Hugh Panero, President and Chief Executive Officer Gary Parsons, Chairman of the Board Joseph J. Euteneuer, Executive Vice President and Chief Financial Officer Joseph Titlebaum, Senior Vice President, General Counsel and Secretary Steve Cook, Executive Vice President of Sales and Marketing Eric Logan, Executive Vice President of Progamming

Jonathan Jacoby, Bank of America Securities Robert Peck, Bear Stearns April Horowitz, Hoeffer and Arnett Lucas Binder, UBS Jason Helfstein, CIBC World Market Ilene Sirakawa, Citigroup James Dix with Deutsche Bank I would like to welcome everyone to the XM Satellite Radio first quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press star then the number two on your telephone keypad. Thank you. Mr. Titlebaum, you may begin your conference. Joseph Titlebaum, Senior Vice President, General Counsel and Secretary: Hello everyone. This is Joe Titlebaum, General Counsel of XM Satellite Radio. Before we begin our prepared remarks, I would like to remind everyone certain information on this call may contain forward looking statements. Due to a number of factors, our actual results may differ material from those that are projected in such forward looking statements. Those factors include future demands for the company service, the company’s dependence on technology and third party vendors, and the potential need for additional financing, as well as other risks described in XM Satellite Radio holding statement form 10K filed with the Securities and Exchange Commission on March 3, 2006. Copies of this filing are available on line and upon request from XM Radio’s Investor Relations Department. I will now turn the call over to Hugh Panero, President and CEO of XM Satellite Radio. Hugh Panero, President and CEO of XM Satellite Radio.: Good morning everyone and thank you for joining us. On the call with me are Gary Parsons, Chairman; Joe Euteneuer, Chief Financial Officer; Steve Cook, Executive Vice President of Sales and Marketing; Eric Logan, Executive Vice President of Programming and, Joe Titlebaum whom you have just heard from. This morning I’ll begin my comments by focusing on the first quarter performance and our return to historically cost-effective subscriber growth. I’ll then provide and update on our distribution channels and latest new products. Eric Logan will discuss major programming deals, and Gary Parsons will outline the recent refinancing arrangements we have put in place. And, finally, Joe Euteneuer will discuss our detailed financial results. In the past several months, XM achieved milestones and announced significant initiatives to sustain growth and reduce overall costs. First, we exceeded 6.5 million subscribers. Subscriber additions were achieved at a cost effective basis. The automotive market returned to solid growth in both net and gross ads and, in March, the 5 millionth vehicle with an XM factory installed radio was produced and, during the first quarter, Honda passed the 1 millionth vehicle installation milestone. The Pioneer Inno, the first portable with player with live XM and MP3 capabilities now shipping, as well as the Samsung neXus 25 and neXus 50. We also recently priced an 800 million dollar debt offering, refinancing our higher cost debt. And, finally, Oprah Winfrey, Opie and Anthony syndication, a Bob Dylan show and other high-profile programming deals were announced. With regard to the first quarter, XM added 568,902 net use subscribers in the quarter, ending with a total of 6,501,859 subscribers. Our first quarter of 2006 results put us on track to achieve our announced target of more than 9 million subscribers by year end. We generated this result in the face of heightened marketplace competition, once again demonstrating the strong underlining demand for our service. With less that 5% of total radio listeners captured by satellite radio to date, enormous market potential remains. As a result of our subscriber growth over the past 12 months, we more than doubled first quarter revenues to 208 million from 102.6 million in the same period last year. We are particularly pleased to report we achieved the first quarter results while significantly reducing subscriber acquisition costs compared to the fourth quarter of 2005. In the first quarter of 2006, XM’s fully-loaded cost of capturing a new subscriber CPGA, was $94, in line with our expectations, and sharply down from our fourth quarter 2005 results of $141. Subscriber acquisitions cost or SAC, a component of CPGA, was $62 in the first quarter of 2006 compared to $89 in the fourth quarter of 2005. We remain committed to efficient SAC and CPGA levels as we grow the business in 2006. The growth in our subscriber rates during the first quarter of 2006 was helped by a return to more normal balance between the automotive or OEM market and the retail aftermarket. In the first quarter of 2006 we added 272,000 net new automotive subscribers, compared to 114,000 in the fourth quarter of 2005 and 212,000 in the first quarter of 2005. As you may recall, the number of factors contributed to an overall auto sales slow down at the end of last year, however in the first quarter of 2006, GM auto sales benefited from its early introduction and heavy promotion of 2007 model year fuel efficient full-sized utility vehicles and pickups to high volume categories for XM factory installation. The strong showing of the new GM vehicle bodes well for our OEM subscriber performance in 2006. Additionally, for all its 2007 model year vehicles, GM has lowered the sticker price for the XM option from $325 to $199 where XM is not included as standard equipment. While GM and Honda will contribute the majority of our net subscriber additions in the automotive market this year, as we have explained, 2006 is the staging year for XM’s newer exclusive factory installed automotive partners who are positioned to drive even greater OEM growth in 2007, 2008 and beyond. I’d like to highlight Toyota’s recent announcement at the New York Auto Show that the new flagship Lexus LS Series will be the first Lexus models to offer factory installed XM radios, and our real-time XM NavTraffic service. XM will be standard equipment on the 2007 LS460L and its new luxury hybrid sedan the 2008 LS600hL. This is an important step forward in our step forward in our strong and growing relationship with Toyota as it begins its factory installation program, which will ramp up significantly in the coming years. Hyundai is preparing to launch its XM factory installation program at end of 2006 for model year 2007 vehicles. Finally, Nissan will start factory installing significant quantities of vehicles in 2007 and over 500,000 in 2008. In total, our existing automotive partners represent approximately 60% of the U.S. auto market, and their factory installation plans for 2008 should result in nearly 5 million vehicles produced annually with XM factory installed radios. In our other major distribution channels, the retail market, we’re beginning to see recovery