Hooper Stevens - Vice President, Investor Relations and Finance Jim Meyer - Chief Executive Officer, Director David Frear - Chief Financial Officer, Executive Vice President Scott Greenstein - President, Chief Content Officer

Kannan Venkateshwar - Barclays Matthew Niknam - Goldman Sachs Jessica Reif Cohen - Bank of America Merrill Lynch Bryan Kraft - Evercore Michael Pace - JPMorgan Jim Goss - Barrington Research

Good morning and welcome to the Sirius XM Radio's third quarter 2013 earnings conference call. Today's conference is being recorded. A question-and-answer session will be conducted following the presentation. (Operator Instructions). At this time, I would like to turn the call over to Hooper Stevens, Vice President, Investor Relations and Finance. Mr. Stevens, please go ahead.

Thank you, Janine, and good morning, everyone. Welcome to Sirius XM's third quarter earnings conference call. Today Jim Meyer, our Chief Executive Officer will be joined by David Frear, our Executive Vice President and Chief Financial Officer. At the conclusion of our prepared remarks, management will be glad to take your questions. Scott Greenstein, our President and Chief Content Officer will also be available for the Q&A portion of the call. First I would like to remind everyone that certain statements made during the call might be forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These and all forward-looking statements are based on management's current beliefs and expectations and necessarily depend upon assumptions, data or methods that may be incorrect or imprecise. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. For more information about these risks and uncertainties, please view Sirius XM's SEC filings. We advise listeners not to rely unduly upon forward-looking statements and disclaim any intent or obligation to update them. As we begin, I would like to advise our listeners that today's results will include discussions about both actual results and adjusted results. All discussions of adjusted operating results exclude the effects of stock-based compensation and certain purchase price accounting adjustments. I will now hand the call over to Jim Meyer.

