Sirius XM Radio (SIRI)

      The following table summarizes the restricted stock unit activity under our stock incentive plans and provides certain information with respect to restricted stock units outstanding (shares in thousands):

      The average remaining contractual life for restricted stock units outstanding at December 31, 2005 was 4.83 years.

      In November 2004, we granted 3,000,000 shares of restricted common stock. Such shares were issued and outstanding as of December 31, 2005. The restrictions applicable to these shares lapse in equal installments on November 18 of each of the five years beginning on November 18, 2005.

      We recorded additional deferred compensation of $18,091 and $32,497 during the years ended December 31, 2005 and 2004 respectively, in connection with restricted stock units granted. As of

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SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollar amounts in thousands, unless otherwise stated)

December 31, 2005 and 2004, we had $24,621 and $43,600, respectively, of deferred compensation associated with restricted stock and restricted stock units. Such deferred compensation is being amortized to expense over the vesting period. We recognized stock compensation expense associated with these restricted stock units and shares of restricted stock of $34,398 and $13,896 for the years ended December 31, 2005 and 2004, respectively. For the year ended December 31, 2005, we also recognized stock compensation expense of $3,361 for restricted stock units expected to be granted in February 2006 for services performed in 2005. For the year ended December 31, 2004, we also recognized stock compensation expense of $2,651 for restricted stock units granted in February 2005 for services performed in 2004.

      During the six months ended June 30, 2005, we granted 1,060,586 restricted stock units, with a grant date fair value of $6.00 per share.

      In November 2004, we granted 3,000,000 shares of restricted common stock. The restrictions applicable to these shares lapse in equal installments on November 18 of each of the next five years beginning on November 18, 2005.

      We recorded additional deferred compensation of $12,119 during the six months ended June 30, 2005 in connection with restricted stock units granted. As of June 30, 2005 and December 31, 2004, we had $34,060 and $43,600, respectively, of deferred compensation associated with restricted stock and restricted stock units. Such deferred compensation is being amortized to expense over the vesting period and is recorded as a component of equity granted to third parties and employees in our accompanying unaudited consolidated statements of operations. We recognized stock compensation expense associated with these restricted stock units and shares of restricted stock of $9,795 and $3,180 for the three months ended June 30, 2005 and 2004, respectively, and $19,096 and $6,559 for the six months ended June 30, 2005 and 2004, respectively. For the three and six months ended June 30, 2005, we also recognized stock compensation expense of $773 and $1,611, respectively, for restricted stock units expected to be granted in February 2006 for services performed in 2005.

Restricted Stock Units and Restricted Stock

      The following table summarizes the restricted stock unit activity under our stock incentive plans and provides certain information with respect to restricted stock units outstanding and exercisable at December 31, 2004 (shares in thousands):

      The average remaining contractual life for restricted stock units outstanding at December 31, 2004 was 6.4 years.

      We granted 3,000,000 shares of restricted common stock. The restrictions applicable to these shares lapse in equal installments on November 18 of each of the next five years beginning on November 18, 2005.

      We recorded deferred compensation of $32,497 and $27,811 during the years ended December 31, 2004 and 2003, respectively, in connection with restricted stock units and restricted stock granted to employees and members of our board of directors. Such deferred compensation is being amortized to expense over the vesting period and is recorded as a component of equity granted to third parties and employees in the accompanying consolidated statements of operations. For the years ended December 31, 2004 and 2003, we recognized stock compensation expense associated with these restricted stock units and shares of restricted stock of $13,896 and $1,949, respectively. In 2004, we also recognized stock compensation expense for 2004 services performed of $2,651 for restricted stock units expected to be granted in February 2005.