What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-02-02 compared with 2022-02-01 · 299 added, 391 removed, 1449 unchanged (32% of the section changed)

22 unchanged sentences

Election of Directors and Item 2.

Ratification of Independent Registered Public Accountants , which we expect to file with the Securities and Exchange Commission prior to April 30, 2022.

Ratification of Independent Registered Public Accountants , which we expect to file with the Securities and Exchange Commission prior to May 1, 2023.

Code of Ethics

4 unchanged sentences

The information required by this Item 11 is incorporated in this report by reference to the applicable information in our definitive proxy statement for the 2023 annual meeting of stockholders set forth under the captions Item 1.

Election of Directors and Executive Compensation , which we expect to file with the Securities and Exchange Commission prior to April 30, 2022.

Election of Directors and Executive Compensation , which we expect to file with the Securities and Exchange Commission prior to May 1, 2023.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Certain information required by this Item 12 is set forth under the heading “Equity Compensation Plan Information” in Part II, Item 5, of this Annual Report on Form 10-K.

The additional information required by this Item 12 is incorporated in this report by reference to the applicable information in our definitive proxy statement for the 2022 annual meeting of stockholders set forth under the caption Stock Ownership , which we expect to file with the Securities and Exchange Commission prior to April 30, 2022.

The additional information required by this Item 12 is incorporated in this report by reference to the applicable information in our definitive proxy statement for the 2023 annual meeting of stockholders set forth under the caption Stock Ownership , which we expect to file with the Securities and Exchange Commission prior to May 1, 2023.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this Item 13 is incorporated in this report by reference to the applicable information in our definitive proxy statement for the 2023 annual meeting of stockholders set forth under the captions Governance of the Company and Item 1.

Election of Directors , which we expect to file with the Securities and Exchange Commission prior to April 30, 2022.

Election of Directors , which we expect to file with the Securities and Exchange Commission prior to May 1, 2023.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

1 unchanged sentence

The information required by this Item 14 is incorporated in this report by reference to the applicable information in our definitive proxy statement for the 2023 annual meeting of stockholders set forth under the caption Item 2.

Ratification of Independent Registered Public Accountants - Principal Accountant Fees and Services , which we expect to file with the Securities and Exchange Commission prior to April 30, 2022.

Ratification of Independent Registered Public Accountants - Principal Accountant Fees and Services , which we expect to file with the Securities and Exchange Commission prior to May 1, 2023.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

32 unchanged sentences

4.6 Indenture, dated as of June 11, 2020, relating to the 4.125% Senior Notes due 2030, among Sirius XM Radio Inc., the guarantors named therein and U.S.

Bank National Association, as trustee, including the form of 4.125% Senior Notes due 2030 (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated June 11, 2020 (File No.

Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated June 11, 2020 (File No.

4.7 Indenture, dated as of June 21, 2021, relating to the 4.000% Senior Notes due 2028, among Sirius XM Radio Inc., the guarantors named therein and U.S.

Bank National Association, as trustee, including the form of 4.000% Senior Notes due 2028 (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated June 21, 2021 (File No.

Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated June 21, 2021 (File No.

4.8 Indenture, dated as of August 16, 2021, relating to the 3.125% Senior Notes due 2026, among Sirius XM Radio Inc., the guarantors named therein and U.S.

Bank National Association, as trustee, including the form of 3.125% Senior Notes due 2026 (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated August 16, 2021 (File No.

Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated August 16, 2021 (File No.

4.9 Indenture, dated as of August 16, 2021, relating to the 3.875% Senior Notes due 2031, among Sirius XM Radio Inc., the guarantors named therein and U.S.

Bank National Association, as trustee, including the form of 3.875% Senior Notes due 2031 (incorporated by reference to Exhibit 4.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated August 16, 2021 (File No.

Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated August 16, 2021 (File No.

4.10 Investment Agreement, dated as of February 17, 2009, between Sirius XM Radio Inc.

2 unchanged sentences

and Liberty Radio LLC, dated as of November 15, 2013 (incorporated by reference to Exhibit 4.15 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2013 (File No.

Exhibit Description

4.12 Description of Registrant's Securities (incorporated by reference to Exhibit 4.15 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2019 (File No.

Exhibit Description

10.1 Credit Agreement, dated as of December 5, 2012, among Sirius XM Radio Inc., JPMorgan Chase Bank, N.A.

9 unchanged sentences

5, dated as of August 31, 2021, to the Credit Agreement, dated as of December 5, 2012, among Sirius XM Radio Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the other agents and lenders parties thereto (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 1, 2021 (File No.

10.6 Amendment No.

6, dated as of April 11, 2022, to the Credit Agreement, dated as of December 5, 2012, among Sirius XM Radio Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the other agents and lenders parties thereto (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on April 11.

2022 (File No.

**10.7 Technology Licensing Agreement among XM Satellite Radio Inc., XM Satellite Radio Holdings Inc., WorldSpace Management Corporation and American Mobile Satellite Corporation, dated as of January 1, 1998, amended by Amendment No.

33 unchanged sentences

2015 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.26 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016 (001-34295)).

*10.23 Employment Agreement, dated as of May 31, 2018, between Sirius XM Radio Inc.

and Dara F Altman (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on June 5, 2018 (File No.

*10.24 Employment Agreement, dated as of June 29, 2015, between Sirius XM Radio Inc.

Cady (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on June 30, 2015 (File No.

*10.25 Amendment to the Employment Agreement between Sirius XM Radio Inc.

and James A Cady, dated as of February 23, 2016 (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 (File No.

*10.26 Employment Agreement, dated as of June 1, 2018, between Sirius XM Radio Inc.

Frear (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on June 5, 2018 (File No.

*10.24 Form of Option Award Agreement between Sirius XM Radio Inc.

4 unchanged sentences

and Patrick L.

Donnelly (incorporated by reference to Exhibit 10.37 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016 (File No.

Donnelly (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on November 22, 2022 (File No.

*10.27 Employment Agreement, dated as of August 21, 2017 between Sirius XM Radio Inc.

8 unchanged sentences

and Jennifer Witz (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on September 15, 2020 (File No.

Exhibit Description

*10.32 Letter Agreement, dated September 14, 2020, regarding private use of aircraft between Sirius XM Radio Inc.

6 unchanged sentences

Sullivan (incorporated by reference to Exhibit 10.3 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed September 15, 2020 (File No.

Exhibit Description

*10.35 First Amendment, dated February 16, 2021, to the Employment Agreement, dated as of September 14, 2020, between Sirius XM Radio Inc.

Sullivan (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed F ebruary 17, 2021 (File No.

Sullivan (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed February 17, 2021 (File No.

*10.36 Employment Agreement, dated as of December 27, 2020 between Sirius XM Radio Inc.

Greenstein (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on December 8, 2020 (File No.

*10.40 Agreement and Release, dated as of September 21, 2020 between Sirius XM Radio Inc.

Frear (incorporated by reference to Exhibit 10.37 to Sirius XM Holdings Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No.

*10.37 Consulting Agreement, dated as of January 1, 2021 between Sirius XM Radio Inc.

and James E Meyer (incorporated by reference to Exhibit 10.38 to Sirius XM Holdings Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020 (File No.

*10.42 Letter Agreement, dated March 5, 2019, between Sirius XM Radio Inc.

and Stephen R.

Cook (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on March 6, 2019 (File No.

*10.38 Employment Agreement, dated June 28, 2022, between Sirius XM Radio Inc.

and Joseph A.

Verbrugge (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on June 29, 2022 (File No.

*10.39 Letter Agreement, dated March 5, 2019, between Sirius XM Radio Inc.

4 unchanged sentences

*10.41 Employment Agreement, dated December 10, 2021, between Sirius XM Radio Inc.

and Joseph Inzerillo (incorporated by reference to Exhibit 10.

1 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on December 13 , 20 21 (File No.

and Joseph Inzerillo (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on December 13, 2021 (File No.

*10.42 Assignment and Assumption Agreement, dated as of November 15, 2013, among Sirius XM Holdings Inc.

10 unchanged sentences

and Liberty Media Corporation (incorporated by reference to Exhibit 10.44 to Sirius XM Holdings Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020 filed on February 2, 2021 (File No.

001-34295 )) .

10.46 Section 253 Agreement, dated as of November 1, 2021, between Sirius XM Holdings Inc.

2 unchanged sentences

23.1 Consent of KPMG LLP (filed herewith).

Exhibit Description

31.1 Certificate of Jennifer C.

4 unchanged sentences

Witz, Chief Executive Officer and Director, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

32.2 Certificate of Sean S.

Sullivan, Executive Vice President and Chief Financial Officer, pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith).

99.1 Amended and Restated Certificate of Incorporation of Sirius XM Radio Inc., as amended (incorporated by reference to Exhibit 3.3 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2013 (File No.

Exhibit Description

99.2 Amended and Restated By-Laws of Sirius XM Radio Inc., as amended (incorporated by reference to Exhibit 3.4 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2013 (File No.

11 unchanged sentences

In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs for any other purpose as of the date they were made or at any other time.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 1st day of February 2022.

SIRIUS XM HOLDINGS INC.

65 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Sufficiency of audit evidence over certain subscriber and advertising revenues

12 unchanged sentences

We evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.

Fair values of the Pandora and Off-Platform reporting unit and the Pandora trademark

As discussed in Note 8 to the consolidated financial statements, the Company’s goodwill balance for the Pandora and Off-Platform reporting unit was $959 million as of December 31, 2022.

Additionally, as discussed in Note 9 to the consolidated financial statements, the trademarks balance due to acquisitions recorded to the Pandora and Off-Platform reporting unit was $312 million as of December 31, 2022, a portion of which related to the Pandora trademark.

The Company performs goodwill and indefinite-lived assets impairment testing on an annual basis during the fourth quarter of each fiscal year, and whenever events and changes in circumstances indicate that the carrying value of a reporting unit or a trademark more likely than not exceeds its fair value.

We identified the assessment of the fair values of the Pandora and Off-Platform reporting unit and the Pandora trademark as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate certain assumptions used by the Company to estimate these fair values.

Specifically, the revenue growth rates, long-term growth rate, and the discount rates involved a higher degree of subjectivity.

In addition, these key assumptions were challenging to test due to the sensitivity of the fair value to changes in these assumptions.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s goodwill and trademark impairment assessment process, including controls related to the key assumptions noted above.

We performed sensitivity analyses to assess the impact of possible changes to the revenue growth rates, long-term growth rate and discount rates assumptions on the fair value of the Pandora and Off-Platform reporting unit and Pandora trademark.