Thank you for joining us today to discuss what we think was a very important quarter for our company, particularly around moves we had made in telematics and programming that will position Sirius XM very well for the long-term growth. Total third quarter revenue of $962 million climbed 11% from $867 million in the third quarter of 2012, once again, setting a new record high. Driven by revenue growth of 11% and modest cash operating expense growth, adjusted EBITDA climbed by 21%, also to a new record high of $296 million in the third quarter, up from $245 million last year. This represented an adjusted EBITDA margin of 30.7%, also a new record, and up just over 250 basis points from the prior year quarter. Free cash flow of $245 million climbed by 26% from last year's third quarter to set a new third quarter record. Based on our strong growth year-to-date in revenue and our outlook for the fourth quarter, we have raised our 2013 revenue guidance to approximately $3.77 billion. We also just issued our initial outlook for 2014, showing continued revenue growth and sharp growth in adjusted EBITDA and margins. In 2014, we anticipate total revenue of over $4 billion and adjusted EBITDA of approximately $1.38 billion, which works out to a 21% growth and adjusted EBITDA versus this year's guidance and an expansion in our adjusted EBITDA margin to 34.5%. We have also decided to increase the monthly price of our core service offering by $0.50, beginning January 1st, to $14.99 per month. As always, you should note that many of our plans such as our pay auto trials, our all access plan, multi-radio subs and others will not see any change in pricing. While changing prices is a difficult decision, particularly on a competitive audio entertainment market, we are confident that our subscribers see significant value on our service and that this modest change will not significantly impact retention next year. Paid subscribers grew by 513,000 in the third quarter to nearly 25.6 million, which was the strongest third quarter performance since the merger of Sirius and XM in 2008. Even with an OEM contract change, that will significantly reduce the number of paid trial subscribers in fourth quarter. We believe, we are on track to exceed our previous guidance for $1.5 million net adds. Year-to-date, we have grown subscribers by nearly 1.7 million and today, we are raising our overall net subscriber growth outlook to 1.6 million for the full year. Our self-pay subscriber base also set a post merger record for the third quarter growing by 373,000. Year-to-date, we have grown our self-pay base by 1.1 million subscribers to a record high of 20.7 million. The 1.8% self-pay churn rate we saw in the third quarter was consistent with our expectations. We have seen that our existing new car subscribers are turning over their vehicles sooner than what would have been predicted based on historical industry trends. As a result, our subscribers are migrating from one radio to another in a newer car. This trend picked up in the third quarter and is ahead of our expectations and this trend of faster turnover is good for the business long-term as it leads to increased opportunities for used car subscriptions, but we are now estimating self-pay net adds of approximately 1.5 million for 2013. In the meantime, new car sales were up, trial starts are up and we continue to be bullish about continued growth in the business. U.S. light vehicle sales remained strong, and consistent with our thinking, came in at SAAR of 15.7 million in the third quarter. Consensus estimates still peg the full year at between 15.5 and 15.6 million units. Our new car penetration rate in the third quarter was a hair under 70%, up about two points from last year's third quarter and the highest quarterly penetration rate in the company's history. Year-to-date, our penetration rate is about 69% of new car sales. Total vehicles in operations with satellite radio climbed to about $57 million at the end of the third quarter or about 24% of all the vehicles on the road in the United States. We continue to expect this number to nearly double in five years time as automakers remain very committed to satellite radio. Along those lines, we recently extended our agreement with Honda to the year 2020, and we are particularly excited that Honda will be significantly increasing penetration of satellite radio across its model [launch]. As Honda rolls out our next generation SXM 2.0 architecture, it will make Sirius XM standard equipment on its most popular trim level, boosting Honda brand penetration by about 20 points. We think this very visible commitment to satellite radio is noteworthy given the growing interest surrounding connected cars. Satellite radio is a highly sought after feature among car buyers, and it's here to stay. Our SXM 2.0 architecture is now the platform of choice for automakers. We have been working many years to secure adoption of this architecture, which gives us the ability to deliver more content and functionality in new vehicles. This effort is largely done on our end. Although automakers' implementation schedules are varied, the platform investments we have made are now bearing fruit, as several automakers are making the shift this year and you will be seeing more of these announcements in future years as well. With this now accomplished, we are hard at work on our next platform. Because we are in both the satellite business and rely on the auto business, by definition everything we do in these worlds requires a very long planning horizon. The capabilities we are introducing with XM 2.0 are strong and will be the core of our business for many years. At the same time, however, we are engaged with automakers as we define our next generation platform one that will be delivered, as cars with embedded connectivity become the standard. In that future, with an embedded environment as the norm, a truly merged satellite and IP platform will provide the best possible experience for our subscribers, providing the ubiquity and efficiency of our broadcast network with a robust two-way capability. Sirius XM is uniquely positioned to develop and deliver this new platform in the years to come. Now let's take a moment and talk about our important second-owner business. We have more than 10,500 dealers nationwide participating in our program to offer buyers satellite equipped pre-owned vehicles with a three-month trial, which in turn helps us convert those buyers into self-paying customers. Our Service Lane program, recently launched, gives us the ability to offer a two-month trial to customers of participating dealers who come in for service and we continue to gain dealer participation with this very new program. We are still on track to deliver more than 1.5 million self-pay gross additions from pre-owned vehicles this year. Many of you have asked in our previous calls about conversion rates in the second owner category, and I will provide you a brief snapshot of where we are today. In those instances where we are able to offer used car buyers a formal trial period, we are seeing excellent results. used car conversion rates today are in the low 30s, a great leading indicator of the demand for Sirius XM Radio. On the content side of our business, Scott and his team were very busy in the third quarter and have positioned us well for the future. We signed long-term renewals in the third quarter to extend our programming agreements with both FOX and Major League Baseball. Our new agreement with FOX runs six years through August 2019, and also includes a substantial expansion of programming rights including the addition of FOX Business and Fox News Talk. Sirius XM is also now the exclusive home for internet audio of the very the popular FOX News Channel. Our new Major League Baseball agreement secures broadcast rights through the 2021 season. It grants us additional Spanish language programming and we gain the ability to now broadcast Major League content across the Sirius network as well as the XM network. Our Major League Baseball extension is a great win for our subscribers and our business as well. We are very excited that these two great pieces of content, our subscribers love, will be in the Sirius XM family for many years to come. Early this fall, we announced a most recent innovation to our exclusive talk programming lineup with Business Radio Powered by The Wharton School. The 24/7 channel, which is scheduled to launch early next year, will provide business and management advice direct from the professors and alumni of the school, similar to what we did with medical experts at NYU for our Doctor Radio channel. Subscriber-only events continue to provide unduplicated experience for our listeners in-person and on-air. We broadcast exclusive now at townhalls with stars as varied as Robin Williams, Pearl Jam and Tina Fey, and live concerts ranging from a club show with John Meyer to Metallica, rocking at Harlem's Apollo Theater. These one of a kind channels and events reinforce our programming and subscriber experience. We are also offering a significantly expanded package of Spanish language content to our subscribers anchored by the talented Piolín who brought his hugely popular morning program to Sirius XM this month. The package includes a variety of Spanish language, music, talk and sports in addition to select English language channels and is available for only $5.99 per month. We are just kicking off our marketing efforts here, but they will include a 90-day free trial offer to fans on the Internet and across our smartphone app line up as well. This Hispanic initiative is going to be a long-term effort to appeal to an important and rapidly growing segment of radio listeners. Our highly leverageable cost structure means that we can aggressively and profitably pursue this market. You will see more of this in the future. Now, a brief word about capital returns. During the third quarter, we repurchased 124 million shares of our common stock for $459 million, which brought our full year total repurchases to 477 million shares for $1.6 billion. As you might have seen, our board of directors recently doubled our share repurchase authorization to 4 billion, giving us about 2.4 billion of total capacity as of the end of the third quarter. We also announced that we will use part of this increased authorization to repurchase $500 million-ish of our stock directly from Liberty Media in three tranches beginning next month. We have obtained board approval to implement a new holding company structure and required notices have already been sent to warrant holders and NASDAQ. By having this structure in place, hopefully by the end of next month, it will add another element of flexibility in the financial structure of the balance sheet. Allowing for completion of announced debt redemption, our leverage as of the third quarter was about three times and we anticipate this will be closer 3.5 times as we repurchase shares in the fourth quarter as well as close on the Agero transaction. Speaking of Agero, let me give you a quick update on where we stand. The review of Agero by the Department of Justice had been in a holding pattern as we, like the rest of America, sat through the government shutdown. Now, with the government back to work we still anticipate approval in time to allow for a fourth quarter close. We will give you more color on the telematics business over the next year and we remained very excited about the strategic benefits of the Agero acquisition and the broader opportunity long-term in telematics. In summary, the third quarter was exactly what we said it would be in terms of scalability and attractiveness of our model. Sirius XM continues to focus on our core strengths by delivering superior content that users are willing to pay for and by improving our leading position with the OEMs with new technology and services, we are able to monetize better than the competition, maintain our outstanding and leverageable cost structure and grow profitably over time. With growing free cash flow and tremendous discipline around using this cash to reward our shareholders, we think investors will love seeing improving free cash flow per share. Now, let me hand it over to David for some additional comments.

