Siriusxm Holdings Inc. · NASDAQ:SIRI
Siriusxm — Sirius XM Radio — Shareholder Meeting (May 2012)
49 slides from Siriusxm's shareholder meeting presentation, May 22, 2012
Slide 1: Annual Stockholder Meeting May 22, 2012
Annual Stockholder Meeting May 22, 2012 Exhibit 99.1
Slide 2: Disclaimer on Forward-Looking Statements
The guidance contained herein is based upon a number of assumptions and estimates that, while considered reasonable by us when taken as a whole, is inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control . In addition
Slide 3: Forward-looking statement risk factors
The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward - looking statements : • we face substantial competition and that competition is likely to increase over time ; • our business depends in l
Slide 4: Management Priorities
Management Priorities • Continue to innovate • Grow subscribers • Grow revenue • Grow free cash flow
Slide 5: Continuing Growth Delivers Record Number of Subscribers
Source: Company filings and estimates Ending Subscribers 2008 - 2012E (mm ) Household Penetration: 13% in 2012E Continuing Growth Delivers Record Number of Subscribers 2008 2009 2010 2011 2012 19.0 18.8 20.2 21.9 23.4 E
Slide 6: Among Largest U.S. Subscription Media Businesses
Among Largest U.S. Subscription Media Businesses 3.6 4.2 12.5 14.1 20.0 22.3 22.3 23.4 Source: Public filings. DTV and Netflix streaming subscriptions represent domestic figures only. 1Q12 Total Basic Paid Subscribers (mm )
Slide 7: Recent Developments
(((‘Siriusxn)) SATELLITE RADIO Recent Developments
Slide 8: NEW Programming
NEW Programming latinos @Meor YQ SOra seu GD ye tt quiene fons: yl @escome “aR Am are @iocksan — pyurads —~Ls voting i
Slide 9: Listening is Just the Beginning
Listening is Just the Beginning Bruce Springsteen Paul McCartney Tim McGraw Foster the People Nirvana Coldplay Tom Petty Ringo Starr Coach K Cardinal Dolan “One Night Only” at Studio 54 Opie & Anthony in Cleveland Beach Boys Greg Allman Usher Concerts | Town Halls | Special Events
Slide 10: Launch of 2.0
• Future commitments with OEMs for chip installation in 2012 and beyond • New online channels enhance blended satellite and online experience • New features provide more control and convenience • Coming Soon: On Demand and Personalized Radio Launch of 2.0
Slide 11: NEW Features
NEW Features • Start Now: Go back up to 5 hours • Tune Start: Start from the beginning • Pause: Pause, rewind and skip • Show Alerts: Be alerted when favorite shows air
Slide 12: Lynx Radio
Lynx Radio • Blended satellite and internet in one radio • More Control • Pause, Rewind and Skip • Start shows and songs from the beginning • Find, set alerts for your favorite SiriusXM shows • Record up to 200 hours of your favorite shows or channels
Slide 13: NEW Mobile Apps
NEW Mobile Apps • New apps for Apple and Android add more control, convenience and content • Start shows and songs from the beginning • Pause, Rewind and Skip • Find and set alerts for favorite shows • New Android App adds support for tablets
Slide 14: NEW Media Player
NEW Media Player • Redesigned User Interface • More Control • Start Now • TuneStart • Pause, Rewind and Skip • Show alerts • More Content
Slide 15: Coming soon: On Demand
Coming soon: On Demand • Access thousands of hours On Demand • Access recently aired and exclusive shows at any time • Will include a broad mix of SiriusXM content • Featured and special on demand content • Growing access to selections from SiriusXM’s archives
Slide 16: Key Metrics
Key Metrics ($ in millions) 1Q11 1Q12 % change Churn rate 2.0% 1.9% - 10 bp Subscribers 20.6 mm 22.3 mm +8% Revenue $724 $805 +11% Adj. EBITDA $181 $208 +15% Net Income $78 $108 +38% FCF ($17) $15 –
