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XM Grows Q4 Revenue, Subs

Washington – Concluding its first full year of commercial operation, XM Satellite Radio Holdings reported substantial fourth-quarter revenue and subscriber growth, as well as a reduction in negative Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA).

Total revenue for the three months ended Dec. 31 reached $9 million, up from $532,000 in the year-ago period. Net subscriber additions hit 145,605 for the fourth quarter, compared with 27,230 in the same period in 2001.

XM ended the year with 347,159 subscribers. The company expects it will add more than 130,000 net subscribers in the first quarter of 2003, roughly two and one half times the number of subscribers added in the first three months of 2002. By the end of this year, XM reiterated it expects to have 1.2 million customers on board.

The company reduced its negative EBITDA to $97.3 million the final three months of the year, down from a negative $113.2 million in the same quarter a year earlier. Net loss, however, increased to $155.9 million, up from $144 million in the same three months a year earlier.

For the 12 months, XM posted total revenue of $20.2 million, up from $533,000 year over year. Negative EBITDA increased to $318 million, of which $25 million was due to charges, compared with negative EBITDA of $238.8 million in 2001. Net loss for the 12 months hit $495 million, up from $284.4 million in 2001.

Looking ahead, XM expects revenue in 2003 to more than quadruple, to $85 million, while the EBITDA loss should drop to $295 million for the same period, including $100 million in financing expenses. XM anticipates reaching cash flow breakeven late in 2004, with EBITDA breakeven coming in 2005.