Sirius XM Radio (SIRI)

YEAR ENDED DECEMBER 31, 2005 VERSUS YEAR ENDED DECEMBER 31, 2004

For the year ended December 31, 2005, SIRIUS recognized total revenue of $242.2 million compared with $66.9 million for the year ended December 31, 2004. This increase in revenue was driven by a net increase of 2,173,302 subscribers from December 31, 2004 to December 31, 2005.

The company’s adjusted loss from operations increased by $111.3 million to ($567.5) million for the year ended December 31, 2005 from ($456.2) million for the year ended December 31, 2004 (refer to the reconciliation table of GAAP loss from operations to adjusted loss from operations). This increase was driven by a 101%, or $175.9 million, increase in subscriber acquisition costs reflecting higher shipments of SIRIUS radios and chip sets and increased commissions to support a 155% increase in gross subscriber additions from 986,556 for the year ended December 31, 2004 to 2,519,301 for the year ended December 31, 2005, offset by reductions in average subsidy rates as the company continued to reduce manufacturing and chip set costs. The increase in subscriber acquisition costs was offset by a 256%, or $160.7 million, increase in subscriber revenue as a result of a 190% increase in the company’s subscriber base.

NINE MONTHS ENDED SEPTEMBER 30, 2005 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2004

For the nine months ended September 30, 2005, SIRIUS recognized total revenue of $162.2 million compared with $41.6 million for the nine months ended September 30, 2004. This increase in revenue was driven by a net increase of 1,511,631 subscribers from September 30, 2004 to September 30, 2005.

The company’s adjusted loss from operations increased by $40.2 million to ($341.2) million for the nine months ended September 30, 2005 from ($301.0) million for the nine months ended September 30, 2004 (refer to the reconciliation table of GAAP loss from operations to adjusted loss from operations). This increase was driven by an 88%, or $95.7 million, increase in subscriber acquisition costs reflecting higher shipments of SIRIUS radios and chip sets and increased commissions to support a 169% increase in gross subscriber additions to 1,252,623 for the nine months ended September 30, 2005 from 465,077 for the nine months ended September 30, 2004, offset by reductions in hardware subsidy rates as the company continued to reduce manufacturing and chip set costs. The effect of an increase in subscriber acquisition costs was more than offset by a 288%, or $115.6 million, increase in subscriber revenue as a result of a 228% increase in the company’s subscriber base.

Programming and content expenses increased by $26.0 million to $63.6 million for the nine months ended September 30, 2005 from $37.6 million for the nine months ended September 30, 2004. The increase was primarily attributable to an increase in license fees associated with sports related programming; compensation related costs for additions to headcount; additional on-air talent costs due to the expansion of the programming lineup; and broadcast royalties as a result of the increase in the company’s subscriber base.

Customer service and billing expenses increased by $12.9 million to $26.6 million for the nine months ended September 30, 2005 from $13.7 million for the nine months ended September 30, 2004. The increase was primarily attributable to call center operating costs necessary to accommodate the increase in the subscriber base. Customer care and billing expenses per average subscriber per month declined 49% to $1.81 for the nine months ended September 30, 2005 from $3.57 for the nine months ended September 30, 2004. General and administrative expenses increased $11.9 million to $42.9 million for the nine months ended September 30, 2005 from $31.0 million for the nine months ended September 30, 2004 primarily as a result of overhead expansion to support the growth of the business. In addition, engineering, design and development expenses increased $11.1 million to $33.2 million for the nine months ended September 30, 2005 from $22.1 million for the nine months ended September 30, 2004 primarily as a result of additional personnel-related costs to support research and development

SIX MONTHS ENDED JUNE 30, 2005 VERSUS SIX MONTHS ENDED JUNE 30, 2004

For the six months ended June 30, 2005, SIRIUS recognized total revenue of $95.4 million compared with $22.5 million for the six months ended June 30, 2004, a 324% year-over-year increase. This increase in revenue was driven by a net increase in the company’s subscriber base of 1,334,285 subscribers from June 30, 2004 to June 30, 2005.

The company’s adjusted loss from operations increased by $60.5 million to ($235.8) million for the six months ended June 30, 2005 from ($175.3) million for the six months ended June 30, 2004 (refer to the reconciliation table of GAAP loss from operations to adjusted loss from operations). This increase was driven by a 120%, or $74.1 million, increase in subscriber acquisition costs reflecting higher shipments of SIRIUS radios and chip sets and increased commissions to support a 205% increase in gross subscriber additions from 257,896 for the six months ended June 30, 2004 to 787,395 for the six months ended June 30, 2005.

