

Engineering, design and development costs decreased 23%, or $2 million, in the three months ended December 31, 2009 compared to the same period in 2008 due to lower costs associated with development, tooling, and testing of radios as well as lower personnel costs.

Restructuring, impairments and related costs decreased 11% during the 2009 quarter due to fewer restructuring charges associated with the merger with XM.

Other expenses decreased 65%, or $132 million, in the three months ended December 31, 2009 compared to the same period in 2008. The reduction was largely the product of the decrease in loss on extinguishment of debt and credit facilities of $94 million, an increase in gain on investments of $29 million, and $7 million increase in other income (expense). The decrease in loss on the extinguishment of debt and credit facilities was driven mainly by the exchange of certain of the company’s 2½% Convertible Notes due 2009 into shares of the company’s common stock in December 2008. The increase in gain on investments was attributable to an impairment charge recorded in 2008 on XM’s carrying value of its investments with no such impairment recorded in the fourth quarter of 2009 and payments received from Canadian Satellite Radio Inc. in excess of XM’s carrying value of its investments.

YEAR ENDED DECEMBER 31, 2009 VERSUS YEAR ENDED DECEMBER 31, 2008

For the twelve months ended December 31, 2009, SIRIUS XM recognized total revenue of $2,527 million compared with $2,437 million for the twelve months ended December 31, 2008. This 4%, or $90 million, increase in revenue was primarily driven by the U.S. Music Royalty Fee introduced in the third quarter of 2009, the sale of “Best of” programming, and rate increases to the company’s multi-subscription and Internet packages.

ARPU for the twelve months ended December 31, 2009 was $10.73, compared to $10.56 for the twelve months ended December 31, 2008. The increase was driven mainly by the sale of “Best of” programming, increased rates on the company’s multi-subscription packages and revenues earned on its Internet packages, partially offset by a decline in net advertising revenue per average subscriber.

The company’s pro forma adjusted income from operations increased $599 million to $463 million for the twelve months ended December 31, 2009 from a loss of ($136) million for the twelve months ended December 31, 2008 (refer to the reconciliation table of net loss to adjusted income (loss) from operations). This increase was driven by a 4%, or $90 million, increase in revenue and a 20%, or $509 million, decrease in expenses included in pro forma adjusted income (loss) from operations.

Satellite and transmission costs decreased 17%, or $17 million, in the twelve months ended December 31, 2009 compared to 2008 due to reductions in repeater maintenance costs, non-cash repeater charges, and personnel costs.

Programming and content costs decreased 17%, or $76 million, in the twelve months ended December 31, 2009 compared to 2008, due to a one-time payment recognized in 2008 to a programming provider upon completion of the merger with XM, reductions in personnel and on-air talent costs as well as savings on certain content arrangements.

Revenue share and royalties increased 2%, or $9 million, for the twelve months ended December 31, 2009 compared to 2008, due to the increase in the company’s revenues and the statutory royalty rate for the performance of sound recordings offset in part by a reduction in the revenue share rate paid to an automaker.

Customer service and billing costs decreased 5%, or $12 million, for the twelve months ended December 31, 2009 compared to 2008 due to scale efficiencies.

Cost of equipment decreased 39%, or $26 million, in the twelve months ended December 31, 2009 compared to 2008 as a result of a decrease in the company’s direct to customer sales, lower inventory write-downs and lower product and component sales.

Sales and marketing costs decreased 32%, or $110 million, and decreased as a percentage of revenue to 9% from 14% in the twelve months ended December 31, 2009 compared to 2008. The decrease was due to reduced advertising and cooperative marketing spend as well as reductions to personnel costs and third party distribution support expenses.

Subscriber acquisition costs decreased 30%, or $175 million, and decreased as a percentage of revenue to 16% from 24% in the twelve months ended December 31, 2009 compared to 2008. This decrease was driven by a 15% improvement in SAC, as adjusted, per gross addition due to fewer OEM installations relative to gross subscriber additions, decreased production of certain radios and lower aftermarket inventory reserves in the twelve months ended December 31, 2009 as compared to the twelve months ended December 31, 2008. Subscriber acquisition costs also decreased as a result of the 19% decline in gross additions during the twelve months ended December 31, 2009.

General and administrative costs decreased 32%, or $85 million, mainly due to the absence of certain legal and regulatory charges incurred in 2008 and lower personnel costs.

Engineering, design and development costs decreased 31%, or $16 million, in the twelve months ended December 31, 2009 compared to 2008, due to lower costs associated with development, tooling, and testing of radios as well as lower personnel costs.

Restructuring, impairments and related costs increased $22 million mainly due to a loss of $24 million on capitalized installment payments, offset partially by a decrease in personnel related restructuring costs.

Other expenses increased 53%, or $202 million, in the twelve months ended December 31, 2009 compared to 2008 driven mainly by the increase in loss on extinguishment of debt and credit facilities of $170 million, and an increase in interest expense of $89 million, offset by an increase of $45 million in gain on investments and an increase in other income of $19 million. The increase in loss on the extinguishment of debt and credit facilities was driven by the full repayment of SIRIUS’ Credit Agreement with Liberty Media and XM’s Amended and Restated Credit Agreement and its Second-Lien Credit Agreement. Interest expense increased due primarily to the issuance of XM’s 13% Senior Notes due 2013 and the 7% Exchangeable Senior Subordinated Notes due 2014 in the fourth quarter of 2008. The increase in gain on investments was attributable to a higher impairment charge recorded in 2008 on XM’s carrying value of its investments than recorded in 2009, payments received from Canadian Satellite Radio Inc. in excess of XM’s carrying value of its investment, partially offset by the company’s share of SIRIUS Canada’s and XM Canada’s net losses for the twelve months ended December 31, 2009 compared to 2008.

The following tables contain actual and pro forma subscriber and key operating metrics for the three and twelve months ended December 31, 2009 and 2008, respectively.

