XM Satellite Radio Holdings Inc. 4Q and 2006 Results

XM Adds Nearly 1.7 Million Net Subscribers in 2006

2006 Revenue Increases 67% to $933 Million
XM Achieves Positive Cash Flow from Operations in the Fourth Quarter of 2006
XM and Sirius to Combine in $13 Billion Merger of Equals

WASHINGTON, Feb. 26 /PRNewswire-FirstCall/ — XM Satellite Radio
Holdings Inc. today reported financial and operating results for the
fourth quarter and full year ended December 31, 2006. XM announced that
2006 revenue increased year over year by 67 percent to $933 million. XM
added 1.696 million new net subscribers in 2006 for a total of 7.629
million subscribers, and XM achieved positive cash flow from operations
in the fourth quarter.

“2006 was a pivotal year for XM,” said Hugh Panero, XM CEO. “The
automobile market is emerging as a key catalyst for satellite radio’s
future growth, and XM is well-positioned through its relationships with
the nation’s largest and fastest-growing automakers. Our financial
metrics are heading in the right direction as marketing costs have
declined and our revenues have increased.”

Fourth Quarter and Full-Year Financial Results

For the fourth quarter of 2006, XM reported quarterly total revenue of
$257.1 million, an increase of 45 percent over the $177.1 million total
revenue reported in fourth quarter of 2005. XM’s full year 2006 total
revenue was $933.4 million, an increase of 67 percent over the $558.3
million total revenue recorded in 2005. Subscription revenue grew 64
percent to $825.6 million from $502.6 million in 2005. Advertising
revenue grew 76 percent to $35.3 million from $20.1 million. These
quarterly and annual increases in revenue were driven by our subscriber
growth and increases in average revenue per subscriber in connection
with our price increase implemented in the second quarter of 2005.

For the fourth quarter, subscriber acquisition cost (SAC), a component
of cost per gross addition (CPGA) was $70 compared to $89 in the same
period last year. CPGA in the fourth quarter was $128 compared to $141
in the same period last year. For full year 2006, SAC was $64,
consistent with $64 in 2005, and CPGA was $108, compared to $109 in
2005.

XM reported an adjusted EBITDA loss of ($69.8) million for the fourth
quarter of 2006, a substantial improvement from the adjusted EBITDA
loss of ($172.9) million reported in the fourth quarter of 2005. For
the full year 2006, XM reported an adjusted EBITDA loss of ($166.2)
million down from the full year 2005 adjusted EBITDA loss of ($403.7)
million. The decline in adjusted EBITDA loss primarily resulted from
our increase in subscribers, growth in subscription margin and lower
marketing costs.

Net loss for the fourth quarter of 2006 was ($256.7) million, which
included the following non-cash items totaling ($79.0) million of the
net loss: a charge of $(57.6) million to reflect an impairment in our
23% ownership in Canadian Satellite Radio and charges of ($21.4)
million from our balance sheet restructuring. XM’s net loss for the
fourth quarter of 2005 was ($268.3) million which included charges of
($25.3) million from our balance sheet restructuring.

Full year net loss was ($718.9) million, which included the following
non- cash items totaling ($198.8) million of the net loss: impairment
charges of ($76.6) million in our investments in WorldSpace and
Canadian Satellite Radio and charges of ($122.2) million from our
balance sheet restructuring. XM’s net loss for the full year 2005 was
($666.7) million which included charges of ($27.6) million from our
balance sheet restructuring.

Successful Balance Sheet Restructuring Concludes

In 2006, the company successfully completed a major recapitalization by
leveraging its improving credit profile to transition to a largely
unsecured capital structure, reducing interest expense by refinancing
the debt issued earlier in the company’s development, extending debt
maturities and enhancing its liquidity position. In conjunction with
the refinancing, the company established a secured $250 million
revolving credit facility maturing in 2009 with a syndicate of blue
chip banks and increased the size of the credit facility with GM by $50
million to $150 million.

Also in 2006, to further simplify the balance sheet, XM redeemed all
outstanding shares of Series B Convertible Preferred Stock, converted
all of its Series C Convertible Preferred Stock into 14.5 million Class
A common shares, and incentivized the conversion of $146.6 million
aggregate fully accreted face amount of 10% Senior Secured Discount
Convertible notes by issuing 48.8 million shares of common stock.

In February 2007, the company entered into a sale-leaseback of the
transponders on the XM-4 satellite whereby the company received $288.5
million of net proceeds of which $44 million was used to retire
outstanding mortgages.

XM Extends Long-Term Agreements with Honda, Toyota; General Motors Expands XM Vehicle Production for 2007

2006 marked the first year that XM added more net new customers through
auto dealerships than at retail. XM’s recent ten-year contract
extensions with Toyota and Honda add to the momentum that XM has in the
new car market.

General Motors, the leading automotive provider of XM radios, announced
its plan to build more than 1.8 million vehicles with factory-installed
XM in 2007. American Honda plans to equip more than 650,000 vehicles
with factory XM radios for 2007 and Toyota is expected to produce more
than one million vehicles with factory XM radios annually by 2010.

