Sirius has announced financial guidance for 2009 assuming the completion of the merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc.Based on the preliminary analysis:
- Total synergies, net of the costs to achieve such synergies, for the combined company are expected to be approximately $400 million in 2009;
- Adjusted EBITDA for the combined company is expected to be approximately $300 million in 2009. Adjusted EBITDA is net income/(loss) before interest and investment income, interest expense (net of amounts capitalized), depreciation expense, and non-cash stock compensation expense
- The combined company is expected to achieve positive free cash flow, before satellite capital expenditures, for the full year 2009.
To date, neither Sirius nor XM has reported positive adjusted EBITDA or achieved free cash flow for a full year.
"The upside potential from this merger is significant. In addition, the synergies, adjusted EBITDA and free cash flow are expected to continue to grow in subsequent years, and we look forward to providing more detail of this growth in coming months," said Mel Karmazin.
The company's financial guidance for total net synergies, adjusted EBITDA and free cash flow assumes, among other things: that the merger will be consummated in the third quarter of 2008; that XM will incur certain incremental interest expense as a result of refinancing certain of its debt; that the combined company will realize certain additional advertising and subscriber revenue synergies as a result of the merger; and that the combined company will achieve cost savings and efficiencies in nearly all aspects of its operations. No assurance can be given that any of these objectives will be met or that the amount of incremental interest at XM will not exceed that anticipated by the company.
Furthermore, the company's financial guidance also assumes that the combined company will, following the consummation of the merger, immediately take steps in nearly all operational areas to rationalize its operations and realize the expected synergies in a timely manner, but no assurance can be given that the necessary measures to realize expected synergies will be implemented in a timely manner.
When the merger was structured, the parties determined that Sirius would be the surviving public parent company and that XM would become a subsidiary of Sirius. As a result, the preponderance of XM's existing debt will require refinancing in connection with the merger. Because of the refinancing, the combined company expects XM to incur incremental interest expense as a result of refinancing certain of its debt. Principally as a result of this higher interest expense at XM, among other factors, substantially more of the free cash flow before satellite capital expenditures in 2009 is forecast to be realized at Sirius, the parent company, than at XM.
In addition, Sirius and XM expect to refinance certain debt in 2009 that is scheduled to mature during that year.
Do we read into this that Mel is confident they are cery close to a vote and an approval ?
Ryan,
Didnt Mel say they wouldnt issue guidance like this until the merger was approved? hmmm
Ryan,
Didnt Mel say they wouldnt issue guidance like this until the merger was approved? hmmm
Why now?
Hartleib, while you're entitled to say whatever you please, the notion that you are somehow looking out for us sirius stockholders by demanding that the FCC waste even more time investigating the interoperability issue, is beyond ridiculous. And just in case you don't know any better, and perhaps you don't, given how you unremittingly remind us of your sizeable interest in sirius - your sirius shares are a drop in the bucket - you could sell at one go and the bid price wouldn't budge a pip. Are you simply an attention whore or just plain nutty?
I think the goal here is to undo some of the damage done by GS so that the stock price drifts up to where it was a couple weeks ago pre-merger. That way the merger will actually have a positive effect on the price as opposed to it just getting it back to where it was.
Table talk from Mel.
Thanks Mel.... we got it Friday in fact.
definately a way to drive the price back up to where it was. Also an important issue for stock holders or people looking to invest into teh stock. No one wants to touch sirius because they are a high debt company, with expected profits to turn in several years. Mel states that in 2009 he will have a profitable company. Thats pretty good news. But is it the truth? who knows...either way investers are stupid.
More BS coming from Melvin Alan "Mel" Karmazin desperate to keep his pockets lined with ignorant money. Sirius should know better than to release any post "merger" MONOPOLY scheme information before the deal is done, and then not till the ink is dry. Poor Melvin Alan "Mel" Karmazin is going to look worse, and the ignorant investor's even worse when Melvin Alan "Mel" Karmazin's "merge" scheme is voted DOWN. Then and only then will the satradio industry have a future and consumers will have satradio which works for them.
"either way investors are stupid"
True Dave. Mel said nothing about profit, he said cash flow positive before satellite capital expenditures. But way to put a spin on it.
Well I see the angry and frustrated NAB poster is back.
Still lacking balls and posting as AC.
Mel says 4th Qtr, I believe him. That means nothing today. I don't believe he would say anything unless he knew the merger will be approved. This service finds more uses every day. A lot of business uses are showing up. They like the variety. Competition?, sure. But that is good for everyone. Cynics beware. This is the best idea since sliced bread. Are commercials a possobility? Sure, between innings or pitches. Why not, it will fill the dead space.