We compared the Company’s historical revenue forecasts to actual results to assess the Company’s ability to accurately forecast revenues.

We compared the Company’s forecasted revenue growth rate assumptions to historical revenue growth rates, to projected revenue growth rates for comparable companies, and to other publicly available data, including third party market studies.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the Company’s long-term growth rate by comparing it to long-term growth rate estimates that were independently developed using publicly available market data for the Company’s industry as well as U.S.

economic growth rates

• evaluating the Company’s discount rates by comparing them to discount rates that were independently developed using publicly available market data for comparable companies.

We have served as the Company’s auditor since 2008.

56 unchanged sentences

Loss on extinguishment of debt — ( 83 ) ( 40 )

Other income (expense) 9 6 ( 3 )

Total other (expense) income ( 489 ) ( 428 ) ( 450 )

Other (expense) income ( 9 ) 9 6

Total other expense ( 431 ) ( 489 ) ( 428 )

Income before income taxes 1,605 1,526 430

13 unchanged sentences

CONSOLIDATED BALANCE SHEETS

As of December 31,

(in millions, except per share data) 2021 2020

(in millions, except per share data) December 31, 2022 December 31, 2021

Current assets:

33 unchanged sentences

3,891 and 3,967 shares outstanding at December 31, 2022 and December 31, 2021, respectively

Accumulated other comprehensive income, net of tax 15 15

Additional paid-in capital — —

Accumulated other comprehensive (loss) income, net of tax ( 4 ) 15

Treasury stock, at cost;

1 and 3 shares of common stock at December 31, 2021 and December 31, 2020, respectively

0 and 1 share of common stock at December 31, 2022 and December 31, 2021, respectively

Accumulated deficit ( 3,351 ) ( 2,636 )

6 unchanged sentences

Common Stock Accumulated

Comprehensive Income Additional

Comprehensive Income (Loss) Additional

Capital Treasury Stock Accumulated

9 unchanged sentences

— — — ( 170 ) — — ( 67 ) ( 237 )

Issuance of common stock as part of Pandora Acquisition 392 1 — 2,354 — — — 2,355

Equity component of convertible note — — — 62 — — — 62

Common stock repurchased — — — — 267 ( 1,574 ) — ( 1,574 )

7 unchanged sentences

— — — ( 126 ) — — ( 142 ) ( 268 )

Issuance of restricted stock units in connection with business acquisition — — — 4 — — — 4

Common stock repurchased — — — — 245 ( 1,512 ) — ( 1,512 )

1 unchanged sentence

Balance at December 31, 2021 3,968 $ 4 $ 15 $ — 1 $ ( 8 ) $ ( 2,636 ) $ ( 2,625 )

Comprehensive income, net of tax — — — — — — 1,314 1,314

Cumulative effect of change in accounting principles — — — — — — ( 10 ) ( 10 )

Comprehensive (loss) income, net of tax — — ( 19 ) — — — 1,213 1,194

Share-based payment expense — — — 213 — — — 213

1 unchanged sentence

Withholding taxes on net share settlement of stock-based compensation — — — ( 114 ) — — — ( 114 )

Capital contribution related to Tax Sharing Agreement with Liberty Media — — — — — — ( 35 ) ( 35 )

Cash dividends paid on common stock, $ 0.3400845 per share

14 unchanged sentences

Depreciation and amortization 536 533 506

Non cash impairment and restructuring costs 24 1,000 —

Impairment and restructuring costs, net 61 24 1,000

Non-cash interest expense, net of amortization of premium 15 21 20

5 unchanged sentences

Dividend received from unconsolidated entity investment 8 2 2

Gain on other investments ( 5 ) ( 3 ) ( 3 )

Loss (gain) on other investments 10 ( 5 ) ( 3 )

Share-based payment expense 197 202 223

15 unchanged sentences

Proceeds from insurance recoveries — 225 —

Purchases of other investments ( 4 ) ( 8 ) ( 7 )

Sale (purchases) of other investments 1 ( 4 ) ( 8 )

Acquisition of business, net of cash acquired ( 136 ) ( 14 ) ( 300 )

Sale of short-term investments — — 73

Proceeds from sale of real estate 15 — —

Investments in related parties and other equity investees ( 2 ) ( 21 ) ( 94 )

6 unchanged sentences

Proceeds from long-term borrowings, net of costs 499 4,442 1,481

Proceeds from sale of capped call security

Principal payments of long-term borrowings ( 6 ) ( 3,503 ) ( 1,507 )

1 unchanged sentence

Payment of contingent consideration for business acquisition ( 3 ) ( 22 ) —

Distribution to parent related to Tax Sharing Agreement ( 36 ) — —

Common stock repurchased and retired ( 647 ) ( 1,523 ) ( 1,555 )

1 unchanged sentence

Net cash used in financing activities ( 1,562 ) ( 1,682 ) ( 1,314 )

Net increase (decrease) in cash, cash equivalents and restricted cash 116 ( 37 ) 55

Net (decrease) increase in cash, cash equivalents and restricted cash ( 134 ) 116 ( 37 )

Cash, cash equivalents and restricted cash at beginning of period (1)

12 unchanged sentences

Non-cash investing and financing activities:

Treasury stock not yet settled $ 11 $ ( 19 ) $ —

Fair value of shares issued related to acquisition of a business $ — $ — $ 2,355

Accumulated other comprehensive income, net of tax $ — $ 7 $ 14

Capital lease obligations incurred to acquire assets $ 14 $ — $ —

Accumulated other comprehensive (loss) income, net of tax $ ( 19 ) $ — $ 7

(1) The following table reconciles cash, cash equivalents and restricted cash per the statement of cash flows to the balance sheet.

19 unchanged sentences

Holdings has no operations independent of Sirius XM and Pandora.

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

We operate two complementary audio entertainment businesses - one of which we refer to as “Sirius XM” and the second of which we refer to as “Pandora and Off-platform”.

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.

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 bundles include live, curated and certain exclusive and on demand programming.

Sirius XM packages 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.

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.

Our Sirius XM service is also available through our in-car 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.

7 unchanged sentences

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

Our Pandora business operates a music, comedy and podcast streaming discovery 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 and podcast streaming discovery platform, offering a personalized experience for each listener wherever and whenever they want to listen, whether through computers, tablets, mobile devices, vehicle 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.

1 unchanged sentence

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 which is sold under the SXM Media brand.

The majority of revenue from Pandora is generated from advertising on our Pandora ad-supported radio service which is sold under the SXM Media brand.

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.

We also have arrangements to serve as the ad sales representative for certain podcasts.

In addition, through

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

(Dollars and shares in millions, except per share amounts)

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.

On February 10, 2020, Sirius XM invested $ 75 in SoundCloud.

SoundCloud is a next-generation music entertainment company, powered by an ecosystem of artists, listeners, and curators on the pulse of what's new, now and next in music culture.

SoundCloud’s platform enables its users to upload, promote, share and create audio entertainment.

The minority investment complements the existing ad sales relationship between SoundCloud and Pandora.

Refer to Note 12 for more information on this investment.

On June 16, 2020, Sirius XM acquired Simplecast for $ 28 in cash.

Simplecast is 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.

Refer to Note 3 for more information on this acquisition.

On October 16, 2020, Sirius XM acquired certain assets and liabilities of Stitcher from The E.W.

Scripps Company and certain of its subsidiaries (“Scripps”) for total consideration of $ 302 , which included $ 266 in cash and $ 36 related to the acquisition date fair value of contingent consideration.

During the year ended December 31, 2021, Stitcher did not achieve certain financial metrics, as a result of which we do not expect to pay to Scripps the 2021 portion of the contingent consideration associated with the transaction.

During the year ended December 31, 2021, we recognized a $ 17 benefit related to the change in fair value of the 2021 portion of the contingent consideration.

The acquisition of Stitcher, in conjunction with Simplecast, created a full-service platform for podcast creators, publishers and advertisers.

Refer to Note 3 for more information on this acquisition.

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

We have an arrangement with SoundCloud Holdings, LLC (“SoundCloud”) to be its exclusive ad sales representative in the US and certain European countries and offer advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms.

We also have arrangements to serve as the ad sales representative for certain podcasts.

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 podcast monetization solutions.

Liberty Media

57 unchanged sentences

The related costs we incur for the right to broadcast music and other programming are recorded as Revenue share and royalties expense.

Fees received from subscribers for the MRF are recorded as deferred revenue and amortized to Subscriber revenue ratably over the service period.

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

(Dollars and shares in millions, except per share amounts)

received from subscribers for the MRF are recorded as deferred revenue and amortized to Subscriber revenue ratably over the service period.

We recognize revenue from the sale of advertising as performance obligations are satisfied, which generally occurs as ads are delivered.

13 unchanged sentences

As the majority of our contracts are one year or less, we have utilized the optional exemption under ASC 606-10-50-14 and do not disclose information about the remaining performance obligations for contracts which have original expected durations of one year or less.

As of December 31, 2021, less than seven percent of our total deferred revenue balance related to contracts that extend beyond one year.

As of December 31, 2022, less than six percent of our total deferred revenue balance related to contracts that extend beyond one year.

These contracts primarily include prepaid data trials which are typically provided for three to five years as well as for self-pay customers who prepay for their audio subscriptions for up to three years in advance.

6 unchanged sentences

Revenue share on non-music channels and podcasts is recognized in Revenue share and royalties in our consolidated statements of comprehensive income when it is earned.

In some cases, we pay minimum guarantees for revenue share to podcast talent which is recorded in Prepaid and other current assets in our consolidated balance sheets.

In some cases, we pay minimum guarantees for revenue share to podcast owners which is recorded in Prepaid and other current assets in our consolidated balance sheets.

The minimum guarantee is recognized in Revenue share and royalties primarily on a straight line basis over the contractual term.

7 unchanged sentences

We pay performance royalties for our Sirius XM and Pandora businesses to holders and rights administrators of musical compositions copyrights, including performing rights organizations and other copyright owners.

These performance royalties

These performance royalties are based on agreements with performing rights organizations which represent the holders of these performance rights.

Our Sirius XM and Pandora businesses have arrangements with these performance rights organizations.

Arrangements with Sirius

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

(Dollars and shares in millions, except per share amounts)

are based on agreements with performing rights organizations which represent the holders of these performance rights.

Our Sirius XM and Pandora businesses have arrangements with these performance rights organizations.