                                                Unaudited
                                                ---------
                              For the Three Months    For the Twelve Months
                               Ended December 31,       Ended December 31,
                               ------------------       ------------------
                                2009        2008        2009         2008
                                ----        ----        ----         ----
                              (Actual)    (Actual)    (Actual)   (Pro Forma)

    Beginning subscribers    18,515,730  18,920,911  19,003,856   17,348,622
    Gross subscriber
     additions                1,882,950   1,713,210   6,208,482    7,710,306
    Deactivated subscribers  (1,625,922) (1,630,265) (6,439,580)  (6,055,072)
                             ----------  ----------  ----------   ----------
    Net additions               257,028      82,945    (231,098)   1,655,234
                             ----------  ----------  ----------   ----------
    Ending subscribers       18,772,758  19,003,856  18,772,758   19,003,856
                             ==========  ==========  ==========   ==========

        Retail                7,725,750   8,905,087   7,725,750    8,905,087
        OEM                  10,930,952   9,995,953  10,930,952    9,995,953
        Rental                  116,056     102,816     116,056      102,816
                             ----------  ----------  ----------   ----------
    Ending subscribers       18,772,758  19,003,856  18,772,758   19,003,856
                             ==========  ==========  ==========   ==========

        Retail                 (200,154)   (131,333) (1,179,452)    (333,628)
        OEM                     442,422     218,249     935,114    1,962,685
        Rental                   14,760      (3,971)     13,240       26,177
                             ----------  ----------  ----------   ----------
    Net additions               257,028      82,945    (231,098)   1,655,234
                             ==========  ==========  ==========   ==========

        Self-pay             15,703,932  15,549,657  15,703,932   15,549,657
        Paid promotional      3,068,826   3,454,199   3,068,826    3,454,199
                             ----------  ----------  ----------   ----------
    Ending subscribers       18,772,758  19,003,856  18,772,758   19,003,856
                             ==========  ==========  ==========   ==========

        Self-pay                247,182     359,069     154,275    1,676,311
        Paid promotional          9,846    (276,124)   (385,373)     (21,077)
                             ----------  ----------  ----------   ----------
    Net additions               257,028      82,945    (231,098)   1,655,234
                             ==========  ==========  ==========   ==========

    Daily weighted average
     number of subscribers   18,576,151  18,910,689  18,529,696   18,373,274
                             ==========  ==========  ==========   ==========

                                         Unaudited Pro Forma
                                         -------------------
                              For the Three Months For the Twelve Months
                               Ended December 31,    Ended December 31,
                               ------------------    ------------------
    (in thousands, except
     for per subscriber
     amounts)                   2009        2008       2009         2008
                                ----        ----       ----         ----

    Average self-pay
     monthly churn (1)(7)           2.0%       1.8%        2.0%        1.8%
    Conversion rate (2)(7)         46.4%      44.2%       45.4%       47.5%
    ARPU (3)(7)                  $10.92     $10.65      $10.73      $10.56
    SAC, as adjusted, per
     gross subscriber
     addition (4)(7)                $64        $70         $63         $74
    Customer service and
     billing expenses, as
     adjusted, per average
     subscriber (5)(7)            $1.06      $1.18       $1.05       $1.11
    Total revenue              $683,779   $644,108  $2,526,703  $2,436,740
    Free cash flow (6)(7)      $149,547    $25,877    $185,319   $(551,771)
    Adjusted income (loss)
     from operations (8)       $115,339    $31,797    $462,539   $(136,298)
    Net loss                   $(25,243) $(248,468)  $(441,333)  $(902,335)

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

                                                   Pro Forma
                                                   ---------
                                  For the Three Months  For the Twelve Months
                                   Ended December 31,     Ended December 31,
                                   ------------------     ------------------
    (in thousands)                  2009       2008        2009        2008
                                    ----       ----        ----        ----

    Revenue:
        Subscriber revenue,
         including effects of
         rebates                  $593,841   $588,622  $2,334,317  $2,258,322
        Advertising revenue, net
         of agency fees             14,467     15,776      51,754      69,933
        Equipment revenue           19,008     30,712      50,352      69,398
        Other revenue               56,463      8,998      90,280      39,087
                                  --------  ---------   ---------   ---------
    Total revenue                  683,779    644,108   2,526,703   2,436,740

    Operating expenses:
        Satellite and
         transmission               25,094     22,851      82,170      99,185
        Programming and content     92,857    105,215     370,470     446,638
        Revenue share and
         royalties                 124,527    122,711     486,990     477,962
        Customer service and
         billing                    58,887     67,036     232,405     244,195
        Cost of equipment           12,200     18,084      40,188      66,104
        Sales and marketing         80,161     81,712     232,199     342,296
        Subscriber acquisition
         costs                     127,588    132,731     401,670     577,126
        General and
         administrative             39,108     51,591     181,920     267,032
        Engineering, design and
         development                 8,018     10,380      36,152      52,500
        Depreciation and
         amortization               57,549     49,519     203,145     245,571
        Restructuring, impairments
         and related costs           2,640      2,977      32,807      10,434
        Share-based payment
         expense                     7,480     24,945      78,782     124,619
                                  --------  ---------   ---------   ---------
    Total operating expenses       636,109    689,752   2,378,898   2,953,662
                                  --------  ---------   ---------   ---------
    Income (loss) from operations   47,670    (45,644)    147,805    (516,922)
        Other expense              (70,276)  (202,649)   (583,157)   (381,425)
                                  --------  ---------   ---------   ---------
    Loss before income taxes       (22,606)  (248,293)   (435,352)   (898,347)
        Income tax expense          (2,637)      (175)     (5,981)     (3,988)

                                  --------  ---------   ---------   ---------
    Net loss                      $(25,243) $(248,468)  $(441,333)  $(902,335)
                                  ========  =========   =========   =========

                      SIRIUS XM RADIO INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                Actual
                                                ------
                            For the Three Months      For the Twelve Months
                             Ended December 31,        Ended December 31,
                             ------------------        ------------------
    (in thousands, except
     per share data)           2009         2008         2009         2008
                               ----         ----         ----         ----
                            (Unaudited)  (Unaudited)  (Unaudited)

