This presentation contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act

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2 1 August 2005

3 This presentation contains forward-looking statements within the meaning of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, and are subject to risks, uncertainties, and other factors that could cause the Company s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: the effects of economic conditions, competition, programming availability and quality, technological developments, developmental difficulties and delays, the availability of capital to finance growth, the impact of government regulations, and other factors detailed, from time to time, in the Company s filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date of this presentation. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forwardlooking statements contained herein to reflect any change in the Company s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

4 XM Gets Rave Reviews XM is the market leader; its equipment is smaller and less expensive, chiefly because XM has developed more sophisticated technology. Wall St. Journal, April 27, 2005 A technological marvel. All baseball all the time, and it is highly addictive Sports Illustrated, April 25, 2005 Hardcore music buffs will likely do better with XM. Smart Money, March 2005 Satellite radio is growing, and XM is top of the dial. BusinessWeek, August 26, 2004

5 XM Targeting Mass Market Opportunity Addressing large markets with high radio listening penetration Over 230 million registered vehicles in the US Over 110 million US households Over 75% of the US population age 12 and older listens to radio daily and 94% tune in on a weekly basis Sources: Bureau of Transportation Statistics 2003, A.C. Neilson Media Research January 2004, Consumer Electronics Association, Radio & Marketing Fact Book 2003

6 Achieving Broad Listener Appeal Age Gender % 24% Female 26% 27% 70% 30% Male Demonstrating A Mass Market Source: Arbitron Custom Listening Study Fall 2004

7 And Demonstrating a Rapidly Growing Subscriber Base XM Expects to End 2005 with 6 Million Subscribers Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Actual Results Estimates XM Subscribers (000 s)

8 And Leading the Satellite Radio Industry 7 Out of 10 Satellite Radio Subscribers Have XM Satellite Radio Subscriber Growth by Quarter Source: XM Radio and publicly disclosed subscriber information

9 Since National Launch XM Has Expanded Channel Lineup and Invested In Content The most 100% Commercial-Free Music Including original music programming specials such as Then Again Live and Artist Confidential Increased to 151 Channels from 100 Channels with the addition of: Bob Edwards, Opie & Anthony, Dr. Laura, G. Gordon Liddy, Tony Kornheiser and Air America 16 channels of Major League Baseball and 9 channels of College Sports 21 channels of XM Instant Traffic & Weather in 21 Major Markets

10 Bringing Live Music and Listeners Back to Radio Over 1000 Live Performances at XM, including: Wynton Marsalis, Melissa Etheridge, Lenny Kravitz, Phil Collins, Randy Newman and Brian Wilson Original programming including: Music Series Artist Confidential and Then Again Live From Bebop to Hip-Hop featuring Quincy Jones XM Presents Jazz at Lincoln Center Welcome to Da Chuuch with Big Snoop Dogg Tom Petty's Buried Treasure

11 XM Delivers the Best in News & Talk

12 Premium Sports Programming College sports from the ACC, Big 10 and Pac 10, complete coverage of the 2006 World Cup, season long IRL and NASCAR coverage, PGA Golf and sports talk from ESPN, Fox Sports and Sporting News

13 And Major League Baseball XM launched exclusive, 24-hour Major League Baseball radio channel, Home Plate, featuring baseball greats Cal Ripken Jr., Rob Dibble, Kevin Kennedy, Larry Bowa and Buck Martinez

14 XM Instant Traffic & Weather 21 dedicated channels offering in-depth, up-to-date information about road and weather conditions Provide traffic and weather conditions, with continuous, real-time updates 24 hours a day, seven days a week The most comprehensive, on-demand traffic and weather updates available on the radio today

15 XM NavTraffic Available in OEM and Retail Aftermarket First integrated satellite/gps traffic system Traffic data overlaid on navigation display Continuously updated, real-time traffic alerts and time-to-destination Available factory-installed in 2005 Acura RL and Cadillac CTS Available for aftermarket installation in Pioneer's AVIC-N2 and Alpine NVE-N872A navigation system

