What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2023-02-02 compared with 2022-02-01 · 129 added, 115 removed, 368 unchanged (40% of the section changed)

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Our Businesses

We operate two complementary audio entertainment businesses - our Sirius XM business and our Pandora business.

We operate two complementary audio entertainment businesses – our Sirius XM business and our Pandora and Off-platform business.

We are the leading audio entertainment company in North America with a portfolio of audio businesses including our flagship subscription entertainment service, Sirius XM;

the ad-supported and premium music streaming services of Pandora;

a podcast network;

an advertising sales group, SXM Media;

and a suite of advertising technology solutions.

We believe we reach a combined monthly audience of approximately 150 million listeners.

We continue to expand the range of choices for our listeners – both in terms of compelling content and the array of ways in which it can be consumed.

There are approximately 152 million vehicles in operation with Sirius XM radios, and the proliferation of smart speakers and other connected devices has increased the range of options consumers have for engaging with and consuming our content.

We also are focused on rapidly growing content categories, such as podcasting.

We also are focused on rapidly growing content categories, such as our continued interest in podcasting.

In 2022, an estimated 109 million Americans listened to a podcast at least monthly.

Our Sirius XM business features music, sports, entertainment, comedy, talk, news, traffic and weather channels and other content, as well as podcasts and infotainment services, in the United States on a subscription fee basis.

Sirius XM’s premier content bundles include live, curated and certain exclusive and on demand programming.

The Sirius XM service is distributed through our two proprietary satellite radio systems and streamed via applications for mobile devices, home devices and other consumer electronic equipment.

Satellite radios are primarily distributed through automakers, retailers and our website.

The Sirius XM service is distributed through our two proprietary satellite radio systems and streamed via the SXM App for mobile devices, home devices and other consumer electronic equipment.

Radios are primarily distributed through automakers, retailers and our website.

Our Sirius XM service is also available through our user interface, which we call “360L,” that combines our satellite and streaming services into a single, cohesive in-vehicle entertainment experience.

The primary source of revenue from our Sirius XM business is subscription fees, with most of our customers subscribing to monthly, quarterly, semi-annual or annual plans.

We also derive revenue from advertising on select non-music channels, direct sales of our satellite radios and accessories, and other ancillary services.

We also derive revenue from advertising on select non-music channels, direct sales of our radios and accessories, and other ancillary services.

As of December 31, 2022, our Sirius XM business had approximately 34.3 million subscribers.

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(“Sirius XM Canada”).

Our Pandora business operates a music, comedy and podcast streaming platform, offering a personalized experience for each listener wherever and whenever they want to listen, whether through mobile devices, car speakers or connected devices.

Pandora and Off-platform

Our Pandora and Off-platform business operates a music, comedy and podcast streaming platform, offering a personalized experience for each listener wherever and whenever they want to listen, whether through mobile devices, car speakers or connected devices.

Pandora enables listeners to create personalized stations and playlists, discover new content, hear artist- and expert-curated playlists, podcasts and select Sirius XM content as well as search and play songs and albums on-demand.

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As of December 31, 2022, Pandora had approximately 6.2 million subscribers.

The majority of revenue from our Pandora business is generated from advertising on our Pandora ad-supported radio service.

The majority of revenue from our Pandora and Off-platform business is generated from advertising on our Pandora ad-supported radio service.

We also derive subscription revenue from our Pandora Plus and Pandora Premium subscribers.

Our Pandora business also sells advertising on audio platforms and in podcasts unaffiliated with us.

Pandora has an arrangement with SoundCloud Holdings, LLC ("SoundCloud") to be its exclusive US ad sales representative.

Through this arrangement, Pandora is able to offer advertisers the ability to execute campaigns in the US across the Pandora and SoundCloud listening platforms.

In addition, through AdsWizz Inc., Pandora provides a comprehensive digital audio and programmatic advertising technology platform, which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions.

Pandora, through its Simplecast business, also offers a podcast management and analytics platform.

Simplecast complements AdsWizz’s advertising technology platform, allowing the company to offer podcasters a solution for management, hosting, analytics and advertising sales.

In 2020, Sirius XM also acquired Stitcher and its Midroll advertising network from the E.W Scripps Company.

Stitcher is a leader in the distribution of podcasts and serves as the ad sales representative for many podcasts, including Oprah’s Super Soul, Freakonomics Radio, Office Ladies, Your Mom’s House, Hidden Brain, and Conan O’Brien Needs a Friend.

We sell advertising on other audio platforms and in widely distributed podcasts, which we consider to be off-platform services.

In 2020, Sirius XM acquired Stitcher, a leader in the distribution of podcasts.

Stitcher has agreements to serve as the ad sales representative for many podcasts.

Sirius XM subscribers can also listen to their favorite podcasts with streaming access via the SXM App and online.