Thanks, Jim. I will be brief and we will open it up for question. Sirius XM had its best quarter ever for revenue, adjusted EBITDA and adjusted EBITDA margin. With the help of an 83% free cash flow to adjusted EBITDA conversion ratio, we had our second best quarter ever for free cash flow. Our results were driven by the best third quarter for both, total net additions and self-paid net additions since the merger of the two companies five years ago. Revenue in the quarter rose nearly 11% over the prior year to $962 million on 9.5% subscriber growth and 1.2% growth in ARPU. We continue to see stable trends in new car conversion and self-pay churn. We have been pleasantly surprised by used car conversion rates this year, used car trials from dealer reports and self identified used cars buyers have seen conversion rates in the low 30% and gross addition from subsequent owners are on track to exceed 1.5 million for the year. As Jim mentioned, with the strength in new car sales, we are raising guidance for total net subscriber addition for the second time this year from 1.5 million to 1.6 million, while at the same time trimming self-pay net additions from 1.6 to 1.5. With the continuing improvements in the economy and robust auto sales, we are seeing a larger number of subscribers selling their car and rotating back into the trial funnel. We are also increasing revenue guidance for 2013 to approximately $3.77 billion. Contribution margin rose to 70.4% in the quarter, up 3 basis points sequentially and 6 basis points over the prior year. Fixed costs increased by 3.7%, but declined as a percentage of revenue from 26.2% to 24.5%. The increase in fixed costs was driven entirely by marketing costs associated with increased trial volumes and our increased subscriber base. Other than a small increase in satellite and transmission cost, all other fixed costs actually declined from the prior year. Subscriber acquisition cost increased 8.7% over the prior year consistent with the general increase in auto sales but declined from 15.4% of revenues to 15.1%. When you add it up, Sirius XM adjusted EBITDA margin rose to 30.7% and we posted record adjusted EBITDA of $295.7 million in the quarter, up 21% over the prior year. Free cash flow grew nearly 26% to $245 million for the quarter and 42% to $624 million for the nine months. With the stock buyback now over $1.6 billion in some 477 million shares, free-cash flow per share grew 31% to $0.039 cents in the quarter and 51% to $0.097 cents for the nine months. On the satellite front, Sirius 6 is scheduled to launch tomorrow with 2:00 PM Eastern. A successful launch of Sirius 6 will complete our satellite replacement cycle and represent the beginning of a three year hiatus from satellite construction spending. Sirius XM has been delivering a great growth story and this quarter was no exception, 11% revenue growth, 21% EBITDA growth, 26% free cash flow growth and 31% free cash flow per share growth. It's a growth story that will continue in the fourth quarter. We will post our first $300 million adjusted EBITDA quarter in Q4, on the way to achieving our guidance of $1.14 billion in adjusted EBITDA and we will generate nearly that much in free cash flow on our way to hitting our $915 million guidance. It was another great quarter, from a balance sheet perspective. We tapped the market at opportune times in August and September, raising $1.2 billion in seven and eight year notes to retire our 8.75% notes and 7.625% notes. In the last 15 months, we have effectively refinanced the entire balance sheet, pushing out maturities, easing or eliminating covenant restrictions and lowering the average cost of our debt from 9.2% to just 5.5%. Net of the retirement of the 7.625% notes which will occur tomorrow, we have $3.2 billion in total debt, $500 million of which is a deep in the money convert that comes out at the end of next year. Net of this convert, our leverage is only 2.3 times on our 2013 EBITDA guidance. We are underlevered, relative to our 3.5 times target and have plenty of liquidity to pursue acquisitions and continue our stock buyback program. As we announced two weeks ago, and as Jim mentioned earlier, our board has approved a $2 billion increase to the stock buyback program. Through the first nine months of this year, we have maintained a pace of roughly $500 million per quarter, finishing with cumulative repurchases of $1.6 billion representing 477 million shares. The outlook for our business continues to be strong. As Jim mentioned, we expect 2014 revenues to rise to over $4 billion, EBITDA to rise 21% to $1.38 billion, and with growing free cash flow and a shrinking share count, we continue to expect robust growth in free cash flow per share. Operator, let's open it up for questions.