in market share relative to the December and January numbers which were heavily impacted by competitive pressures. During the first quarter of 2006 we added 304 thousand net new subscribers, compared to 319 in the same period last year when we introduced the first generation XM2Go MyFi. Our new products this year are being introduced in the second quarter. We achieved this result at cost effective SAC and CPGA levels and we expect our new product introductions to positively impact retail sales in the second, third and fourth quarters of this year. On the product side, we are premiering the first portable satellite radios which combine live XM and MP3 capabilities. Unveiled at the Consumer Electronics Show in January, these small sleek devices represent a major breakthrough in consumer electronics. With the Pioneer Inno and Samsung Helix, subscribers are able to receive XM live while on the go, and can record up to 50 hours of programming giving consumers the ability to time shift XM contents for listening at their convenience. XM subscribers can also bookmark selected songs for later purchase via our Napster partnership and create play lists. These features enable subscribers to listen to XM broadcasts anytime and anywhere. Reaction has been extremely positive with enthusiastic press endorsements, calling the Inno “extremely cool”, “a major coup” and “a disruptive piece of technology”. Actually, in today’s paper, USA Today, there’s a wonderful review on the (inaudible) that they ended by saying that the Inno is a real winner. The Pioneer Inno and the Helix both have an MSRP of about $399 and the same functionality. Other new products available at lower price points are the Samsung Nexus 25 and the Nexus 50. Similar to the Inno and the Helix, the even smaller Nexus models provide consumers with time shifting capability and storage of XM and MP3 content. The Nexus 25 player can store up 25 hours and the Nexus 50, up to 50 hours of content. These Nexus products are designed to receive Xm programming while docked at the home or in the car. The Pioneer Inno began arriving at retail this week with Nexus devices arriving next week. In the second quarter, specifically for the Dads and Grads selling season, we will have significant quantities of our next generation products available at retail. Along with introducing our high end products during the second quarter, we were also debuting the AGT Sportscaster at an SU Level MSRP of $59, joining our other plug and play radios the XT, The Express and the Sky Fi II. The introduction of the Sportscaster is timed to coincide with our major league baseball and Worldcup Soccer coverage. The Sportscaster provides sports fans with thirty channel presets, including preprogrammed presets for our (inaudible) and Talk Radio channels, and there will be Home Plate and Home Ice, as well as a special channel displaying continuous tech updates showing when and where to find live sports broadcasts on XM. The radio transmits wirelessly to any car FM radio so sports fans can hear their favorite teams as they travel coast to coast and slip into an optional, wearable kit with headphones for in-stadium listening. With the Sportscaster, Inno, Helix, neXus 25, neXus 50, we are introducing a total of 5 new products in the second quarter, all supporting our great content and continued growth in the retail aftermarket through the remainder of the year. Let’s turn the programming now where Eric Logan will describe our latest enhancements and announcements. Eric Logan, Executive Vice President of Progamming: Thank you. XM’s strategy is simply to offer the most complete, diverse and compelling content on radio. In February we announced a landmark partnership with Oprah Winfrey for the creation of an innovative Oprah and Friends channel. March witnessed the wide baseball coverage on XM of the World Baseball Classic followed by the first pitch of the 2006 Major League Baseball season in April. We’re now preparing for the launch of Bob Dylan’s show on May 3rd and are excited about the expanded distribution of our Opie and Anthony show which began yesterday. As stated earlier, XM and Harpo Productions are working toward a September launch of the Oprah and Friends channel. Construction of our studio is underway at Harpo’s facility in Chicago and programming development is progressing on schedule. I think everyone knows how popular Oprah Winfrey is, particularly with women. Women are a rapidly growing presence in the XM nation, comprising nearly 40% of our subscriber base today; which is up from 30% one year ago. With Oprah and Friends and XM’s existing Take Five women’s lifestyle channel with Ellen Degeneres and Good Morning America, XM is clearly the satellite leader in women’s programming and lifestyle content. For sports fans, we’ve enhanced this year’s baseball coverage with the World Baseball Classic featuring the United States and 15 other national teams from around the world which garnered an estimated 1.3 million listeners on XM. Following the successful coverage of the Classic, we commenced our most popular sports offering, complete wide coverage of Major League Baseball. An estimated 4.1 million XM listeners tuned into opening day of the 2006 season. MLB is clearly the most compelling major sport satellite radio listening, and you can expect to see and increase in our MLB related marketing as we target and acquire passionate and geographically displaced fans. Preparations for extensive coverage of one of the worlds greatest sporting events, the Fifa Worldcup, are underway. XM is this year’s official satellite radio broadcaster and its coverage represent the first time in the history of the sport that worldcup soccer will be nationally available on radio in the US. In March, XM launched a dedicated channel for English language coverage, channel 148, and the exclusive XM show Worldcup this Week. Beginning on June 9 and continuing through July 9, we will broadcast the games in English and Spanish featuring renowned commentators such as Jeff August and Andres Cantor. Other key XM sports programming events during the past several months included coverage of the master’s golf tournament, the launch of the Dale Earnhardt, Jr. show and the Jimmy Johnson show, as well as James Carville and Luke Russert’s 60/20 sports talk show. Now moving from sports to music. We’ve expanded our channel lineup to 170 channels including 69 commercial free music channels, the most in satellite radio. A major new feature of our music coverage will be Bob Dylan’s much anticipated show, (inaudible) radio hour with Bob Dylan, premiering on May 3rd on deep tracks channel 40. each weekly show wil present an eclectic mix of music based around a theme and host Bob Dylan will interact with the audience while offering stories about the music and topics of interest. In addition, the show is going to feature contributions from special guests, including Elvis Costello, Martin Sheen, Sarah Silverman and Jimmy Kimmel. Back to you, Hugh.