Slide 17: Pre-Owned Vehicle Market
Pre - Owned Vehicle Market • Certified Pre - Owned Program (CPO) : Launched with nearly all major automakers • Additional Used Car Efforts : 5,000 franchised dealers supporting our non - CPO used car initiative • OEM revenue sharing creates strong arrangements • Expecting approximately 1 million gro
Slide 18: 1Q12 Revenue Selected Companies
1Q12 Revenue Selected Companies $ 74 m $ 672 m $ 805 m Pandora SiriusXM Clear Channel Radio Source: Pandora based on Wall St. research estimates and company guidance
Slide 19: SiriusXM Market
(((‘Siriusxn)) SATELLITE RADIO SiriusXM Market
Slide 20: Radio Revenue 2001 2011
Radio Revenue 2001 2011 Terrestrial Radio: CCU, CBS, Citadel, ETM, CMLS, etc. $18 b (100%) $15.1 b (78%) IP Radio: Last.fm, Slacker, Pandora, Rhapsody, MOG, etc. nil ~$1.2 b (6%) Satellite Radio: SiriusXM nil $3.0 b (16%) TOTAL $18.0 b ~$19.3 b Source: Analyst estimates and industry reports
Slide 21: 2012E Revenue Projections Selected Companies
2012E Revenue Projections Selected Companies $417 m $ 3.0 b $ 3.3 b Pandora SiriusXM Clear Channel Radio Source: Based on Wall St. research estimates and company guidance; Pandora fiscal year ending 1/2013
Slide 22: SiriusXM's Superior Revenue Model
Clear Channel $12.55/ Listener Based on 2011 Revenue SiriusXM $137.69/ Subscriber Pandora $5.84/ Active User Source: Based on company filings. Pandora fiscal year ending 1/2012 SiriusXM’s Superior Revenue Model
Slide 23: The Digital Music Ecosystem: Complicated and Crowded
The Digital Music Ecosystem: Complicated and Crowded
Slide 24: Paying Subscribers Digital Music Services
Paying Subscribers Digital Music Services ~3 m ~1 m ~1 m NOTE: Pandora and Spotify numbers based on Wall St. research estimates Pandora SiriusXM Rhapsody Spotify 22.3 m
Slide 25: Competitive Advantages
Competitive Advantages • Satellite delivery system with seamless continental U.S. coverage • Over 135 channels of curated content • Long term OEM agreements • Approximately $7.8 billion of gross NOL’s • Subscription model • Focused, pure - play satellite radio company
Slide 26: SiriusXM Businesses
(((Siriusxn)) SATELLITE RADIO SiriusXM Businesses
Slide 27: 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 28: Penetration Gains at Automakers
Penetration Gains at Automakers OEM penetration as a percentage of U.S. auto sales 46% 56% 63% 67% 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 2011
Slide 29: Factory-Enabled Vehicles in Operation to Increase Dramatically
0 10 20 30 40 50 60 70 80 90 100 Factory - Enabled Vehicles in Operation to Increase Dramatically (millions) Source: Company estimates based on external industry estimates of 2012 - 17 automotive sales
Slide 30: Focus on Subscriber Retention Yields Results
Focus on Subscriber Retention Yields Results 4 - 5% 1.4% 1.9% 1.4% Netflix DTV SiriusXM Dish Source : Public filings and industry estimate 1Q12 Comparative Monthly Churn Rates 4 - 5% HBO/ Showtime/ Starz
Slide 31: Multi-Year Revenue Growth
2008 2009 2010 2011 2012E $2.4 $2.5 $2.8 $3.0 $3.3 2008 figure is adjusted for the merger of Sirius and XM Multi - Year Revenue Growth (billions)
Slide 32: Significant Adj. EBITDA Growth
Significant Adj. EBITDA Growth (millions) ($136) $463 $626 $731 $ 875 2008 figure is adjusted for the merger of Sirius and XM . 2008 2009 2010 2012E 2011
Slide 33: Strong FCF Growth
Strong FCF Growth (millions) $(552) $185 $210 $416 ~ $700 2008 figure is adjusted for the merger of Sirius and XM 2008 2009 2010 2012E 2011
Slide 34: Growth Statistics and Improvements Since Merger