Arrangements with Sirius XM generally include fixed payments during the term of the agreement and arrangements with Pandora for its ad-supported radio service have variable payments based on usage and ownership of a royalty pool.

XM generally include fixed payments during the term of the agreement and arrangements with Pandora for its ad-supported radio service have variable payments based on usage and ownership of a royalty pool.

Pandora must also license reproduction rights, which are also referred to as mechanical rights, to offer the interactive features of the Pandora services.

28 unchanged sentences

and provisions for inventory allowance attributable to inventory consumed in our automotive and retail distribution channels.

Subscriber acquisition costs do not include advertising costs, loyalty payments to distributors and dealers of radios and revenue share payments to automakers and retailers of radios.

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

(Dollars and shares in millions, except per share amounts)

acquisition costs do not include advertising costs, loyalty payments to distributors and dealers of radios and revenue share payments to automakers and retailers of radios.

Subsidies paid to radio manufacturers and automakers are expensed upon installation, shipment, receipt of product or activation and are included in Subscriber acquisition costs because we are responsible for providing the service to the customers.

6 unchanged sentences

These costs are reported as a component of Engineering, design and development expense in our consolidated statements of comprehensive income.

Accumulated Other Comprehensive Income (Loss), net of tax

Accumulated other comprehensive income of $ 15 was primarily comprised of the cumulative foreign currency translation adjustments related to Sirius XM Canada (refer to Note 12 for additional information).

During the year ended December 31, 2021, we recorded a net foreign currency translation adjustment of less than $1.

During the years ended December 31, 2020 and 2019, we recorded a foreign currency translation adjustment gain of $ 7 and $ 14 , respectively, net of tax.

Accumulated Other Comprehensive (Loss) Income, net of tax

Accumulated other comprehensive (loss) of $( 4 ) was primarily comprised of the cumulative foreign currency translation adjustments related to Sirius XM Canada (refer to Note 12 for additional information).

During the year ended December 31, 2022, we recorded a net foreign currency translation adjustment of $( 19 ), net of tax.

During the years ended December 31, 2021 and 2020, we recorded a foreign currency translation adjustment of less than $ 1 and $ 7 , respectively, net of tax.

Recently Adopted Accounting Policies

Accounting Standard Update ( “ ASU ” ) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) .

In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06 which removes the separation models for convertible debt with cash conversion or beneficial conversion features.

ASU 2020-06 also requires the application of the if-converted method for calculating diluted earnings per share as the treasury stock method will no longer be permitted for convertible instruments.

During the three months ended March 31, 2022, we adopted ASU 2020-06 as of January 1, 2022 using the modified retrospective approach and recorded a $ 14 increase to the carrying value of Pandora's 1.75 % Convertible Senior Notes due 2023 and an increase of $ 10 , net of tax, to our accumulated deficit.

The adoption of ASU 2020-06 did not have a material impact on our diluted earnings per share.

(3) Acquisitions

Other acquisitions

On April 23, 2021, we completed a small acquisition for total consideration of $ 27 which included $ 20 in cash, a $ 3 deferred cash payment and $ 4 in restricted stock units.

On May 20, 2022, we completed an acquisition for total cash consideration of $ 93 .

We recognized goodwill of $ 69 , indefinite-lived intangible assets of $ 1 and other long-term assets of $ 23 .

The other assets represent acquired content which will be amortized over its estimated useful life to Programming and content in our consolidated statements of comprehensive income.

On January 12, 2022, we completed an acquisition for total cash consideration of $ 43 .

We recognized goodwill of $ 29 , other definite-lived intangible assets of $ 19 and liabilities of $ 4 .

On April 23, 2021, we completed an acquisition for total consideration of $ 27 which included $ 20 in cash, a $ 3 deferred cash payment and $ 4 in restricted stock units.

We recognized goodwill of $ 23 and other assets of $ 5 .

On October 16, 2020, Sirius XM acquired certain assets and liabilities of Stitcher from Scripps for $ 266 in cash, which amount included net working capital adjustments of $ 5 during the year ended December 31, 2021.

The total purchase consideration of $ 302 included $ 36 related to the acquisition date fair value of the contingent consideration.

During the year ended December 31, 2021, we recognized a $ 17 benefit related to the change in fair value of the 2021 portion of the contingent consideration in Impairment, restructuring and acquisition costs on our consolidated statements of comprehensive income.

The fair value of the contingent consideration was determined using a probability-weighted cash flow model and will be remeasured to fair value at each subsequent reporting period.

Stitcher is included in our Pandora reporting unit.

On October 16, 2020, we acquired the assets of Stitcher from The E.W.

Scripps Company and certain of its subsidiaries (“Scripps”) for total consideration of $ 302 , which included $ 266 in cash and $ 36 related to contingent consideration.

During the year ended December 31, 2021, we recognized a $ 17 benefit related to the change in fair value of the 2021 portion of the contingent consideration related to the Stitcher transaction in Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income.

The fair value of the contingent consideration was determined using a probability-weighted cash flow model.

Stitcher is included in our Pandora and Off-platform reporting unit.

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

(Dollars and shares in millions, except per share amounts)

The table below summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date:

Acquired Assets:

Receivables, net $ 21

Prepaid expenses and other current assets 16

Property and equipment 8

Intangible assets 38

Operating lease right-of-use assets 11

Total assets $ 318

Assumed Liabilities:

Accounts payable and accrued expenses $ 4

Deferred revenue 1

Operating lease current liabilities 2

Operating lease liabilities 9

Total liabilities $ 16

Total consideration $ 302

The Stitcher acquisition was accounted for using the acquisition method of accounting and was financed through borrowings under Sirius XM's Credit Facility.

1 unchanged sentence

Simplecast is a podcast management and analytics platform.

Simplecast complements AdsWizz's advertising technology platform, allowing the company to offer podcasters of all sizes a powerful, comprehensive solution for publishing, analytics, distribution and advertising sales, and is included in the Pandora reporting unit.

Simplecast complements AdsWizz's advertising technology platform, allowing the company to offer podcasters a comprehensive solution for publishing, analytics, distribution and advertising sales, and is included in the Pandora and Off-platform reporting unit.

The Simplecast acquisition was accounted for using the acquisition method of accounting.

We recognized goodwill of $ 17 , amortizable intangible assets of $ 12 , other assets of less than $ 1 and deferred tax liabilities of $ 1 .

On February 1, 2019, through a series of transactions, Pandora Media, Inc., became an indirect wholly owned subsidiary of Sirius XM and continues to operate as Pandora Media, LLC (the “Pandora Acquisition”).

In connection with the Pandora Acquisition, we purchased all of the outstanding shares of the capital stock of Pandora for $ 2,355 by converting each outstanding share of Pandora common stock into 1.44 shares of our common stock and we also canceled our preferred stock investment in Pandora for $ 524 for total consideration of $ 2,879 .

Net cash acquired was $ 313 .

As part of the Pandora Acquisition, Holdings unconditionally guaranteed all of the payment obligations of Pandora under its outstanding 1.75 % convertible senior notes due 2020 and 1.75 % convertible senior notes due 2023.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

The table below shows the value of the consideration paid in connection with the Pandora Acquisition:

Pandora common stock outstanding 272

Exchange ratio 1.44

Common stock issued 392

Price per share of Holdings common stock $ 5.83

Value of common stock issued to Pandora stockholders $ 2,285

Value of replacement equity awards attributable to pre-combination service $ 70

Consideration of common stock and replacement equity awards for pre-combination service $ 2,355

Sirius XM’s Pandora preferred stock investment (related party fair value instrument) canceled $ 524

Total consideration for Pandora Acquisition $ 2,879

Value attributed to par at $ 0.001 par value

Balance to capital in excess of par value $ 2,354

The table below summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date:

Acquired Assets:

Cash and cash equivalents $ 313

Receivables, net 353

Prepaid expenses and other current assets 109

Property and equipment 65

Intangible assets 1,107

Goodwill 1,553

Deferred tax assets 102

Operating lease right-of-use assets 104

Long term assets 7

Total assets $ 3,713

Assumed Liabilities:

Accounts payable and accrued expenses $ 324

Deferred revenue 37

Operating lease current liabilities 28

Current maturities of debt 151

Long-term debt (a) 218

Operating lease liabilities 69

Other long-term liabilities 7

Total liabilities $ 834

Total consideration $ 2,879

(a) In order to present the assets acquired and liabilities assumed, the conversion feature associated with Pandora's convertible notes for $ 62 has been included within Long-term debt in the table above and included within Additional paid-in-capital within our statement of stockholders' equity (deficit).

Refer to Note 13 for additional information.

The Pandora Acquisition was accounted for using the acquisition method of accounting.

The excess purchase price over identifiable net tangible and intangible assets of $ 1,553 was recorded to Goodwill in our consolidated balance sheets as of December 31, 2019.

Refer to Note 8 for a further discussion of Pandora goodwill which was impaired in the year ended December 31, 2020.

A total of $ 776 has been allocated to identifiable intangible assets subject to amortization and relates to the assessed fair value of the acquired customer relationships and software and technology and is being amortized over the estimated weighted average useful lives of 8 and 5 years, respectively.

A total of $ 331 has been allocated to identifiable

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

indefinite lived intangible assets and relates to the assessed fair value of the acquired trademarks.

The fair value assessed for the majority of the remaining assets acquired and liabilities assumed equaled their carrying value.

Goodwill represents synergies and economies of scale expected from the combination of services.

Goodwill has been allocated to the Pandora segment.

Additionally, in connection with the Pandora Acquisition, we acquired gross net operating loss (“NOL”) carryforwards of approximately $ 1,287 for federal income tax purposes that are available to offset future taxable income.

The acquired NOL's are limited by Section 382 of the Internal Revenue Code.

Those limitations are not expected to impact our ability to fully utilize those NOL's within the carryforward period.

We recognized acquisition related costs of $ 84 related to the Pandora Acquisition during the year ended December 31, 2019.

Pro Forma Financial Information

Pandora was consolidated into our financial statements starting on the acquisition date, February 1, 2019.

The aggregate revenue and net loss of Pandora consolidated into our financial statements was $ 1,607 and $ 303 , respectively, for the year ended December 31, 2019.

The following pro forma financial information presents our results as if the Pandora Acquisition had occurred on January 1, 2019:

For the Years Ended December 31,

2021 2020 2019

Total revenue $ 8,696 $ 8,046 $ 7,921

Net income $ 1,314 $ 131 $ 938

These pro forma results are based on estimates and assumptions, which we believe are reasonable.