I’d like to conclude our discussion on programming with a few words about Opie and Anthony. This past Monday, we announced an unprecedented arrangement with CBS radio to syndicate XM talk stars Opie and Anthony on CBS affiliates in 7 major markets including New York, Philadelphia, Boston, Dallas, Pittsburgh, Cleveland, and West Palm Beach. Monday through Friday, CBS will carry the first three ours of the show from 6am-9am, simulcast on XM. XM will follow the simulcast with an additional 2 hours of uncut entertainment, exclusively for our XM subscribers. This expanded 5 hour show will air live all uncut on XM and repeated during the day. We believe this is a win-win for everyone. CBS gets a proven morning drive show while XM generates syndication revenue and gains valuable marketing and branding reaching 40% of the US population. The deal already has received very positive reviews and lots of press nationwide. I’d like now to turn the call over to Gary Parsons who will describe the major elements of our refinancing arrangements, currently being concluded by XM. Gary? Gary Parsons, Chairman of the Board: Thanks a lot Hugh. I’d like to take a couple of minutes to update you on the recent refinancing transaction. As we announced last Friday, XM priced $800 million in unsecured notes, which will be consummated subject to customary closing conditions on May 1st. the purpose of this refinancing was to leverage XM’s improving credit profile to transition to a largely unsecured capital structure, while also reducing interest expense, lowering our overall cost of capital, extending maturities and enhancing financial flexibility. The offering itself consisted of $600 million of senior unsecured notes, due 2014 with a coupon of 9.75% and $200 of senior unsecured floating rate notes, due 2013, yielding a coupon of LIBOR plus 450 basis points. The net proceeds will be fully utilized to repurchase or redeem the company’s 14% senior secured notes, due 2009, the 12% senior secured notes due 2010 and the senior secured floating rate notes, due 2009. And finally, the elimination of $320 million in obligations to General Motors for $237 million, which is an implicit discount rate of 13%. So in addition to replacing these 12, 13, and 14% obligations with sub-10% debt, we established a secured $250 million revolving credit facility that matures in 2009, with a group of blue chip investment and commercial banks, which is scheduled to close concurrently with the notes offering. The new credit facility, combined with an increase in our General Motors credit facility to $150 million, now provides us with access to $450 million in liquidity without having to keep hundreds of million of excess, unused cash on the balance sheet. Our improved operational performance and new, simplified debt structure, qualified XM to receive a notch rating upgrade to B3 from Moody’s and B minus from Standard and Poor’s for our senior secured debt. Joe, would you like to comment on the refinancing as well? Joseph J. Euteneuer, Executive Vice President and Chief Financial Officer: Thanks, Gary. We are very pleased with the marketplace support of this refinancing. The refinancing allows us to replace a variety of higher cost debt instruments we issued in the early stages of the company’s development, with lower interest rate debt. This will result in a simplification of our capital structure and balance sheet. Upon completion of the transactions Gary just outlined, we will incur a non-cash charge of approximately $75 million on the income statement, in the 2nd quarter. Additionally, the pre-payment of the GM liability will decrease our annual amortization of GM liability to approximately $26 million per annum from $37 per annum currently. This change reflects the $83 million of savings from the pre-payment amortized straight line over the remaining 7.5 years of the GM distribution agreement. Now I would like to focus on a series of de-leveraging transactions, involving our 10% convertible notes and series B preferred stock, which we executed in the first quarter and in April. These transactions continue our balance sheet simplification and should be viewed as complimentary and as an extension of the refinancing transactions. After this discussion, I will turn to the first quarter financial results. We have been opportunistically converting the remain outstanding 10% convertible notes, since they turned cash pay effective January 1, 2006. These notes, issued in early 2003, appear on the balance sheet as debt, even though they are convertible at $3.18 per share. So they are deeply in the money. They are expected to be converted into equity at some point. These shares are currently included in our fully diluted share count. Since these instruments are not yet callable, we have incentivized the conversion of a number of these notes. In the first quarter, we converted 52 million of the notes for 17.1 million shares, eliminating an estimated $21 million of future interest payments over the next 4 years. We recognized 18.4 million of non-cash de-leveraging losses in connection with this transaction. In April, we exchanged a further 27.7 million of the 10% convertible notes, or 9.1 million shares, which will eliminate approximately $10 million of future interest payments over the next 4 years. We will recognize approximately $10 million of non-cash de-leveraging losses in connection with this transaction in the 2nd quarter. After completion of the April transaction, the current face value of the 10% convertible notes was $100 million. Also in April, we purchased approximately 77% of our outstanding series B preferred stock for $18 million, saving us approximately $10 million of future dividend payments, as well as avoiding the redemption premium. There is no de-leveraging loss as a result of this transaction. Only 23% or 108,000 shares remain outstanding and all of the shares are currently calling. Before I review the first quarter results, let me provide an update on our equity investments in Canadian satellite radio and Worldspace. Both companies are in the early stages of their development. First, let’s talk about our 23% interest in Canadian satellite radio. CSR recently announced 2nd quarter fiscal year 2006 results and has projected it will exceed its target of 75,000 subscribers before august 31, 2006. CSR also announced exclusive factory installation distribution agreements with Honda Canada and Nissan Canada, who joined General Motors as shareholders in CSR. Now that CSR is operational, I will give you a brief overview of how we record CSR related transactions on our financial statements. In the 4th quarter of 2005, we recorded on the balance sheet $152 million of deferred income associated with the gain from our 23% equity ownership in CSR. This gain is being amortized into net income over the expected 15 year term of the contract. The quarterly amortization of the gain, of $2.5 million is recorded in other revenue. In addition to this recurring amortization, we recorded our 23% or $8.9 million of CSR’s net loss on the line item in our income statement called equity in net loss of affiliates. Each quarter, we will record our equity share of the net income or loss of CSR. We also recognize other income of $4.4 million from a one time gain on the sale of repeaters to CSR. We are currently entitled to receive a 15% revenue share from CSR. The quarterly earned revenue share will be amortized over the life of the agreement and recorded in other revenue on the income statement on a straight line basis. Finally, CSR’s reimbursement of the cost of our exclusive NHL contract, for GAAP purposes, will be recorded in other revenue rather than being netted against programming costs. In the last 2 quarters of 2005, we recorded mark to market gains on our Worldspace investment through our balance sheet and accumulated