    Revenue:
        Subscriber revenue,
         including effects
         of rebates          $588,048     $568,523   $2,287,503   $1,548,919
        Advertising revenue,
         net of agency fees    14,467       15,776       51,754       47,190
        Equipment revenue      19,008       30,712       50,352       56,001
        Other revenue          54,650        7,172       83,029       11,882
                            ---------    ---------    ---------   ----------
    Total revenue             676,173      622,183    2,472,638    1,663,992
    Operating expenses
     (depreciation and
     amortization shown
     separately below) (1):
        Cost of services:
            Satellite and
             transmission      24,597       24,481       84,033       59,279
            Programming
             and content       77,297       89,214      308,121      312,189
            Revenue share and
             royalties        100,355      103,217      397,210      280,852
            Customer service
             and billing       58,887       67,818      234,456      165,036
            Cost of equipment  12,200       18,084       40,188       46,091
        Sales and marketing    76,308       80,699      228,956      231,937
        Subscriber
         acquisition costs    109,733      113,512      340,506      371,343
        General and
         administrative        44,601       64,586      227,554      213,142
        Engineering, design
         and development        8,056       12,404       41,031       40,496
        Impairment of goodwill      -       15,331            -    4,766,190
        Depreciation and
         amortization          77,826       82,958      309,450      203,752
        Restructuring,
         impairments and
         related costs          2,640        2,977       32,807       10,434
                            ---------    ---------    ---------   ----------
    Total operating
     expenses                 592,500      675,281    2,244,312    6,700,741
                            ---------    ---------    ---------   ----------
        Income (loss)
         from operations       83,673      (53,098)     228,326   (5,036,749)
    Other income (expense):
        Interest and
         investment income      1,043          (90)       3,645        9,079
        Interest expense, net
         of amounts
         capitalized          (66,358)     (61,196)    (306,420)    (144,833)
        Loss on extinguishment
         of debt and credit
         facilities, net       (3,879)     (98,203)    (267,646)     (98,203)
        Gain (loss) on
         investments            1,474      (27,418)       1,931      (30,507)
        Other income (expense)    851       (5,664)       3,355       (9,599)
                            ---------    ---------    ---------   ----------
    Total other expense       (66,869)    (192,571)    (565,135)    (274,063)
                            ---------    ---------    ---------   ----------
        Income (loss) before
         income taxes          16,804     (245,669)    (336,809)  (5,310,812)
        Income tax expense     (2,637)        (175)      (5,981)      (2,476)
                            ---------    ---------    ---------   ----------
            Net income (loss)  14,167     (245,844)    (342,790)  (5,313,288)
        Preferred stock
         beneficial conversion
         feature                    -            -     (186,188)           -
                            ---------    ---------    ---------   ----------
            Net income (loss)
             attributable
             to common
             stockholders
                              $14,167    $(245,844)   $(528,978) $(5,313,288)
                            =========    =========    =========    =========
    Net loss per common
     share (basic and
     diluted)                      $-       $(0.08)      $(0.15)      $(2.45)
                            =========    =========    =========    =========
    Weighted average common
     shares outstanding
      (basic and diluted)   3,642,459    3,160,223    3,585,864    2,169,489
                            =========    =========    =========    =========

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

    Satellite and transmission  $(276)      $1,349       $2,745       $4,236
    Programming and content     1,646        4,672        9,064       12,148
    Customer service and
     billing                        -          783        2,051        1,920
    Sales and marketing          (474)       2,165        9,608       13,541
    Subscriber acquisition
     costs                          -            -            -           14
    General and
     administrative             5,493       12,995       45,634       49,354
    Engineering, design
     and development               38        2,023        4,879        6,192

                               ------      -------      -------      -------
    Total share-based
     payment expense           $6,427      $23,987      $73,981      $87,405
                               ======      =======      =======      =======

                       SIRIUS XM RADIO INC. AND SUBSIDIARIES
                            CONSOLIDATED BALANCE SHEETS

                                                        As of December 31,
                                                        ------------------
    (in thousands, except share and per share data)     2009          2008
                                                        ----          ----
                         ASSETS                      (Unaudited)
    Current assets:
      Cash and cash equivalents                        $383,489      $380,446
      Accounts receivable, net                          113,580       102,024
      Receivables from distributors                      48,738        45,950
      Inventory, net                                     16,193        24,462
      Prepaid expenses                                  100,273        67,203
      Related party current assets                      106,247       110,427
      Deferred tax asset                                 72,640        31,270
      Other current assets                               18,620        27,474
                                                     ----------    ----------
          Total current assets                          859,780       789,256
    Property and equipment, net                       1,711,003     1,703,476
    FCC licenses                                      2,083,654     2,083,654
    Restricted investments                                3,400       141,250
    Deferred financing fees, net                          8,902         9,197
    Intangible assets, net                              611,461       688,671
    Goodwill                                          1,834,856     1,834,856
    Related party long-term assets                      110,594       128,357
    Other long-term assets                               39,878        81,019
                                                     ----------    ----------
            Total assets                             $7,263,528    $7,459,736
                                                     ==========    ==========
          LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable and accrued expenses            $543,686      $625,264
      Accrued interest                                   74,566        76,463
      Current portion of deferred revenue             1,086,205     1,002,736
      Current portion of deferred credit on
       executory contracts                              252,831       234,774
      Current maturities of long-term debt               13,882       399,726
      Related party current liabilities                 105,471        68,373
                                                     ----------    ----------
            Total current liabilities                 2,076,641     2,407,336
    Deferred revenue                                    283,942       247,889
    Deferred credit on executory contracts              784,078     1,037,190
    Long-term debt                                    2,799,127     2,820,781
    Long-term related party debt                        263,566             -
    Deferred tax liability                              940,182       894,453
    Related party long-term liabilities                  17,508             -
    Other long-term liabilities                          61,052        43,550
                                                     ----------    ----------
            Total liabilities                         7,226,096     7,451,199
                                                     ----------    ----------