They are not the results that would have been realized had the acquisition actually occurred on January 1, 2019 and are not indicative of our consolidated results of operations in future periods.

The pro forma results primarily include adjustments related to amortization of acquired intangible assets, depreciation of property and equipment, acquisition costs, fair value gain or loss on the Pandora investment and associated tax impacts.

Acquisition related costs for the years ended December 31, 2022, 2021 and 2020, were $ 2 , $ 12 and $ 4 , respectively.

(4) Fair Value Measurements

14 unchanged sentences

— $ 8,362 — $ 8,362 — $ 9,052 — $ 9,052

(a) The fair value for non-publicly traded instruments is based upon estimates from a market maker and brokerage firm.

Refer to Note 13 for information related to the carrying value of our debt as of December 31, 2022 and 2021.

(5) Restructuring Costs

During the year ended December 31, 2022, we evaluated our office space needs, and, as a result of such analysis, we vacated certain office spaces.

We assessed the recoverability of the carrying value of the operating lease right of use assets related to these locations.

We determined that the carrying values of the assets were not recoverable, and we recorded an impairment of $ 16 to reduce the carrying value of the assets to their fair values.

Additionally, we wrote off fixed assets of $ 5 in connection with furniture and equipment located at the impaired office spaces.

Separately, we performed an analysis surrounding initiatives that we are no longer pursuing and recorded an impairment of $ 43 associated with terminated software projects and an impairment of $ 6 related to personnel severance.

The total restructuring and impairment charge of $ 70 was recorded to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income for the year ended December 31, 2022.

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

(Dollars and shares in millions, except per share amounts)

(a) The fair value for non-publicly traded instruments is based upon estimates from a market maker and brokerage firm.

Refer to Note 13 for information related to the carrying value of our debt as of December 31, 2021 and 2020.

(5) Restructuring Costs

During the year ended December 31, 2021, we evaluated our office space needs and, as a result of such analysis, surrendered certain office leases primarily in New York, New York and Oakland, California.

During the year ended December 31, 2021, we evaluated our office space needs and, as a result of such analysis, surrendered certain office leases.

We assessed the recoverability of the carrying value of the operating lease right of use assets related to these locations.

2 unchanged sentences

The fair values of the assets were determined using a discounted cash flow model based on management's assumptions regarding the ability to sublease the locations and the remaining term of the leases.

The total charge of $ 25 was recorded to Impairment, restructuring and acquisition costs in our consolidated statement of comprehensive income for the years ended December 31, 2021.

In May 2020, we terminated the Automatic service, which was part of our connected services business.

During the year ended December 31, 2020, we recorded $ 24 of restructuring expenses primarily related to the write down of property and equipment, definite lived intangible assets and certain other assets in Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income.

The termination of the Automatic service does not meet the requirements to be reported as a discontinued operation in our consolidated statements of comprehensive income because the termination of the service does not represent a strategic shift that will have a major effect on our operations and financial results.

We did no t record any restructuring expenses during the year ended December 31, 2019.

The total charge of $ 25 was recorded to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income for the year ended December 31, 2021.

During the year ended December 31, 2020, we recorded $ 24 of restructuring expenses primarily related to the write down of property and equipment, definite lived intangible assets and certain other assets related to the termination of the Automatic service in Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income.

The termination of the Automatic service did not meet the requirements to be reported as a discontinued operation in our consolidated statements of comprehensive income because the termination of the service does not represent a strategic shift that will have a major effect on our operations and financial results.

(6) Earnings per Share

15 unchanged sentences

Diluted $ 0.31 $ 0.32 $ 0.03

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

(7) Receivables, net

3 unchanged sentences

Our allowance for doubtful accounts is based upon our assessment of various factors.

We consider historical experience, the age of the receivable balances, current economic conditions, industry experience and other factors that may affect the counterparty’s ability to pay.

We consider historical experience, the age of the receivable balances, current economic conditions, industry experience and other factors that may affect the counterparty’s

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

ability to pay.

Bad debt expense is included in Customer service and billing expense in our consolidated statements of comprehensive income.

13 unchanged sentences

ASC 350, Intangibles - Goodwill and Other , states that an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

ASC 350 also states that a reporting unit with a zero or negative carrying amount is not required to perform a qualitative assessment.

Our Sirius XM reporting unit, which has an allocated goodwill balance of $ 2,290 , had a negative carrying amount as of December 31, 2022.

As of December 31, 2021, there were no indicators of impairment, and no impairment losses were recorded for goodwill during the year ended December 31, 2021.

As of December 31, 2022, there were no indicators of impairment, and no impairment losses were recorded for goodwill during the years ended December 31, 2022 and 2021.

During the year ended December 31, 2022, we elected to perform a quantitative goodwill assessment of our Pandora and Off-platform reporting unit and determined the fair value of the reporting unit using a combination of an income approach, employing a discounted cash flow model, and a market approach.

The results of our 2022 goodwill impairment test indicated that the estimated fair value of our Pandora and Off-platform reporting unit exceeded its carrying amount.

During the year ended December 31, 2020, we performed a quantitative goodwill assessment and determined the fair value of our reporting units using a combination of an income approach, employing a discounted cash flow model, and a market approach.

The discounted cash flow model relied on making assumptions, such as the extent of the economic downturn related to the COVID-19 pandemic, the expected timing of recovery, expected growth in profitability and discount rate, which we believed were appropriate.

The discounted cash flow model relied on assumptions, such as the extent of the economic downturn related to the COVID-19 pandemic, the expected timing of recovery, expected growth in profitability and discount rate, which we believed were appropriate.

Additionally, assumptions related to guideline company financial multiples used in the market approach decreased based on market observations.

The results of our 2020 goodwill impairment test indicated that the estimated fair value of the Sirius XM reporting unit exceeded its carrying amount.

The carrying amount of the Pandora reporting unit exceeded its estimated fair value primarily due to a reduction in the long-term forecast to reflect increased costs related to royalty rates for streaming and increased uncertainty surrounding the projected demand for advertising and decrease of listening hours.

As a result, we recorded a goodwill impairment charge of $ 956 during the year ended December 31, 2020 to write down the carrying amount of the Pandora goodwill in the Impairment, restructuring and acquisitions line item in our

The carrying amount of the Pandora and Off-platform reporting unit exceeded its estimated fair value primarily due to a reduction in the long-term forecast to reflect increased costs related to royalty rates for streaming and increased uncertainty surrounding the projected demand for advertising and decrease of listening hours.

As a result, we recorded a goodwill impairment charge of $ 956 during the year ended December 31, 2020 to write down the carrying amount of the Pandora and Off-platform goodwill in the Impairment, restructuring and acquisition costs line item in our consolidated statements of comprehensive income.

As of December 31, 2022, the cumulative balance of goodwill impairments recorded was $ 5,722 , of which $ 4,766 was recognized during the year ended December 31, 2008 and is included in the carrying amount of the goodwill allocated to our

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

(Dollars and shares in millions, except per share amounts)

consolidated statements of comprehensive income.

No impairment losses were recorded for goodwill during the year ended December 31, 2019.

As of December 31, 2021, the cumulative balance of goodwill impairments recorded was $ 5,722 , of which $ 4,766 was recognized during the year ended December 31, 2008 and is included in the carrying amount of the goodwill allocated to our Sirius XM reporting unit and $ 956 was recognized during the year ended December 31, 2020 and is included in the carrying amount of the goodwill allocated to our Pandora reporting unit.

As of December 31, 2021, the carrying amount of goodwill for our Sirius XM and Pandora reporting units was $ 2,290 and $ 861 , respectively.

During the year ended December 31, 2021, we recorded $ 6 of goodwill related to purchase accounting adjustments for the acquisition of Stitcher and $ 23 of goodwill related to a small acquisition which was recorded to our Pandora reporting unit.

Sirius XM reporting unit and $ 956 was recognized during the year ended December 31, 2020 and is included in the carrying amount of the goodwill allocated to our Pandora and Off-platform reporting unit.

As of December 31, 2022, the carrying amount of goodwill for our Sirius XM and Pandora and Off-platform reporting units was $ 2,290 and $ 959 , respectively.

During the year ended December 31, 2022, we recorded $ 98 of goodwill related to acquisitions associated with our Pandora and Off-platform reporting unit.

Refer to Note 3 for information regarding these acquisitions.

Refer to the table below for our goodwill activity for the years ended December 31, 2022 and 2021:

Sirius XM Pandora Total

Sirius XM Pandora and Off-platform Total

Balance at January 1, 2021 $ 2,290 $ 832 $ 3,122

Acquisition — 29 29

Impairment charge — ( 956 ) ( 956 )

Balance at December 31, 2021 2,290 861 3,151

14 unchanged sentences

Software and technology 7 years 31 ( 21 ) 10 31 ( 19 ) 12

Due to Pandora and Stitcher Acquisitions:

Due to Acquisitions recorded to Pandora

and Off-platform Reporting Unit:

Indefinite life intangible assets:

18 unchanged sentences

If the carrying value of the intangible assets exceeds its fair value, an impairment loss is recognized in an amount equal to that excess.

We completed a quantitative assessment of our FCC licenses and Pandora trademarks during the fourth quarter of 2022.

As of the date of our annual assessment for 2022, our impairment assessment of the fair value of our indefinite intangible assets indicated that the estimated fair value of our FCC licenses and Pandora trademarks exceeded their carrying values and therefore no impairment exists.

We completed our qualitative assessments of our FCC licenses and XM and Pandora trademarks during the fourth quarter of 2021.

As of the date of our annual assessment, our qualitative impairment assessment of the fair value of our indefinite intangible assets indicated that the fair value of such assets exceeded their carrying value and therefore were not at risk of impairment.

We completed a quantitative assessment of our FCC licenses and XM and Pandora trademarks during the fourth quarter of 2020 and qualitative assessments during the fourth quarter of 2019.

We completed a quantitative assessment of our FCC licenses and XM and Pandora trademarks during the fourth quarter of 2020.

As of the date of our annual assessment for 2020, our impairment assessment of the fair value of our indefinite intangible assets indicated that the carrying value of our Pandora trademark exceeded the fair value of the asset by $ 20 .

2 unchanged sentences

During the year ended December 31, 2020, we also recognized an impairment loss of less than $ 1 for intangible assets with indefinite lives related to the termination of the Automatic service.

No impairment loss was recognized for intangible assets with indefinite lives during the year ended December 31, 2019.

Definite Life Intangible Assets

4 unchanged sentences

Amortization expense for all definite life intangible assets was $ 156 , $ 154 and $ 152 for the years ended December 31, 2022, 2021 and 2020, respectively.