Thank you. (Operator Instructions) Your first question will come from Kannan Venkateshwar with Barclays. Kannan Venkateshwar - Barclays: Just a couple of questions, but first was on the self-pay sub. Could you help us understand the numbers a little bit in terms of the penetration rate since the one and what drove the slight decline in terms of the guidance numbers there? Also in terms of the numbers going forward, how much of the guidance next year is driven by self-pay versus rest of OEM?

Okay. On penetration rate, we are just a bit below 70% in terms of incorporation rate new car production. I think as we mentioned a couple of times in the call that the change in self-pay subs is a result of migration of existing subscribers as they turn over their cars. Probably not a big surprise that since our subscribers over index higher income that they turn their cars over faster than general industry trends, so as it is turning out it looks like they are moving them. We anticipated that, but it looks like they are turning over cars, at least at this point in time, a little faster than what our expectations were, so effectively, it's like somebody upgrading to a new phone, all right? They moving from one car to another, but remaining the subscriber, so we just have this sort of migration effect out of self-pay and into trial, so that was the driver of the decline. Most of our self-pay subscribers come from auto sales right, so really to your final question, I don't think there is much distinction there. In terms of our guidance, the guidance for 2014, we are providing this time is the over $4 billion in revenue and the $1.38 billion in adjusted EBITDA. Subscriber guidance will probably follow the close of the year as we traditionally tune up for the finish of the year, we look at the most recent forecast for auto sales and then finalize our marketing and retention plans for the year.