Plowboy has proven through his childish and whiney posts he is one of those stupid investors. No need to take out your personal problems out on others who chose to post the truth on Orbitcast instead of your typical delusions of grandeur. Just because you Plowboy got suckered in on a risky investment, and lost your shirt and pants no need for you to try to sucker others making more ignorant investors Melvin Alan "Mel" Karmazin's bitches.
Don't ya love the last line.... they expect to refinance "certin Debt" in 2009.... No shit... really? has anyone kept track of the impending debt that sirius has to repay starting next year?
OMG... are investors really this stupid?
GM stock hurting Sirius/XM today again, which has trumped this article
Don't forget Ford and Chrysler sales hurting for Sirius as well.
One thing Mel conveniently leaves out of his synergies is the fact that when ala carte' starts up next year, the synergies take a nosedive due to falling ARPU.
I predict as much as 30% of current subs, and 60% of all new subs signing up for the reduced cost package. This will cannabize a lot of those synergies.
That was cannibilize, not cannibize, heh.
I don't think so, people are lazy.
I would bet that most of the current subs will up their monthly fee $4 to receive the complete package and then simply block those channels they don't like.
Too many people assume people will cut to the $7 package...I bet they don't
I would bet that most of the current subs will up their monthly fee $4 to receive the complete package and then simply block those channels they don't like
what happened to the anual synergies $$$ BILLIONS citi anylyst said???
In todays economy of $4.20 gas and forclosure city, people are not going to upping much of anything. If anything, they will downsize with the al a carte.
A sirius subscription is 3 gallons of gas, or 60 miles on average, per month.
If they enjoy the sat radio, I doubt they will trade it for 3 gallons of gas.
The billions quoted by analysts weren't annual savings - it was the net present value of the total synergies over time.
Regarding Debt due....don't you think those extending credit need to stay on this ship? Pretty tough and likely expensive to foreclose on bandwidth and satellites. Besides, when this merger goes through, it will be the most powerful,but not the only, broadcasting medium to travelers, commuters, and those of us who live in rural areas (and used to have to bounce from crappy station to crappy station when you went over the mountain)....
Next Step for SXM....Buy ICOG and get Stern, MLB, NFL, NHL, NASCAR, GPS, WEATHER, Mobile Satellite TV, and Communication Capabilities (more bars from ANYWHERE) from your mobile device. Tear down the cell towers, satellite is finally here and viable.
Is this another case of Mel's pump and dump?
After all, if he was unable to predict the time lime of a merger that he speculated would be completed in 2007, why would anyone think he has the capability to project earnings 18 months out? I'm sick of all of it. The hype, the FCC, the missed dates, the over promising, the pumping, the lies. When my subscription runs out I'll never give Sirius or XM a second thought if it cost 1.99 a YEAR....although my husband is still a believer.
Synergies are for queers.
landofbigfoot we can only assume your joking..... Satradio is a industry going nowhere but down and the "merge" is only helping it down quicker.
sat radio rules and when this all passes over and everything is in order id like all the anonymous nab cowards to kiss our *ss
Votes coming by this Thursday.. please !!
Is this another case of Mel's pump and dump? YES!
Melvin Alan "Mel" Karmazin, NAB member like Hugh "I have no clue" Panero are out of their league and prove each day what hacks they are when it comes to the satradio industry. Since 2006 Melvin Alan "Mel" Karmazin thought he could pull one over on everyone, try to force a "merge" MONOPOLY, and use the ignorance of satradio fanboys to accept getting screwed hook, line, and sinker.
Like a wise woman Missy said, I too will not support Melvin Alan "Mel" Karmazin "merge" scheme. As Melvin Alan "Mel" Karmazin can only fool the minority with his scheme, which IF approved is bad for the satradio industry and bad for consumers.
More BS coming from NAB fan boy who is so desperate to keep his pockets lined with ignorant money. The NAB should know better than to oppose this "merger" and the NAB fanboy's scheme is so pathetic he's wasting time before the deal is done. Poor Donald McDonald Reur is going to look worse, and the Sat rad merge is Allowed. Then and only then will the satradio industry have a future and consumers will have satradio which works for them.