Covering topics such as true crime, news, politics, music, comedy, sports and entertainment, Sirius XM's curated selection of podcasts comes from third parties such as Audiochuck, Crooked Media and NBC News.

Our Pandora business also offered a portal, “Pandora For Podcasters,” for podcasters to share their podcast with new audiences and gather data about their show.

In 2022, Pandora for Podcasters migrated to a new podcaster portal, Simplecast Creator Connect.

Podcasts submitted through this portal are offered to subscribers of Pandora’s ad-supported service as an additional benefit.

Through our Simplecast business we also offer a podcast management and analytics platform, allowing us to offer podcasters a solution for management, hosting, analytics and advertising sales.

SXM Media is a combined sales group spanning our Sirius XM, Pandora, and Stitcher audio entertainment platforms and services.

SXM Media has a reach of more than 150 million monthly listeners, and gives brands, creators, and publishers access to the largest digital audio advertising platform in North America.

SXM Media also sells advertising on audio platforms and in podcasts unaffiliated with us and serves as the exclusive advertising representative for other third party platforms and podcasters, including such major entities as SoundCloud and NBCUniversal.

SXM Media offers advertisers the ability to execute campaigns in the United States across various platforms, including Pandora and SoundCloud.

In addition, through AdsWizz Inc., we provide a comprehensive digital audio and programmatic advertising technology platform, which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and monetization solutions.

Our Sirius XM Business

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We continue to expand our offerings, including through programming that represents diverse viewpoints, historically underserved audiences and original content of a type not typically available to consumers.

Streaming Service

Sirius XM Streaming Service

Our streaming service includes a variety of music and non-music channels, including channels and content that are not available on our satellite radio service, and podcasts.

We offer applications to allow consumers to access our streaming service on smartphones, tablets, computers, home devices and other consumer electronic equipment.

Consumers can access our streaming service on smartphones, tablets, computers, home devices and other consumer electronic equipment.

Our streaming product currently features:

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Our Sirius XM service also includes a library of podcasts, some of which are exclusive to our service, and other on demand content.

Our streaming service offers subscribers the ability to choose their favorite podcast episodes from a catalog of content as well as select material from a library of podcasts we are assembling.

Our streaming service is included as part of the vast majority of Sirius XM’s packages, including the Music and Entertainment and Platinum plans.

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We have agreements with many automakers to deploy our 360L interface in a variety of vehicles.

We believe that 360L will be included in a majority of vehicles that include Sirius XM functionality in the future.

In 2022, our 360L platform was included in approximately 110 vehicle models manufactured for sale in the United States.

We expect that 360L will be included in a majority of vehicles that include Sirius XM functionality in the future.

360L allows us to take advantage of advanced in-dash infotainment systems.

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The wireless streaming connection included in 360L enables enhanced search and recommendations functions, making discovery of our content in the vehicle easier.

In certain cases, 360L also allows consumers to manage aspects of their subscriptions directly through their vehicles’ equipment and provides us data on how our subscribers use our service.

360L also provides us data on how our subscribers use our service.

Distribution of Radios

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Our XM-3 and XM-4 satellites serve as spares for the XM system.

Our SXM-8 satellite was successfully launched into a geostationary orbit on June 6, 2021 and was placed into service on September 8, 2021 following the completion of in-orbit testing.

The SXM-8 satellite replaced our XM-3 satellite, which remains available as an in-orbit spare along with XM-5.

On December 13, 2020, our SXM-7 satellite was successfully launched and in-orbit testing of SXM-7 began on January 4, 2021.

During in-orbit testing of SXM-7 events occurred which caused failures of certain SXM-7 payload units.

The evaluation of SXM-7 concluded that the satellite will not function as intended.

The evaluation of SXM-7 concluded that the satellite would not function as intended.

SXM-7 remains in-orbit at its assigned orbital location, but is not being used to provide satellite radio service.

We have entered into agreements for the design, construction and launch of two additional satellites, SXM-9 and SXM-10.

We have entered into agreements for the design and construction of four additional satellites, SXM-9, SXM-10, SXM-11 and SXM-12.

We have also entered into agreements to launch two of those satellites.

Construction of our SXM-9 and SXM-10 satellites is underway and those satellites are expected to be launched into geostationary orbits in 2024 and 2025, respectively.

Construction of our SXM-11 and SXM-12 satellites is expected to begin shortly and those satellites are anticipated to be launched into geostationary orbits in 2026 and 2027, respectively.

Satellite Insurance.

We have procured insurance for SXM-8 to cover the risks associated with the satellite's first year of in-orbit operation.

In 2021, we collected an aggregate of $225 million under the insurance policies we purchased with respect to SXM-7.

We have procured insurance for SXM-9, SXM-10, SXM-11 and SXM-12 to cover the risks associated with each satellite's launch and first year of in-orbit operation.

