Siriusxm Holdings Inc. · NASDAQ:SIRI
Siriusxm — SIRIUS XM Radio — Shareholder Meeting (May 2009)
41 slides from Siriusxm's shareholder meeting presentation, May 27, 2009
Slide 1: Annual Meeting of Stockholders
MAY 27, 2009 Annual Meeting of Stockholders
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: Corporate Priorities: Obtain license
Corporate Priorities Obtain license 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 > 1990-1997 < 1997
Slide 4: Corporate Priorities: Develop radio chipsets and launch satellites
Corporate Priorities Develop radio chipsets and launch satellites < 1997 1998 1999 2002 2003 2004 2005 2006 2007 2008 2009 > 2000-2001 2000 2001
Slide 5: Corporate Priorities: Develop content and auto arrangements
Corporate Priorities Develop content and auto arrangements < 1997 1998 1999 2005 2006 2007 2008 2009 > 2000-2004 2000 2001 2002 2003 2004
Slide 6: Corporate Priorities: Rapidly build subscriber base
Corporate Priorities Rapidly build subscriber base < 1997 1998 1999 2000 2001 2002 2008 2009 > 2003-2007 2003 2004 2005 2006 2007
Slide 7: Corporate Priorities: Complete merger
Corporate Priorities Complete merger < 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2009 > February 2007 - July 2008 2007 2008
Slide 8: Corporate Priorities: Cut costs
Corporate Priorities Cut costs < 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008-2009 2008 2009 >
Slide 9: Corporate Priorities: Focus on cash flow
Corporate Priorities Focus on cash flow < 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 and beyond 2009 >
Slide 10: Complete Diverse Programming
Complete Diverse Programming Over 85 Channels of Commercial-Free Music Live Coverage of Every Major Sport The Best in News, Talk and Entertainment
Slide 11: Social Media to Drive Subscriber Growth and Interaction
Social Media to Drive Subscriber Growth and Interaction Twitter, MySpace, YouTube, Facebook
Slide 12: Tiered Selling Began Seven Months Ago
Tiered Selling Began Seven Months Ago No price alternatives prior to merger No base price increase before August 2011 SIRIUS XM Total $9.99 packages A la carte 544 k 204 k 748 k 97 k 4 k Source: Company reports as of 5/17/09 “Best of Package”
Slide 13: Operating Costs Improve Across the Board
Operating Costs Improve Across the Board Programming and content Satellite and transmission General and administrative 10% 23% 32% Source: Company reports
Slide 14: Operating Costs Improve Across the Board
Operating Costs Improve Across the Board Sales and marketing Engineering, Design & Development Subscriber acquisition costs 36% 48% 48% Source: Company reports
Slide 15: Penetration Gains at Every Major Automaker
Penetration Gains at Every Major Automaker Combined OEM penetration as a percentage of U.S. auto sales 22% 33% 45% 53% 2006 2007 2008 1Q09 Source: Company reports
Slide 16: Subscriber Growth Shifts to OEM
Subscriber Growth Shifts to OEM 100% mm mm mm mm 79% 61% 55% 54% 45% 46% 39% 21% Subscribers % Retail % OEM 0% 2001 2002 2004 2007 2009 Source: Company reports
Slide 17: Portable Radios + MP3
Portable Radios + MP3 Portable Stiletto 2 Portable XMp3
Slide 18: Introduced Interoperable and a la Carte Radios
Introduced Interoperable and a la Carte Radios MiRGE Radio Starmate 5 Dock & Play Radio
Slide 19: Certified Preowned Program (CPO)
Certified Preowned Program (CPO) Launched with Honda, GM, Acura, Volvo, Porsche, Volkswagen and Ford (regional) 4 additional programs to be launched soon Low subscriber acquisition costs
Slide 20: Launching Apple iPhone/iPod Touch and Smart Phone Applications
Launching Apple iPhone/iPod Touch and Smart Phone Applications
Slide 21: Focus on EBITDA / FCF
Focus on EBITDA / FCF Will Impact Subscriber Growth Streaming now $2.99 / month vs. free Family plan now $8.99 / month vs. $6.99 / month Content cost control Improved OEM & Retail contracts OEM penetration adjustments Channel rationalization
Slide 22: Focus on Profitable Growth
Focus on Profitable Growth Sample High Sample Low Converting Vehicle Converting Vehicle Conversion Rate 70% 30% SAC payback months Source: SIRIUS XM estimates based on select sample data
Slide 23: Focus on Churn Management
Focus on Churn Management 4 - 5% 4.20% 2.20% 1.83% 1.33% HBO/ Showtime/ Starz Netflix SIRIUS|XM Dish DTV Source: Company reports and estimates
