XM’s Losses Grow, While Costs to Acquire Customers Continues to Drop

XM’s EBITDA loss was $95.8 million for the second quarter of 2003, compared to
the EBITDA loss of $78.7 million in the second quarter of 2002. The satcaster credited the $8.3 million improvement with an increase in revenue from subscriber growth and declining costs to get those paying customers.
XM President and CEO Hugh Panero said XM remains on track to reach cash flow breakeven in late 2004 and the quarterly losses being reported today are to be expected from a rapidly ramping growth business. “XM continues to show significant progress in adding subscribers, controlling costs and achieving key operational milestones,” Panero said. “By the end of the third quarter, XM Radio will be rapidly approaching one million
subscribers, a major milestone for satellite radio.”
XM’s Cost Per Gross Addition, the per unit measurement of the fully loaded acquisition costs, including advertising and marketing, for Q2 was $160 per subscriber as compared to $591 per subscriber in the second quarter of 2002.
Subscriber Acquisition Costs are a subset of CPGA expenses and reflect the direct subsidy and distribution expenses per unit. XM’s SAC for the second quarter of 2003 was $80 per subscriber as compared to $132 per subscriber for the same period last year.
As of June 30, 2003, XM had $345.9 million in cash plus undrawn credit and equity facilities from GM of $114.4 million.