Yes. I just want to add one thing is that on top of it, I think David used the right word in his comments. We have tweaked basically our subscriber guidance for the year and we have tweaked it for one phenomenon, which is it appears our subscribers are transitioning faster to newer cars either because the economy is improving or because they are more affluent. I don't which one and so we are really just seeing a shift in those subscribers when they go from their first relationship with us to their next new car, they are now moving from self-pay into our trial funnels and you will see our trial funnels look very strong. Kannan Venkateshwar - Barclays: Okay. Just one comment on embedded cars in the IP platform, I mean is that at some point in the future the core part of your business model and the way your content gets delivered? What kind of economics does that represents?

Well, I think I was pretty clear on what I said which is, number one, there is no question in my mind, the architecture of the future, long-term vehicle will incorporate on embedded transporter or call it embedded modem. Which way ultimately customers get which part of their services, way too early to define. But what I will clearly tell you is, and again I was strong in my comment there and I will be strong again, the value of having our own private ubiquitous one-way nationwide network, and being able to combine it with a public two-way LTE network, we think, gives us a very strong option or strong position going forward to optimize the entertainment experience.

For a long time, data traffic has shown severely asymmetric patterns. And we don't think that's going to change going forward. So having, effectively, an interactive request channel through embedded modems combined with an ample downlink channel is, we think, a very valuable asset to have in the automotive fleet. Kannan Venkateshwar - Barclays: Thank you.

Thank you. We will take our next question from Matthew Niknam with Goldman Sachs. Matthew Niknam - Goldman Sachs: Hi, guys. Thanks for taking the question. Two from me, if I could. One on ARPU. Can you talk about some of the factors giving you increased confidence in the ability to raise prices next year? And whether the greater investments in differentiated content provides greater ability for increases beyond '14? Then secondly on margins. So there is a good deal of margin expansion we have seen in recent years. The reset with your large OEM partner in 4Q gives additional tailwind. Given that in the announced rate hike, can you talk about where you might see opportunity to maybe reinvest some of the margin tailwinds into '14? Thanks.

So I will deal with the price increase, and then David will take the rest. I mean price increases are never a happy thing or never easy to decide. We have gauged where we are. We look at our churn profile where we are. We look at the great value story that, we believe, we are bringing our customers. And we wouldn't have announced a price increase if we weren't confident that we could achieve that without turning over the applecart, per se, and I remain confident in that. As far as where our price goes in the future, we will cross those bridges as we get there and we will continue to make the same kind of assessment to try to judge the elasticity of our subscribers, clearly what's going on in the economy at that time and what our value proposition is and optimize all three. But I feel comfortable with the price increase. By the way, our subscribers will be hearing about it in the next week and I think that's all I can say on that. Dave, can you take the rest?

Yes, sure. On the content differentiation, and as Jim has said that we think long and hard about this, the content differentiation is pretty much the only reason why people are paying us at all because, as you know, all of the competitive services are free to the consumer. So the content differentiation is important and Scott's team continues to do an unbelievable job creating a unique and compelling experience for our subscribers. In terms of what are we going to do with the expanding margin, I think you should expect us to continue to invest the way that we have been all the way along, that in our results so far, you have seen us make major investments in the development and deployment of IP services and telematics, the continuous generational change in the SDARS technology and better intelligence to help us manage what is outside of the cellular carriers, the one of the largest paid subscriber bases in the world. So we will continue to that and we believe we can continue to make those important investments in the future within the margin expansion and are very confident that we are investing at a strong level to drive future services and still be able to hit the 40% EBITDA margins that we have given you from for long-term guidance. Matthew Niknam - Goldman Sachs: Okay, thanks, guys.

