Canadian Satellite
Radio Holdings Inc.
and XM Canada
Annual General Meeting
of Shareholders
0
John Bitove
Executive Chairman
1
Agenda
John Bitove, Executive Chairman
Welcome
Darren Kirkwood, Legal Counsel
Formal part of the meeting
John Bitove, Executive Chairman
Introductory remarks
Michael Moskowitz, President and CEO
Strategic remarks
Michael Washinushi, CFO
Q1 2008 financial highlights
Michael Moskowitz, President and CEO
Closing remarks
Q&A
2
Board of Directors
Pierre Boivin
Gary Parsons
Marc Comeau
Bob Storey
Phil Evershed
Joe Verbrugge
James McCutcheon
Mat Wilcox
3
Darren Kirkwood
Legal Counsel
4
Safe Harbour Forward-Looking Statements
Certain statements included above may be forward-looking in nature. Such statements
can be identified by the use of forward-looking terminology such as "expects," "may,"
"will," "should," "intend," "plan," or "anticipates" or the negative thereof or comparable
terminology, or by discussions of strategy. Forward-looking statements include estimates,
plans, expectations, opinions, forecasts, projections, targets, guidance or other
statements that are not statements of fact.
Although CSR believes that the expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that such expectations will prove to have been
correct. CSR's forward-looking statements are expressly qualified in their entirety by this
cautionary statement. CSR makes no commitment to revise or update any forward-looking
statements in order to reflect events or circumstances after the date any such statement is
made.
Additional information identifying risks and uncertainties is contained in CSR's filings with
the Canadian securities regulators, available at www.sedar.com.
5
John Bitove
Executive Chairman
6
Rapid Progress in F2007 – F2008 Off to Strong Start
ƒ Building on our accomplishments
ƒ Increasing subscribers and revenue
ƒ Controlling costs
ƒ Prudently managing our cash
ƒ Continuing to develop our solid foundation of partners
ƒ Making good progress towards medium and long-term goals
ƒ Merger or no merger, it is business as usual for XM Canada
ƒ F2008 is off to a strong start
7
Michael Moskowitz
Chief Executive Officer & President
8
Our Mission
Canada’s premium digital
audio entertainment and
information company
9
Driving Shareholder Value
Target
1 Million
Subscribers
Target
$100 Million
Operating Profit
2010
2012
10
Key Sectors Provide Future Opportunity
1.26 Million
Annual Potential
Subscribers
260,000
1,000,000
2010
Aftermarket
Automotive
11
Key Drivers of Growth
ƒ Automotive
ƒ Retail
ƒ Programming and content
ƒ Strategic partnerships
12
TRIPLED Our Revenue
$21.2M
3X
$6.9M
F2006
F2007
13
DOUBLED Total Subscribers
1 Million
315K
152K
2X
F2006
F2007
2010E
14
DOUBLED Self-Paying Subscribers
315K
152K
2X
185K
91K
F2006
F2007
Other subscribers
Self-paying subscribers
15
XM Reaches 60% Of New Vehicle Models in Canada
XM now available in
150 different vehicle models!
16
Shifting Mix Towards Automotive
F2007
F2006
8%
27%
Aftermarket self-paying subscribers
Automotive self-paying subscribers
17
Car Installations Growing
Vehicles with Factory Installed XM Satellite Radios
Cumulative vehicles on the road and on order
.
480K
247K
78K
F2006
F2007
F2008E
18
Showing Strength At Retail
Retail Growth – Radios Sold
Q1 2008 vs. Q1 2007
74%
XM Canada
19
Expanding Retail Distribution Channels
5,500
Target 4,000
3,000
2006
2007
20
Superior Consumer Products
2007
2006
$179
$69
$99
$129
$169
$239
$149
$99
$399
Grab ‘n’ Go
Bundles
$69
$99
21
Leading the Canadian Satellite Radio Market
Competitive Advantage in Programming
Genre
XM Canada
Competition
Advantage
Pop & Hits
14
13
XM
Hip Hop/Urban
7
5
XM
Country
7
5
XM
Christian
3
1
XM
Latin
4
1
XM
Kids
2
1
XM
Sports
36
11
XM
TOTAL MUSIC
69
65
XM
TOTAL TALK
61
45
XM
TOTAL
CHANNELS
130
110
XM
22
Scoring with NHL Exclusivity
ƒ Exclusive satellite radio partner of the NHL
until 2015
ƒ Comprehensive coverage with nine play-byplay channels including NHL Home Ice
ƒ NHL Hour, a candid interactive talk show
hosted by NHL Commissioner, Gary Bettman
ƒ Already seeing positive impact of NHL
exclusivity on key areas of our business:
ƒ subscriber growth
ƒ retail market share
23
Attracting New Listeners
ƒ According to third party research by Hotspec:
– 24% of listeners want unique content
– 45% of listeners want a variety of content
ƒ ATN-Asian Radio is North America’s first continent-wide
South Asian channel
ƒ Innovate partnership with Asian Television Network (ATN)
operator of 14 digital television channels across Canada
ƒ Other multicultural partnerships under consideration
24
24
Partnerships Provide 50 Million+ Points of Contact
25
Outpacing Growth of Satellite TV, Wireless & Cable
1,100,000
850,000
330,000
42,000
Satellite
Radio
U.S.
