With a large music library, push towards automotive integration and a strong relationship with existing iPhone and iPad customers, Apple can potentially give Sirius XM some competition. However, Apple's new radio service seems to lack Sirius XM's programming diversity. Additionally, the company seems to have copied Pandora's business model after failing at its own attempts at innovating music delivery, implying it doesn't have much competitive advantage apart from having a bigger library. 
Share:  With a large music library, push towards automotive integration and a strong relationship with existing iPhone and iPad customers, Apple can potentially give <span class="company">Sirius XM</span> some competition. However, Apple's new radio service seems to lack <span class="company">Sirius XM</span>'s programming diversity. Additionally, the company seems to have copied Pandora's business model after failing at its own attempts at innovating music delivery, implying it doesn't have much competitive advantage apart from having a bigger library. Tweet this   read full story

What may have been of more interest to investors was the discussion of a holding company, or "HoldCo", its purpose and its implications. For those unfamiliar with this topic, it was initially mentioned on the first quarter conference call when Frear stated: At the end of the first quarter, gross debt to EBITDA was at a very conservative 2.5 times, debt market conditions are very favorable, and you should expect to see us periodically and opportunistically raise new debt financing to extend maturities, ease covenant restrictions, and maintain our leverage ratio. The combination of our strong free cash flow and 3.5 times leverage target will provide ample liquidity to maintain a very robust return of capital program and continue to strategically invest in the business. Additionally in the next several weeks we will also form a new holding company to enhance our financial flexibility 
Share:  What may have been of more interest to investors was the discussion of a holding company, or "HoldCo", its purpose and its implications. <span class="sent">For those unfamiliar with this topic, it was initially mentioned on the first quarter conference call when <span class="analyst">Frear</span> stated: At the end of the first quarter, gross debt to EBITDA was at a very conservative 2.5 times, debt market conditions are very favorable, and you should expect to see us periodically and opportunistically raise new debt financing to extend maturities, ease covenant restrictions, and maintain our leverage ratio.</span> The combination of our strong free cash flow and 3.5 times leverage target will provide ample liquidity to maintain a very robust return of capital program and continue to strategically invest in the business. Additionally in the next several weeks we will also form a new holding company to enhance our financial flexibility....On getting to the leverage target, I think as many know that we are somewhat restricted or will be somewhat restricted later in the year with , by two of our debt issues in making restricted payments that we will probably work our way to that 3.5 times sort of over the next several months perhaps into sometime early next year. <span class="sent">At the Bank of America presentation earlier this week, <span class="analyst">Frear</span> stated: We've got the process started for creating a HoldCo, so it's more administration to getting it in place.</span> We'll have one eventually. I can't tell you exactly when it'll be....While it may be taking longer than originally expected, the timing apparently won't become much of an issue until "the very late part of this year", but without a HoldCo, it could be more constraining on the operating company in 2014. <span class="sent">It's important that investors understand more about that "optionality" that <span class="analyst">Frear</span> mentioned and how a holding company would allow <span class="company">Sirius XM</span> greater flexibility.</span> As <span class="analyst">Frear</span> stated on the Q1 conference call, the company is "somewhat restricted" by two of its debt covenants when it comes to increasing the <span class="company">Sirius XM</span> leverage ratio towards 3.5x. Since those comments, the company added $500 million of Senior Notes due 2020 and $500 million of Senior Notes due 2023, or a total of $1 billion....It's important that investors understand more about that "optionality" that <span class="analyst">Frear</span> mentioned and how a holding company would allow <span class="company">Sirius XM</span> greater flexibility. <span class="sent">As <span class="analyst">Frear</span> stated on the Q1 conference call, the company is "somewhat restricted" by two of its debt covenants when it comes to increasing the <span class="company">Sirius XM</span> leverage ratio towards 3.5x.</span> Since those comments, the company added $500 million of Senior Notes due 2020 and $500 million of Senior Notes due 2023, or a total of $1 billion. This brought the total company debt to about $3.4 billion, and the leverage ratio to the 2013 Adjusted EBITDA guidance of $1.1 billion would be 3.1x....It's consolidated operating cash flow minus a muiltiple of interest expense. <span class="sent">Here's what else <span class="analyst">Frear</span> had to say about the formation of a holding company and its potential uses.</span> We don't have any current plans for HoldCo. What can it be used for? Tweet this   read full story

Quick Take Sirius XM has done well over the past few years, growing its revenues, margins and the number of subscribers substantially. The subscriber growth has found primary support from the increase in new vehicle sales as well as a higher new car penetration rate. EBITDA margins have risen from 44% in 2007 to 33.5% in 2012, and we expect the growth to continue. 
Share:  Quick Take <span class="company">Sirius XM</span> has done well over the past few years, growing its revenues, margins and the number of subscribers substantially. The subscriber growth has found primary support from the increase in new vehicle sales as well as a higher new car penetration rate. EBITDA margins have risen from 44% in 2007 to 33.5% in 2012, and we expect the growth to continue. Tweet this   read full story