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Sirius XM Lowers Operating Costs

Karmazin emphasizes cash flow growth; company subscriber numbers are off a bit

Proclaiming that “satellite radio is now a cash flow growth story,” Sirius XM President/CEO Mel Karmazin expressed pleasure with his company’s first-quarter financial results.

The satcaster reported $605.5 million in pro forma revenue, up 5% over the first quarter of 2008, and $108.8 million in first quarter pro forma adjusted income from operations, as compared to a year ago when it reported a pro forma adjusted loss from operations of $70.2 million.

This quarter represents the company’s second consecutive of positive adjusted income from operations, according to Karmazin.

The recent merger has helped the satcaster reduce operating costs 23%, demonstrating Sirius XM’s “focus on improving profitability despite slower automobile sales and a 2% sequential decline in satellite radio subscribers,” said Karmazin.

The Q1 2009 pro forma net loss improved 73% to $62.9 million as compared to the same period last year with a pro forma net loss of $233.4 million.

Subscriber acquisition costs were $61 per in the first quarter of 2009, compared to $82 for the same period a year ago.

Sirius XM ended the first quarter with about 18.6 million subscribers, up 3% from 17.9 million pro forma subscribers a year ago but down 2% from fourth quarter 2008 subscribers of 19,003,856.

Monthly customer churn was 2.2% in the first quarter 2009. That compares with 2.1% for Sirius and 1.8% for XM a year ago.