We do not have insurance policies covering our other in-orbit satellites as we consider the premium costs to be uneconomical relative to the risk of satellite failure.

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Our satellites are monitored, tracked and controlled by a third party satellite operator.

Our programming originates from studios in New York City, Los Angeles and Washington D.C.

Our programming originates from studios in New York City, Los Angeles, Miami and Washington D.C.

and, to a lesser extent, from smaller studios in Nashville and a variety of venues across the country.

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Our programming is available for commercial establishments.

Commercial subscription accounts are available through providers of in-store entertainment solutions and directly from us.

Our wholly-owned subsidiary, Cloud Cover Media, Inc.

(“Cloud Cover”), offers a music programming service for commercial establishments.

Commercial subscription accounts are also available through Pandora for Business and SiriusXM for Business, each of which offers a licensed, commercial-free music service for offices, restaurants and other business establishments.

Satellite Television Service.

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We offer real-time weather services in vehicles, boats and planes.

Commercial subscribers are included in our subscriber count.

Commercial subscribers to the Sirius XM programming service are included in our subscriber count.

Commercial subscribers to the Cloud Cover music programming service are not included in our subscriber count.

Subscribers to the DISH Network satellite television service are not included in our subscriber count and subscribers to our Travel Link, real-time traffic services and real-time weather services are not included in our subscriber count, unless the applicable service is purchased by the subscriber separately and not as part of a radio subscription to our service.

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Sirius XM holds a 70% equity interest and 33% voting interest in Sirius XM Canada, with the remainder of Sirius XM Canada's voting and equity interests held by two shareholders.

Sirius XM has entered into a Services Agreement and an Advisory Services Agreement with Sirius XM Canada.

Each agreement has a thirty year term.

Pursuant to the Services Agreement, Sirius XM Canada pays Sirius XM 25% of its gross revenues on a monthly basis and, pursuant to the Advisory Services Agreement, Sirius XM Canada pays Sirius XM 5% of its gross revenues on a monthly basis.

In 2022, Sirius XM and Sirius XM Canada entered into an amended and restated services and distribution agreement.

The amended and restated services and distribution agreement modified the existing Services Agreement and terminated the existing Advisory Agreement between Sirius XM and Sirius XM Canada.

Pursuant to the amended and restated services and distribution agreement, the fee payable by Sirius XM Canada to Sirius XM was modified from a fixed percentage of revenue to a variable fee, based on a target operating profit for Sirius XM Canada.

Such variable fee is expected to be evaluated annually based on comparable companies.

In accordance with the amended and restated services and distribution agreement, the fee is payable on a monthly basis, in arrears, beginning January 1, 2022.

In May 2017, Sirius XM extended a loan to Sirius XM Canada in the principal amount of $131 million.

In connection with the execution of the amended and restated services and distribution agreement, Sirius XM forgave $113 million in principal amount of such loan to Sirius XM Canada, leaving an outstanding principal amount of $8 million on such loan.

The principal amount that was forgiven by Sirius XM was considered satisfied and as contributed capital from Sirius XM.

As of December 31, 2022, Sirius XM Canada had approximately 2.6 million subscribers.

Sirius XM Canada’s subscribers are not included in our subscriber count or subscriber-based operating metrics.

Our Pandora Business

Our Pandora and Off-platform Business

Pandora Media, LLC, which owns and operates our Pandora business, is a wholly owned subsidiary of Sirius XM.

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Users are able to create personalized stations and playlists and search and play songs and albums on-demand.

The Pandora service utilizes content

programming algorithms, data collected from listeners, and attributes of the music to predict user music preferences, play content suited to the tastes of each listener, and introduce each listener to music consistent with the consumer's preferences.

The Pandora service utilizes content programming algorithms, data collected from listeners, and attributes of the music to predict user music preferences, play content suited to the tastes of each listener, and introduce each listener to music consistent with the consumer's preferences.

The Pandora service is available on iOS and Android mobile devices, web browsers, and other internet connected devices.

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In addition, our Pandora service is integrated into consumer electronic, voice-based devices and smart speakers.

The Pandora service is available as an ad-supported radio service, a radio subscription service (Pandora Plus), or an on-demand subscription service (Pandora Premium).

The Pandora service is available as (1) an ad-supported radio service, (2) a radio subscription service (Pandora Plus) and (3) an on-demand subscription service (Pandora Premium).

Local and national advertisers deliver targeted messages to our Pandora listeners on the ad-supported service.

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Our Pandora business offers Pandora Plus – an ad-free, subscription version of the radio service that includes options for replaying songs, skipping songs, offline listening, and higher quality audio on supported devices.

Content provided to each listener of Pandora Plus is more tailored when the listener interacts more with the platform.

Content provided to each listener of Pandora Plus is more tailored when the listener interacts with the platform.

Premium Access is also available to Pandora Plus listeners.