Thank you. We will take our next question from Jessica Reif Cohen from Bank of America Merrill Lynch. Jessica Reif Cohen - Bank of America Merrill Lynch: Thanks. I have a couple of questions. On capital returns, the $2.4 billion remaining, I was wondering if you could talk about the time frame and why wouldn't you accelerate next year, particularly now that you have announced the HoldCo structure?

Well, HoldCo is not quite there yet and as you know that we haven't had a history of talking specifically to time frame. Although, we have said many times that we have a 3.5 times leverage target that if we live to that target and look at everybody's model out there, so it gets you to conclusion that will probably raise an additional $1 billion a year in net debt, but our free cash flow was clearly headed to $1 billion a year. When you look at what amounts to $2 billion of potential funding, what's the company going to do with it. If we don't have something to buy, well from time-to-time we could I guess let cash surplus build. I think it is likely that we will choose to return that money to shareholders.

Great. Then just couple more. The initial guidance of $1.38 billion for EBITDA for next year, I mean initially this just seems low given all of the trends that are in place. Then combine that with the price increase, so just wondering if you could give us some color on kind of your thoughts on that?

Talking about the price increase, you got to remember that it's a price increase on the basic package and there are a lot of packages that aren't affected by the increase, so I think that what we have said is that over time you should expect to see gently rising sort of ARPU as we maybe tinker with price here and there and continue our efforts to up-sell. At the same time, we continue to look at the introduction of lower price packages that may appeal to a more price-sensitive consumer. At the end of the day, what we are really driving towards is optimizing the free cash flow of the business, so we are looking to drive the subscriber growth, which we believe will drive margins.

Which leads to my last question, perfect segue, on the Hispanic market, which is low priced, I was just wondering could you give us a sense of what you think that market opportunity is? I mean, just seems like a really interesting add-on and I guess part B to that question is on some of the contract renewals. You mentioned Fox, Major League baseball. Can you give a sense of what happens to those underlying costs?

David, do you want to do the contract renewals first?

Yes. We had a long-term trend statement, where in programming costs, we said that we expect the trend to be down, right? Reducing programming costs and that in fact is exactly what Scott has delivered. He has taken a whole bunch channels and content arrangements that were driving $400 million a year in spending when we put the two companies together. You know his team has driven that to now under $300 million. We only have one pre-merger contracts left, which is the NHL agreements, those and up until after the Stanley Cup in 2015. I think that the process of continuously declining programming cost was certainly going into abate in the next couple of years. Then like every other business that we are subject to inflationary increases from time-to-time, I don't think you will see us have the kind of pressure in content cost that you have seen on the video side.

Yes. I will add one point to that. We cautious and I repeat cautiously work with our programming partners for a longer term agreement that I think is great for our company which gives us a certainty on what our programming costs are going to be for these two major pieces of content over the next six and seven years and I can tell you I am very happy with where we came at. In terms the Hispanic, Jessica. I only know a couple of things. Number one, it's a rising and growing percent of the population. Number two, our data clearly shows us we are under indexed. When we look at our conversion data, when we look at our self-pay data, we are clearly under indexed and that can only be from first from one conclusion which is we didn't have the content necessary to successfully compete in this important segment, so we very carefully and someone asked a question earlier about are you going to invest. We are investing pretty heavily in the Hispanic community and the Hispanic tier in content. Piolín being a great example. This is a major morning star that was on Hispanic terrestrial radio, that's now exclusively on Sirius XM. And then, as you have seen in baseball, for instance, we have the Spanish rights for the games and more and more and more, we continue to take an expansion of our content, call it Hispanitizing it, meaning making it available in Spanish language as well as combining it with unique and exclusive content to build, what I think is, a strong package. I want to caution you, and I made my comment very deliberately so you can hold me accountable to it, this is a march, not a sprint. Okay? We haven't even done our marketing rollout yet to know what we are even going to get for this in the next six months. But what I can tell you is, we are going to stay at it. And we are going to continue to learn and figure out, just like we have done in other important segments and I am not going to rest until we get our fair share of that business. That's what we deserve and I am really excited about it because I think it's totally additive to our business and not in any way predatory to our existing subscriber base. I also want to point out that I don't think Hispanic is the only place that this concept can work. So, I think you are going to see us look at other niche, that are single-digit, low double-digit parts of the demographics out there where we can offer unique programming and mass markets to that unique segment. And I am pretty excited about that. Scott, you want to add a little to that?