    Commitments and contingencies
    Stockholders' equity:
      Preferred stock, par value $0.001; 50,000,000
       authorized at December 31, 2009 and 2008:
         Series A convertible preferred stock
          (liquidation preference of $51,370 at
          December 31, 2009 and 2008); 24,808,959
          shares issued and outstanding at December 31,
          2009 and 2008                                      25            25
         Convertible perpetual preferred stock,
          series B (liquidation preference of $13 and
          $0 at December 31, 2009 and 2008, respectively);
          12,500,000 and zero shares issued and
          outstanding at December 31, 2009 and 2008,
          respectively                                       13             -
        Convertible preferred stock, series C junior; no
         shares issued and outstanding at December 31,
         2009 and 2008                                        -             -
      Common stock, par value $0.001; 9,000,000,000 and
       8,000,000,000 shares authorized at December 31,
       2009 and 2008, respectively; 3,882,659,087 and
       3,651,765,837 shares issued and outstanding at
       December 31, 2009 and 2008, respectively           3,882         3,652
      Accumulated other comprehensive loss, net of tax   (6,581)       (7,871)
      Additional paid-in capital                     10,281,331     9,724,991
      Accumulated deficit                           (10,241,238)   (9,712,260)
                                                    -----------    ----------
            Total stockholders' equity                   37,432         8,537
                                                    -----------    ----------
            Total liabilities and stockholders'
             equity                                  $7,263,528    $7,459,736
                                                    ===========    ==========

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

                                                       For the Years Ended
                                                           December 31,
                                                       -------------------
    (in thousands)                                      2009         2008
                                                        ----         ----
                                                    (Unaudited)
    Cash flows from operating activities:
        Net loss                                      $(342,790) $(5,313,288)
        Adjustments to reconcile net loss to net
         cash provided by (used in) operating
         activities:
            Depreciation and amortization               309,450      203,752
            Impairment of goodwill                            -    4,766,190
            Non-cash interest expense, net of
             amortization of premium                     33,818       (6,311)
            Provision for doubtful accounts              30,602       21,589
            Amortization of deferred income
             related to equity method investment         (2,776)      (1,156)
            Loss on extinguishment of debt and
             credit facilities, net                     267,646       98,203
            Restructuring, impairments and related
             costs                                       26,964            -
            Loss (gain) on disposal of assets                 -        4,879
            Loss on investments                          13,664       28,999
            Share-based payment expense                  73,981       87,405
            Deferred income taxes                         5,981        2,476
            Other non-cash purchase price
             adjustments                               (202,054)     (68,330)
            Other                                             -        1,643
            Changes in operating assets and liabilities:
                Accounts receivable                     (42,158)     (32,121)
                Inventory                                 8,269        8,291
                Receivables from distributors            (2,788)      14,401
                Related party assets                     15,305      (22,249)
                Prepaid expenses and other current
                 assets                                  10,027      (19,953)
                Other long-term assets                   86,674       (5,490)
                Accounts payable and accrued
                 expenses                               (46,645)     (83,037)
                Accrued interest                          2,429       23,081
                Deferred revenue                         89,144       73,334
                Related party liabilities                54,606       34,646
                Other long-term liabilities              44,481       30,249
                                                       --------     --------
                        Net cash provided by (used
                         in) operating activities       433,830     (152,797)
                                                       --------     --------

    Cash flows from investing activities:
        Additions to property and equipment            (248,511)    (130,551)
        Sales of property and equipment                       -          105
        Purchases of restricted and other investments         -       (3,000)
        Acquisition of acquired entity cash                   -      819,521
        Merger related costs                                  -      (23,519)
        Sale of restricted and other investments              -       65,869
                                                       --------     --------
                        Net cash (used in) provided
                         by investing activities       (248,511)     728,425
                                                       --------     --------

    Cash flows from financing activities:
        Proceeds from exercise of warrants and
         stock options                                        -          471
        Preferred stock issuance costs, net of costs     (3,712)           -
        Long-term borrowings, net of costs              582,612      531,743
        Related party long-term borrowings, net of
         costs                                          362,593            -
        Payment of premiums on redemption of debt       (17,075)     (18,693)
        Payments to noncontrolling interest                   -      (61,880)
        Repayment of long-term borrowings              (755,447)  (1,085,643)
        Repayment of related party long-term
         borrowings                                    (351,247)           -
                                                       --------     --------
                        Net cash (used in) provided
                         by financing activities       (182,276)    (634,002)
                                                       --------     --------
    Net increase (decrease) in cash and cash
     equivalents                                          3,043      (58,374)
    Cash and cash equivalents at beginning of
     period                                             380,446      438,820
                                                       --------     --------
    Cash and cash equivalents at end of period         $383,489     $380,446
                                                       ========     ========

    FOOTNOTES TO PRESS RELEASE AND TABLES FOR NON-GAAP FINANCIAL MEASURES

    (1)  Average self-pay monthly churn represents the monthly average of
         self-pay deactivations by 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 of
         sale, vehicle owners and 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 and net
         advertising revenue, divided by the number of months in the period,
         divided by the daily weighted average number of subscribers for the
         period. ARPU is calculated as follows (in thousands, except for
         subscriber and per subscriber amounts):

                                             Unaudited Pro Forma
                                             -------------------
                                  For the Three Months  For the Twelve Months
                                   Ended December 31,     Ended December 31,
                                   ------------------     ------------------
                                     2009       2008       2009       2008
                                     ----       ----       ----       ----

    Subscriber revenue             $593,841   $588,622 $2,334,317 $2,258,322
    Net advertising revenue          14,467     15,776     51,754     69,933
                                   --------   -------- ---------- ----------
        Total subscriber and
         net advertising revenue
                                   $608,308   $604,398 $2,386,071 $2,328,255
                                   ========   ======== ========== ==========
    Daily weighted average
     number of subscribers       18,576,151 18,910,689 18,529,696 18,373,274
    ARPU                             $10.92     $10.65     $10.73     $10.56

    (4)  SAC, as adjusted, 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 divided
         by the number of gross subscriber additions for the period. SAC, as
         adjusted, per gross subscriber addition is calculated as follows (in
         thousands, except for subscriber and per subscriber amounts):