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Pandora Premium also includes a “share” feature where consumers can share their stations, songs, albums, podcasts or playlists through social media, messaging applications and email.

Advertising Revenue

SXM Media is a combined sales group spanning our Sirius XM, Pandora, and Stitcher audio entertainment platforms and services.

SXM Media has a reach of more than 150 million listeners, and gives brands, creators, and publishers access to the largest digital audio advertising platform in North America.

SXM Media also serves as the exclusive advertising representative for other third party platforms and podcasters, including such major entities as SoundCloud and NBCUniversal.

SXM Media is the exclusive advertising sales representative for our Sirius XM, Pandora and Stitcher platforms.

In addition to subscription fees, Sirius XM derives revenues from advertising on select non-music channels.

Pandora’s primary source of revenue is the sale of audio, display and video advertising for connected device platforms, including computers and mobile devices.

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Pandora provides advertisers with the ability to target and connect with listeners based on various criteria including age, gender, geographic location and content preferences.

Our Pandora business also has agreements to sell the available advertising inventory in the United States for SoundCloud, one of the world’s largest open audio platforms, and other third parties.

Stitcher licenses from creators original podcasts and operates content networks.

Stitcher also provides podcast advertising services that generate revenue from approximately 400 shows and offers a mobile app listening platform where consumers can stream the latest in news, sports, talk, and entertainment on demand.

Stitcher earns revenue by distributing advertising on certain owned and operated podcasts as well as those created by third parties, including placement based on an advertiser’s desired target audience, and from the sale of advertising on its licensed podcasts and podcasts offered within the Stitcher app.

Stitcher licenses original podcasts from their creators and operates content networks.

Stitcher also provides podcast advertising services that generate revenue from over 430 shows and offers a mobile app listening platform where consumers can stream the latest in news, sports, talk, and entertainment on demand.

Stitcher creates and distributes original podcasts licensed from third parties through platforms such as its Stitcher App and the iPhone podcast App.

Stitcher also earns subscription revenue from its Stitcher Premium subscription service.

In addition to advertising revenue, Stitcher earns subscription revenue from its Stitcher Premium subscription service.

Users pay a monthly or annual fee for access on Stitcher Premium to premium content and ad-free archived podcast episodes.

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Simplecast complements AdsWizz’s advertising technology platform, allowing the company to offer podcasters a solution for management, hosting, analytics and advertising sales.

We face significant competition for listeners and advertisers in our Sirius XM business and our Pandora business, including from providers of radio and other audio services.

We face significant competition for listeners and advertisers in our Sirius XM business and our Pandora and Off-platform business, including from providers of radio and other audio services.

Competition for Subscribers and Listeners

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and companies in the broadcast radio market.

We compete against these providers for advertisers on the basis of several factors, including advertisers’ overall budgets, perceived return on investment, effectiveness and relevance of our advertising platforms, price, delivery of large volumes or precise types of advertisements to targeted demographics, transactional capabilities and reporting capabilities.

We compete against these providers for advertisers on the basis of several factors, including advertisers’ overall budgets, perceived return on investment, effectiveness and relevance of our advertising platforms, the amount and scope of our data on listeners, price, delivery of large volumes or precise types of advertisements to targeted demographics, transactional capabilities and reporting capabilities.

The online advertising marketplace continues to evolve rapidly, particularly with the introduction of new digital advertising technologies and expanding capabilities of larger internet companies.

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There are several States that require specific information security controls to protect certain types of information and specific notifications to consumers in the event of a security breach that compromises certain categories of personal information.

Certain of our services are also subject to laws in the United States and abroad pertaining to privacy of user data and other information, including the California Consumer Protection Act and the European General Data Protection Regulation.

Our Privacy Policies and customer agreements describe our practices pertaining to the foregoing.

Certain of our services are also subject to laws in the United States and abroad pertaining to privacy of user data and other information, including the California Consumer Privacy Act and the European General Data Protection Regulation.

Our Privacy Policies and customer agreements describe our practices.

We believe we comply with all of our obligations under all applicable laws and regulations.

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For our Pandora subscription services, copyright holders receive payments for these rights at the rates determined in accordance with the statutory license set forth in Section 115 of the United States Copyright Act.

In January 2018, the Copyright Royalty Board (the “CRB”) set a rate structure for the five-year period commencing January 1, 2018 and ending on December 31, 2022.

The rate was 14.2% of revenues or 25.2% of record label payments in 2021.

The rate was scheduled to increase over the five-year period to 15.1% of revenues or 26.2% of record label payments by 2022.

In August 2021, the United States Court of Appeals for the District of Columbia Circuit concluded that the CRB failed to provide adequate notice of the rate structure it adopted, failed to explain its rejection of a past settlement agreement as a benchmark for going forward, and never identified the source of its asserted authority to substantively redefine a material term of its initial determination.

For these reasons, the Court of Appeals overturned the CRB’s adopted rate structure and percentage rates and remanded the proceeding to the CRB for further proceedings.