Growth Statistics and Improvements Since Merger ($ in millions) 1Q09 1Q10 1Q11 1Q12 Subscribers 18.6 mm 18.9 mm 20.6 mm 22.3 mm Revenue $587 $664 $724 $805 Adj. EBITDA $109 $158 $181 $208 FCF ($4) ($127) ($17) $15
Slide 35: 2012 Outlook
2012 Outlook 2012 guidance: • Revenue of approx. $3.3 billion • Adj. EBITDA of approx. $875 million • FCF of approx. $700 million • 1.5 million net subscriber additions
Slide 36: Reduced Leverage Ratios
Reduced Leverage Ratios Gross Debt to TTM Adj. EBITDA 1Q09 1Q10 1Q11 1Q12 7.1x 4.8x 3.9x 72.5x
Slide 37: Investment Thesis: Significantly Improved Borrowing Costs
Investment Thesis: Significantly Improved Borrowing Costs Note: Secured transactions in June and August 2009 also included OID. February 2009 transaction also included fees and equity issuance. February 2009 15% secured (REPAID) June 2009 11.25% secured (REPAID) August 2009 9.75% secured March 2010
Slide 38: Investment Thesis: Operational Leverage Drives EBITDA
Investment Thesis: Operational Leverage Drives EBITDA Contribution margin of approximately 70% Adjusted EBITDA Margins 2008 2009 2010 2011 At Maturity (6%) 18% 22% 24% 40%+ • EBITDA margin improves dramatically as we scale subscribers and revenue
Slide 39: Investment Thesis: Completion of Satellite Build Translates to More FCF
Investment Thesis: Completion of Satellite Build Translates to More FCF 2005 • 2006 • 2007 • 2008 • 2009 • 2010 • 2011 • 2012 • 2013 • 2014 • 2015 • 2016 • 2017 XM 3 XM 4 SIRIUS 5 XM 5 SIRIUS 6 LAUNCH DATE
Slide 40: Auto Sales Forecast
2012E 2013E 2014E 2015E 2016E 14.3 15.0 15.6 16.1 16.6 Source: Based on external industry estimates of 2012 - 16 automotive sales Auto Sales Forecast (millions)
Slide 41: Lower Annual Leverage Ratios
Lower Annual Leverage Ratios 2009 2010 2011 2012E 6.7x 5.1x 4.1x 3.1x Gross Debt to Adj. EBITDA Approaching our 3.0x target leverage ratio
Slide 42: Investment Thesis: Free Cash Flow Growth
Investment Thesis: Free Cash Flow + Subscriber Growth + Revenue Growth + Lower Interest Expense + Lower Capital Expenditures + Cash Savings from NOL Use = Free Cash Flow Growth
Slide 43: Excess Cash Presents Opportunities
Excess Cash Presents Opportunities ($ in millions) 2010 2011 2012E Beginning Cash $383 $587 $774 Free Cash Flow $210 $416 $700 Net Debt Repayments nil ($240) ($382) Ending Cash $587 $774 $1,092 Note: Figures are simplified and approximate. Forward estimates exclude other financing activities, such a
Slide 44: Acquisitions and Returns of Capital
Acquisitions and Returns of Capital • Free Cash Flow creates opportunities to enhance the business or return capital to stockholders • Acquisitions • Dividends • Stock buybacks
Slide 45: Reconciliation for SiriusXM
Reconciliation for SiriusXM Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY 2011 As Reported Total Revenue 723,839 744,397 762,550 783,738 804,722 242,245 637,235 922,066 1,663,992 2,472,638 2,816,992 3,014,524 Predecessor Financial Information - - - - - 558,266
Slide 46: Reconciliation for SiriusXM
Reconciliation for SiriusXM Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY 2011 As Reported Restructuring, Impairments and Related Costs - - - - - - 10,917 - 10,434 32,807 63,800 - Predecessor Financial Information - - - - - - - - - - - - Purchase Price Accounti
Slide 47: Reconciliation for SiriusXM
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
Slide 48: Reconciliation for SiriusXM
Reconciliation for SiriusXM For the Years Ended December 31, 2011 2010 2009 Cash Flow information Net cash provided by operating activities $543,630 $512,895 $433,830 Net cash used in investing activities (127,888) (302,414) (248,511) Net cash used in financing activities (228,443) (7,279) (182,276)
Slide 49: Satellite Radio
SATELLITE RADIO