Sirius XM Radio (SIRI)

Programming is an important part of our service, and the costs to renew our programming arrangements may be more than anticipated.

          Third-party content is an important part of our service, and we compete with many parties for content. We have entered into a number of important content arrangements, including agreements with the NFL, Howard Stern and NASCAR, which require us to pay substantial sums. Our agreement with the NFL expires at the end of the

19

Programming is an important part of our service, and the costs to renew our programming arrangements may be more than anticipated.

      Third-party content is an important part of our service, and we compete with many parties, including XM Radio, for content. We have entered into a number of important content arrangements, including agreements with the NFL, Howard Stern and NASCAR, which require us to pay substantial sums. Our agreement with the NFL expires at the end of the 2010-2011 NFL season; our agreement with Howard Stern expires in December 2010; and our agreement with NASCAR expires in 2011. As these agreements expire, we may not be able to negotiate renewals of one or more of these agreements, or renew such agreements at costs we believe are attractive.

      Our financial obligations under our agreement with Howard Stern consist of both fixed and incentive payments in cash and common stock, and are substantial. In October 2004 we disclosed that the aggregate fixed obligations under our agreement with Stern would be approximately $100 million per year commencing in 2006. The 34,375,000 shares issued in January 2006 for the benefit of Howard Stern and Don Buchwald, his agent, were valued in October 2004 at approximately $110 million and were included as part of the aggregate fixed obligations under the agreement. At issuance, these shares were valued at approximately $225 million, which will be recorded to equity granted to third parties and employees expense in the first quarter of 2006.

      In addition, we may not be able to obtain additional third-party content within the costs contemplated by our business plan. We also must negotiate and enter into final music programming royalty arrangements with BMI and our existing arrangements with the ASCAP, SESAC and SoundExchange will expire at the end of 2006. Such royalty arrangements may be more costly than anticipated.

      Certain copyright holders have stated concerns regarding features in SIRIUS radios that allow subscribers to listen to SIRIUS programming after the initial broadcast. We believe these devices comply with applicable copyright law. We cannot assure that our royalty fees will remain at current levels or that arbitration or litigation will not arise in connection with royalty arrangements or SIRIUS radios that include certain recording capabilities and we cannot predict what the costs to us of a proceeding or a settlement of such a dispute or disputes might be.

Programming is an important part of our service, and the costs to renew our programming arrangements may be more than anticipated.

      Third-party content is an important part of our service, and we compete with many parties, including XM Radio, for content. Since January 2004, we have entered into a number of important content arrangements, including agreements with the NFL, Howard Stern and NASCAR, which require us to pay substantial sums. As these agreements expire, we may not be able to negotiate renewals of one or more of these agreements, or renew such agreements at costs we believe are attractive.

      In addition, we may not be able to obtain additional third-party content within the costs contemplated by our business plan. We also must negotiate and enter into music programming royalty arrangements with BMI and in the future will have to re-negotiate our existing arrangements with the ASCAP, SESAC and SoundExchange. We expect to establish license fees with BMI through negotiation and such royalty arrangements may be more costly than anticipated.