16 XM Has Built Superior OEM Partnerships XM is the exclusive OEM factory-installed distribution partner or preferred provider of data services to 56% of the OEM marketplace General Motors Honda Toyota Hyundai Nissan 56% 6% VW / Audi Porsche Kia Subaru Suzuki XM Radio Partners Non Exclusive or Unaligned 38% GM and Honda to Produce Nearly 2 Million XM-Equipped Vehicles in 2005

17 And is Winning OEM Deals Toyota selected only XM for factory installation Toyota and XM enter into long term data services agreement Hyundai first automaker to add standard XM to full vehicle lineup Starting in 2006, XM will be factory installed in Hyundai models Nissan selected only XM to supply satellite-delivered data services XM radio offered as an option on all models of Nissan and Infiniti vehicles (18 models in total)

18 XM Leads Retail Aftermarket Products and Pricing Full range of car, home and portable products Price points low, medium and high -- from $99 - $299 Placement and Partners Broad distribution in national, regional, local and specialty retailers Product presence in multiple store locations (car, home, portable) Partnerships with industry leaders Promotion Controlled use of in-store and other promotions Cost-efficient technology and equipment subsidies Cost-efficient growth channels

19 XM Offers Superior Products Led by SKYFi2 and Roady2 Built in wireless FM transmitter Tune select by song and artist Portability with home kits and boombox options SKYFi2 offers first ever pause and replay in satellite radio and personalized stock ticker and sports scores Roady2 is industry s smallest and lightest satellite radio

20 XM Expands Lineup of XM2GO Handheld Products Products will be offered from Delphi, Pioneer and Tao Listen to XM at home, at work, in the car or on the go My XM memory mode allows user to store five hours of XM s content Built in wireless FM transmitter Personalized stock ticker and sports scores Includes car kit, home kit, rechargeable battery, headphones, antennas and more

21 XM Introduces Connect-and-Play Technology For a low cost, XM integrates into a broad range of home devices (i.e., stereo receivers, DVD players) -- simply plug an XM Connect-and-Play home antenna (MSRP: $49.99) into an XM-Ready audio product The first XM-Ready products are available now from Yamaha they include several home receivers and home theater systems Other manufacturers of XM-Ready products will include Eton, Pioneer, Denon, Harmon Kardon, LG Electronics, Onkyo, Thomson/RCA, Polk Audio and Boston Acoustics

22 XM Radio and AOL Join Forces The leading satellite radio company and the leading interactive services company join forces to create a new online radio service Consumers will have the ability to select a free, web radio sample offering or an enhanced premium service for a low monthly fee In addition, XM will integrate select AOL original programs such as AOL Music Sessions and AOL Music LIVE! into the satellite radio service

23 Marketing & Distribution Partners Car Manufacturers GM, Honda, Toyota, Hyundai and others Marketing JetBlue, AirTran, Starbucks, Avis, National, Alamo Online Distribution Dell, Microsoft and AOL

24 Strong Operating Momentum Rapid Revenue Growth ($M) Stabilizing CPGA $875 $125 $83 $591 $53 $4 $9 $18 $33 $240 $160 $125 $101 $104 $98 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q

25 Attractive Business Model Recurring subscriber revenue High subscription margin Low Cost Per Gross Addition (CPGA) High Prepaid Revenue Consistent High Growth ~$9/month with low churn >60+% at scale <$100 in 1H 2005 ~9 Months Prepaid Revenue 1.25M subs added in last 2 quarters Subscriber Revenue and Margins Positively Impacted by $3 Subscription Rate Increase

26 Compelling Subscriber Economics Second Quarter 2005 CPGA $98 Average cash billing (9+ months) $(81) Net cash employed $17 ARPU ~$9 Future Subscriber Economics to Significantly Improve with Announced $3 Subscription Price Increase

27 Summary Financial Guidance (In millions) 2005 Subscribers 6.0 Subscription Revenue $500 EBITDA (excluding de-leveraging charges) ($395) Working Capital averages 9+ months of prepaid revenue Free cashflow breakeven in 2006

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