                                              Unaudited Pro Forma
                                              -------------------
                                    For the Three Months For the Twelve Months
                                     Ended December 31,    Ended December 31,
                                     ------------------    ------------------
                                       2009       2008       2009       2008
                                       ----       ----       ----       ----

    Subscriber acquisition cost    $127,588   $132,731   $401,670   $577,140
    Less: share-based payment
     expense granted to third
     parties and employees                -          -          -        (14)
    Less: margin from direct sales
     of radios  and accessories      (6,808)   (12,628)   (10,164)    (3,294)
                                  ---------   --------   --------   --------
    SAC, as adjusted               $120,780   $120,103   $391,506   $573,832
                                   ========   ========   ========   ========

    Gross subscriber additions    1,882,950  1,713,210  6,208,482  7,710,306
    SAC, as adjusted, per gross
     subscriber addition                $64        $70        $63        $74

    (5)  Customer service and billing expenses, as adjusted, per average
         subscriber is derived from total customer service and billing
         expenses, excluding share-based payment expense, divided by the
         number of months in the period, divided by the daily weighted average
         number of subscribers for the period. Customer service and billing
         expenses, as adjusted, per average subscriber is calculated as
         follows (in thousands, except for subscriber and per subscriber
         amounts):

                                             Unaudited Pro Forma
                                             -------------------
                                For the Three Months   For the Twelve Months
                                 Ended December 31,      Ended December 31,
                                 ------------------      ------------------
                                  2009        2008        2009        2008
                                  ----        ----        ----        ----

    Customer service and
     billing expenses             $58,981     $67,906    $234,909    $248,176
    Less: share-based payment
     expense                          (94)       (870)     (2,504)     (3,981)
                               ----------  ----------  ----------  ----------
    Customer service and
     billing expenses, as
     adjusted                     $58,887     $67,036    $232,405    $244,195
                               ==========  ==========  ==========  ==========
    Daily weighted average
     number of subscribers     18,576,151  18,910,689  18,529,696  18,373,274
    Customer service and
     billing expenses, as
     adjusted, per average
     subscriber                     $1.06       $1.18       $1.05       $1.11

    (6)  Free cash flow is calculated as follows:

                                                Unaudited Pro Forma
                                                -------------------
                                    For the Three Months For the Twelve Months
                                     Ended December 31,    Ended December 31,
                                      ------------------   ------------------
    (in thousands)                      2009     2008       2009       2008
                                        ----     ----       ----       ----

    Net cash provided by (used in)
     operating activities             $180,723  $64,195  $433,830  $(403,883)
    Additions to property and
     equipment                         (31,176) (27,846) (248,511)  (161,394)
    Merger related costs                     -  (10,472)        -    (23,519)
    Restricted and other investment
     activity                                -        -         -     37,025
                                      --------  -------  --------  ---------
    Free cash flow                    $149,547  $25,877  $185,319  $(551,771)
                                      ========  =======  ========  =========

    (7)  Average self-pay monthly churn; conversion rate; ARPU; SAC, as
         adjusted, per gross subscriber addition; customer service and billing
         expenses, as adjusted, per average subscriber; and free cash flow are
         not measures of financial performance under U.S. generally accepted
         accounting principles ("GAAP"). We believe these non-GAAP financial
         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 also believe that investors also use
         our current and projected metrics to monitor the performance of our
         business and to make investment decisions.

         We believe the exclusion of share-based payment expense in our
         calculations of SAC, as adjusted, per gross subscriber addition and
         customer service and billing expenses, as adjusted, 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 subscriber
         acquisition costs and customer service and billing expenses.
         Specifically, the exclusion of share-based payment expense in our
         calculation of SAC, as adjusted, per gross subscriber addition is
         critical in being able to understand the economic impact of the
         direct costs incurred to acquire a subscriber and the effect over
         time as economies of scale are reached.

         These non-GAAP financial measures are used in addition to and in
         conjunction with results presented in accordance with GAAP. These
         non-GAAP financial 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.

    (8)  We refer to net income (loss) before interest and investment income;
         interest expense, net of amounts capitalized; income tax expense;
         loss on extinguishment of debt and credit facilities, net; (gain)
         loss on investments; other expense (income); restructuring,
         impairments and related costs; depreciation and amortization; and
         share-based payment expense as adjusted income (loss) from
         operations.  Adjusted income (loss) from operations is not a measure
         of financial performance under U.S. GAAP. We believe adjusted income
         (loss) from operations is a useful measure of our operating
         performance. We use adjusted income (loss) from operations for
         budgetary and planning purposes; to assess the relative profitability
         and on-going performance of our consolidated operations; to compare
         our performance from period-to-period; and to compare our performance
         to that of our competitors. We also believe adjusted income (loss)
         from operations is useful to investors to compare our operating
         performance to the performance of other communications, entertainment
         and media companies. We believe that investors use current and
         projected adjusted income (loss) from operations 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
         results of operations reflect significant charges for interest and
         depreciation expense. We believe adjusted income (loss) from
         operations provides useful information about the operating
         performance of our business apart from the costs associated with our
         capital structure and physical plant. The exclusion of interest and
         depreciation and amortization expense is useful given fluctuations in
         interest rates and significant variation in depreciation and
         amortization expense that can result from the amount and timing of
         capital expenditures and 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
         taxes is appropriate for comparability purposes as the tax positions
         of companies can vary because of their differing abilities to take
         advantage of tax benefits and because of the tax policies of the
         various jurisdictions in which they operate. We believe the exclusion
         of restructuring, impairments and related costs is useful given the
         non-recurring 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. To compensate for the exclusion of taxes,
         other expense (income), depreciation and amortization and share-based
         payment expense, we separately measure and budget for these items.