Programming and content expenses increased by $21.5 million to $40.6 million for the six months ended June 30, 2005 from $19.1 million for the six months ended June 30, 2004. The increase was primarily attributable to an increase in costs to create, produce and acquire content, such as the NFL, NBA and college sports; additional on-air talent costs due to the expansion of the programming line-up; and increased variable broadcast royalties as a result of the increase in the company’s subscriber base.

Customer service and billing expenses increased by $8.8 million to $17.2 million for the six months ended June 30, 2005 from $8.4 million for the six months ended June 30,

2004. The increase was a direct result of the growth in the company’s subscriber base and additional costs associated with a new billing system.

Sales and marketing expenses increased by $8.0 million to $68.8 million for the six months ended June 30, 2005 from $60.8 million for the six months ended June 30, 2004. The increase was primarily a result of increased automotive OEM revenue share and retail residuals as a result of the increase in subscribers and additional personnel-related costs to support the growth of the company. In addition, the company incurred higher overall distribution costs in the first half of 2005 to support the expansion of the retail distribution channel, offset in part by costs associated with the commencement of the company’s sales efforts with RadioShack in June 2004.

General and administrative expenses increased by $9.8 million to $29.0 million for the six months ended June 30, 2005 from $19.2 million for the six months ended June 30, 2004 primarily as a result of overhead expansion to support the growth of the business. In addition, engineering, design and development expenses increased by $11.8 million to $23.4 million for the six months ended June 30, 2005 from $11.6 million for the six months ended June 30, 2004 primarily as a result of additional personnel-related costs to support research and development efforts, costs associated with tooling and manufacturing upgrades at DaimlerChrysler and Ford to support factory installations of SIRIUS radios and product development costs for the company’s next generation products.

SIRIUS reported a net loss of ($371.2) million, or ($0.28) per share, for the six months ended June 30, 2005 compared with a net loss of ($280.9) million, or ($0.23) per share, for the six months ended June 30, 2004.

(Selected financial information follows).

SIRIUS defines adjusted loss from operations as GAAP loss from operations before depreciation and equity granted to third parties and employees. SIRIUS believes adjusted loss from operations is useful to investors because it represents operating expenses of the company excluding the effects of non-cash items.

SIRIUS defines average monthly revenue per subscriber, or ARPU, as the total earned subscriber revenue and net advertising revenue divided by the daily weighted average number of subscribers for the period.

SIRIUS defines subscriber acquisition costs, or SAC, per gross subscriber addition as SAC and the negative margin from the direct sale of SIRIUS radios and accessories divided by the number of gross subscriber additions for the period.

Adjusted loss from operations, ARPU and SAC per gross subscriber addition are not measures of financial performance under U.S. generally accepted accounting principles and are used as measures of operating performance. As a result, these metrics may be susceptible to varying calculations; may not be comparable to other similarly titled measures of other companies; and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. generally accepted accounting principles.

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FIRST QUARTER 2005 VERSUS FIRST QUARTER 2004

For the first quarter of 2005, SIRIUS recognized total revenue of $43.2 million, compared with $9.3 million for the first quarter of 2004, a 365% year-over-year increase. This increase in revenue was driven by a net increase in the company’s subscriber base of 1,097,032 subscribers, or 312%, from March 31, 2004 to March 31, 2005.

The company’s adjusted loss from operations increased by $49.1 million, to ($127.1) million in 2005 (refer to the reconciliation table of GAAP loss from operations to adjusted loss from operations). This increase was driven in part by $40.1 million of increased subscriber acquisition costs, as SIRIUS’ gross subscriber additions exceeded last year’s first quarter gross subscriber additions by nearly 246,000 subscribers.

Programming and content expenses increased by $15.8 million, to $24.5 million for the first quarter of 2005, from $8.7 million for the first quarter of 2004. The increase in programming and content expenses was primarily attributable to an increase in costs to create, produce and acquire content, specifically costs associated with sports related programming initiatives, such as the NFL, NBA and college sports, and new branded music and talk channels such as Maxim Radio, Faction and Shade 45.

Sales and marketing expenses increased by $11.0 million, to $36.7 million for the first quarter of 2005, from $25.7 million for the year-ago first quarter. The increase in sales and marketing expenses was primarily a result of higher sponsorship and event marketing costs, increased OEM revenue share as a result of the increase in OEM net subscriber additions, higher distribution costs to support the expansion of our retail distribution channel, and personnel-related costs to support the continued growth of the company.