The CRB has implemented proceedings to consider and address the Court of Appeals’ decision.

In January 2018, the Copyright Royalty Board (the “CRB”) set a rate structure for the five-year period commencing January 1, 2018 and ending on December 31, 2022 (“Phono III”).

The rate was the greater of 15.1% of revenues or 26.2% of record label payments in 2022, with each rate prong increasing from slightly lower percentages in years prior to 2022.

In July 2022, after the Court of Appeals for the D.C.

Circuit vacated the CRB’s initial rate determination, the CRB issued a new ruling that retained the first prong from its initial determination (with rates increasing up to 15.1% of revenues in 2022), but revised the second rate prong downward, from 26.2% to 21% of record label payments for each year for 2018-2022.

Music publishers have challenged that downward adjustment, and a decision from the CRB on that challenge is expected to be issued in 2023.

Following that decision, Pandora will make retroactive adjustments to its 2018-2022 payments to the extent that the new, final rates differ from those under which its previous payments were made.

In September 2022, in a CRB proceeding to determine mechanical royalty rates under Section 115 for the five-year period commencing January 1, 2023 and ending December 31, 2027 (“Phono IV”), the participating music publishers and digital music services, including Pandora, reached a settlement.

That settlement set the rates at the greater of 15.1% of revenues or 26.2% of record label payments for 2023, rising over the five-year period to 15.35% of revenues or 26.2% of record label payments by 2027.

That settlement was adopted by the CRB on December 30, 2022, and became effective on January 1, 2023.

Sound Recordings

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Under the statutory license, we may negotiate royalty arrangements with the owners of sound recordings or, if negotiation is unsuccessful, the royalty rate is established by the CRB.

Sound recording rights holders, typically large record companies, are primarily represented by SoundExchange, Inc.

Sound recording rights holders, typically large record companies, are primarily

represented by SoundExchange, Inc.

(“SoundExchange”), an organization which negotiates licenses, and collects and distributes royalties on behalf of record companies and performing artists.

Interactive streaming services, such as Pandora Plus and Pandora Premium, do not qualify for the statutory license and the services must negotiate direct license arrangements with the owners of copyrights in sound recordings.

Interactive streaming services, such as Pandora Plus and Pandora Premium, do not qualify for the statutory license and those services must negotiate direct license arrangements with the owners of copyrights in sound recordings.

Sirius XM Business .

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The rates and terms permit us to reduce the payment due each month for those sound recordings directly licensed from copyright owners and exclude from our revenue certain other items, such as royalties paid to us for intellectual property, sales and use taxes, bad debt expense and generally revenue attributable to areas of our business that do not involve the use of copyrighted sound recordings.

In 2021, as a result of the CRB ruling discussed below we paid a per performance rate for the streaming of certain sound recordings of $0.0026 on our Sirius XM streaming service which increased from $0.0024 in 2020.

In 2022, we paid a per performance rate for the streaming of certain sound recordings of $0.0028 on our Sirius XM streaming service which increased from $0.0026 in 2021.

Pandora Business.

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For sound recordings that we stream and for which we have not entered into a direct license agreement with the sound recording rights holders, the sound recordings are streamed pursuant to the statutory license, and applicable rates thereunder set by the CRB.

Sound recordings subject to the statutory license can only be played through our radio services and not through services that are offered on-demand or offline or through any replay or additional skip features.

In June 2021, the CRB issued its initial determination regarding the royalty rates payable by us under the statutory license by which webcasters perform sound recordings via digital transmission over the internet and make ephemeral (server) copies of those recordings during the five-year period starting January 1, 2021 and ending on December 31, 2025.

Because the proceeding focuses on setting statutory rates for non-interactive online music streaming (commonly identified as “webcasting”), the proceeding set the rates that our Pandora business pays for statutorily licensed music streaming on its free, ad-supported service (and for the non-interactive music streaming that occur on its subscription tiers), and that our Sirius XM business pays for music streaming on its subscription internet radio service.

The proceeding did not set the rates that we pay for our other music offerings (such as our satellite radio or business establishment services) and does not affect the rates we pay music publishers for our services, which are covered under different licenses.

The statutory rates set in this proceeding will, however, affect the amount we pay for streaming on Pandora

under certain of its direct licenses with sound recording copyright owners (i.e., record companies).

The royalty rates under many of those direct licenses, which cover a large majority of the sound recordings that we perform on Pandora, are indexed to the statutory rates established in this proceeding.

Under the terms of the CRB’s decision, the statutory royalty rate in 2021 was $0.0021 per performance for non-subscription transmissions (such as offered by the Pandora ad-supported business) and $0.0026 per performance for subscription transmissions (such as offered by the Sirius XM internet radio service).