Satellite
Radio
Canada
Satellite TV
Year 1 Subscribers
Year 2 Subscribers
Wireless
15,000
Cable
Sources: StatsCan, CWTA, U.S. filings
26
Execution is Key to Achieving Results
Revenue
Fixed and Marketing Costs (1)(2)(3)
$25.6M
$57.2M
$14.9M
$6.1M
$10.7M
LTM Nov/06
$51.1M
LTM Nov/07
LTM Nov/06
LTM Nov/07
(1) Fixed costs include customer care & billing, broadcast & operations, programming & content, general & administrative, marketing support and
advertising & marketing and excludes subsidies and distributions.
(2) Excludes special charges.
(3) Excludes $2 million of non-cash, non-recurring advertising & marketing expenses related to the write-off of prepaid advertising costs in Q3 2007.
27
Michael Washinushi
Chief Financial Officer
28
Current Status
ƒ Continue to pursue growth
–
–
–
–
invest in XM brand
promote our NHL exclusivity
capitalize on our competitive advantages
advance our key growth drivers
ƒ Fully funded business model
– $48.8 million in cash-on-hand and investments
– multi-year plans & XM credit facility provide additional liquidity
ƒ On track to achieving
– positive cash flow as early as Q4 2008
– 1 million subscribers in 2010
– $100 million operating profit in 2012
29
Path to Cash Flow Breakeven
n
utio
es
ri b
nu
t
n
e
o
v
Re
le C
Operating Profit
ia b
r
a
V
$
Variable SAC
BREAKEVEN
RANGE
Fixed and Marketing Costs (at Q1 2008)
0
500,000
1,000,000
1,500,000
Subscribers
30
Total Subscribers
350,300
315,200
277,600
237,500
88,200
87,400
188,100
95,900
82,900
74,400
136,400
152,500
Q2 2007
Q3 2007
101,800
Q1 2007
Self-Paying
Other Paying
OEM Promotional
185,400
Q4 2007
214,100
Q1 2008
Rental Car Subscribers
31
Self-Paying Net Subscriber Additions
28,700
171%
10,600
Q1 2007
Q1 2008
32
Revenue
$8.1M
113%
$3.8M
Q1 2007
Q1 2008
33
Driving Cash and Subscriber Retention
ARPU
Deferred Revenue
$15.9M
$11.30
$11.27
$6.0M
Q1 2007
Q1 2008
Q1 2007
Q1 2008
34
SAC and CPGA
SAC
CPGA
$92
$311
$181
$46
Q1 2007
Q1 2008
Q1 2007
Q1 2008
35
Total Fixed and Marketing Costs*
$14.7M
19%
Q1 2007
$11.9M
Q1 2008
* Fixed costs include: customer care & billing, broadcast & operations, programming & content, general &
administrative, marketing support and advertising & marketing and excludes subsidies and distributions.
36
Adjusted Operating Loss
Q1 2007
Q1 2008
$2.3M
($10.5M)
($12.8M)
37
Quarterly Cash Usage
Q1*
Q2
Q3
Q4
($0.8)
($3.9)
($8.3)
($8.6)
($12.6)
2007
2008
* Q1 ‘08 excludes net proceeds of $19.4M from convertible debt transaction.
38
Liquidity
($ Millions)
Cash and short-term investments
Restricted investments
Total cash and investments
Senior notes
XM credit facility drawn (1)(2)
Convertible debentures, net proceeds
Total debt
(3)
November 30,
2007
August 31,
2007
$ 30.3
$ 14.8
18.5
19.3
48.8
34.1
100.0
105.6
3.1
2.1
19.4
―
122.5
109.5
41.9
42.9
Available and unused credit facilities
XM credit facility undrawn
(1) Total amount drawn on the credit facility, including both the liability and equity components.
(2) Includes accumulated interest expense on facility.
(3) Includes both the liability and equity components.
39
Michael Moskowitz
Chief Executive Officer & President
40
Strategic Tactics
ƒ Build on our vision
ƒ Continue developing a differentiated, higher margin position
ƒ Achieve organizational alignment
ƒ Deliver a superior listener experience
ƒ Grow and nurture talented senior management team
41
Q&A
42
Canadian Satellite
Radio Holdings Inc.
and XM Canada
Annual General Meeting
of Shareholders
43