XM Completes New State-of-the-Art Satellite System with “Rhythm” and “Blues”

In December 2006, XM began broadcasting through its XM-4 satellite
(known as “Blues”) manufactured by Boeing Satellite Systems
International, Inc. The combination of “Rhythm,” the XM-3 satellite
launched in February 2005, and “Blues” provides a solid foundation to
deliver a full complement of digital broadcasts for at least the next
15 years. “Rhythm” and “Blues” replace XM’s original satellites “Rock”
and “Roll,” which were launched in 2001 and will serve as in-orbit
spares for the near-term.

XM and Sirius to Combine in $13 Billion Merger of Equals

XM Satellite Radio and Sirius Satellite Radio last week announced that
they have entered into a definitive agreement, under which the
companies will be combined in a tax-free, all-stock merger of equals
with a combined enterprise value of approximately $13 billion, which
includes net debt of approximately $1.6 billion. Under the terms of the
agreement, XM shareholders will receive a fixed exchange ratio of 4.6
shares of Sirius common stock for each share of XM they own. XM and
Sirius shareholders will each own approximately 50 percent of the
combined company. The combination creates a nationwide audio
entertainment provider with combined 2006 revenues of approximately
$1.5 billion based on analysts’ consensus estimates. The transaction is
subject to approval by both companies’ shareholders, the satisfaction
of customary closing conditions and regulatory review and approvals,
including antitrust agencies and the FCC. Pending regulatory approval,
the companies expect the transaction to be completed by the end of 2007.
————————————–
This press release contains
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements include, but
are not limited to, statements about the benefits of the business
combination transaction involving Sirius Satellite Radio Inc. and XM
Satellite Radio Holdings Inc., including potential synergies and cost
savings and the timing thereof, future financial and operating results,
the combined company’s plans, objectives, expectations and intentions
with respect to future operations, products and services; and other
statements identified by words such as “anticipate,” “believe,” “plan,”
“estimate,” “expect,” “intend,” “will,” “should,” “may,” or words of
similar meaning. Such forward-looking statements are based upon the
current beliefs and expectations of Sirius’s and XM’s management and
are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are
difficult to predict and generally beyond the control of Sirius and XM.
Actual results may differ materially from the results anticipated in
these forward-looking statements.

The following factors, among others, could cause actual results to
differ materially from the anticipated results or other expectations
expressed in the forward-looking statement: general business and
economic conditions; the performance of financial markets and interest
rates; the ability to obtain governmental approvals of the transaction
on a timely basis; the failure of Sirius and XM shareholders to approve
the transaction; the failure to realize synergies and cost-savings from
the transaction or delay in realization thereof; the businesses of
Sirius and XM may not be combined successfully, or such combination may
take longer, be more difficult, time-consuming or costly to accomplish
than expected; and operating costs and business disruption following
the merger, including adverse effects on employee retention and on our
business relationships with third parties, including manufacturers of
radios, retailers, automakers and programming providers. Additional
factors that could cause Sirius’s and XM’s results to differ materially
from those described in the forward-looking statements can be found in
Sirius’s and XM’s Annual Reports on Form 10-K for the year ended
December 31, 2005, and Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2006, June 30, 2006 and September 30, 2006 which are
filed with the Securities and Exchange Commission (the “SEC”) and
available at the SEC’s Internet site (http://www.sec.gov). The
information set forth herein speaks only as of the date hereof, and
Sirius and XM disclaim any intention or obligation to update any
forward looking statements as a result of developments occurring after
the date of this press release.

Important Additional Information Will be Filed with the SEC

This communication is being made in respect of the proposed business
combination involving Sirius and XM. In connection with the proposed
transaction, Sirius plans to file with the SEC a Registration Statement
on Form S-4 containing a Joint Proxy Statement/Prospectus and each of
Sirius and XM plan to file with the SEC other documents regarding the
proposed transaction. The definitive Joint Proxy Statement/Prospectus
will be mailed to stockholders of Sirius and XM. INVESTORS AND SECURITY
HOLDERS OF SIRIUS AND XM ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY
IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of
the Registration Statement and the Joint Proxy Statement/Prospectus
(when available) and other documents filed with the SEC by Sirius and
XM through the web site maintained by the SEC at http://www.sec.gov. Free
copies of the Registration Statement and the Joint Proxy
Statement/Prospectus (when available) and other documents filed with
the SEC can also be obtained by directing a request to Sirius Satellite
Radio Inc., 1221 Avenue of the Americas, New York, NY 10020, Attention:
Investor Relations or by directing a request to XM Satellite Radio
Holdings Inc., 1500 Eckington Place, NE Washington, DC 20002,
Attention: Investor Relations.

Sirius, XM and their respective directors and executive officers and
other persons may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. Information regarding
Sirius’s directors and executive officers is available in its Annual
Report on Form 10-K for the year ended December 31, 2005, which was
filed with the SEC on March 13, 2006, and its proxy statement for its
2006 annual meeting of stockholders, which was filed with the SEC on
April 21, 2006, and information regarding XM’s directors and executive
officers is available in XM’s Annual Report on Form 10-K, for the year
ended December 31, 2005, which was filed with the SEC on March 3, 2006
and its proxy statement for its 2006 annual meeting of shareholders,
which was filed with the SEC on April 25, 2006. Other information
regarding the participants in the proxy solicitation and a description
of their direct and indirect interests, by security holdings or
otherwise, will be contained in the Joint Proxy Statement/Prospectus
and other relevant materials to be filed with the SEC when they become
available.

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