There were no retirements of definite lived intangible assets during the years ended December 31, 2022 and 2021.

There were retirements of definite lived intangible assets of $ 17 , which included a loss of $ 4 , due to the termination of the Automatic service, during the year ended December 31, 2020.

There were no retirements of definite lived intangible assets during the year ended December 31, 2021.

SIRIUS XM HOLDINGS INC.

21 unchanged sentences

If the carrying amount of an asset exceeds the estimated future cash flows, an impairment charge is recognized in an amount by which the carrying amount exceeds the fair value of the asset.

During the year ended December 31, 2022, we recorded impairment charges of $ 48 related to the write off of terminated software projects and fixed assets in connection with furniture and equipment located at impaired office spaces.

Refer to the Note 5 for more information.

During the year ended December 31, 2021, we recorded an impairment charge of $ 220 related to our SXM-7 satellite which was offset by insurance recoveries.

Refer to the discussion below for more information.

We did no t record any impairments during the years ended December 31, 2020 and 2019.

We did not record any impairment charges during the year ended 2020.

SIRIUS XM HOLDINGS INC.

23 unchanged sentences

Depreciation and amortization expense on property and equipment was $ 380 , $ 379 and $ 354 for the years ended December 31, 2022, 2021 and 2020, respectively.

We retired property and equipment of $ 65 during the year ended December 31, 2021.

Property and equipment of $ 94 , which included a loss of $ 13 related to the termination of the Automatic service, was retired during the year ended December 31, 2020.

We retired property and equipment of $ 9 during the year ended December 31, 2019.

During the year ended December 31, 2022, we wrote off furniture and equipment in connection with impaired office space leases and we disposed of assets associated with software development initiatives that we are no longer pursuing.

In addition to the property and equipment impaired above, we sold real estate during the year ended December 31, 2022 for net proceeds of $ 15 resulting in a gain of $ 8 which has been recorded to Impairment, restructuring and acquisition costs line item in our consolidated statements of comprehensive income.

We retired property and equipment of $ 65 during the year ended December 31, 2021 and $ 94 during the year ended December 31, 2020, which included a loss of $ 13 related to the termination of the Automatic service.

We capitalize a portion of the interest on funds borrowed to finance the construction and launch of our satellites.

Capitalized interest is recorded as part of the asset’s cost and depreciated over the satellite’s useful life.

Capitalized interest costs were $ 7 , $ 19 , and $ 17 for the years ended December 31, 2021, 2020 and 2019, respectively, which related to the construction of our SXM-7 and SXM-8 satellites.

Capitalized interest costs were $ 5 , $ 7 and $ 19 for the years ended December 31, 2022, 2021 and 2020, respectively, which related to the construction of our SXM-7, SXM-8, SXM-9 and SXM-10 satellites.

We also capitalize a portion of share-based compensation related to employee time for capitalized software projects.

16 unchanged sentences

SXM-8 2021 2036 2029

On December 13, 2020, our SXM-7 satellite was 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, which we considered to be a triggering event prompting the assessment as to whether the asset's carrying value of $ 220 was recoverable.

In determining recoverability of SXM-7, we compared the asset's carrying value to the undiscounted cash flows derived from the satellite.

SXM-7 was determined to be a total loss and therefore, we determined that the carrying value of the satellite was not recoverable and an impairment charge of $ 220 was recorded to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income for the year ended December 31, 2021.

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

During the year ended December 30, 2021, we recorded an impairment charge of $ 220 to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income related to the total loss of the SXM-7 satellite.

We procured insurance for SXM-7 to cover the risks associated with the satellite's launch and first year of in-orbit operation.

1 unchanged sentence

During the year ended December 30, 2021, we collected $ 225 of insurance recoveries.

Of this amount, $ 220 has been recorded as a reduction to Impairment, restructuring and acquisition costs during the year ended December 31, 2021.

The remaining $ 5 has been recorded in Other income during the year ended December 31, 2021.

Of this amount, $ 220 was recorded as a reduction to Impairment, restructuring and acquisition costs during year ended December 30, 2021.

The remaining $ 5 was recorded in Other income during the year ended December 30, 2021.

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

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 the XM-3 satellite, which remains available as an in-orbit spare along with XM-5.

Our SXM-8 satellite replaced our XM-3 satellite.

During the year ended December 31, 2022, we replaced our XM-4 satellite with our XM-5 satellite.

As of December 31, 2022, our XM-3 and XM-4 satellites remain available as in-orbit spares.

We have operating and finance leases for offices, terrestrial repeaters, data centers and certain equipment.

2 unchanged sentences

Additionally, we elected the practical expedient to not recognize right-of-use assets or lease liabilities for short-term leases, which are those leases with a term of twelve months or less at the lease commencement date.

During the year ended December 31, 2021, we ceased using certain leased locations and recorded an impairment charge of $ 18 to write down the carrying value of the right-of-use assets for these locations to their estimated fair values.

During the years ended December 31, 2022 and 2021, we ceased using certain leased locations and recorded an impairment charge of $ 16 and $ 18 , respectively, to write down the carrying value of the right-of-use assets for these locations to their estimated fair values.

Refer to Note 5 for additional information.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

The components of lease expense were as follows:

4 unchanged sentences

Total lease cost $ 74 $ 73

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

Supplemental cash flow information related to leases was as follows:

23 unchanged sentences

Operating leases 8 years 8 years

Finance leases 0 years 1 year

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

Finance leases 4 years 0 years

December 31, 2022 December 31, 2021

2 unchanged sentences

Finance leases 2.3 % — %

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

Maturities of lease liabilities were as follows:

15 unchanged sentences

The tax sharing agreement was negotiated and approved by a special committee of Holdings’ board of directors, all of whom are independent of Liberty Media.

Under the Internal Revenue Code, two corporations may form a consolidated tax group, and file a consolidated federal income tax return, if one corporation owns stock representing at least 80% of the voting power and value of the outstanding capital stock of the other corporation.

As of December 31, 2021, Liberty Media beneficially owned, directly and indirectly, approximately 81 % of the outstanding shares of our common stock resulting in Holdings and Liberty Media becoming members of the same consolidated tax group.

The tax sharing agreement governs certain matters related to the resulting consolidated federal income tax returns, as well as state and local returns filed on a consolidated or combined basis.

Refer to Note 17 for more information regarding the tax sharing agreement.

Sirius XM Canada

1 unchanged sentence

We own 591 shares of preferred stock of Sirius XM Canada, which has a liquidation preference of one Canadian dollar per share.

Sirius XM also made a loan to Sirius XM Canada in the aggregate amount of $ 131 .

The loan is denominated in Canadian dollars and is considered a long-term investment with any unrealized gains or losses reported within Accumulated other comprehensive (loss) income.

During the years ended December 31, 2021, 2020 and 2019, Sirius XM Canada repaid $ 2 , $ 11 and less than $ 1 of the principal amount of the loan, respectively.

Sirius XM Canada is accounted for as an equity method investment, and its results are not consolidated in our consolidated financial statements.

Sirius XM Canada does not meet the requirements for consolidation as we do not have the ability to direct the most significant activities that impact Sirius XM Canada's economic performance.

On March 15, 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, each dated as of May 25, 2017, 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 .

Prior to the March 2022 amendment, cumulative note repayments by Sirius XM Canada were $ 10 .

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

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

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

(Dollars and shares in millions, except per share amounts)

Sirius XM has 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 currently 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.

Sirius XM Canada is accounted for as an equity method investment, and its results are not consolidated in our consolidated financial statements.

Sirius XM Canada does not meet the requirements for consolidation as we do not have the ability to direct the most significant activities that impact Sirius XM Canada's economic performance.

Our related party long-term assets as of December 31, 2022 and December 31, 2021 included the carrying value of our investment balance in Sirius XM Canada of $ 412 and $ 334 , respectively, and, as of December 31, 2022 and December 31, 2021, also included $ 8 and $ 120 , respectively, for the long-term value of the outstanding loan to Sirius XM Canada.

Sirius XM Canada paid gross dividends to us of $ 2 during each of the years ended December 31, 2021, 2020 and 2019.

Sirius XM Canada paid gross dividends to us of $ 9 , $ 2 and $ 2 during the years ended December 31, 2022, 2021 and 2020, respectively.

Dividends are first recorded as a reduction to our investment balance in Sirius XM Canada to the extent a balance exists and then as Other (expense) income for any remaining portion.

We recorded revenue from Sirius XM Canada as Other revenue in our consolidated statements of comprehensive income of $ 101 , $ 97 and $ 98 for the years ended December 31, 2021, 2020 and 2019, respectively.

In February 2020, Sirius XM completed a $ 75 investment in SoundCloud's Series G Membership Units ("Series G Units").

The Series G Units are convertible at the option of the holders at any time into shares of ordinary membership units of SoundCloud at a ratio of one ordinary membership unit for each Series G Unit.

The investment in SoundCloud is accounted for as an equity method investment which is recorded in Related party long-term assets in our consolidated balance sheets.

We recorded revenue from Sirius XM Canada as Other revenue in our consolidated statements of comprehensive income of $ 111 , $ 101 and $ 97 during the years ended December 31, 2022, 2021 and 2020, respectively.

We have an investment in SoundCloud which is accounted for as an equity method investment and recorded in Related party long-term assets in our consolidated balance sheets.

Sirius XM has appointed two individuals to serve on SoundCloud's nine -member board of managers.

Sirius XM's share of SoundCloud's net loss was $ 6 , $ 2 and $ 1 for the years ended December 31, 2022, 2021 and 2020, respectively, which was recorded in Other (expense) income in our consolidated statements of comprehensive income.

In addition to our investment in SoundCloud, Pandora has an agreement with SoundCloud to be its exclusive US ad sales representative.

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

We recorded revenue share expense of $ 60 , $ 55 and $ 40 for the years ended December 31, 2021, 2020 and 2019, respectively.

We also had related party liabilities of $ 24 as of each of December 31, 2021 and 2020, related to this agreement.

In addition to our investment in SoundCloud, Pandora has an agreement with SoundCloud to be its exclusive ad sales representative in the US and certain European countries.

Through this arrangement, Pandora offers advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms.

We recorded revenue share expense related to this agreement of $ 55 , $ 60 and $ 55 for the years ended December 31, 2022, 2021 and 2020, respectively.

We also had related party liabilities of $ 19 and $ 24 as of December 31, 2022 and 2021, respectively, related to this agreement.

