Section 6: Team 54Nikhil Vaidya, Mathew Merritt, Jessica Bond, Ruth-Anne Culliton, Anisha Mehta,

Jeffrey Cobourn, Silvia Kusic

Merger Integration Plan: SIRIUS Canada & XM Canada

Management Team

Marketing Strategy

Synergies

Risk

Employee Morale

Finance

SiriusXM Merger

IssuesObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Canadian Satellite Radio Holdings Inc;

22.7%

SIRIUS XM; 37.1%

CBC; 15.0%

Slaight Communica-tions; 15.0%

Other Investors; 10.2%

ShareholdersObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Organizational: Lean Management Team Operational: Focus on OEM Penetration

(Cost-Effective Marketing) Marketing: Various Tactics to Enhance the Product and

Revenues Financial: Existing Strategy ($150MM Debt Issuance)• Pay off Mezzanine Debt Portion by FYE 2012• Pay off 20% of outstanding Senior notes per year• Projected to offer Dividends of $0.20 at FYE 2014

RecommendationsObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

MARK REDMOND

President & CEO

MICHAEL MOSKOWITZ

President & CEO

MICHAELWASHINUSHI

CFO

MARKKNAPTON

VP Operations

JANET GILLESPIE

VP Marketing

JASON REDMANCFO

JOHN LEWISVP

Programming

PAUL CUNNINGHAMVP Marketing

AL MCNEVINVP Customer

Relations

SHERRY KERRGeneral Counsel

Current Structure

SIRIUS

XM

Objectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

MARK REDMOND

President & CEO

MICHAEL MOSKOWITZ

COO

MICHAELWASHINUSHI

CFO

MARKKNAPTON

VP Customer Relations

JOHN LEWISVP

Programming

PAUL CUNNINGHAMVP Marketing

SHERRY KERRGeneral Counsel

Proposed StructureObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Managing Layoffs

Al McNevin6 years

($470 000)

Janet Gillespie3 years

($235 000)

Jason Redman7 months

($0)

Meet Individually

Severance Package

Restrict Access Immediately

Letters of Recommendation

Objectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Managing Restructuring

• Same Salary• Signing Bonus• Stock Options

Michael Moskowitz

XM President & CEO

Sirius XM COO

Mark Knapton

XM VP Operations

Sirius XM VP Customer Relations

Stock Options

Sirius XM Executives

10.2%

Objectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Anticipated Synergies

Cost Savings

RevenueGrowth

• Accounting• Customer care• Call centre• HR• PR• Administration• IT• Website• Economies of Scale• Decreased Internal Development•Minimizes Competition

•2011: 18%

•2012: 12%

•2013: 9%

Objectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Integrated Company CulturesObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

$12.95/monthOptimal Price

Discount Model• Time-sensitive

discount options• 1st week = 20% • 1st mo. = 15%• < 3rd mo.= 10%

Customization• A la carte• “Best of”

Channels• Keep most

popular channels from each

• Remove overlapping channels and replace with international channels, move programming from local radio, etc.

OEM• Toyota (9% of all

cars but only 15% penetration)

• Cheaper• More exposure

Retail

Marketing Focus• Smartphones• Quality not

Quantitiy• Various listening

platforms for one price

• “Pennies a Day”

Free-Trial• 3 month limit

Price Product Place Promotion

Marketing StrategyObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Proforma 2010A 2011E 2012E 2013ERevenues $199,568,373 $235,490,680 $263,749,562 $287,487,022 Revenue Growth 18% 12% 9%Operating Expenses $231,562,545 $220,895,878 $215,562,545 $234,963,174 Realization of Synergies 80% 80% 100%Operating Income (Loss) -$31,994,172 $14,594,802 $48,187,017 $52,523,848 EBIT Margin -16.03% 6.20% 18.27% 18.27%Net Income (Loss) -$48,358,742 $3,650,031 $40,219,907 $46,179,138 Profit Margin -24.23% 1.55% 15.25% 16.06%Basic & Diluted EPS -$0.39 $0.03 $0.33 $0.38Dividends $- $- $- $-

Condensed Income StatementObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Effective

Interest Rate

Proforma

2010A 2011E 2012E 2013E

9.75% Senior Debt 9.75% $130,000,000 $104,000,000 $83,200,000 $66,560,000

Debt Repayment 20% 20% 20%

8% Convertible Notes 10.00% $18,993,225 $9,496,613 $- $-

Debt Repayment 50% 100% 0%

Preferred Shares - $- $- $- $-

Common Shares 10.125% $166,399,935 $166,399,935 $166,399,935 $166,399,935Cash & Cash Equivalents $31,258,413 $41,509,639 $86,599,376 $147,001,421

Retained Earnings -

$118,938,272-

$115,288,241 -$75,068,335 -$28,889,196

Condensed Financing ScheduleObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Proforma 2010A 2011E 2012E 2013EEBIT/Interest Expense -1.9x 1.32x 5.94x 8.09xTotal Debt/TEV 47.24% 40.55% 33.33% 28.57%Total Debt/Equity 89.54% 68.21% 50.00% 40.00%Return on Equity (ROE) -29.06% 2.19% 24.17% 27.75%

Forward Looking RatiosObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Distribution Challenges Objectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Maintaining Employee MoraleObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Timeline

Fire 3 executives and hold a meeting with all employees explaining the change

Mandatory meet & greet with new manager & employees

Hold monthly social events to

solidify corporate culture

Through intranet allow employees to constantly and

openly give feedback

Facilitate training programs to educate employees on new

policies and procedures

Objectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Organizational: External hiring

Marketing: If unsuccessful in penetrating OEM, then focus on retail

Operational: Internally develop portion of currently outsourced operations

Financial: If sales growth estimate is not met, alternative financing may be necessary

ContingencyObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion

Organizational: Lean Management Team Operational: Focus on OEM Penetration

(Cost-Effective Marketing) Marketing: Various Tactics to Enhance the Product and

Revenues Financial: Existing Strategy ($150MM Debt Issuance)• Pay off Mezzanine Debt Portion by FYE 2012• Pay off 20% of outstanding Senior notes per year• Projected to offer Dividends of $0.20 at FYE 2014

ConclusionObjectives

Decision

Organizational

Operational

Marketing

Financial

Strategy

Contingency

Conclusion