Yes. One other thing, Jessica, I wanted to add, when David accurately mentioned about our programming costs and all that, I want to be really clear because sometimes there are questions about that. It isn't either a charitable situation or anything else why our cost structure is what it is. The partners do exhaustive research and they get great feedback for a variety of different reasons and often overlapping reasons from brand extensions in the car for a TV network to national calls on what was a local show and other thing and we actually have a couple of situations now where there are partners paying us, in some cases significant money, for content we want and they want the bandwidth to be on our platform. So we are in a unique position in the assets we offer versus a lot of other media companies to partners that come on our platform. Jessica Reif Cohen - Bank of America Merrill Lynch: Can I just follow up on what you just said? So can you give us a sense of the magnitude of how much partners pay you in total?

No, I don't think we want to give any of that detail. I think that's just one way we are balancing our programming cost. So it's Scott's language. Jessica Reif Cohen - Bank of America Merrill Lynch: Great. Thank you so much.

Thank you. We will take our next question from Bryan Kraft with Evercore. Bryan Kraft - Evercore: Hi, just a couple of questions. One was, I was wondering if you could provide any kind of rough quantification of the percentage of units that are entering trial that are existing subscribers? Sort of quantifying these trial subs that are existing subs and are buying new cars? And then, also can you talk about what percentage of the trial base at this point represents used cars. And finally, can you just talk about how you are tracking according to your initial plan this year for used car unit growth. Thank you.

So I will take the easiest one first and that is, I am real confident in our used car guidance for this year. We are moving along quite nicely. David, I think you can comment on the other two.

Yes, in terms of the proportion of our trials, in the trial volume that represents existing subscribers migrating through, I don't think that's a delineation we are going to provide at the time. And the same thing with the trial inventory on used cars. It is probably best to just stay focused on the fact that we are seeing roughly 50% growth year-over-year in additions from the used car volume. Bryan Kraft - Evercore: David, maybe in that vein, on the first question, can you talk about maybe year-over-year what kind of increase you have seen in the existing subs turning over as a percentage?

I don't have that number, honestly, off the top of my head. As we mentioned in the call, it's a little - This is all sort of new developing information, right? We don't have any real history on it and so we are going through the learning for the first time. My guess is that the behavior of this is going to change with economic cycles, right, and it's going to change as the complexion of the subscriber base changes, so what we are seeing now in our activity is most likely the behavior of people who were buying cars as we were moving into the recession and out of the early recovery of the recession. Now presumably, those are higher income people. This is just one of these things we are going to have to watch over time like a lot of the numbers you have seen from us over the years that we end up showing great statistical stability at the end of the day and my guess is just like the first couple of years when we were talking about used car conversion rates, because we are seeing a lot volatility month-to-month to what those rates were, but for the first time today here is coming out and saying hey we see those rates in low 30% and that's because the numbers have sort of stabilized, so we will keep an eye on some of these other things. As we feel we have a better grip on the numbers, we see the statistical behavior stabilize a little bit, maybe we will open the covered a little bit.

Yes. I think the David is absolutely right. The key word to use there was this is a new phenomenon for us that we have seen some acceleration on and I think the used car conversion rate [compares] is exactly right. I don't think we want to comment until we are sure we know that what we are going to tell you is what we believe is right and I don't think we know. David I don't know what that number is today.

Could I just ask one other, just a clarification too? When someone is an existing subscriber and they got a new car and that's a free trial car, not a paid trial. Are they counted as self-pay churn?

