Attachment 1998quarterly 10Q re

This document pretains to SAT-LOA-19900518-00036 for Application to Launch and Operate on a Satellite Space Stations filing.

IBFS_SATLOA1990051800036_1060363

Henry L. (Jeff) Baumann Executive Vice President, Law & Regulatory Policy Legal & Regulatory Affairs BROADCASTERS 1771 N Street, NW * Washington, DC 20036—2981 (202) 429¢5454e Fax: (202) 775—3526 L jbaumann@nab.org 4s October 8, 1998 RECEIVED Ms. Magalie R. Salas OCT =— 8 998 Secretary Federal Communications Commission Federal Communications Commission 1919 M Street, N.W. Office of Secratary Room 222 Washington, DC 20554 Satellite CD Radio, Inc. Ro,C es File Nos. 71—SAT—AMEND—97 $# . 49/50—DSS—P/LA—905 *4 J3 0 196 58/59—DSS—AMEND—90 e ’ 8/9—DSS—AMEND—92 uie 12/13—DDS—AMEND—92 44/55—DDS—AMEND—92 42—SAT—AMEND—95 71—SAT—AMEND—97 American Mobile Radio Corporation File Nos. 72—SAT—AMEND—97 26/27—DSS—LA—931/15/93 83/84—SAT—AMEND—953/10/95 72—SAT—AMEND—97 IB Docket No. 95—91 GEN Docket No. 90—357 RM No. 8610 PP—24 PP—86 PP—87 Dear Ms. Salas: On August 14, 1998, CD Radio filed its quarterly 10—Q report with the Securities and Exchange Commission. In that report, CD Radio indicated that it has substantially changed its technical plans for providing digital radio service. In its application to the FCC, CD Radio stated its intention to employ fwo in—space satellites, with one ground spare. The SEC filing (p. 4) reveals that:

October 8, 1998 Page 2 "During the quarter ended June 30, 1998, the Company decided to enhance its satellite delivery system to include a third in orbit satellite and to terminate certain launch and orbit related contracts." CD Radio‘s own press release ("CD Radio Expands to 100 Channels with Fourth Satellite," May 29, 1998) confirms this change in CD Radio‘s technical plan. Copies of the relevant portions of both documents are attached. To our knowledge, CD Radio has not reported this fundamental change in its technical plan to the Commission or sought to amend its application. Changes in the technical proposals of CD Radio, and perhaps those of the other SDARS permittee, American Mobile Radio Corporation, could raise significant questions about whether the service they intend to offer differs from the proposals on which the Commission granted their permits —— and in particular may change the need for and use of terrestrial repeaters. NAB asks that both permittees be required to provide the Commission with an updated description of their entire technical facility plans. The Commission should then allow time for public comment on any implications of those updated proposals before taking any further actions needed to initiate SDARS service. Requiring the SDARS permittees to make a full disclosure of their current technical plans would not cause substantial delay in authorizing service, and would assure the Commission that the service proposed to be offered to the public would be consistent with its expectations. Respectfully submitted Attachments ce: FCC Commissioners Roy J. Stewart, Chief, Mass Media Bureau Regina Keeney, Chief, International Bureau Carl R. Frank, Counsel for Satellite CD Radio, Inc. Bruce D. Jacobs, Counsel for American Mobile Radio Corp. Howard M. Liberman, Counsel for Primosphere Limited Partnership

Company Filings Search Page 1 of 242 FREE rTF{Lt_iL + mpose continuous quotes stocks.com m odities.options.charts .news Aevel.fl.free.trial CD RADIO INC 10—Q Filing Date: 8/14/98 Filing Index <DOCUMENT > <TYPE>10—Q <SEQUENCE>1L <DESCRIPTION>FORM 10—Q <TEXT> UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10—Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For The Quarterly Period Ended June 30, 1998 Commission file number 0—24710 CD RADIO INC. (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1180 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10036 (Address of principal executive offices) (Z2ip code) 212—899—5000 (Registrant‘s telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing

Company Filings Search Page 7 of 242 Comprehensive Income In 1997, the Financial Accounting Standards Board ("the FASB") issued SFAS No. 130, "Reporting Comprehensive Income. " SFAS No. 130 requires additional reporting with respect to certain changes in assets and liabilities that previously were included in stockholders‘ equity. The Company has no comprehensive income items to report for the current presentation. Recent Accounting Pronouncements The FASB has issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," which requires financial and descriptive information with respect to operating segments of an entity based on the way management disaggregates the entity for internal operating decisions. There is no impact to the Company‘s June 30, 1998 financial statements from the adoption of this standard. <PAGE> Marketable Securities Marketable securities consist of fixed income securities and are stated at market value. Marketable securities are defined as trading securities under the provision of SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities" and unrealized holding gains and losses are reflected in earnings. Unrealized holding gains were $11,000 and $624,000 at June 30, 1998 and December 31, 1997, respectively. Special Charges During the quarter ended June 30, 1998, the Company decided to enhance its satellite delivery system to include a third in—orbit satellite and to terminate certain launch and orbit related contracts. The Company recorded special charges totaling approximately $25.7 million related primarily to the termination of such contracts. Reclassifications Certain amounts in the prior period‘s financial statements have been reclassified to conform to the current period presentation. 5 <PAGE> CD RADIO INC. AND SUBSIDIARY (A Development Stage Enterprise) Management‘s Discussion and Analysis of Financial Condition and Results of Operations Special Note Regarding Forward—Looking Statements In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"), the Company is hereby providing cautionary statements identifying important factors that could cause the Company‘s actual results to differ materially from those projected in forward—looking statements ({as such term is defined in the Reform Act) made in this report. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance ({often, but not always, through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," [ 2lb d w h eb 91 d1 i wA n e T5w1 sae t lnratamsian" and "antlamnk"l are nat hisfarics

| CDRadio Center Online Page 1 of 3 CD dg a ; cE CHAIRMAN aa T . me ' t I 6 CD Radio Expands to 100 Channels with Fourth Satellite New York, N.Y. — May 29, 1998 — CD Radio Inc. (Nasdaq: CDRD) announced today that it has exercised its option to purchase a fourth satellite from Loral Space & Communications Ltd., doubling CD Radio‘s planned broadcast capacity to 100 channels in its nationwide satellite—to—car radio broadcasting system scheduled for launch beginning next year. "In terms of incremental value delivered to consumers, the step—up from 50 channels to 100 channels is analogous to the difference between a regular bookstore and a Barnes and Noble superstore," said David Margolese, CD Radio‘s chairman and chief executive. "The expanded system will be used to deliver more of what people want — more music, more choice. Additionally, it will also be used to address the Hispanic and sports markets in a significant way, and to generate additional advertising revenues on our non—music channels." Under terms of the agreement, Loral replaces Arianespace as CD Radio‘s launch service provider, delivering three Loral FS—1300 satellites in—orbit on a turnkey basis along with one ground spare. Launches are scheduled for November 1999, December 1999, and January 2000. CD Radio‘s incremental cost of the expanded system is approximately $290 million, of which Loral has provided assistance in arranging $145 million of financing primarily through Bank of America. Last year, CD Radio was granted one of two FCC national satellite radio broadcast licenses. The company is building a satellite—to—car 100 channel radio system for the broadcast of music and other programming to motorists throughout the United States. The majority of CD Radio‘s planned programming formats are generally unavailable on conventional radio stations in any single market. Furthermore, unlike conventional stations, which have an average range of approximately 30 miles before reception fades, CD Radio‘s signal is designed to cover the continental United States coast to coast. Music channels will be commercial—free, unlike conventional stations which interrupt their broadcasts with up to 18 minutes of commercials during every hour of music programming. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as ‘will likely result,‘ ‘are expected to,‘ ‘will continue,‘ ‘is anticipated,‘ ‘estimated,‘ ‘intends,‘ ‘plans,‘ ‘projection,‘ and ‘outlook‘) are not historical facts and may be forward—looking and, accordingly, such statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in the forward—looking statements. Accordingly, any such statements are qualified in their entirety by reference to, and are accompanied by, the factors discussed in CD Radio‘s Annual Report on Form 10—K for http://www.cdradio.com/pr052998 .html 10/7/98

