Siriusxm Holdings Inc. · NASDAQ:SIRI
Siriusxm — Sirius XM Radio — Shareholder Meeting (May 2011)
43 slides from Siriusxm's shareholder meeting presentation, May 25, 2011
Slide 1: Annual Meeting of Stockholders May 25, 2011
Annual Meeting of Stockholders May 25, 2011
Slide 2: Disclaimer on forward-looking statements
Disclaimer on forward-looking statements The guidance contained herein are based upon a number of assumptions and estimates that, while considered reasonable by us when taken as a whole, are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of
Slide 3: Tremendous Growth Since Our 2001 Launch Despite New Competition
Tremendous Growth Since Our 2001 Launch Despite New Competition 1994 - Internet radio streaming 2001 - Satellite radio begins service 2001 - Apple iPods introduced 2003 - HD radio broadcasts begin 2005 - MP3 connectivity in vehicles 2010 - U.S. smartphone users top 60m
Slide 4: SiriusXM's Superior Content is a Significant Competitive Advantage
SiriusXM's Superior Content is a Significant Competitive Advantage Commercial-Free Music Live Coverage of Every Major Sport The Best in News, Talk and Entertainment
Slide 5: Programming Evolution
RENEWALS: Howard Stern, NFL, Elvis, Grateful Dead, Shade45, O&A, ESPN, PGA NEW PROGRAMMING: Dr. Laura, SXM Fantasy Sports Radio, Pearl Jam Radio, SXM College Sports Nation, TMZ Live, Yoshiki Radio POP-UP CHANNELS: Paul McCartney, Neil Diamond Radio, Elton!, Tim McGraw Radio, Simon & Garfunkel, Manda
Slide 6: Penetration Gains at Automakers
Penetration Gains at Automakers OEM penetration as a percentage of U.S. auto sales 2006 2007 2008 2009 Source: Total US light vehicle sales per Global Insight and company estimates of SiriusXM enabled sales; Represents factory and port installs only 2010
Slide 7: U.S. Auto Sales Resume Growth
U.S. Auto Sales Resume Growth (mm) Source: Industry estimates
Slide 8: Factory-Enabled Vehicles in Operation to Increase Dramatically
Factory-Enabled Vehicles in Operation to Increase Dramatically (mm) Source: Company estimates based on external industry estimates of 2010-15 automotive sales
Slide 9: Pre-owned Vehicle Programs
Pre-owned Vehicle Programs Certified Pre-owned Owned (CPO): Launched BMW, Chrysler, Ford/Lincoln, General Motors, Honda/Acura, Hyundai, Kia, Lexus, Mercedes-Benz, Nissan/ Infiniti, Porsche, Volvo and VW/Audi Non-Certified: Launched with Chrysler, General Motors and Mercedes-Benz Additional programs
Slide 10: Growth Opportunity in Services
Growth Opportunity in Services Multiple infotainment services offered and planned: Traffic, weather, sports tracking, fuel listings, movie listings, airport and flight conditions, red light cameras Other new services and audio features in development
Slide 11: Launched iPad, iPhone, BlackBerry and Android-Powered Smartphone Apps
Launched iPad, iPhone, BlackBerry and Android-Powered Smartphone Apps
Slide 12: SiriusXM Internet Radio and Home Access
SiriusXM Internet Radio: Home Access Radios and Streaming Media Players: Connected TV's: Developing Apps for TVs and Blu-Ray Players Initial introductions scheduled for Q3-2011 A/V Receivers: Custom-install Systems:
Slide 13: Focus on Subscriber Retention Yields Results
Focus on Subscriber Retention Yields Results 3.9% 1.5% 2.0% 1.5% Netflix DTV SiriusXM Dish Source: Public filings and industry estimates 1Q11 Comparative Monthly Churn Rates 4-5% HBO/ Showtime / Starz
Slide 14: Multi-Year Revenue Growth
Multi-Year Revenue Growth (billions) 2009 2008 2007 2011E Note: Historical revenue figures are adjusted pro forma results.
Slide 15: Significant Adj. EBITDA Growth
Significant Adj. EBITDA Growth (mm)
Slide 16: Strong FCF Growth
Strong FCF Growth (mm) $210 $350 $185
Slide 17: Growth Statistics and Improvements
Growth Statistics and Improvements 1Q10 1Q11 CHANGE Penetration rate 59% 65% +600 bp Conversion 45.2% 44.7% -50 bp Subscribers 18.9 mm 20.6 mm +9% Revenue $664 mm $724 mm +9% Adj. EBITDA $158 mm $181 mm +15% Margin 23.5% 24.9% +140 bp
Slide 18: Continuing Growth Delivers Record Number of Subscribers
Continuing Growth Delivers Record Number of Subscribers Source: Company filings Ending Subscribers 2003-2011E (mm) 1.6 4.4 9.2 13.7 19.0 17.3 18.8 2004 2005 2007 2008 2009 2003 2010 20.2 2006 21.6 2011E
Slide 19: Among Largest U.S. Subscription Media Businesses
Among Largest U.S. Subscription Media Businesses 1Q11 Total Basic Paid Subscribers (mm) Source: Public filings
Slide 20: Radio Revenue 2001 vs 2010
Radio Revenue 2001 2010 Terrestrial Radio: CCU, CBS, Citadel, ETM, CMLS, etc. $18 b (100%) $15 b (80%) IP Radio: Last .fm, Slacker, Pandora, Rhapsody, MOG, etc. nil < $1 b (5%) Satellite Radio: SiriusXM nil $2.8 b (15%) TOTAL $18.0 b $18.8 b Source: analyst estimates and industry reports
Slide 21: 2010 Subscription Radio Revenue
2010 Subscription Radio Revenue TOTAL: $3.1 billion Satellite Radio: $2.8 billion Internet Radio: ~$0.3 billion SiriusXM's share of pay radio: 90% Source: analyst estimates and industry reports