Slide 24: Growth Statistics and Improvements
Growth Statistics and Improvements PF 1Q08 PF 1Q09 % Improvement Adjusted EBITDA ($70) mm $109 mm NMF Subscribers Revenue Cash operating expenses 17.9 mm $579 mm $649 mm 18.6 mm $606 mm $497 mm (23%) 5% 3% Source: Most recent Sirius XM 10Q filing. Figures are pro forma
Slide 25: SIRIUS XM is Now a Cash Flow Growth Story
SIRIUS XM is Now a Cash Flow Growth Story ($61) mm ($37) mm $32 mm $109 mm 2Q08 3Q08 4Q08 1Q09 Pro Forma Adj. EBITDA Source: Company reports
Slide 26: Now the Largest Radio Company based on First Quarter Revenue
SIRIUS XM is Now the Largest Radio Company based on First Quarter Revenue (-24%) $55 (-21%) $75 (-23%) $76 (-23%) $159 (-29%) $260 (-22%) $604 (+5%) $606 Cumulus Entercom Cox Radio Citadel CBS Radio Clear Channel SIRIUS|XM 1Q09 Radio Revenue (% change versus 1Q08) Source: Company reports
Slide 27: Adjusted EBITDA: Change in First Quarter Versus Year Ago
Adjusted EBITDA: Change in First Quarter Versus Year Ago ($11) Cumulus ($14) Entercom ($17) Cox Radio ($25) Citadel ($70) CBS Radio ($136) Clear Channel $179 SIRIUS|XM Source: Company reports
Slide 28: Internet Radio Searches for Business Model
Internet Radio Searches for Business Model $2.4 B <$25 M <$100 M <$100 M $161 M Pandora lastFM.com Slacker Rhapsody/ RadioPass SIRIUS XM | 2008 Revenue Source: Company reports and estimates
Slide 29: Pro Forma Adjusted EBITDA: Now Expecting More than $350 mm in 2009
Pro Forma Adjusted EBITDA: Now Expecting More than $350 mm in 2009 Above $350 mm ($136) mm ($679) mm ($566) mm ($971) mm 2005 2006 2007 2008 2009 Guidance increased from more than $300 mm Source: Company reports
Slide 30: Satellite Expenditures Sharply Reduced After 2011
Satellite Expenditures Sharply Reduced After 2011 SIRIUS 1, 2, & 3 XM 1 & 2 XM XM SIRIUS SIRIUS XM 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 LAUNCH DATE
Slide 31: Completed Refinancing
Completed Refinancing Firm plan to meet all 2009 / 2010 maturities Liberty Media committed to $530 mm, received a 40% equity stake Bank debt renewed and extended
Slide 32: Debt Maturities ($ millions)
Debt Maturities ($ millions) $339 $180 $632 $485 $1,279 $555 2009 2010 2011 2012 2013 2014 Source: Company reports
Slide 33: Strong Market Value
Strong Market Value SIRIUS|XM is the 140th most valuable company on NASDAQ (out of nearly 3,000 companies) Other companies with similar valuations: DreamWorks and Netflix Source: NASDAQ as of May 20, 2009
Slide 34: Improved Market Value
Improved Market Value $457 Million 12/18/08 $2.3 Billion Up 393% 5/22/09 Source: NASDAQ and company reports
Slide 35: Highlights of the Past Year
Highlights of the Past Year Closed merger (17 months) Refinanced $2.2 billion of $3.3 billion debt Seamless integration Achieved more synergies Introduced and successfully marketed tiered pricing
Slide 36: Highlights of the Past Year continued
Highlights of the Past Year continued Initiated preowned certified programs Achieved first positive Pro Forma Adj. EBITDA quarter in 4Q08: +$32 m vs. ($224) m in 4Q07 Strong Pro Forma Adj. EBITDA Growth in 1Q09 to $109 m vs. ($70) m in 1Q08
Slide 37: Near Term Concerns
Near Term Concerns U.S. auto sales Churn Debt
Slide 38: Management Priorities
Management Priorities Grow revenue Manage churn Continue cost reductions Position for auto rebound Expand new platforms Manage balance sheet Cash flow growth
Slide 39: Everything Worth Listening To Is Now On
Everything Worth Listening To Is Now On
Slide 40: Adjusted EBITDA definition
We refer to net loss before interest and investment income, interest expense net of amounts capitalized, income tax expense, loss from redemption of debt, loss on investments, other expense (income), restructuring and related cost, depreciation and amortization, and share related payment expense as
Slide 41: Reconciliation of pro forma income (loss) from operations to adjusted EBITDA
The reconciliation of the pro forma income (loss) from operations to the pro forma adjusted EBITDA is calculated as follows. Pro forma (loss) income from operations (1,385) (1,471) (1,025) (517) Impairment of parts - 11 - - Restructuring and related costs - - - 10 Depreciation and amortization 244 2