         There are material limitations associated with the use of adjusted
         income (loss) from operations in evaluating our company compared with
         net loss, which reflects overall financial performance, including the
         effects of taxes, other (income) expense, depreciation and
         amortization, restructuring, impairments and related costs and share-
         based payment expense. We use adjusted income (loss) from operations
         to supplement GAAP results to provide a more complete understanding
         of the factors and trends affecting the business than GAAP results
         alone. Investors that wish to compare and evaluate our operating
         results after giving effect for these costs, should refer to net loss
         as disclosed in our consolidated statements of operations. Since
         adjusted income (loss) from operations is a non-GAAP financial
         measure, our calculation of adjusted income (loss) from operations
         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 the pro forma unadjusted net income (loss) to
         the pro forma adjusted income (loss) from operations is calculated as
         follows (see footnotes for reconciliation of the pro forma amounts to      their respective GAAP amounts):

                                              Unaudited Pro Forma
                                              -------------------
                                   For the Three Months For the Twelve Months
                                    Ended December 31,    Ended December 31,
                                    ------------------    ------------------
    (in thousands)                   2009       2008        2009       2008
                                     ----       ----        ----       ----

    Reconciliation of Net loss to
     Adjusted income (loss) from
     operations:
      Net loss                     $(25,243) $(248,468) $(441,333) $(902,335)
    Add back Net loss items
     excluded from Adjusted
     income (loss) from operations:
      Interest and investment
       income                        (1,043)        90     (3,645)   (12,092)
      Interest expense, net of
       amounts capitalized           69,765     71,274    324,442    235,655
      Income tax expense              2,637        175      5,981      3,988
      Loss on extinguishment of
       debt and facilities, net       3,879     98,203    267,646     98,203
      (Gain) loss on investments     (1,474)    27,418     (1,931)    43,517
      Other (income) expense           (851)     5,664     (3,355)    16,142
                                   --------    -------   --------  ---------
        Income (loss) from
         operations                  47,670    (45,644)   147,805   (516,922)
      Restructuring, impairments
       and related costs              2,640      2,977     32,807     10,434
      Depreciation and amortization  57,549     49,519    203,145    245,571
      Share-based payment expense     7,480     24,945     78,782    124,619

                                   --------    -------   --------  ---------
    Adjusted income (loss) from
     operations                    $115,339    $31,797   $462,539  $(136,298)
                                   ========    =======   ========  =========

         There are material limitations associated with the use of a pro forma
         unadjusted results of operations in evaluating our company compared
         with our GAAP results of operations, which reflects overall financial
         performance. We use pro forma unadjusted results of operations to
         supplement GAAP results to provide a more complete understanding of
         the factors and trends affecting the business than GAAP results
         alone. Investors that wish to compare and evaluate our operating
         results after giving effect for these costs, should refer to results
         of operations as disclosed in our consolidated statements of
         operations. Since pro forma unadjusted results of operations is a
         non-GAAP financial measure, our 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.

    (9)  The following tables reconcile our GAAP results of operations to our
         non-GAAP pro forma unadjusted results of operations (in thousands):

                        Unaudited For the Three Months Ended December 31, 2009
                        ------------------------------------------------------
                                                        Allocation
                                            Purchase     of Share-
                                              Price        based
                                    As     Accounting     Payment      Pro
                                 Reported  Adjustments    Expense      Forma
                                 --------  -----------  -----------    -----

    Revenue:
        Subscriber revenue,
         including effects of
         rebates                 $588,048       $5,793           $-  $593,841
        Advertising revenue,
         net of agency fees        14,467            -            -    14,467
        Equipment revenue          19,008            -            -    19,008
        Other revenue              54,650        1,813            -    56,463
                                  -------     --------       ------  --------
    Total revenue                 676,173        7,606            -   683,779
    Operating expenses
     (depreciation and
     amortization shown
     separately below) (1)
        Cost of services:
            Satellite and
             transmission          24,597          327          170    25,094
            Programming and
             content               77,297       17,361       (1,801)   92,857
            Revenue share and
             royalties            100,355       24,172            -   124,527
            Customer service
             and billing           58,887           94          (94)   58,887
            Cost of equipment      12,200            -            -    12,200
        Sales and marketing        76,308        3,522          331    80,161
        Subscriber acquisition
         costs                    109,733       17,855            -   127,588
        General and
         administrative            44,601          350       (5,843)   39,108
        Engineering, design and
         development                8,056          205         (243)    8,018
        Depreciation and
         amortization              77,826      (20,277)           -    57,549
        Restructuring,
         impairments and related
         costs                      2,640            -            -     2,640
        Share-based payment
         expense                        -            -        7,480     7,480
                                  -------     --------       ------  --------
    Total operating expenses      592,500       43,609            -   636,109
                                  -------     --------       ------  --------
        Income (loss) from
         operations                83,673      (36,003)           -    47,670
    Other income (expense)
        Interest and investment
         income                     1,043            -            -     1,043
        Interest expense, net
         of amounts capitalized   (66,358)      (3,407)           -   (69,765)
        Loss on extinguishment
         of debt and credit
         facilities, net           (3,879)           -            -    (3,879)
        Gain on investments         1,474            -            -     1,474
        Other income                  851            -            -       851
                                  -------     --------       ------  --------
    Total other expense           (66,869)      (3,407)           -   (70,276)
                                  -------     --------       ------  --------
        Income (loss) before
         income taxes              16,804      (39,410)           -   (22,606)
        Income tax expense         (2,637)           -            -    (2,637)
                                  -------     --------       ------  --------
            Net income (loss)     $14,167     $(39,410)          $-  $(25,243)
                                  =======     ========       ======  ========

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

    Satellite and transmission      $(276)        $106           $-     $(170)
    Programming and content         1,646          155            -     1,801
    Customer service and billing        -           94            -        94
    Sales and marketing              (474)         143            -      (331)
    Subscriber acquisition costs        -            -            -         -
    General and administrative      5,493          350            -     5,843
    Engineering, design and
     development                       38          205            -       243

                                   ------       ------           --    ------
    Total share-based payment
     expense                       $6,427       $1,053           $-    $7,480
                                   ======       ======           ==    ======

