Washington — XM Satellite Radio has added 322,000 new net subscribers in the second quarter of 2008, a 17 percent increase since last year’s second quarter.
The increase gives the company a total of 9.653 million subscribers. Total gross additions for the quarter were 1.081 million, including a record 857,000 OEM gross additions — the fifth consecutive quarter of record OEM gross additions — and 224,000 retail gross additions.
Second-quarter 2008 churn improved to 1.67 percent, compared with both second-quarter 2007 churn of 1.84 percent and to first-quarter 2008 churn of 1.77 percent.
XM also announced that subscription revenue for second-quarter 2008 is expected to be in the range of $283 million to $288 million, and that the second-quarter 2008 adjusted operating loss is expected to be in the range of $32 million to $38 million, excluding the impact of any Federal Communications Commission decision on its proposed merger with Sirius Satellite Radio.
XM also announced that it is launching an offering of $400 million aggregate principal amount of new senior notes. The offering is part of a series of transactions to refinance certain debt of XM in connection with the pending merger with Sirius Satellite Radio. The offering will be structured in a manner that will permit it to be unwound if the merger is not consummated, XM said.
And on Friday XM said it had entered into a written agreement with holders of a majority of its outstanding 9.75 percent senior notes due 2014. Pursuant to the agreement, these holders have agreed to waive XM's change of control repurchase obligation of the 9.75 percent notes with respect to the consummation of the previously announced merger of XM and Sirius. Pursuant to the terms of the indenture governing the 9.75 percent notes, the waiver is effective for all holders of those notes.
The waiver provides that, promptly following the closing of the merger, XM will commence an offer to exchange the 9.75 percent notes for a combination of at least $400 million of cash and up to $200 million aggregate principal amount of a new series of senior notes to be issued by XM.