It's been a year of validation for Sirius XM Radio (NASDAQ:SIRI). There have been plenty of ups and downs, but ultimately we find the popular satellite radio provider closing out the year with improving cash flows and credit rating agency outlooks. Even subscriber counts are starting to inch higher after back-to-back sequential dips to kick off the year.

Let's take a look at how Sirius XM progressed through 2009, with share prices at the start of every month to chart its course.

January, $0.12
Sirius XM began the year the same way it closed out 2008: Swaying convertible note holders to swap debt for low-priced stock. These were desperate times, since the first of three beefy debt repayment milestones in 2009 for a cash-strapped Sirius XM was coming in February.

There were a few positive developments, despite the bankruptcy fears. Sirius XM introduced MiRGE, its first interoperable radio capable of receiving all of Sirius and XM programming in a single receiver. The satrad giant also announced that it would be increasing its rate for secondary receivers in March, along with charging for higher-quality streams. The merger between Sirius and XM was approved on the condition that the combined company would not increase its base rate of $12.99 a month, but these moves were allowed.

February, $0.12
With debt holders and key content partners expecting considerable payments, this was destined to be a sink-or-swim month for Sirius XM. CEO Mel Karmazin sent up a flare, conceding that if negotiations with its creditors proved fruitless that Sirius XM "may be forced to file for bankruptcy protection as early as Feb. 17, 2009."

Thankfully, it never came to that. EchoStar (NASDAQ:SATS) and Liberty Media Capital (NASDAQ:LCAPA) stepped up as dueling white knights. Sirius XM ultimately went with John Malone over Charles Ergen. The terms were brutal. Liberty would provide as much as $530 million in loans to Sirius XM that had to be paid back and hand over a 40% preferred share stake in the company.

However, Sirius XM was able to skirt Chapter 11 bankruptcy reorganization.

March, $0.16
The company released its delayed 2008 annual report in mid-March. Huge mergers have a funny way in setting bean counters back. The real nugget in the company's quarterly conference call was that Sirius XM was developing its own streaming application for Apple's (NASDAQ:AAPL) App Store. It targeted a second-quarter release, opening up the potential for incremental revenue streams outside of its receiver-owning subscriber base.

April, $0.35
After seeing its shares more than double in March, April was tame in comparison. Shorts began to bet against the company and Standard & Poor's raised its credit rating. Liberty Media Capital's infusion was clearly providing the breathing space that Sirius XM needed.

May, $0.39
Sirius XM released its first quarter results in May. It wasn't pretty, with the satellite radio subscriber shedding 404,422 net subscribers during the period. The upside is that it posted a substantially narrower deficit, repositioning itself as a cash flow growth story. It hosted its annual shareholder meeting by month's end.

June, $0.35
The anxiously anticipated Sirius XM application hit Apple's virtual storefront in June. The big shocker at the time was that Howard Stern's two channels were not contractually available through the app for the iPhone and Wi-Fi-tethered iPod Touch. It would limit the appeal of the application, and Sirius XM has yet to reveal how many streaming accounts it drummed up through the offering. Rosie O'Donnell also agreed to host a show that would air on both Sirius and XM.

July, $0.43
Sirius XM extended Karmazin's contract through 2012 in July, even though shareholders had seen their stock take a 90% hit during his tenure.

It also brokered a smart deal with BMW, providing buyers of certified used Beamers that already have satellite receivers with three free months of service. Motivating new car showrooms to promote satellite radio subscriptions was a great start, but now that many pioneers are trading in their cars, it was a no-brainer to reach out to the used car market with dormant receivers. A new music royalty fee -- bumping up primary monthly subscriptions from $12.95 to $14.93 -- also went into effect with July renewals. It may not have been popular with consumers, but it was a testament to Sirius XM's pricing elasticity.

August, $0.45
The media giant's second-quarter report in August showed another sequential dip in subscribers. Sirius XM closed out the period with 18.4 million members, a significant decrease from its 2008 year-end peak of more than 19 million subs. However, it also continued to make inroads in improving its cash flow position. It was also able to raise money by issuing debt at a reasonably attractive rate.

September, $0.67
With its stock still trading below a buck, Sirius XM received a Nasdaq delisting notice, giving it 180 calendar days to rectify the sub-$1 price tag. If the stock is still trading for pocket change by March 2010, Sirius XM can appeal the decision or go through with its board-approved plans for a reverse split.

October, $0.64
It was a slow month for Sirius XM, as it braced itself for the third-quarter report that would silence many cynics.

November, $0.59
In a breakthrough quarterly report, Sirius XM broke even in the third quarter. It also reversed back-to-back sequential subscriber declines, closing out the third quarter with 102,295 more subscribers than it started with.

An improving economy and a successful cash for clunkers program that also elevated Ford's (NYSE:F) shares certainly helped, but Sirius XM gained ground despite its new fees and that's huge.

Chairman Gary Parsons, one of the holdovers from the XM side, also resigned in November.

December, $0.63
And so far, it's been a mostly quiet end to an extremely wild year at Sirius XM. There's plenty of chatter of what Howard Stern will do when his contract is up, but Sirius has him locked up through the end of 2010.

With just a few trading days left in 2009, shares of Sirius XM have appreciated fivefold. Even DirecTV (NYSE:DTV), Netflix (NASDAQ:NFLX), and other subscriber-based entertainment services that consistently grew their user bases during the recession can't claim those lofty gains.

Sirius XM survived -- and then thrived -- in 2009. Now it's on to the open-ended potential of 2010.

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Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He does not own shares in any of the stocks in this story, except for Netflix. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.