SIRIUS XM HOLDINGS INC.

5 unchanged sentences

Issuer / Borrower Issued Debt Maturity Date Interest

Payable December 31,

2021 December 31, 2021 December 31, 2020

(b) (f) July 2017 3.875 % Senior Notes

August 1, 2022 semi-annually on February 1 and August 1 $ — $ — $ 997

Payable December 31, 2022 December 31, 2022 December 31, 2021

1 unchanged sentence

December 1, 2023 semi-annually on June 1 and December 1 $ 193 $ 193 $ 177

(b) (f) July 2019 4.625 % Senior Notes

July 15, 2024 semi-annually on January 15 and July 15 — — 1,488

(b) (f) May 2016 5.375 % Senior Notes

July 15, 2026 semi-annually on January 15 and July 15 — — 993

(b) (g) August 2021 3.125 % Senior Notes

(b) (f) April 2022 Incremental Term Loan April 11, 2024 variable fee paid monthly 500 500 —

(b) August 2021 3.125 % Senior Notes

September 1, 2026 semi-annually on March 1 and September 1 1,000 992 990

1 unchanged sentence

August 1, 2027 semi-annually on February 1 and August 1 1,500 1,492 1,491

(b) (g) June 2021 4.00 % Senior Notes

(b) June 2021 4.00 % Senior Notes

July 15, 2028 semi-annually on January 15 and July 15 2,000 1,982 1,979

3 unchanged sentences

July 1, 2030 semi-annually on January 1 and July 1 1,500 1,487 1,485

(b) (g) August 2021 3.875 % Senior Notes

(b) August 2021 3.875 % Senior Notes

September 1, 2031 semi-annually on March 1 and September 1 1,500 1,485 1,484

6 unchanged sentences

(a) The carrying value of the obligations is net of any remaining unamortized original issue discount.

(b) All material domestic subsidiaries, including Pandora and its subsidiaries, that guarantee the Credit Facility have guaranteed these notes.

(b) All material domestic subsidiaries, including Pandora and its subsidiaries, that guarantee the Credit Facility have guaranteed the incremental term loan and these notes.

(d) We acquired $ 193 in principal amount of the 1.75 % Convertible Senior Notes due 2023 as part of the acquisition of Pandora Media, Inc.

We allocate the principal amount of the 1.75 % Convertible Senior Notes due 2023 between the liability and equity components.

The value assigned to the debt components of the 1.75 % Convertible Senior Notes due 2023 is the estimated fair value as of the issuance date of similar debt without the conversion feature.

The difference between the fair value of the debt and this estimated fair value represents the value which has been assigned to the equity component.

The equity component is recorded to additional paid-in capital and is not remeasured as long as it continues to meet the conditions for equity classification.

The excess of the principal amount of the Notes over the carrying amount of the liability component is recorded as a debt discount and is being amortized to interest expense using the effective interest method through the December 1, 2023 maturity date.

The 1.75 % Convertible Senior Notes due 2023 were not convertible into common stock and not redeemable as of December 31, 2021.

As a result, we have classified the debt as Long-term within our consolidated balance sheets.

Prior to the adoption of ASU 2020-06, we allocated the principal amount of the 1.75 % Convertible Senior Notes due 2023 between the liability and equity components.

During the three months ended March 31, 2022, we adopted ASU 2020-06 as of January 1, 2022, which removed the separation model for convertible debt with cash conversion features.

Refer to Note 2 for more information on the adoption of ASU 2020-06.

The 1.75 % Convertible Senior Notes due 2023 were not convertible into common stock and were not redeemable as of December 31, 2022.

(e) In August 2021, Sirius XM entered into an amendment to extend the maturity of the $ 1,750 Credit Facility to August 31, 2026.

Sirius XM's obligations under the Credit Facility are guaranteed by certain of its material domestic subsidiaries,

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

including Pandora and its subsidiaries, and are secured by a lien on substantially all of Sirius XM's assets and the assets of its material domestic subsidiaries.

Sirius XM's obligations under the Credit Facility are guaranteed by certain of its material domestic subsidiaries, including Pandora and its subsidiaries, and are secured by a lien on substantially all of Sirius XM's assets and the assets of its material domestic subsidiaries.

Interest on borrowings is payable on a monthly basis and accrues at a rate based on LIBOR plus an applicable rate.

2 unchanged sentences

All of Sirius XM's outstanding borrowings under the Credit Facility are classified as Long-term debt within our consolidated balance sheets due to the long-term maturity of this debt.

Additionally, the amount available for future borrowing under the Credit Facility is reduced by letters of credit issued for the benefit of Pandora, which were $ 1 as of December 31, 2021.

(f) On August 2, 2021, Sirius XM redeemed $ 1,000 in outstanding principal amount of the 3.875 % Senior Notes due 2022 for an aggregate redemption price, including interest, of $ 1,019 .

On August 16, 2021, Sirius XM redeemed $ 1,500 in outstanding principal amount of the 4.625 % Senior Notes due 2024 for an aggregate redemption price, including premium and interest, of $ 1,541 .

On September 2, 2021, Sirius XM redeemed $ 1,000 in outstanding principal amount of the 5.375 % Senior Notes due 2026 for an aggregate redemption price, including premium and interest, of $ 1,034 .

During the years ended December 31, 2021, we recognized $ 83 to Loss on extinguishment of debt, consisting primarily of redemption premiums of $ 62 , unamortized discount and unamortized deferred financing fees, as a result of these redemptions.

(g) On August 16, 2021, Sirius XM issued $ 1,000 aggregate principal amount of the 3.125 % Senior Notes due 2026 and $ 1,500 aggregate principal amount of the 3.875 % Senior Notes due 2031 with a net original issuance discount and deferred financing costs in aggregate of $ 13 and $ 19 , respectively.

On June 21, 2021, Sirius XM issued $ 2,000 aggregate principal amount of the 4.00 % Senior Notes due 2028 with a net original issuance discount and deferred financing costs in the aggregate of $ 26 .

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

(f) In April 2022, Sirius XM entered into an amendment to the Credit Facility to incorporate an Incremental Term Loan borrowing of $ 500 which matures on April 11, 2024.

Interest on the Incremental Term Loan borrowing is based on the Adjusted Term Secured Overnight Financing Rate plus an applicable rate.

On August 2, 2021, Sirius XM redeemed $ 1,000 in outstanding principal amount of its 3.875 % Senior Notes due 2022 for an aggregate purchase price, including interest, of $ 1,019 .

On August 16, 2021, Sirius XM redeemed $ 1,500 in outstanding principal amount of its 4.625 % Senior Notes due 2024 for an aggregate purchase price, including premium and interest, of $ 1,541 .

On September 2, 2021, Sirius XM redeemed $ 1,000 in outstanding principal amount of its 5.375 % Senior Notes due 2026 for an aggregate purchase price, including premium and interest, of $ 1,034 .

During the year ended December 31, 2021, we recognized $ 83 to Loss on extinguishment of debt, consisting primarily of redemption premiums of $ 62 , unamortized discount and unamortized deferred financing fees, as a result of these redemptions.

On July 9, 2020, Sirius XM redeemed $ 500 of its then outstanding 4.625 % Senior Notes due 2023 for an aggregate redemption price, including premium and interest, of $ 507 .

1 unchanged sentence

During the year ended December 31, 2020, we recognized $ 40 to Loss on extinguishment of debt, consisting primarily of redemption premiums, unamortized discount and deferred financing fees, as a result of these redemptions.

On July 18, 2019, Sirius XM redeemed $ 1,500 in outstanding principal amount of the 6.00 % Senior Notes due 2024 for an aggregate redemption price, including premium and interest, of $ 1,546 .

During the year ended December 31, 2019, we recognized $ 57 to Loss on extinguishment of debt, consisting primarily of unamortized discount, deferred financing fees and redemption premium, as a result of this redemption.

Covenants and Restrictions

14 unchanged sentences

If an event of default occurs and is continuing, our debt could become immediately due and payable.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

The indenture governing the Pandora 2023 Notes (as defined below) contains covenants that limit Pandora’s ability to merge or consolidate and provides for customary events of default, which include nonpayment of principal or interest, breach of covenants, payment defaults or acceleration of other indebtedness and certain events of bankruptcy.

4 unchanged sentences

The Pandora 2023 Notes will mature on December 1, 2023, unless earlier repurchased or redeemed by Pandora or converted in accordance with their terms.

As of December 31, 2021, the conversion rate applicable to the Pandora 2023 Notes was 153.7797 shares of Holdings' common stock per one thousand principal amount of the Pandora 2023 Notes plus carryforward adjustments not yet effected pursuant to the terms of the indenture governing the Pandora 2023 Notes.

As of December 31, 2022, the conversion rate applicable to the Pandora 2023 Notes was 162.7373 shares of Holdings' common stock per one thousand principal amount of the Pandora 2023 Notes.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

(14) Stockholders’ Equity

3 unchanged sentences

As of December 31, 2022, there were 219 shares of common stock reserved for issuance in connection with outstanding stock-based awards to members of our board of directors, employees and third parties.

Special Dividend

During the year ended December 31, 2022, our board of directors declared and paid the following special cash dividend on our common stock:

Declaration Date Dividend Per Share Record Date Total Amount Payment Date

January 31, 2022 $ 0.25 February 11, 2022 $ 987 February 25, 2022

Quarterly Dividends

During the year ended December 31, 2021, we declared and paid the following dividends:

During the year ended December 31, 2022, our board of directors also declared and paid the following dividends:

Declaration Date Dividend Per Share Record Date Total Amount Payment Date

2 unchanged sentences

July 14, 2022 $ 0.0219615 August 5, 2022 $ 86 August 31, 2022

October 25, 2021 $ 0.0219615 November 5, 2021 $ 88 November 29, 2021

November 1, 2022 $ 0.0242 November 11, 2022 $ 94 November 30, 2022

Stock Repurchase Program

3 unchanged sentences

As of December 31, 2022, our cumulative repurchases since December 2012 under our stock repurchase program totaled 3,662 shares for $ 16,558 , and $ 1,442 remained available for future share repurchases under our stock repurchase program.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

The following table summarizes our total share repurchase activity for the years ended:

1 unchanged sentence

Share Repurchase Type Shares Amount Shares Amount Shares Amount

Open Market Repurchases (a)

245 $ 1,512 267 $ 1,574 364 $ 2,159

(a) As of December 31, 2021, $ 8 of common stock repurchases had not settled, nor been retired, and were recorded as Treasury stock within our consolidated balance sheets and consolidated statement of stockholders’ equity (deficit).