                        Unaudited For the Three Months Ended December 31, 2008
                        ------------------------------------------------------
                                           Purchase    Allocation
                                            Price       of Share-
                                          Accounting      based
                                 As      Adjustments     Payment       Pro
                               Reported       (a)        Expense      Forma
                               --------  ------------  -----------    -----

    Revenue:
        Subscriber revenue,
         including effects of
         rebates               $568,523       $20,099           $-   $588,622
        Advertising revenue,
         net of agency fees      15,776             -            -     15,776
        Equipment revenue        30,712             -            -     30,712
        Other revenue             7,172         1,826            -      8,998
                              ---------       -------       ------  ---------
    Total revenue               622,183        21,925            -    644,108
    Operating expenses
     (depreciation and
     amortization shown
     separately below) (1)
        Cost of services:
            Satellite and
             transmission        24,481          (214)      (1,416)    22,851
            Programming and
             content             89,214        20,755       (4,754)   105,215
            Revenue share
             and royalties      103,217        19,494            -    122,711
            Customer service
             and billing         67,818            88         (870)    67,036
            Cost of equipment    18,084             -            -     18,084
        Sales and marketing      80,699         3,312       (2,299)    81,712
        Subscriber
         acquisition costs      113,512        19,219            -    132,731
        General and
         administrative          64,586           306      (13,301)    51,591
        Engineering, design
         and development         12,404           281       (2,305)    10,380
        Impairment of
         goodwill                15,331       (15,331)           -          -
        Depreciation and
         amortization            82,958       (33,439)           -     49,519
        Restructuring,
         impairments and
         related costs            2,977             -            -      2,977
        Share-based payment
         expense                      -             -       24,945     24,945
                              ---------       -------       ------  ---------
    Total operating expenses    675,281        14,471            -    689,752
                              ---------       -------       ------  ---------
        (Loss) income from
         operations             (53,098)        7,454            -    (45,644)
    Other income (expense)
        Interest and
         investment income          (90)            -            -        (90)
        Interest expense,
         net of amounts
         capitalized            (61,196)      (10,078)           -    (71,274)
        Loss on
         extinguishment of
         debt and credit
         facilities, net        (98,203)            -            -    (98,203)
        Loss on investments     (27,418)            -            -    (27,418)
        Other expense            (5,664)            -            -     (5,664)
                                 ------             -            -     ------
    Total other expense        (192,571)      (10,078)           -   (202,649)
                              ---------       -------       ------  ---------
        Loss before income
         taxes                 (245,669)       (2,624)           -   (248,293)
        Income tax expense         (175)            -            -       (175)
                              ---------       -------       ------  ---------
            Net loss          $(245,844)      $(2,624)          $-  $(248,468)
                              =========       =======       ======  =========

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

    Satellite and transmission   $1,349           $67           $-     $1,416
    Programming and content       4,672            82            -      4,754
    Customer service and
     billing                        783            87            -        870
    Sales and marketing           2,165           134            -      2,299
    General and
     administrative              12,995           306            -     13,301
    Engineering, design and
     development                  2,023           282            -      2,305

                              ---------       -------       ------  ---------
    Total share-based
     payment expense            $23,987          $958           $-    $24,945
                              =========       =======       ======  =========
    -------------------------
    (a) Includes impairment of goodwill.

                              Unaudited For the Year Ended December 31, 2009
                              ----------------------------------------------
                                                      Allocation
                                          Purchase     of Share-
                                            Price        based
                                 As      Accounting     Payment       Pro
                              Reported   Adjustments    Expense       Forma
                              --------   -----------  -----------     -----

    Revenue:
        Subscriber revenue,
         including effects
         of rebates          $2,287,503      $46,814           $-  $2,334,317
        Advertising
         revenue, net of
         agency fees             51,754            -            -      51,754
        Equipment revenue        50,352            -            -      50,352
        Other revenue            83,029        7,251            -      90,280
                              ---------     --------       ------   ---------
    Total revenue             2,472,638       54,065            -   2,526,703
    Operating expenses
     (depreciation and
     amortization shown
     separately below) (1)
        Cost of services:
            Satellite and
             transmission        84,033        1,339       (3,202)     82,170
            Programming and
             content            308,121       72,069       (9,720)    370,470
            Revenue share
             and royalties      397,210       89,780            -     486,990
            Customer service
             and billing        234,456          453       (2,504)    232,405
            Cost of equipment    40,188            -            -      40,188
        Sales and marketing     228,956       13,507      (10,264)    232,199
        Subscriber
         acquisition costs      340,506       61,164            -     401,670
        General and
         administrative         227,554        1,602      (47,236)    181,920
        Engineering, design
         and development         41,031          977       (5,856)     36,152
        Depreciation and
         amortization           309,450     (106,305)           -     203,145
        Restructuring,
         impairments and
         related costs           32,807            -            -      32,807
        Share-based payment
         expense                      -            -       78,782      78,782
                              ---------     --------       ------   ---------
    Total operating expenses  2,244,312      134,586            -   2,378,898
                              ---------     --------       ------   ---------
        Income (loss) from
         operations             228,326      (80,521)           -     147,805
    Other income (expense)
        Interest and
         investment income        3,645            -            -       3,645
        Interest expense,
         net of amounts
         capitalized           (306,420)     (18,022)           -    (324,442)
        Loss on
         extinguishment of
         debt and credit
         facilities, net       (267,646)           -            -    (267,646)
        Gain on investments       1,931            -            -       1,931
        Other income              3,355            -            -       3,355
                                  -----            -            -       -----
    Total other expense        (565,135)     (18,022)           -    (583,157)
                              ---------     --------       ------   ---------
        Loss before income
         taxes                 (336,809)     (98,543)           -    (435,352)
        Income tax expense       (5,981)           -            -      (5,981)
                              ---------     --------       ------   ---------
            Net loss          $(342,790)    $(98,543)          $-   $(441,333)
                              =========     ========       ======   =========