Slide 22: 2010 Revenue Selected Companies
2010 Revenue Selected Companies (billions) Source: Public filings
Slide 23: SiriusXM the Largest Radio Company in the 1Q
SirusXM the Largest Radio Company in the 1Q 1Q11 Revenue $724 mm (+9%) $640 mm (+3%) SiriusXM Clear Channel Radio
Slide 24: The Digital Music Ecosystem: Complicated and Crowded
The Digital Music Ecosystem: Complicated and Crowded
Slide 25: Paying Subscribers Digital Music Services
Paying Subscribers Digital Music Services 20.6 m Source: Industry estimates
Slide 26: SiriusXM's Superior Revenue Model
SiriusXM's Superior Revenue Model Pandora $1.68 / User Source: Public filings and industry estimates Clear Channel $13.61 / Listener Based on 2010 Revenue SiriusXM $141 / Subscriber
Slide 27: Satellite Radio 2.0 in Retail Stores 4Q11
Satellite Radio 2.0 in Retail Stores 4Q11 Additional channels feature: - New music genres and programming - New suite of Hispanic channels targets fastest growing demographic Enhanced functionality: Electronic programming guide Pause, rewind, replay and record
Slide 28: Investment Thesis: Operational Leverage Drives EBITDA
Investment Thesis: Operational Leverage Drives EBITDA Contribution margin of approximately 70% Adjusted EBITDA Margins Adjusted EBITDA Margins Adjusted EBITDA Margins Adjusted EBITDA Margins 2008 2009 2010 At Maturity (6%) 18% 22% 40%+ EBITDA margin improves dramatically as we scale subscribers and
Slide 29: Investment Thesis: Completion of Satellite Build Translates to More FCF
Investment Thesis: Completion of Satellite Build Translates to More FCF 2005 • 2006 • 2007 • 2008 • 2009 • 2010 • 2011 • 2012 • 2013 • 2014 • 2015 • 2016 • 2017 XM 3 XM 4 SIRIUS 5 XM 5 SIRIUS 6 LAUNCH DATE
Slide 30: Investment Thesis: Significantly Improved Borrowing Costs
Investment Thesis: Significantly Improved Borrowing Costs February 2009: 15% secured (REPAID) June 2009: 11.25% secured (REPAID) August 2009: 9.75% secured March 2010: 8.75% unsecured October 2010: 7.625% unsecured - Trading @ 6.2% Yield Note: Secured transactions in June and August 2009 also includ
Slide 31: Lower Leverage Ratios
Lower Leverage Ratios Net Debt to TTM Adj. EBITDA Approaching our 3.0x target leverage ratio
Slide 32: Solid Balance Sheet and Strong Liquidity Position
Solid Balance Sheet and Strong Liquidity Position $587 million cash balance at year end 2010 Net debt to adjusted EBITDA at 4.1x at 1Q11 No significant maturities until mid 2013
Slide 33: Investment Thesis: Free Cash Flow
Investment Thesis: Free Cash Flow + Subscriber Growth + Revenue Growth + Lower Interest Expense + Lower Capital Expenditures + Cash Savings from NOL Use = Free Cash Flow Growth
Slide 34: Excess Cash Presents Opportunities
Excess Cash Presents Opportunities 2010 2011E 2012E Beginning Cash $383 m $587 m $707 m Free Cash Flow $210 m ~$350 m >$350 m Net Debt Repayments nil ($230) m nil Ending Cash $587 m $707 m >$1,057 m Note: Figures are simplified and approximate. Forward estimates exclude other financing activities, s
Slide 35: Acquisitions & Returns of Capital
Acquisitions & Returns of Capital Free Cash Flow creates opportunities to enhance the business or return capital to shareholders Acquisitions Dividends Stock buybacks
Slide 36: SIRI Historical Market Capitalization
SIRI Historical Market Capitalization (billions) $3.7 861% $10.4 178% $14.9 43%
Slide 37: SiriusXM Highlights
SiriusXM Highlights 20.2 mm subscribers at YE 2010, expected to grow by 1.4 mm in 2011 20.6 mm subscribers at Q1 2011 Other 2011 guidance: Revenue of approx. $3 billion Adj. EBITDA of approx. $715 million FCF to approach $350 million Stable churn and conversion rates
Slide 38: Competitive Advantages
Competitive Advantages Satellite delivery system with near- complete continental U.S. coverage Over 135 channels of curated content Long term OEM agreements Approximately $8 billion of NOL's Subscription model Focused, pure-play satellite radio company
Slide 39: Management Priorities
Management Priorities Continue to innovate Grow subscribers Grow revenue Grow free cash flow
Slide 40: Reconciliation for SiriusXM
Reconciliation for SiriusXM Q108 Q208 Q308 Q408 Q1 09 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q1 2011 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 As Reported Total Revenue 270,350 283,017 488,443 622,183 586,979 590,829 618,656 676,173 663,784 699,761 717,548 735,899 723,839 242,245 637,235 922,066 1,663,9
Slide 41: Reconciliation for SiriusXM
Reconciliation for SiriusXM Q108 Q208 Q308 Q408 Q1 09 Q209 Q309 Q409 Q110 Q210 Q310 Q410 Q1 2011 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 As Reported Restructuring, Impairments and Related Costs - - 7,430 2,977 614 27,000 2,554 2,640 - 1,803 2,267 59,730 - - 10,917 - 10,434 32,807 63,800 Predecesso
Slide 42: Reconciliation for SiriusXM: ARPU
Reconciliation for SiriusXM 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 f
Slide 43: Everything worth listening to is on
Everything worth listening to is on