other comprehensive income. Our investment will be mark to market each quarter and will fluctuate based on the price of Worldspace stock. As a result of the recent decline in Worldspace stock price, we have recorded a mark to market loss of $6.7 million for the first quarter, through other comprehensive income. Now we will turn to our first quarter operating results and I’ll refer you to the financial attachments to our first quarter 2006 earnings press release. Total subscribers on March 31 exceeded 6.5 million. Approximately 5.9 million were self-paying subscribers. These self-paying subscribers comprised 91% of our total subscriber base and represented 78% growth or 2.6 million more subscribers, compared to the first quarter of 2005. OEM promotional subscribers totaled 548,000 at the end of the first quarter of 2006, compared to 426,000 at the end of first quarter 2005 and 461,000 at the end of the fourth quarter 2005. OEM promotional subscribers represent 8.4% of our total subscriber base, down from 11.3% in the first quarter of 2005. the balance of our total subscriber base reflects 37,000 rental car subscriptions and 22,000 data services subscriptions. In the first quarter of 2006, we will return to our historic balance between OEM and retail markets. We added 272,000 net OEM subscribers in the first quarter 2006, up from 212,000 in the first quarter of 2005 and up strongly from 114,000 in the fourth quarter of 2005. This improvement in net OEM subscribers can in part be attributed to stronger sales of GM’s 2007 models. The OEM conversion rate in the first quarter of 2006 was the same as the 4th quarter of 2005, at 54.3%. While our retail gross additions increased by 24% in the 1st quarter of 2006, compared to the 1st quarter of 2005, our retail net additions decreased by 5% in the first quarter of 2006 compared to the same quarter of 2005. The lower 2006 net additions are due to the impact of a higher churn rate on a much larger average subscriber base. Overall, the churn rate on self-paying subscribers, which includes retail and OEM subscribers, for the first quarter of 2006 was 1.64%, up slightly from the 1.57% experienced in the 4th quarter of 2005. We have previously stated we expect churn to increase somewhat in 2006, relative to 2005, and our expectations have not changed in this regard. Now let’s discuss revenue. Total revenue in the first quarter of 2006 grew 103% to $208 million from $102 million in the same period in 2005. the revenue increase was due to our expanded subscriber base as well as an increase in average revenue per subscriber. Recurring subscription revenue for the first quarter more than double to $188.1 million, from $93 million in the same period in 2005. The annual subscription revenue run rate for the first quarter of 2006, increased to $752 million. XM’s recurring average subscription revenue per subscriber, or ARPU, crossed the $10 threshold for the first time in the first quarter of 2006. ARPU increased to $10.07, up from $8.84 in the first quarter of 2005 and up from the $9.85 in the fourth quarter of 2005. This ARPU increase reflects the positive impact of our April 2005 rate increase, partially offset by greater participation in annual and multi-year pre-payment plans and family plan subscriptions. We expect ARPU to exceed the $10 mark for the full year 2006. Annual and mult-year pre-payment plan subscriptions contribute significantly to our cash flow and represent approximately 42% of XM subscribers, compared to 33% at the end of the 1st quarter of 2005. Family plan subscribers have grown to 20% of our subscriber base, compared to 13% at the end of the first quarter of 2005. the average pre-payment period remains at 9 months. For the first quarter of 2006, deferred revenue – where we include these prepayments on the balance sheet – increased by $22.5 million since December 31, 2005. Variable expenses, which include the cost of equipment sales, revenue share and royalties, customer care and billing and ad sales, but exclude fixed costs and marketing CPGA expenses, were $68 million during the first quarter of 2006, up from the $40 million in the first quarter of 2005. Changes in variable expenses are the direct result of growth in revenue and subscribers. The contribution margin of our subscriber business, which equals subscription revenue minus revenue share, royalties and customer service costs, increased 7 percentage points to 69.9% in the first quarter, compared to the first quarter of 2005. Fixed expenses, which include satellite and terrestrial, broadcast and operations, programming and content, research and development, general and administrative and marketing and retention and support, were $91 million during the first quarter of 2006, up from $52 in the first quarter of 2005. the annualized impact of programming contracts in 2005 including major league baseball and R&D expenses associated with our new devices, like the Pioneer Inno, drove the increase in fixed expenses. On the other hand, fixed expenses per average monthly subscriber improved to $4.85 in the first quarter of 2006, from $4.98 in the first quarter of 2005, excluding CSR’s reimbursement of NHL payments. Our operating leverage will continue to improve, as measured by fixed cost per average monthly subscriber. I will now address subscriber acquisition costs, or SAC, and the fully loaded cost per gross addition, or CPGA, both of which are calculated on a per unit basis. SAC is a subset of CPGA and reflects direct costs of manufacturer subsidies, distribution expenses, promotions, and negative margin on equipment sales. XM’s SAT for the first quarter of 2006 was $62, down significantly from $89 in the fourth quarter of 2005 and up slightly compared to the $52 in the first quarter of 2005. First quarter SAC was higher than last year due to the closeout hardware promotions and rebates. The broader measure of CPGA is the fully loaded measurement of the cost to gain each new subscriber. CPGA includes SAC, which we just discussed, plus all discretionary advertising and marketing costs. As we predicted, CPGA for the first quarter of 2006 was $94, down significantly from the $141 in the fourth quarter of 2005 and in line with the $90 in the first quarter of 2005. We expect CPGA to increase in the 2nd quarter, due to marketing of MLB and the introduction of our new radios. We are committed to keeping CPGA under $100 for the full year 2006. First quarter 2006 EBITDA was a loss of $83.5 million, compared to a loss of $71.3 million in the first quarter of 2005. I refer you to the press release attachment, which in 2006 included $4.6 million of other income, $8.9 million in equity and net loss of affiliates, $18.4 million loss from de-leveraging transactions and $12.1 million of stock-based compensation expense. Please note this is the first time we have reported stock-based compensation expense, in accordance with SFAS123R and the first time we have reported separately equity and net loss of affiliates with respect to our equity interest in Canadian satellite radio. Our operating performance continues to improve, as measured by our ability to generate pre-marketing EBITDA to cover and increasing amount of the cost to capture new subscribers. Our pre-marketing EBITDA was $49.9 million in the first quarter of 2006, compared to $10.7 million in the first quarter of 2005. In conclusion, let me reiterate our guidance. We expect to reach 9 million subscribers by year end, post an $860 million in subscriber revenue, with $250 million EBITDA loss, excluding the items I previously mentioned, such as stock based compensation, de-leveraging expenses and affiliate losses. And lastly, we expect to produce positive cash flow from operations in the fourth quarter of 2006 and for the full year of 2007. Let me turn the call back over to Hugh for some closing remarks.