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

    Satellite and transmission   $2,745         $457           $-      $3,202
    Programming and content       9,064          656            -       9,720
    Customer service and
     billing                      2,051          453            -       2,504
    Sales and marketing           9,608          656            -      10,264
    Subscriber acquisition
     costs                            -            -            -           -
    General and administrative   45,634        1,602            -      47,236
    Engineering, design and
     development                  4,879          977            -       5,856
                                -------       ------           --     -------
    Total share-based
     payment expense            $73,981       $4,801           $-     $78,782
                                =======       ======           ==     =======

                             Unaudited For the Year Ended December 31, 2008
                             ----------------------------------------------
                                                  Purchase  Allocation
                                                   Price     of Share-
                                     Predecessor Accounting   based
                              As      Financial    Adjust-    Payment    Pro
                            Reported Information  ments (a)   Expense   Forma
                            -------- ----------- ----------- ---------  -----

    Revenue:
        Subscriber revenue,
         including effects
         of rebates     $1,548,919   $670,870     $38,533       $- $2,258,322
        Advertising
         revenue, net of
         agency fees        47,190     22,743           -        -     69,933
        Equipment revenue   56,001     13,397           -        -     69,398
        Other revenue       11,882     24,184       3,021        -     39,087
                       -----------    -------  ----------  -------  ---------
    Total revenue        1,663,992    731,194      41,554        -  2,436,740
    Operating expenses
     (depreciation and
     amortization shown
     separately below) (1)
        Cost of services:
            Satellite and
             transmission   59,279     46,566         424   (7,084)    99,185
            Programming
             and content   312,189    117,156      34,667  (17,374)   446,638
            Revenue
             share and
             royalties     280,852    166,606      30,504        -    477,962
            Customer
             service and
             billing       165,036     82,947         193   (3,981)   244,195
            Cost of
             equipment      46,091     20,013           -        -     66,104
        Sales and
         marketing         231,937    126,054       5,393  (21,088)   342,296
        Subscriber
         acquisition
         costs             371,343    174,083      31,714      (14)   577,126
        General and
         administrative    213,142    116,444       1,083  (63,637)   267,032
        Engineering,
         design and
         development        40,496     23,045         400  (11,441)    52,500
        Impairment of
         goodwill        4,766,190          -  (4,766,190)       -          -
        Depreciation and
         amortization      203,752     88,749     (46,930)       -    245,571
        Restructuring,
         impairments and
         related costs      10,434          -           -        -     10,434
        Share-based
         payment expense         -          -           -  124,619    124,619
                       -----------    -------  ----------  -------  ---------
    Total operating
     expenses            6,700,741    961,663  (4,708,742)       -  2,953,662
                       -----------    -------  ----------  -------  ---------
        (Loss) income
         from
         operations     (5,036,749)  (230,469)  4,750,296        -   (516,922)
    Other income
     (expense)
        Interest and
         investment
         income              9,079      3,013           -        -     12,092
        Interest
         expense, net of
         amounts
         capitalized      (144,833)   (73,937)    (16,885)       -   (235,655)
        Loss on
         extinguishment
         of debt and
         credit
         facilities, net   (98,203)         -           -        -    (98,203)
        Loss on
         investments       (30,507)   (13,010)          -        -    (43,517)
        Other expense       (9,599)    (6,543)          -        -    (16,142)
                       -----------    -------  ----------  -------  ---------
    Total other expense   (274,063)   (90,477)    (16,885)       -   (381,425)
                       -----------    -------  ----------  -------  ---------
        (Loss) income
         before income
         taxes          (5,310,812)  (320,946)  4,733,411        -   (898,347)
        Income tax
         expense            (2,476)    (1,512)          -        -     (3,988)
                       -----------    -------  ----------  -------  ---------
            Net (loss)
             income    $(5,313,288) $(322,458) $4,733,411       $-  $(902,335)
                       ===========  =========  ==========  =======  =========

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

    Satellite and
     transmission           $4,236     $2,745        $103       $-     $7,084
    Programming and
     content                12,148      4,949         277        -     17,374
    Customer service and
     billing                 1,920      1,869         192        -      3,981
    Sales and marketing     13,541      7,047         500        -     21,088
    Subscriber
     acquisition costs          14          -           -        -         14
    General and
     administrative         49,354     13,200       1,083        -     63,637
    Engineering, design
     and development         6,192      4,675         574        -     11,441
                           -------    -------      ------       --   --------
    Total share-
     based payment
     expense               $87,405    $34,485      $2,729       $-   $124,619
                           =======    =======      ======       ==   ========
    ---------------------
    (a) Includes impairment of goodwill.

    (10) The following table reconciles our GAAP Net loss per common share
         (basic and diluted) to our non-GAAP Net loss per common share (basic
         and diluted) excluding the following charges: (a) preferred stock
         beneficial conversion feature, (b) loss on extinguishment of debt and
         credit facilities, net, and (c) loss on impairment of goodwill.

                                                         Unaudited
                                                         ---------
                                              For the Three   For the Twelve
                                               Months Ended    Months Ended
                                               December 31,    December 31,
                                               -------------   -------------
    (per share data includes basic and
     diluted)                                 2009     2008    2009     2008
                                              ----     ----    ----     ----

    Net loss per common share                  $0.00  $(0.08) $(0.15) $(2.45)
    Less:  Preferred stock beneficial
     conversion feature                            -       -   (0.05)      -
                                               -----   -----   -----   -----
    Net loss per common share excluding
     preferred stock beneficial conversion
     feature                                    0.00   (0.08)  (0.10)  (2.45)
    Less:  Loss on extinguishment of debt and
     credit facilities, net                    (0.00)  (0.03)  (0.07)  (0.05)
                                               -----   -----   -----   -----
    Net loss per common share excluding loss
     on extinguishment of debt and credit
     facilities, net and preferred stock
     beneficial conversion feature              0.00   (0.05)  (0.02)  (2.40)
    Less:  Impairment of goodwill                  -   (0.00)      -   (2.20)
                                               -----   -----   -----   -----
    Net loss per common share, excluding
     charges                                   $0.00  $(0.04) $(0.02) $(0.21)
                                               =====  ======  ======  ======