These rates for 2021 were an approximate 17% increase in the rates for non-subscription transmissions and an approximate 8% increase in the rates for subscription transmissions, in each case over the rates in effect during 2020.

Rates for the remainder of the five-year period are subject to adjustment each year by the CRB to reflect any changes occurring in the cost of living as determined by the most recent Consumer Price Index for All Urban Consumers.

Sound recordings subject to the statutory license can only be played through our radio services and not through services that are offered on-demand or offline or through any replay features.

The royalty rates under many of those direct licenses, which cover a large majority of the sound recordings that we perform on Pandora, are indexed to the statutory rates established by the CRB.

Prior to the enactment of the Orrin G.

Hatch-Bob Goodlatte Music Modernization Act in October 2018, our rights to perform certain sound recordings that were fixed before February 15, 1972 were governed by state law.

We still face a class action lawsuit brought by plaintiffs who allege that Pandora violated their alleged exclusive copyright ownership rights to the reproduction and public performance of sound recordings created prior to February 15, 1972.

We still face a class action lawsuit brought by plaintiffs who allege that Pandora violated their alleged exclusive copyright ownership rights to the reproduction of sound recordings created prior to February 15, 1972.

Legal Proceedings” of this Annual Report on Form 10-K for information on this action.

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We have granted a license to use certain of our trademarks in Canada to Sirius XM Canada.

Pandora Business

Pandora and Off-platform Business

We have registered, and intend to maintain, the trademarks “Pandora,” “Ampcast” and “Music Genome Project,” in addition to a number of other Pandora logos and marks, with the United States Patent and Trademark Office in connection with the services we offer.

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As of December 31, 2022, we had 5,869 full-time and part-time employees, the overwhelming majority of which were full-time employees.

During 2021, our workforce decreased by approximately 2.4% compared to the prior year, and our core voluntary full-time employee turnover rate was approximately 12.6%.

Our business relies on our ability to attract and retain talented employees.

To attract and retain talent, we strive to create a diverse, inclusive and supportive workplace, with opportunities for our employees to grow and develop in their careers, supported by competitive compensation, benefits and health and wellness programs, and by programs that build connections between our employees and their communities.

Corporate Culture

We are focused on creating a corporate culture of integrity and respect, with the goal of working together to drive our business to be creative, innovative and competitive.

To achieve these objectives, we have adopted and regularly communicate to our employees the following core values, which we call “ AMPLIFY ”:

• A pplaud and encourage new thinking

• M ove forward and be purposeful in our desire to win

• P rioritize honesty, integrity and respectful communication

• L ean on each other and learn from one another

• I nvest in our actions and commit to the follow through

• F ind ways to give back by focusing on community and feeding your individuality

• Y ou Matter.

We embrace our differences, empower each other and include everyone

As of December 31, 2022, our workforce increased by approximately 5% compared to the prior year, and our core voluntary full-time employee turnover rate was approximately 10.1%.

Our business relies on our ability to attract, engage and retain talented employees.

We strive to create a diverse, inclusive and supportive workplace, with opportunities for our employees to grow and develop in their careers, supported by competitive compensation, benefits and health and wellness programs, and by programs that build connections between our employees and their communities.

We are focused on creating a culture of integrity and respect, with the goal of working together to drive our business to be creative, innovative and competitive.

In 2022, we announced a new set of core values to our workforce:

“We believe we will shape the future of audio because we are:

authentic, inclusive, curious and driven”.

We intend to employ these core values to inform and guide the decisions and behaviors of our employees.

We operate a performance-based environment where results matter and financial discipline is enforced.

We have tried to create a highly collaborative culture in which employees feel a sense of pride that their input is sought after and valued.

At the same time, we believe in holding individuals accountable and have tried to create a culture in which employees “do what they say they are going to do.” We believe that our culture is a long-term competitive advantage for us, fuels our ability to execute and is a critical underpinning of our employee talent strategy.

The Nominating, Environmental, Social and Governance Committee of our Board of Directors oversees our management continuity planning process, and reviews and evaluates succession plans relating to our Chief Executive Officer and other executive officers.

We have a highly collaborative culture in which employees feel a sense of pride that their input is sought after and valued.

At the same time, we believe in holding individuals accountable for results and employees are empowered and expected to “do what they say they are going to do.” We believe that our culture is a long-term competitive advantage for us, fuels our ability to execute and is a critical underpinning of our employee talent strategy.

The Compensation Committee of our Board of Directors oversees our management continuity planning process, and reviews and evaluates succession plans relating to our Chief Executive Officer and other executive officers.

Diversity, Equity and Inclusion

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The charter for the Nominating, Environmental, Social and Governance Committee of our Board of Directors requires such committee to review and make recommendations, as the committee deems appropriate, regarding the composition and size of the Board of Directors in order to ensure the Board of Directors has the requisite expertise and its membership consists of persons with sufficiently diverse and independent backgrounds.