Thanks, Joe. With our refinancing arrangements in place, exciting new programming coming on – our season of programming starts with major league baseball big time in the second quarter – innovative new products hitting retail stores, the automotive market resuming its strength and our costs under control, we’re off to a solid start in 2006. We would now like to take your calls and questions.

At this time I would like to remind everyone if you would like to ask a question, please press star and the number one on your telephone keypad. We’ll pause for just a moment to compile the Q&A roster. Our first question comes from the line of Robert Peck with Bear Stearns.

Hey guys. Good quarter. I just wanted to focus on some non-fundamentals I guess for a second, because they’re sort of topical. First of all, starting the FCC, could you tell us a little bit more about that? How often do they do these reviews? Is it a power issue of the transmitter? And I guess most importantly for the FCC, does this affect any other units, particularly the new units that will be coming out and could there be a monetary penalty? Joseph Titlebaum, Senior Vice President, General Counsel and Secretary: Bob, actually all of these things we don’t know in many cases all these sort of things because we just received these inquiries. In fact, on the modulator thing, on the same day we received it we also got a general industry-wide notice of clarification from the FCC on how to measure this in car vs. out of car. So we don’t even know completely whether that influences this to any extent. The only things we can say that we have been able to determine very rapidly is its not in any way a safety or health issue. Rarely does the FCC require recalls on anything like this. And, we have received minimal complaints or notices about any sort of interference issues. So, we have about 30 days I think to investigate it and respond.

