Sirius XM Radio expecting to rapidly improve cash flow, CFO says

By Jennifer Lanning Drey

Savannah, Ga., March 8 - Sirius XM Radio Inc. has "a great blue print" for rapidly expanding its cash flow given factors including the company's growing EBITDA and decreasing capital expenditures, David Frear, its chief financial officer, said during a Tuesday presentation at the Credit Suisse Global Media and Communications Convergence Conference in Miami.

Sirius XM expects its cash flow to approach $300 million in 2011.

"We have an incredibly strong outlook for free cash flow, and we think growth prospects for the next several years are quite good as the pool of enabled vehicles on the road should grow from maybe 33 million to over 70 million in a few years," Frear said.

At the same time, Sirius XM expects to drop about $200 million in capital expenditure requirements between 2010 and 2012, he said.

As a result, the company is projecting it will generate more than $3 billion in revenue this year and more than $700 million in EBITDA.

The projections are expected to help Sirius XM "grow into" its leverage target of roughly 3 times by the end of this 2011 or early 2012, Frear said.

Once the company reaches the leverage target it will probably stop using its cash flow to retire debt and begin looking at distributions to shareholders, he said.

Sirius XM Radio is a satellite radio provider based in New York.

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