The company is the only satellite radio operator in the U.S., with significant barriers to entry. It has a large subscriber base, with a stable monthly subscriber churn of slightly less than 2% despite gradual price increases. It depends on U.S. automotive sales for growth. It has long-term vulnerability to intensifying competition from evolving car dashboard entertainment landscape. The company has significant debt leverage, in the 3x-4x range (our calculation), with dividends and debt-financed share repurchases offsetting revenue and EBITDA gains. It has robust cash flow from operations (we expect $1.7 billion to $1.8 billion in 2017). It has moderate capital spending requirements ($250 million to $275 million in 2017). It has adequate liquidity and covenant headroom. S&P Global Ratings'