We are focused on increasing women and minority representation at all levels of our organization.

We periodically request our employees to voluntarily self-identify personal information related to gender, race, ethnicity, veteran and disability status.

This information about the demographics of our employee population allows us to assess and evaluate our diversity, equity and inclusion efforts.

As of December 31, 2022, 41% of our employees identified as women and 38% identified as people of color (African American, Latinx, Asian, and Native American).

At our executive leadership level (which we define as employees at the vice president and above level), 32% of our employees identified as women and 15% identified as people of color.

We expect to release updated information regarding the composition of our workforce on an annual basis.

We are focused on increasing the representation of women and people of color at all levels of our organization.

We recruit talent in diverse communities, including by engaging as a sponsor of professional conferences focused on diverse talent.

We have created a program, called Pathways, that provides recent graduates of Historically Black Colleges and Universities with entry-level full-time opportunities.

Our Pathways program provides recent graduates of Historically Black Colleges and Universities with entry-level full-time opportunities.

We also have agreements with third parties designed to offer leadership development for Black, Latinx, Native American and Asian employees.

Additionally, we provide a mentoring program to help underrepresented employees benefit from coaching, guidance, and feedback.

We have five employee resource groups, including groups supporting Women, People of Color (African Americans, Latinx, Asian and Hispanic), Veterans, the LGBTQIA+ community and employees with disabilities.

We have implemented a broad set of anti-harassment and discrimination policies designed to protect against discrimination based upon sex, gender, race, color, religion/religious creed, national origin, ancestry, physical or mental disability, genetic information, age, marital status, pregnancy, sexual orientation, gender identity, gender expression, sex stereotype, transgender, immigration status, military and protected veteran status, medical condition, or any basis prohibited under federal, state or local law.

We have five employee resource groups, including groups supporting women, people of color, veterans, the LGBTQIA+ community and employees with disabilities.

under federal, state or local law.

We also provide regular training and guidance to our workforce regarding diversity, equity and inclusion.

In 2021, we launched “Can We Talk?” an initiative aimed at increasing cultural awareness and promoting dialogue and “Conscious Inclusion” a facilitator-led training required for all of our full-time U.S.

Our “Can We Talk?” initiative is aimed at increasing cultural awareness and promoting dialogue.

We also offer a program we call “Conscious Inclusion,” a facilitator-led training required for all of our full-time U.S.

based employees.

Conscious Inclusion enables employees to explore bias and its impact, learn how it translates to reactions and behaviors towards differences, and is designed to promote inclusive behaviors in our workplace.

We also periodically request our employees to voluntarily self-identify personal information related to gender, race, ethnicity, veteran and disability status.

This information about the demographics of our employee population allows us to assess and evaluate our diversity, equity and inclusion efforts.

We also comply with the FCC’s Equal Employment Opportunity (“EEO”) rules, including making our EEO reports publicly available.

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We provide our employees and their families with access to a variety of health and wellness programs, including benefits that support their physical and mental health.

In response to the COVID-19 pandemic, we implemented changes that we consider to be in the best interest of our employees, as well as the communities in which we operate, and which comply with government regulations.

As a result of the COVID-19 pandemic, the vast majority of our employees worked from home in 2021.

We have implemented additional safety

measures for employees continuing on-site work.

We believe we have been able to preserve our business continuity without sacrificing our commitment to keeping our employees safe during the COVID-19 pandemic.

Compensation and Benefits

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We provide competitive compensation and benefits programs for our employees.

In addition to salaries, these programs (which vary by employee level and by the country where the employees are located) include, among other items, bonuses, equity-based compensation awards, a 401(k) plan and a non-qualified deferred compensation plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, paid parental leave, advocacy resources, flexible work schedules and employee assistance programs.

In addition to salaries, these programs (which vary by employee level and by the country where the employees are located) include, among other items, bonuses, equity-based compensation awards, a 401(k) plan and a non-qualified deferred compensation plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, paid parental leave, fertility resources, advocacy resources, flexible work schedules and employee assistance programs.

Talent Development

We provide numerous training opportunities for our employees, with a focus on continuous learning and development and methodologies to manage performance, provide feedback and develop talent.

To supplement the training offerings and variety of content available to our employees, we launched LinkedIn Learning in 2022.

LinkedIn Learning is an online learning platform which provides our employees with access to on-demand courses, covering a wide range of technical, business, software, and creative topics.

We also have an internal digital workplace which provides employees with quick access to learning resources that cover a variety of topics.

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In addition, full-time employees are eligible to receive five days of paid time off to volunteer with charitable organizations of their choice.

During 2021, over 370 employees volunteered almost 5,000 hours, while over 700 employees utilized our charitable matching program, benefiting almost 1,300 charitable organizations.

During 2022, over 450 employees volunteered over 6,000 hours, while over 800 employees utilized our charitable matching program, benefiting more than 1,000 charitable organizations.