And just to clarify for the new units coming out, are they a similar power? Do you think they could be susceptible to the same ruling? Joseph Titlebaum, Senior Vice President, General Counsel and Secretary: We don’t even know because they’ve used different techniques on some of our older radios vs. our newer radios. We’ll have to go in and assess. Robert Peck.: Switching gears onto the FTC for a second. It seems like a broad inquiry there. Assuming for a second that maybe its more telemarketing focused and do not call registry stuff, could you tell us what percent of your subs are coming through that channel? Is it somewhat diminimus? Hugh Panero.: Bob, I would say it’s not appropriate to assume anything. We really just got this letter. I mean I say that very candidly. Our intention is to comply fully with the information request. To our knowledge we comply with all of the laws that are under the purview of the federal trade commission and we’re just going to have to go through this process of speaking to them and finding out what it is that they really are focusing on and then respond to it. I would like to, in the future, if at all possible, avoid having these kinds of letters show up the day or two days before our earnings call. But that’s sort of the journey we’re on right now. We feel confident but we’re going to comply fully with the information request.

Last question then I’ll let somebody else go, for O&A, could you give us an update as to the number of listeners you think they had? And Hugh, maybe bigger picture here, does this open up a potential future of sharing with terrestrial back and forth either way, must like broadcast TV does with cable?

That’s an interesting point. First of all, they were one of our top 10 shows on XM. I don’t have specific numbers of their listenership, but they’re obviously very popular. I think that my experience, having been in the cable TV industry and the PPV industry, has been that when you have these overlapping distribution technologies, service companies, that everybody tries to find some way to work together, whether it be phone companies on a wholesale basis selling the services of EchoStar whether it be Motorola selling iPod-like devices to consumers, whether it be cable companies who are selling content to DBS distributors. We have found what we think is a pretty unique arrangement, whereby as I described in my remarks, CBS I think had a challenging situation with the people that they currently had on their radio stations. Opie and Anthony provides them with very proven radio talent and we – on the other hand – get branding and marketing messages along with syndication revenues. So I think we do it on a case-by-case basis. We even say our Bob Edwards show is actually syndicated on the weekends to some public radio stations. And I think it’s on a case by case basis. Robert Peck.: Thanks, good quarter.

The next question comes from the line of Jonathan Jacoby with Bank of America Securities.

Good morning. A few questions here. Can you give us a little color on your retail market share by month? And do you have any expectation how your 2nd quarter market share will turn out? The next question is on churn. Do you have any sense how much of the slight pickup in churn is due to the annual subscribers, which I believe is about 20%, is sort of hitting the rate hike? Or, are some of the increased related to lower quality subscribers that you got from the fourth quarter with some aggressive pricing promotions?

Those are two interesting questions. On the first one, we don’t give our out market share on a monthly basis but I would have to, and I think most of the analysts in the street community are aware that clearly in the first part of the quarter in the January time frame, our competitor was very strong for a situation that you’re all pretty aware of. We have actually seen our market share gradually increase, returning to more normalized levels and I think you’re going to see a pretty evenly competitive marketplace in the second quarter and beyond, especially as we rollout our new products. And then also, there’s a certain seasonality to our content. Our content is things like major league baseball, which really start in the 2nd quarter. We obviously put more marketing dollars behind that and obviously there’s a lot of attention paid to that along with the world cup and Bob Dylan and a bunch of other things and even a pre-promotion of Oprah Winfrey. I think that’s the way it’s going and I think there are a number of third party analytic work that’s been done to support that. With regard to churn, Steve, do you want to deal with that? Steve Cook, Executive Vice President of Sales and Marketing: Sure. On the churn, we did see that pick up in the first quarter. I will tell you though that our voluntary component of churn has been very stable for the last six months. The increase was attributed to some higher non-pays that’s really due to just the sheer volume of subs that we brought on in the month of December. The pickup you see is really related to that. There was a small piece related to the one-year annual plan that we put in place last year right at the time of the rate increase and we may see a little more of that hitting in April. But really, first quarter was attributed to non-pay.

Just one follow up, quickly. Yesterday or a little bit earlier, the Senate…there’s some talk on this Perform Act. Do you have any strategy or thoughts behind what’s going on there? It also does seem that, and perhaps you’re working with the consumer electronics association, they seem to be taking out some advertising, obviously supporting satellite radio. Just if you can give us some color.

I’ll give you some color. Gary did actually a great job at the senate panel hearing yesterday to the judiciary committee. Basically, our strategy is to get our message and our story out and the basic message is this: with all due respect to Senator Feinstein, we believe that this piece of legislation is anti-consumer. What it does is it really challenges a consumer’s right to record material for their own personal use. It is described in this bill, which is I think trying to boil the ocean a bit, under the rubric of it being parity between various distribution outlets, which included some internet streaming, XM satellite radio, the satellite radio category and terrestrial radio. What’s strange about the bill in its effort to sort of boil the ocean, it sort of left out the whole traditional radio marketplace, who doesn’t pay any royalty in this. It’s a very complicated issue and even at the hearing, which was an interesting hearing and Gary did a great job – it was unfortunate that there were no representatives of the consumer electronics industry there – who are really the true advocates, along with companies like XM and others, on the rights of consumers. There is clearly a balance here. We continue to engage in conversations with both staff and also on a business level with the labels. But this is a dialogue and the kinds of debates that are going to go on until we reach some resolution.

Thank you.

The next question is from the line of April Horowitz with Hoeffer and Arnett.