Open Market Repurchases 103 $ 639 245 $ 1,512 267 $ 1,574

Preferred Stock, par value $ 0.001 per share

1 unchanged sentence

There were no shares of preferred stock issued or outstanding as of December 31, 2022 and December 31, 2021.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

(15) Benefit Plans

We recognized share-based payment expense of $ 197 , $ 202 and $ 223 for the years ended December 31, 2022, 2021 and 2020, respectively.

The amount recognized during the year ended December 31, 2019 includes $ 21 of share-based compensation expense recorded in Impairment, restructuring, and acquisition costs in our consolidated statements of comprehensive income.

We account for equity instruments granted in accordance with ASC 718, Compensation - Stock Compensation .

24 unchanged sentences

Restricted stock units include performance-based restricted stock units (“PRSUs”), the vesting of which are subject to the achievement of performance goals and the employee's continued employment and generally cliff vest on the third anniversary of the grant date.

Each restricted stock unit entitles the holder to

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

receive one share of common stock upon vesting.

Each restricted stock unit entitles the holder to receive one share of common stock upon vesting.

As of December 31, 2022, 122 shares of common stock were available for future grants under the 2015 Plan.

In February 2021, the Compensation Committee of our Board of Directors approved a modification to the design of our long-term equity compensation program for our senior management.

The Compensation Committee intends to award equity-based compensation to our senior management in the form of:

6 unchanged sentences

The settlement of PRSUs earned in respect of the applicable three-year performance period will be generally subject to the executive’s continued employment with us through the date the total stockholder return performance is certified by the Compensation Committee.

In connection with our February 2019 acquisition of Pandora, we assumed all shares available for issuance (including any shares that later become available for issuance in accordance with the terms of the applicable plans) under each of the 2014 Stock Incentive Plan of AdsWizz Inc., the Pandora Media, Inc.

2011 Equity Incentive Plan, the Pandora Media, Inc.

2004 Stock Plan and the TheSavageBeast.com, Inc.

2000 Stock Incentive Plan, which were previously approved by stockholders of Pandora or the applicable adopting entity.

All shares available under these stock plans became additional shares available for grant pursuant to the terms of the 2015 Plan (as adjusted, to the extent appropriate, to reflect the application of the exchange ratio).

Subject to certain limitations set forth in the 2015 Plan, such shares may be used for awards under the 2015 Plan.

We maintain six share-based benefit plans in addition to the 2015 Plan — the Sirius XM Radio Inc.

2009 Long-Term Stock Incentive Plan, the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan, the 2014 Stock Incentive Plan of AdsWizz Inc., the Pandora Media, Inc.

2009 Long-Term Stock Incentive Plan, the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan, the 2014 Stock

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

Incentive Plan of AdsWizz Inc., the Pandora Media, Inc.

2011 Equity Incentive Plan, the Pandora Media, Inc.

9 unchanged sentences

Expected dividend yield 1.3 % 1.0 % 0.8 %

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

The following table summarizes stock option activity under our share-based plans for the years ended December 31, 2022, 2021 and 2020:

1 unchanged sentence

Exercise Price

Per Share Weighted-Average

Per Share (1)

Weighted-Average

Contractual Term (Years) Aggregate

Outstanding at the beginning of January 1, 2020 208 $ 4.46

Awards granted in connection with acquisition 7 $ 3.85

Granted 11 $ 6.87

11 unchanged sentences

Exercisable as of December 31, 2022 78 $ 5.18 4.58 $ 69

(1) On February 25, 2022, we paid a special dividend which resulted in a $ 0.25 reduction to the exercise price of all options outstanding as of February 11, 2022.

The table above reflects the exercise price reduction for all stock option activity during the year ended December 31, 2022 and for the outstanding and exercisable balances as of December 31, 2022.

Stock option activity and balances prior to January 1, 2022 were not adjusted in the table above.

The weighted average grant date fair value per stock option granted during the years ended December 31, 2022, 2021 and 2020 was $ 1.48 , $ 1.77 and $ 1.46 , respectively.

10 unchanged sentences

Nonvested at the beginning of January 1, 2020 75 $ 5.95

Awards granted in connection with acquisition 48 $ 5.83

Granted 37 $ 6.14

12 unchanged sentences

During the years ended December 31, 2022, 2021 and 2020, the number of net settled shares issued as a result of restricted stock units vesting totaled 19 , 16 and 20 , respectively.

During the years ended December 31, 2021, 2020 and 2019, we granted 7 , 4 and 6 PRSUs to certain employees, respectively.

During the years ended December 31, 2022, 2021 and 2020, we granted 6 , 7 and 4 PRSUs, respectively, to certain employees.

We believe it is probable that the performance target applicable to these PRSUs will be achieved.

In connection with the cash dividends paid during each of the years ended December 31, 2021, 2020 and 2019, we granted less than 1 restricted stock units, including PRSUs, in accordance with the terms of existing award agreements.

In connection with the cash dividends paid during each of the years ended December 31, 2022, 2021 and 2020, we granted 4 , 1 and 1 restricted stock units, including PRSUs, in accordance with the terms of existing award agreements, respectively.

These grants did not result in any additional incremental share-based payment expense being recognized during the years ended December 31, 2022, 2021 and 2020.

3 unchanged sentences

401(k) Savings Plans

Sirius XM Radio Inc.

401(k) Savings Plan

Sirius XM sponsors the Sirius XM Radio Inc.

5 unchanged sentences

Our cash employer matching contributions are not used to purchase shares of our common stock on the open market, unless the employee elects our common stock as their investment option for this contribution.

In October 2020, the Pandora Media, LLC 401(k) Profit Sharing Plan and Trust merged with the Sirius XM Plan.

We recognized expenses of $ 19 , $ 21 and $ 16 for the years ended December 31, 2022, 2021 and 2020, respectively, in connection with the Sirius XM Plan.

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

(Dollars and shares in millions, except per share amounts)

We recognized expenses of $ 21 , $ 16 and $ 9 for the years ended December 31, 2021, 2020 and 2019, respectively, in connection with the Sirius XM and Pandora Plans.

Sirius XM Holdings Inc.

4 unchanged sentences

We have established a grantor (or “rabbi”) trust to facilitate the payment of our obligations under the DCP.

Contributions to the DCP, net of withdrawals, were $ 4 , $ 8 and $ 7 for the years ended December 31, 2021, 2020 and 2019, respectively.

Contributions to the DCP, net of withdrawals, for the years ended December 31, 2022, 2021 and 2020 were $( 1 ), $ 4 and $ 8 , respectively.

As of December 31, 2022 and December 31, 2021, the fair value of the investments held in the trust were $ 47 and $ 56 , respectively, which is included in Other long-term assets in our consolidated balance sheets and classified as trading securities.

1 unchanged sentence

The associated liability is recorded within Other long-term liabilities in our consolidated balance sheets, and any increase or decrease in the liability is recorded in General and administrative expense within our consolidated statements of comprehensive income.

We recorded gains on investments held in the trust of $ 5 , $ 3 and $ 3 for the years ended December 31, 2021, 2020 and 2019, respectively.

We recorded (losses) gains on investments held in the trust of $( 10 ), $ 5 and $ 3 for the years ended December 31, 2022, 2021 and 2020, respectively.

(16) Commitments and Contingencies

16 unchanged sentences

Satellite and transmission.

We have entered into agreements with third parties to design, build and launch two new 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.

We also have entered into agreements with third parties to operate and maintain satellite telemetry, tracking and control facilities and certain components of our terrestrial repeater networks.

5 unchanged sentences

Sales and marketing.

We have entered into various marketing, sponsorship and distribution agreements to promote our brands and are obligated to make payments to sponsors, retailers, automakers, radio manufacturers and other third parties under

Certain programming and content agreements also require us to purchase advertising on properties owned or controlled by the licensors.

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

(Dollars and shares in millions, except per share amounts)

these agreements.

Certain programming and content agreements also require us to purchase advertising on properties owned or controlled by the licensors.

Satellite incentive payments.

Boeing Satellite Systems International, Inc., the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments upon XM-4 meeting its fifteen-year design life, which we expect to occur.

Boeing may also be entitled to up to $ 10 of additional incentive payments if our XM-4 satellite continues to operate above baseline specifications during the five years beyond the satellite’s fifteen-year design life.

Maxar Technologies (formerly Space Systems/Loral), the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments upon XM-5, SIRIUS FM-5, SIRIUS FM-6, and SXM-8 meeting their fifteen-year design life, which we expect to occur.

5 unchanged sentences

We have entered into music royalty arrangements that include fixed payments.

Certain of our content agreements also contain minimum guarantees.

During the year ended December 31, 2021, we prepaid $ 5 in content costs related to minimum guarantees.

As of December 31, 2021, we had future fixed minimum guarantee commitments of $ 444 , of which $ 24 will be paid in 2022 and the remainder will be paid thereafter.

In addition, certain of our podcast agreements also contain minimum guarantees.

As of December 31, 2022, we had future fixed commitments related to music royalty and podcast agreements of $ 484 , of which $ 217 will be paid in 2023 and the remainder will be paid thereafter.

On a quarterly basis, we record the greater of the cumulative actual content costs incurred or the cumulative minimum guarantee based on forecasted usage for the minimum guarantee period.

The minimum guarantee period is the period of time that the minimum guarantee relates to, as specified in each agreement, which may be annual or a longer period.

The cumulative minimum guarantee, based on forecasted usage, considers factors such as listening hours, revenue, subscribers and other terms of each agreement that impact our expected attainment or recoupment of the minimum guarantees based on the relative attribution method.

The cumulative minimum guarantee, based on forecasted usage, considers factors such as listening hours, downloads, revenue, subscribers and other terms of each agreement that impact our expected attainment or recoupment of the minimum guarantees based on the relative attribution method.

Several of our content agreements also include provisions related to the royalty payments and structures of those agreements relative to other content licensing arrangements, which, if triggered, cause our payments under those agreements to escalate.

In addition, record labels, publishers and performing rights organizations (“PROs”) with whom we have entered into direct license agreements have the right to audit our content payments, and such audits often result in disputes over whether we have paid the proper content costs.

In addition, record labels, publishers and performing rights organizations with whom we have entered into direct license agreements have the right to audit our content payments, and such audits often result in disputes over whether we have paid the proper content costs.

We have also entered into various agreements with third parties for general operating purposes.

4 unchanged sentences

We may enter into additional programming, distribution, marketing and other agreements that contain similar variable cost provisions.