CDRadio Center Online Page 2 of 3 the year ended December 31, 1997. Among the key factors that have a direct bearing on CD Radio‘s results of operations are the potential risk of delay in implementing CD Radio‘s business plan; increased costs of construction and launchof necessary satellites; dependence on satellite construction and launch contractors; risk of launch failure; unproven market and unproven applications of existing technology; and CD Radio‘s need for additional substantial financing. For Further Information: Madeline Couton, CD Radio, 212—899—5000 Channel Listing CD Radio‘s 100 channels will offer listeners a wide range of music categories as well as news, sports and talk radio programming. Currently, CD Rad10 anticipates that its 100 broadcast channels will be allocated as follows: 51. News 1. Symphonic 22. News . 53. News 2. Chamber Music 54. News 3. Opera 55. News 4. \Top of. the Charts 56.* News 5. ‘50s Hits ; . 57. News 6. ‘60s Hits 1 . 58. News 7. ‘70s Hits \ . 59. News 8. ‘80s Hits ; . 60. News 9. ‘90s Hits 61. Sports 10. Soft Rock °P 62. Sports 11. Love Songs . 63. Sports 12. Singers . & Songs 64. Sports 13. Beautiful Instrumentals i 65. Sports 14. Broadway‘s Best . . 66. Sports 15. Big Band/Swing . 67. Sports 16. Classic Jazz 68. Sports 17. Contemporary Jazz 69. Sports 18. NAC Jazz 70. Sports 19. New Age . 71. Entertainment 20. Soul Ballads . 72. Entertainment 21. Contemporary R&B 73. Entertainment 22. Classic Soul Hits 74' 23. R&B Oldies En.tertainment 24. Rap/Hip Hop 75 25. Dance Entertainment 26. Tropical 76. Entertainment 27. Latin Jazz 77. Entertainm 1 ent 28. Boleros 29. Latin Contemporary ;g Entertainment 30. Merengue 31. Cumbia Entertainment http://www.cdradio.com/pr052998.html 10/7/98

«CDRadio Center Online Page 3 of 3 31. Cumbia 80 32. Mexicana . e Entertainment 33. Tex—Mex . . ~ 81. Hispanic 34. Rock en Espafiol . . . 82. Hispanic 35. Country Hits * . . 83. Hispanic 36. Modern Country . . . 84. Hispanic 37. Classic Country 85. H; . 38. Folk Rock 80 Hispanic 39. Alternative Rock I 37 pp{Danic 40. Alternative Rock II +« HSpanic — Rock I 88. Hispanic 41. Classic 890. Hispani 42. Classic Rock II 90. H¥Sp ic 43. Album Rock 01 Specialty 44. Hard Rock/Metal « BpPecla ty 92. Specialty 45. Blues — 93. Specialty 40. Reggae 47. World Beat 94. «BDeci4 Specialt 29 95. Specialty 48. Gospel . . ; 26. Specialty 49. Contemporary Christian . — 1 50. Children‘s 97. Specialty . Entertainment 98. Specialty 99. Specialty 100. Specialty CD Radio Home | Chairman‘s Message | About CD Radio Channel Listing | Investment Information | CD Radio News | Request Investor Kit ©1998 CD Radio Inc. Site designed and implemented by Morse—Balegno http://www.cdradio.com/pr052998 .html 10/7/98


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