In 2020, we contributed $25 million to a donor advised fund to support our charitable contributions, an effort we call SiriusXM Cares.

In 2021, SiriusXM Cares contributed to a variety of organizations which promote social equality, education, hiring, or combat racial injustice, including The Apollo Theater, Save The Music, Huston-Tillotson University, Asian Americans Advancing Justice, South Asian Americans Leading Together, the Alliance for Women in Media, the Human Rights Campaign, TASH ( an international advocacy association of people with disabilities, their family members, other advocates, and people who work in the disability field), the League of United Latin American Citizens, the Native American Rights Fund, The Warrior Alliance, the AutoNation Foundation and the St.

Thomas Aquinas College Social Justice Center.

Over the past three years, SiriusXM Cares contributed to a variety of organizations which promote social equality, education, hiring, or combat racial injustice, including The Apollo Theater, The Smithsonian Institute’s National Museum of African American History and Culture, Save The Music, Huston-Tillotson University, Asian Americans Advancing Justice, South Asian Americans Leading Together, the Alliance for Women in Media, the Human Rights Campaign, TASH (an international advocacy association of people with disabilities, their family members, other advocates, and people who work in the disability field), the League of United Latin American Citizens, the Native American Rights Fund, The Warrior Alliance, the AutoNation Foundation, the St.

Thomas Aquinas College Social Justice Center, United Jewish Appeal Federation of Jewish Philanthropies of NY, Inc., City of Hope, United States Holocaust Memorial Museum, and The Last Mile.

Corporate Information and Available Information

12 unchanged sentences

Greenstein 63 President, Chief Content Officer

Altman 63 Executive Vice President and Chief Administrative Officer

Donnelly 61 Executive Vice President, General Counsel and Secretary

2 unchanged sentences

Sullivan 55 Executive Vice President and Chief Financial Officer

Verbrugge 53 Chief Commercial Officer

Witz has served as our Chief Executive Officer since January 1, 2021.

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Witz began her career in the Investment Banking Department at Kidder, Peabody & Co Inc.

She is a member of the board of directors of LendingTree, Inc., a leading online marketplace that connects consumers with financial products, and serves on its compensation committee.

Greenstein has served as our President and Chief Content Officer since May 2004.

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Greenstein was Senior Vice President of Motion Pictures, Music, New Media and Publishing at Miramax Films, and held senior positions at Viacom Inc.

Altman has served as our Executive Vice President and Chief Administrative Officer since September 2008.

From January 2006 until September 2008, Ms.

Altman served as Executive Vice President, Business and Legal Affairs, of XM.

Altman was Executive Vice President of Business Affairs for Discovery Communications from 1997 through 2005.

From 1993 to 1997, Ms.

Altman served as Senior Vice President and General Counsel of Reiss Media Enterprises, which owned Request TV, a national pay-per-view service.

Before Request TV, Ms.

Altman served as counsel for Home Box Office.

Altman started her career as an attorney at the law firm of Willkie Farr & Gallagher LLP.

Donnelly has served as our Executive Vice President, General Counsel and Secretary, since May 1998.

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Sullivan was Chief Financial Officer of HiT Entertainment, a children’s entertainment company, from 2009 to 2010;

the Chief Financial Officer and President of the Commercial Print and Packaging division of Cenveo, Inc., a diversified manufacturing company

focused on print-related products, from 2005 to 2008;

the Chief Financial Officer and President of the Commercial Print and Packaging division of Cenveo, Inc., a diversified manufacturing company focused on print-related products, from 2005 to 2008;

and Executive Vice President and Chief Financial Officer of Spencer Press, Inc., a catalogue printing company, from 2004 to 2005.

He is a member of the board of directors of Acushnet Holdings Corp., a leader in the design, development, manufacturing and distribution of golf products, and serves on its nominating and corporate governance committee and is the chair of its audit committee.

Verbrugge has served as our Chief Commercial Officer since June 2022.

Verbrugge has served in many senior positions during his 19-year career with us .

Verbrugge served as our Executive Vice President, SXM Digital Subscriptions, from January 2022 until June 2022;

as our Executive Vice President, Sales and Development, from October 2020 until January 2022;

as our Executive Vice President, Division President, Connected Vehicle, from March 2019 until October 2020;

as our Executive Vice President and General Manager, Emerging Business, from April 2017 until March 2019;

and as our Executive Vice President, Sales and Development, from December 2015 until April 2017.

From September 2004 through December 2015, Mr.

Verbrugge served in various senior positions for us and XM Satellite Radio Holdings Inc.

Verbrugge was a consultant with The Dealy Strategy Group LLC, a management consulting firm specializing in international satellite communications and information services companies, from 1999 until 2004.

Verbrugge is a member of the board of directors of Stride, Inc., a provider of tech-enabled education solutions, and serves on its compensation committee.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business