XM Radio 2000 Annual Report Download - page 25

XM SATELLiTE RADiO 2000 Annual Report
Liquidity and Capital Resources
At December 31, 2000, we had a total of cash and cash equivalents of $224.9 million, which excludes $95.3 million of
current restricted investments, and working capital of $261.2 million. Giving effect to the concurrent offerings detailed
below, as of March 6, 2001, we had cash and cash equivalents of $417.6 million, which excludes $95.3 million of
current restricted investments, and working capital of $453.9 million on a pro forma basis. By comparison, cash, cash
equivalents and short-term investments were $120.2 million and working capital equaled $94.7 million at December 31,
1999. The increases in the respective balances are due primarily to the proceeds from the financings described below.
Funds Raised for Period Through Commencement of Commercial Operations
Since inception, we have raised an aggregate of $1.3 billion, net of expenses, interest reserve and repayment of
debt. These funds are expected to be sufficient, in the absence of additional financing, to cover funding needs
through commencement of commercial operations in the summer of 2001 and into 2002. These funds have been
used to acquire our FCC license, make required payments for our system, including the satellites, terrestrial
repeater system, and ground networks, and for working capital and operating expenses.
Sources of Funds. Of the $1.3 billion raised to date, approximately $167.0 million, excluding the Class A
common stock acquired by Motient Corporation as part of our initial public offering, has been raised through the
issuance of equity to, and receipt of loans from, Motient Corporation and a former stockholder. Of this amount,
approximately $90.7 million and $46.0 million was raised in 1997 and 1998, respectively, and $30.3 million
was raised in January 1999.
In July 1999, we issued $250.0 million of Series A subordinated convertible notes to six strategic and financial
investors—General Motors, $50.0 million; Clear Channel Communications, $75.0 million; DIRECTV, $50.0 million;
and Columbia Capital, Telcom Ventures, L.L.C. and Madison Dearborn Partners, $75.0 million in the aggregate.
Using part of the proceeds from the issuance of the Series A subordinated convertible notes, we paid a former
stockholder $75.0 million in July 1999 to redeem an outstanding loan. We incurred fees and expenses totaling
$11.3 million in connection with these transactions.
In October 1999, we completed an initial public offering which yielded net proceeds of $114.1 million.
Concurrent with the closing of our initial public offering, $250.0 million of our Series A subordinated convertible
notes, together with associated accrued interest, converted into shares of our Series A convertible preferred
stock and shares of our Class A common stock. Additionally, $103.3 million of convertible notes issued to
Motient by us, together with associated accrued interest, converted into shares of our Class B common stock.
During the fiscal year ended December 31, 2000:
•We completed a follow-on offering of 4,370,000 shares of Class A common stock, yielding
net proceeds of $132.1 million;
•We completed a concurrent offering of 2,000,000 shares of our Series B convertible
redeemable preferred stock, which yielded net proceeds of $96.5 million;
•We completed a private placement of 325,000 units, each consisting of $1,000 principal amount of 14%
senior secured notes due 2010 of XM, and one warrant to purchase 8.024815 shares of our Class A
common stock at $49.50 per share that provided net proceeds of $191.5 million excluding $123.0
million for an interest reserve; and
•We closed a private offering of 235,000 shares of our Series C convertible redeemable preferred stock,
which yielded net proceeds of approximately $226.8 million. We recorded a $123.0 million beneficial
conversion charge that reduced earnings available to common stockholders. The issuance of the Series C
preferred stock also caused the exercise price of the warrants sold in March 2000 to be adjusted to
$47.94 and the number of warrant shares to be increased to 8.285948 per warrant.
FiNANCiALS 2000
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