XM Satellite Radio Holdings Inc. / XMSR

About XM Satellite Radio Holdings Inc.

1500 Eckington Pl. NE, Washington, D.C. 20002
www.xmradio.com | 202-380-4000 | Founded: 1992

Industry: Media | Category: Public Companies

For XM Satellite Radio, 2005 was another year of milestones, ending in an intense battle for subscribers in advance of shock jock Howard Stern's debut this January on rival Sirius Satellite Radio.
District-based XM started the year with 3.2 million subscribers and added 2.7 million more, despite raising its basic monthly fee nearly $3 to $12.95. It launched its third satellite and bought additional wireless spectrum that will allow it to expand multimedia offerings. A few months before unveiling the first combination XM radio and digital music player, XM partnered with online music store Napster to allow subscribers to purchase online music and other programming they had heard on XM Radio. Even as XM was cutting deals, it was also preparing for an especially intense holiday shopping season battle.
Both XM and Sirius added more subscribers in the last three months of the year than in any other quarter. Though still under contract with Viacom, Stern made a round of television appearances. XM countered with its own new celebrities, adding rapper Snoop Dogg, comedian Ellen DeGeneres, and rocker David Bowie and featuring all three in a television commercial highlighting XM's diverse offerings. In February of this year, XM added Oprah Winfrey to the roster, with a three-year, $55 million deal.
But XM posted substantially higher losses last year, and its cost to land each new subscriber grew. The spend-to-build approach alienated one board member, Pierce "Jack" Roberts Jr., who resigned in February of this year, warning of a "crisis on the horizon" if the company did not curb its spending. The company said its heavy expenses reflected a "onetime competitive event," namely Howard Stern.
Last summer's record gas prices hurt XM by slowing sales at General Motors, its biggest automotive partner and one of several automakers that install XM equipment in their vehicles. Together, they help attract about half of XM's subscribers.
Company officials have long said that XM will start bringing in enough money to cover its expenses in the fourth quarter of 2006 and begin its march into the black. (Neither Sirius nor XM has posted a profit yet.)

Chairman and founder: Gary Parsons

2005 Financial Data

Revenues: $558,266,000 | Net Income: $-666,715,000
Asssets: $2,223,661,000 | Earnings Per Share: $-3.07
Total employees: 750 | Local employees: 550