I was wondering if you could give us an update on the new spectrum. Where are you with respect to getting that approved? Is there a time frame for when – if you don’t get it approved – that you’ll pull that offer? And then also, with respect to the FCC’s inquiries, do you know if they’re inquiring to anybody else’s devices? Like Apple’s FM modulators?

April, a couple of questions there and the last piece of it first. No, we don’t know if they’re inquiring to others. We tend to, whenever we get something we disclose it immediately and put things out just so we can’t tell about anybody else’s. Relative to the progress at the FCC on the WCF frequencies or other elements like that, it is still underway. We do have opportunities to relook at the deal. If, in fact, it’s not going to be able to be approved for the purposes that we intend to move forward with, it is still our firm desire and intent to close that transaction and be able to put those frequencies to work for what we think would be the benefit of the American public, but we’ll see how that turns out.

And Joe, I was wondering, could you give us a little bit of color as to how to think about the Canadian opportunity and what those equity pickups might look like for the year? Joseph J. Euteneuer, Executive Vice President and Chief Financial Of: I think what to think about, April, is for the quarter after I went through all of that accounting that it basically netted out to a very immaterial impact on the financial statements and as a result of the startup nature of the company, the losses are small in the early years and as they grow quickly, they’ll convert over to a net income base after a couple of year out. So it shouldn’t be a dramatic impact.

And then lastly on the conversion rate of 54%. Can you give us what you think it might be for the year if it will trend upward or if you’ve plateau-ed and the 54% is the bottom? Steve Cook.: Hey April, this is Steve. The conversion rate…we’re banging away on that. We are not satisfied with where we are. We were flat vs. fourth quarter. At this point we’ve got a number of initiatives in place to try and move that up. I hesitate to really predict what it’s going to be over the balance of the year. We’ve had two flat quarters and we’re working to improve that.

Great. That’s all I’ve got and congratulations on the refinancing.

The next question is from the line of Lucas Binder with UBS.

Hi. Good morning. A couple of quick questions. First of all, on the royalty agreements, we’ve seen Sirius kind of take a little bit of a lead with regards to the (inaudible) device and coming to an agreement with the music labels. Should we see something similar from you guys with regard to any sort of royalty that you would pay for the sale of your MP3 devices?

This requires me a little bit to speculate on the Sirius deals. We’re working toward that goal. My understanding of some of the Sirius deals are that they were specifically for their S50 product. We’ve hear rumors in the past about what some of the qualifications are about those things but no one has explained to us really what those deals are because we’re negotiating independently with the labels. I think our discussion with the labels are more for our products, which we believe to be the kind of things that consumers want because of their flexibility. What Sirius did with their S50 product, which I don’t thin is in the class of our products in a certain sense, is…I don’t really understand it. Our intention is to enter the same kind of deals with the labels. We have actually been in negotiations with them but, again, these kinds of dialogues go on in congress, they go on in a business sense and eventually they may end up in the courts. But we feel very confident that these devices are legal, they are consumer friendly and they comply with existing law and existing tradition as it relates to people’s ability to record material and use it for their convenience. And, actually, in the article in USA Today, today, where a reporter actually explained I think beautifully the use of the product where he was receiving the signal of XM walking around, he went into a subway, he went to our record mode where he had recorded some content, and he got to listen to our product on the train in New York City. And I think it’s a perfect example of why this product is great and why it extends convenience to consumers.

And then if I could ask one other follow up. Following this refinancing and the prepayment for GM, how do you look at free cash flow? Not just operating cash flow, but free cash flow for 2007, given that you’ve taken out over $50 million in cash payments on a net basis for GM?

I think, Lucas, the answer to your question is remember next year we still have the capital expenditures associated with XM5 and based on the timing of those to the extent that they’re earlier in the year, you would then free up to the position of being able to be free cash flow towards the latter part of the year, subject to the timing of those satellite CapEx.

Alright. Thank you very much.

The next question comes from the line of Jason Helfstein with CBC World Markets.

Hi. Three questions. The first, can you talk about what kind of presence you guys have today in Washington? And I would think just as the satellite radio industry becomes more successful, the NAB is going to try to continue to make more noise and kind of having a stake in the ground in DC probably makes a lot o sense; if you could, talk about that. Second question, Joe, can you just give us what was the current portion of long term debt in the quarter? And then also what’s a normalized stock option expense number for the rest of the quarters? Should we use this quarter as a run rate or was that higher than normal? Thanks.

Well, regarding our presence in Washington and not to be flip about it, but we’re located here, which is an advantage. We have a variety of organizations and people and in-house talent that assist us with our efforts in Washington. Clearly a qualification for living in Washington is that you have to be a political gadfly and so Gary and I qualify in that area, as well. Gary obviously did a great job testifying. But we are basically building a team of people and have in place the kinds of people we need to deal with the growing profile of our company, whereby we are the leader; so a lot of people look at us pretty closely. And the NAB has always been someone who has sort of attacked us or pursued a variety of tactics to slow us down. And as they come up, we meet them and we believe that we will prevail. We won’t win every single one of our arguments, but on the whole I think that we’ve been pretty effective. And actually, just going back to the birth of the company where it was the NAB that actually tried to kill the whole industry in the first place. What most people learn is that with these kinds of businesses because of their underlying and compelling value to consumers, is that they prevail. We are just going through the normal fight where incumbents are basically trying to throw things in our way. Gary Parsons, Chairman of the Board: And I think that the bigger takeaway actually is the one that you did mention that as we are now becoming bigger, we are starting to be a larger impact, far more customers, that both adds strength and leverage to ourselves as an industry overall, not just ourselves, but the industry overall and the strength of our position. But, it also brings out more people who want to throw logjams in your way. So we will be attuned to those going forward.