We also have a surety bond of approximately $ 45 primarily used as security against non-performance in the normal course of business.

We do not have any other significant off-balance sheet financing arrangements that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

4 unchanged sentences

Significant judgment is required to determine both probability and the estimated amount of a loss or potential loss.

We may be unable to reasonably estimate the reasonably possible loss or range of

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

loss for a particular legal contingency for various reasons, including, among others, because:

We may be unable to reasonably estimate the reasonably possible loss or range of loss for a particular legal contingency for various reasons, including, among others, because:

(i) the damages sought are indeterminate;

9 unchanged sentences

filed a class action suit against Pandora in the federal district court for the Central District of California.

The complaint alleges a violation of California Civil Code Section 980, unfair competition, misappropriation and conversion in connection with the public performance of sound recordings recorded prior to February 15, 1972 (which we refer to as, “pre-1972 recordings”).

The complaint alleges a violation of California Civil Code

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

Section 980, unfair competition, misappropriation and conversion in connection with the public performance of sound recordings recorded prior to February 15, 1972 (which we refer to as, “pre-1972 recordings”).

On December 19, 2014, Pandora filed a motion to strike the complaint pursuant to California’s Anti-Strategic Lawsuit Against Public Participation (“Anti-SLAPP”) statute, which following denial of Pandora’s motion was appealed to the Ninth Circuit Court of Appeals.

23 unchanged sentences

The Ninth Circuit remanded the case for entry of judgment consistent with the terms of the parties’ contingent settlement agreement, and on October 6, 2021, the parties to the related case stipulated to its dismissal with prejudice.

The Flo & Eddie Inc.

Sirius XM Radio Inc.

decision is precedential in the Ninth Circuit, and therefore we believe substantially narrows the claims that Flo & Eddie may continue to assert against Pandora.

Following issuance of the Flo & Eddie Inc.

2 unchanged sentences

Pandora Media, LLC .

The Flo & Eddie Inc.

Sirius XM Radio Inc.

decision is precedential in the Ninth Circuit, and therefore we believe substantially narrows the claims that Flo & Eddie may continue to assert against Pandora.

We believe we have substantial defenses to the remaining claims asserted in this action, and we intend to defend this action vigorously.

Pandora promptly filed an appeal of the District Court’s order denying the renewed motion to dismiss the case under California’s anti-SLAAP statute.

On June 2, 2022, the Ninth Circuit upheld the District Court’s order denying dismissal of the case under California’s anti-SLAPP statute, finding that Pandora had failed to demonstrate that Flo & Eddie’s claims arise from Pandora’s protected conduct.

As part of the decision, the Ninth Circuit noted that Pandora had forcefully argued that the Court’s decision in Flo & Eddie Inc.

Sirius XM Radio Inc., and other decisions under New York, Florida and Georgia law, foreclosed Flo & Eddie’s claims as a matter of law.

Because the case has been pending for over seven years , the Ninth Circuit remanded the case to the District Court and directed “the district court to consider expedited motions practice on the legal validity of Flo & Eddie’s claims in light of the intervening precedent.”

On September 29, 2022, Flo & Eddie filed an Amended Complaint, and on October 13, 2022, Pandora filed an Answer to the Amended Complaint.

In accordance with the directive of the Ninth Circuit, the parties have agreed to a schedule for a Motion for Summary Judgment.

In November 2022, Pandora filed a Motion for Summary Judgment and briefing on this Motion is expected to be completed in February 2023.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

Other Matters .

4 unchanged sentences

and owners of patents, trademarks, copyrights or other intellectual property.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

None of these other matters, in our opinion, is likely to have a material adverse effect on our business, financial condition or results of operations.

(17) Income Taxes

Current federal income tax expense or benefit represents the amounts expected to be reported on the Company's income tax return, and deferred income tax expense or benefits represents the change in net deferred tax assets and liabilities.

Current federal income tax expense or benefit represents the amounts expected to be reported on our income tax return, and deferred income tax expense or benefits represents the change in net deferred tax assets and liabilities.

Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted income tax rates that will be in effect when these differences reverse.

5 unchanged sentences

The tax sharing agreement contains provisions that we believe are customary for tax sharing agreements between members of a consolidated group.

On November 3, 2021, Liberty Media informed us that it beneficially owned over 80% of the outstanding shares of our common stock;

as a result of this, we will now be included in the consolidated tax return of Liberty Media beginning November 4, 2021.

On November 3, 2021, Liberty Media informed us that it beneficially owned over 80% of the outstanding shares of our common stock, resulting in our inclusion in the 2021 consolidated tax return of Liberty Media.

The tax sharing agreement and our inclusion in Liberty Media’s consolidated tax group is not expected to have any material adverse effect on us.

35 unchanged sentences

Effective tax rate 24.4 % 13.9 % 69.5 %

Our effective tax rate of 13.9 % for the year ended December 31, 2021 was primarily impacted by settlements with various states as well as a benefit related to research and development and certain other credits, partially offset by federal and state income tax expense.

Our effective tax rate of 24.4 % for the year ended December 31, 2022 was primarily impacted by federal and state income tax expense as well as changes in state valuation allowance, partially offset by a benefit related to research and development and certain other credits.

Our effective tax rate of 13.9 % for the year ended December 31, 2021 was primarily impacted by federal and state income tax expense, partially offset by settlements with various states as well as a benefit related to research and development and certain other credits.

Our effective tax rate of 69.5 % for the year ended December 31, 2020 was primarily impacted by the nondeductible Pandora goodwill impairment charge, partially offset by the recognition of excess tax benefits related to share-based compensation, a benefit related to state and federal research and development and certain other credits and a worthless stock deduction associated with the termination of the Automatic service.

Our effective tax rate of 23.6 % for the year ended December 31, 2019 was primarily impacted by the recognition of excess tax benefits related to share-based compensation and benefits related to state and federal research and development and certain other credits, partially offset by the impact of nondeductible compensation.

Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year-end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

30 unchanged sentences

For the years ended December 31, 2022 and 2021, we recorded $ 25 and $ 71 for state and federal tax credits, respectively.

As of December 31, 2021, our gross federal net operating loss carryforwards were approximately $ 643 .

We expect to utilize a majority of our federal income tax credits, which consist of research and development tax credits, other tax credits and foreign tax credits, by December 31, 2022.

As of December 31, 2021 and 2020, we had a valuation allowance related to deferred tax assets of $ 83 and $ 54 , respectively, which were not likely to be realized due to the timing of certain state net operating loss limitations.

During the year ended December 31, 2021, our valuation allowance increased primarily as a result of the increase in net deferred tax asset related to prior net operating loss carryforwards as a result of settlements with various states.

As of December 31, 2022, our gross federal net operating loss carryforwards were approximately $ 423 which are subject to Section 382 limitations.

As of December 31, 2022 and 2021, we had a valuation allowance related to deferred tax assets of $ 113 and $ 83 , respectively, that were not likely to be realized due to the timing of certain federal and state net operating loss limitations.

During the year ended December 31, 2022, our valuation allowance increased primarily as a result of the impact of decrease in forecasted earnings, resulting in lower projected utilization of state and local net operating losses.

This was partially offset by a write off of a valuation allowance that was recorded on net operating losses that expired during the current year.

As a portion of these net operating losses are not anticipated to be realizable, we increased our valuation allowance for those expected to expire un-utilized based on taxable income projections.

26 unchanged sentences

Balance, end of year $ 198 $ 179

On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law.

Among other things, the IRA imposes a 15% corporate alternative minimum tax for tax years beginning after December 31, 2022, levies a 1% excise tax on net stock repurchases after December 31, 2022, and provides tax incentives to promote clean energy.

Beginning in 2023, our net stock repurchases will be subject to the excise tax.

Based on the historical net repurchase activity, the excise tax and the other provisions of the IRA are not expected to have a material impact on our results of operations or financial position.

(18) Segments and Geographic Information

In accordance with FASB ASC Topic 280, Segment Reporting , we disaggregate our operations into two reportable segments:

Sirius XM and Pandora.

Sirius XM and Pandora and Off-platform.

The financial results of these segments are utilized by the chief operating decision maker, who is our Chief Executive Officer, for evaluating segment performance and allocating resources.

6 unchanged sentences

We had less than $ 1 of intersegment advertising revenue during the years ended December 31, 2022 and 2021.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

Segment revenue and gross profit were as follows during the periods presented:

For the Year Ended December 31, 2022

Sirius XM Pandora Total

Sirius XM Pandora and Off-platform Total

Subscriber revenue $ 6,370 $ 522 $ 6,892

6 unchanged sentences

Segment gross profit $ 4,264 $ 655 $ 4,919

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows:

12 unchanged sentences

For the Year Ended December 31, 2021

Sirius XM Pandora Total

Sirius XM Pandora and Off-platform Total

Subscriber revenue $ 6,084 $ 530 $ 6,614

6 unchanged sentences

Segment gross profit $ 4,030 $ 743 $ 4,773

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows:

11 unchanged sentences

(b) Share-based payment expense of $ 45 related to cost of services, $ 58 related to sales and marketing, $ 36 related to engineering, design and development and $ 63 related to general and administrative has been excluded for the year ended December 31, 2021.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

For the Year Ended December 31, 2020

Sirius XM Pandora Total

Sirius XM Pandora and Off-platform Total

Subscriber revenue $ 5,857 $ 515 $ 6,372

19 unchanged sentences

(c) Share-based payment expense of $ 44 related to cost of services, $ 68 related to sales and marketing, $ 43 related to engineering, design and development and $ 68 related to general and administrative has been excluded for the year ended December 31, 2020.

SIRIUS XM HOLDINGS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

(Dollars and shares in millions, except per share amounts)

A measure of segment assets is not currently provided to the Chief Executive Officer and has therefore not been provided.

3 unchanged sentences

Capital Return Program

For the period from January 1, 2022 to January 28, 2022, we repurchased 19 shares of our common stock on the open market for an aggregate purchase price of $ 116 , including fees and commissions.

On January 25, 2023, our board of directors declared a quarterly dividend on our common stock in the amount of $ 0.0242 per share of common stock payable on February 24, 2023 to stockholders of record as of the close of business on February 9, 2023.

On January 31, 2022, our board of directors declared a special cash dividend on our common stock in the amount of $ 0.25 per share of common stock payable on February 25, 2022 to stockholders of record as of the close of business on February 11, 2022.

SIRIUS XM HOLDINGS INC.

13 unchanged sentences

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 9A. Controls and Procedures