Yes. Look, I think the 1.8% continues to be a up pretty good number, because your next logical question which I know you are going to ask. Is that well do you achieve 100% of those guys when they migrate back to the trial. Of course the answer is no, but when you are all done tracking it through, whether it's rotate through as a paid trial or an unpaid trial and you look at the net retention, we think 1.8% is a fair representation of what happens after the migration effect of people moving from one car to another, so it continues to be I think a good long-term planning number for you to use.

Thank you. We will take our next question from Mike Pace with JPMorgan. Michael Pace - JPMorgan: Hi. Thanks. Just a couple of structural questions, you mentioned a few items that are still pending to complete the HoldCo structure. Is there anything else that has to get done? If so, what? Then as far as the Agero acquisition goes, can you just talk about how you will fund that? Where that would sit in the capital structure if HoldCo is put in place prior to that? Then just a follow-up or two.

With HoldCo it is just paperwork at this point, paperwork and time. We have to provide notices to people and we have to wait for periods of time, so I think you should see HoldCo placed in the next few weeks. We obviously don't have clearance yet from the government to close. If we close the HoldCo or close Agero prior to Hold Co's formation, we will obviously be funding it out of the operating company. If we close it after the HoldCo is formed, it's possible that we could acquire or finance it up there. If I had to pick the odds, the odds today is that we will draw down on $1.25 billion bank facility in order to initially fund the acquisition. Then we will look opportunistically at the markets and maybe term that money out. Michael Pace - JPMorgan: Then I think you said pro forma for Agero, and I thought you said stock buybacks in the fourth quarter your leverage ratio will be around 3.5 times. How does that work when you first close Agero? Will you be under the 3.5 times and obviously this is just in the context of the 3.5 times covenant in one of your bonds?

I think that we have a couple of things, so in the 5.25, right, that have the 3.5 times research and they also have a builder. Then we also have HoldCo, so between the builder and HoldCo, we have plenty of flexibility that, if we choose to continue buying back at $500 million a quarter, that I don't see any particular problem in doing that. Michael Pace - JPMorgan: Great, and then just one more. As far as the stock buybacks that you have agreed to do with Liberty. I think the timing and the amounts are pretty clear. But can you remind us who has what options to accelerate that and then how should we think about that from your end?

I am going to reference you back to the 8-K on the description of the options. But I think, for the most, you should think of it as we will do purchases then, at this point, you should anticipate for purchases in November, January and April. And Mike, just to finish on the 3.5 times, I think the way everybody ought to be looking at our leverage at this point is net of a convert. And certainly, it would be my intention to manage to a net of the convert leverage that, with it so deep in the money, the odds are overwhelmingly likely that it turns into equity in December '14. And like everybody talks about, we are seeing historically low rates in the high yield market and knowing that we are going to maintain a 3.5 times ratio for the long-term, over the next couple of quarters, we may very well look to effectively pre-fund the replenishment of the deleveraging that's going to occur. So if you see us bump up above 3.5 times, it's doing up in more than just managing the fact that now we have a big slug that we are going to be raising, need to replace next December. Michael Pace - JPMorgan: Okay, great. Thank you.

Thank you. Gentlemen, your next and final question will come from Jim Goss with Barrington Research. Jim Goss - Barrington Research: Two questions. Firstly, is there more upside in terms of penetration similar to the Honda revised agreement you described earlier? And to the extent that you have had the wind at your back with auto sales reaching a cyclical peak or at least a more normalized peak, are there other opportunities that are sufficient to sustain desired growth? Is it the used car market, the Spanish language, IP or what are the strategic priorities you feel there are the most important in that regard?

Well, this is Jim. I think a couple of things, Jim. Thanks for answering the question on Honda because I do think the Honda announcement was a pretty important announcement that we made yesterday in terms of penetration, more towards the confidence in automakers with satellite radio. Is there some more? There is some tweaking, okay, around the penetration rate but I think 70 continues to be a very strong and good benchmark. In terms of growth, I think we have been very clear. We continue to put major emphasis on the second-owner business and drive that hard. Obviously, then we are looking at other initiatives like Hispanic to supplement around that with additional growth and I think you got it. I think those are the two big ones that we are concentrating on right now for 2014. Jim Goss - Barrington Research: Alright, thanks.

Thank you.

Thanks, everybody.