Joe, do you have…? Joseph J. Euteneuer, Executive Vice President and Chief Financial Officer: Yeah, the current portion of long term debt is just under $10 million, around $8 million, give or take. And then our stock option expense, because of the timing of our annual grants are normally in the April time frame, you’ll see if go up slightly in the 2nd quarter and sort of stay at those levels for the remainder of the year.

Just one follow up to the first question. Just to get a little more detail on the FCC inquiry. Were there specific stations that complained? How much detail do you have as far as what information the FCC has?

Really, we don’t have any detail on that at this point in time. We certainly intend to try to find that out. From our own records, we’ve received minimal types of concerns or complaints.

Okay. Thank you very much.

The next question comes from the line of Ilene Sirakawa with Citigroup.

Thanks for taking the question. I just have two kinds of questions. One is, I wanted to get more details on the Opie and Anthony deal. Did CBS approach you or was if vice versa? And was the primary driver of that deal the syndication dollars or the marketing promotion? And also, in connection with that deal, did you extend the contract length that you have with your current Opie and Anthony deal and was that a consideration? And then I have a follow up.

First of all, I’m not going to reveal some of the details about the contract. Basically, the color on it is that I actually have had a very cordial relationship with Joel Hollander at Infinity, for a while. Clearly, we discussed lots of different things where we are obviously competitors in some environments, we are neutral in others. With regard to this deal, we’re kind of in love with it. I think that the attributes of the deal that you describe, in its totality, is really what convinced us that this is a smart thing for both companies. Ilene Sirakawa.: Okay, thanks. And then just as a follow up on the federal inquiries. Do you think that there’s a chance that you would actually have to do a recall of any products? And, on the FTC inquiry, do you have any idea what the genesis was of that? Was there sort of increasing customer complaints or do you have any idea what spurred that on?

Very simply on the recall issue, we don’t know. We just don’t know. With regards to the FTC, again – we just received the inquiry and clearly over the next couple of days we are going to make contact with the FTC and inquire about what their major concerns are. But, it’s a pretty general inquiry and we don’t have any…in our business there’s sort of a flash point of a particular kind of complaint that we’ve gotten that’s out of the ordinary that may have caused this. We just don’t know. Clearly, most companies have been through this process in the telecommunications area and others, you get an inquiry like this, you’re a good company, we basically put out in an 8K what happened. Some companies actually could have held this while they vetted the process, but we had an earnings call coming up so we made a decision to put it out. And now, we’re going to go through what is a fundamental process of going out and vetting with the FTC what their concerns are and then give them all the data that they ask for. Ilene Sirakawa.: Okay. Thank you very much. I appreciate it.

I think we have time for one more question.

Your last question is from the line of James Dix with Deutsche Bank.

Hey, good morning guys. Just a couple of questions. First, regarding the performance you’re getting from General Motors, any color you can provide us on the variations in installation rates you get from General Motors, or really any of the auto manufacturers, on the SUVs and some of the higher end vehicles? And then secondly, you rolled out some additional channels in the quarter to add to your commercial-free music capability. Any color you can provide and any further upside you can get in terms of capacity from compression or other technologies? And just what exactly did you do in order to provide those additional channels? Thanks.

I think on the first question I would say that with regard to the SUVS and the pickups, clearly as we indicated in our script, those kinds of vehicles have a higher penetration with regards to XM satellite radio and we think that will continue. The across-the-board, though, the conversion rates reflect the average of all of those players. But I think clearly what you’ll find is those people that have these comfort cars that are now moving to a fuel efficient model are the kinds of cars that are very attractive. Also, they tend to have built in LCD screens so that the display of the information about XM radio is really in a spectacular format and I think that’s what you find with regards to that. On your other question which was pertaining to capacity…we basically don’t talk about our capacity. Clearly we had some capacity that allowed us to expand the lineup. As you know this is not an incident amount of bandwidth. We obviously have work going on with things like (inaudible) modulation and other things that we can do, but when we have an opportunity to do something and if it’s within our sort of bandwidth capacity limits, we will make certain decisions. A lot of them are based on what are current trends in music and what we want to do and what opportunities we have. But we will do it on a case by case basis.

Okay. Just one follow up on the questions on the regulatory inquiries. I take it then that you really have no prior notice of either the FCC or the FTC inquiries which lead to these letters?

No and clearly if I had known about it two weeks ago, I would have liked to have avoided putting out 8Ks on the day before or the day of my earnings call. It really just came in and we have a number of people here in our company who’ve been involved with big consumer companies in the past and this is a process that we’re going to go through. To the best of our knowledge now, we believe we comply with all the laws and we are looking forward to providing information to the FCC.

Great. Thank you. Gary Parsons, Chairman of the Board: Thanks very much everyone for joining us on the call and we look forward to speaking to you on the next call.

This concludes today’s XM Satellite Radio conference call. You may now disconnect.