AC has proven through his childish and whiney posts he is one of those stupid NAB employees . No need to take out your personal problems out on others who chose to post the truth on Orbitcast instead of your typical delusions of grandeur. Just because you AC got suckered in To childish nonsense over at NAB headquarters, and lost your shirt and pants no need for you to try to sucker others making more ignorant non sense for Ronald Mcdonald Reur
Is this another case of AC fanboy's pump and dump? YES!
ronald Mcdonald Reur MR. Corporate BUM, MR. NAB member is out of his league and proves to us each day what stiffs they are when it comes to the HD radio industry. Since 2006 ronald Mcdonald Reur thought he could pull one over on everyone, try to force a "halt in this merger, and use the ignorance of HD radio fanboys to accept getting more choice not stale FM/HD radio.
Like all over america say, I too will not support Ronald Mcdonald reur scheme. As Ronald mcdonald reur can only fool the minority with his scheme to halt the merger which IF approved is good for the satradio industry and bad for ronald mcdonald reur
Dear AC,
Thank you for the kind words and for acknowleding my wisdom. Now that we have established my intelligence, (and yes I am a Mensa member) let me say that I hate Turd radio, the Nab sucks, and I support the RIAA in it's efforts for performer pay. Just because I may recognize Mr. Karmazin as a fart doesn't mean I don't comprehend that the NAB is a turd that should be flushed.
Hugs,
Missy
Ron & Fez 12 to 3
Billions in synergies is what we and the government were told. Bullshit. How can anyone support this. Bash the NAB all you want for defending their turf but Mel has done nothing but lie & spin since this idiotic idea began. I am the biggest SDARS fanboy you'll find but this is a dying industry. It was great but if either of these company's are still standing in 5 years I see commercials on all channels, less variety in music channels and FCC indecency regulations.
And if you think Stern isn't going back to FM in 2 years you're fucking crazy.
You guys realize that people cant just "downsize" to al carte right? There will be certain radios that can do al la carte which when mixed in with the 18mil current subs and large percent of new subs from OEMs (That will take some time to received al la carte) and people who dont want it. It will be a VERY SMALL part of their subs for the first couple years with negligible impact on ARPU if they have decent demand for wider roll out of nav traffic and best off packages as add ons..
This was a very interesting thing to put out today, I am not sure what the intention was, but ineresting none the less..
Just think if they didn't have to pay Stern $500,000,000 they would see profit faster.
Senator Kerry wrote a letter opposing the merger now... haha... wow. these politicians just do not get it!
After all this time we still have post like this showing some people do not understand that if Sirius did not have Howard we would not have Sirius.
Just for those that do not understand Howard took Sirius a unknown and made it better known than XM. It has little to do with sterns show but all to do with how he made Sirius a known name.
Just think if they didn't have to pay Stern $500,000,000 they would see profit faster.
So you are saying that Stern was a advertising campagin? What a joke a 1/2 billion that was funded with share dilution is not the best approach to build a brand.
Oh the children are again coming out to prove their ignorance... How come when ever Melvin Alan "Mel" Karmazin's "merge" scheme comes up do the blind and ignorant feel the need to prove themselves and their blind ignorance?
How come these self proclaimed satradio fans suddenly find fault with their own choice in satradio enough to want choice to be taken away?
How come these self proclaimed satradio fans suddenly find fault with their own choice in satradio enough to want content and talent to be taken away which will happen since Melvin Alan "Mel" Karmazin's "merge" scheme means a end to direct competition, and a end to the reasons why Sirius and Xm are where they are?
How come these self proclaimed satradio fans suddenly find fault with their own choice in satradio enough to want content and talent to be taken away which will happen since Melvin Alan "Mel" Karmazin's "merge" scheme means prices will go up?
How come these self proclaimed satradio fans suddenly find fault with their own choice in satradio enough to want content and talent to be taken away which will happen since Melvin Alan "Mel" Karmazin's "merge" scheme means an end to the satradio industry?
Hook, Line, and Sinker blind ignorance...
More bitches of Melvin Alan "Mel" Karmazin......
"Can't we all just get along'?
Any time there is an AC post with "quotes" and CAPS, I just skip over it as he no longer has anything viable to contribute to the board.
AC makes me puke,
Good for you ignore the truth and continue holding on to your ignorance. You post certainly adds so much viable info to the board, and proves your blind ignorance all at the same time.
Hook, Line, and Sinker blind ignorance...
Just yet another bitch of Melvin Alan "Mel" Karmazin......
Anonymous Cowards can still suck my balls.
Gil, you can grow up at any time..... Are you proud posting like a child using rude, crude words?
Melvin Alan "Mel" Karmazin continues his "merge" MONOPOLY scheme, which he admitted was against regulations while the satradio industry continues on it's quick path to destruction. Melvin Alan "Mel" Karmazin is caught in a dream of lining his pockets one more time on the backs of consumers and the industry.
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