What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-01 compared with 2023-02-02 · 303 added, 353 removed, 1395 unchanged (32% of the section changed)

4 unchanged sentences

An evaluation was performed under the supervision and with the participation of our management, including Jennifer C.

Witz, our Chief Executive Officer, and Sean S.

Sullivan, our Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as that term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2022.

Witz, our Chief Executive Officer, and Thomas D.

Barry, our Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as that term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2023.

Based on that evaluation, our management, including our Chief Executive Officer and our Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of December 31, 2023 at the reasonable assurance level.

4 unchanged sentences

Our management used the Internal Control-Integrated Framework ( 2013 ) issued by the Committee of Sponsoring Organizations of the Treadway Commission to perform this evaluation.

on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our internal control over financial reporting was effective as of December 31, 2022.

Based on that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our internal control over financial reporting was effective as of December 31, 2023.

KPMG LLP, an independent registered public accounting firm, which has audited and reported on the consolidated financial statements contained in this Annual Report on Form 10-K, has issued its report on the effectiveness of our internal control over financial reporting.

44 unchanged sentences

and White Oaks Acquisition Corp., dated as of September 23, 2018 (incorporated by reference to Exhibit 2.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 24, 2018 (File No.

Agreement and Plan of Merger, dated as of December 11, 2023, by and among Sirius XM Holdings Inc., Liberty Media Corporation, Liberty Sirius XM Holdings Inc.

and Radio Merger Sub, LLC (incorporated by reference to Exhibit 2.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on December 13, 2023 (File No.

3.1 Amended and Restated Certificate of Incorporation of Sirius XM Holdings Inc.

7 unchanged sentences

Bank National Association, as trustee, relating to the 5.500% Senior Notes due 2029 (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on June 7, 2019 (File No.

4.4 First Supplemental Indenture, dated as of January 31, 2019, relating to the 1.75% Convertible Senior Notes due 2023, between Pandora Media, Inc.

and Citibank, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on January 31, 2019 (File No.

4.5 Third Supplemental Indenture, dated as of February 1, 2019, relating to the 1.75% Convertible Senior Notes due 2023, among Pandora Media, LLC (f/k/a Pandora Media, Inc.), Sirius XM Holdings Inc.

and Citibank, N.A.

as trustee ((incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on February 1, 2019 (File No.

4.4 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.

11 unchanged sentences

4.10 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.

Reorganization Agreement, dated as of December 11, 2023, by and among Sirius XM Holdings Inc., Liberty Media Corporation and Liberty Sirius XM Holdings Inc.

(incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on December 13, 2023 (File No.

Exhibit Description

10.2 Voting Agreement, dated as of December 11, 2023, by and among Sirius XM Holdings Inc., Liberty Media Corporation, Liberty Sirius XM Holdings Inc.

and each of The John C.

Malone 1995 Revocable Trust, The Leslie A.

Malone 1995 Revocable Trust, The Malone Family Land Preservation Foundation and John C.

Malone June 2003 Charitable Remainder Unitrust (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on December 13, 2023 (File No.

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

12 unchanged sentences

2022 (File No.

Amendment No.

7, dated as of March 29, 2023, 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 Quarterly Report on Form 10-Q filed on April 27.

2023 (File No.

Amendment No.

8, dated as of December 29, 2023, 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 January 3.

2024 (File No.

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.

9 unchanged sentences

Sirius XM Radio 401(k) Savings Plan, January 1, 2009 Restatement (incorporated by reference to Exhibit 10.30 to Sirius XM Radio Inc.’s Annual Report on Form 10-K for the year ended December 31, 2009 (File No.

Exhibit Description

Sirius XM Radio Inc.

9 unchanged sentences

2009 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.35 to Sirius XM Radio Inc.’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No.

Exhibit Description

Form of Non-Qualified Stock Option Agreement pursuant to the Sirius XM Holdings Inc.

12 unchanged sentences

Meyer (incorporated by reference to Exhibit 10.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed October 16, 2009 (File No.

*10.25 Employment Agreement, dated December 24, 2018 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 26, 2018 (File No.

Employment Agreement, dated as of November 21, 2022 between Sirius XM Radio Inc.

1 unchanged sentence

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.

and Jennifer Witz (incorporated by reference to Exhibit 10.30 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2017 (File No.

*10.28 Employment Agreement, dated August 16, 2018, between Sirius XM Radio Inc.

Meyer (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on August 16, 2018 (File No.

*10.29 Letter agreement, dated August 16, 2018, regarding use of private aircraft between Sirius XM Radio Inc.

Meyer (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on August 16, 2018 (File No.

*10.30 Employment Agreement, dated as of March 5, 2019 between Sirius XM Radio Inc.

and Jennifer Witz (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on March 6, 2019 (File No.

*10.31 Employment Agreement, dated as of September 14, 2020 between Sirius XM Radio Inc.

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.

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

and Jennifer C.

Witz (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed September 15, 2020 (File No.

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

Employment Agreement, dated as of December 14 , 2023 between Sirius XM Radio Inc.

and Jennifer Witz (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.'s Current Report on Form 8 -K filed on December 15 , 2023 ( File No.

Letter Agreement, dated December 14, 2023, regarding private use of aircraft between Sirius XM Radio Inc.

and Jennifer C.

Witz (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed February 17, 2021 (File No.

*10.34 Employment Agreement, dated as of September 14, 2020, between Sirius XM Radio Inc.

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 February 17, 2021 (File No.

Witz (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on December 15, 2023 (File No.

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.

*10.37 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.

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

1 unchanged sentence

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.

and Joseph A.

Verbrugge (incorporated by reference to Exhibit 10.3 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on March 6, 2019 (File No.

*10.40 Employment Agreement, dated as of May 5, 2021, between Sirius XM Radio Inc.

Altman (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on May 7, 2021 (File No.

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, 2021 (File No.

Exhibit Description

Employment Agreement, dated April 3, 2023 between Sirius XM Radio Inc.

and Thomas D.

Barry (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on April 4, 2023 (File No.

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

16 unchanged sentences

Witz, Chief Executive Officer and Director, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2 Certificate of Sean S.

Sullivan, Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2 Certificate of Thomas D.

Barry, Executive Vice President and Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.1 Certificate of Jennifer C.

1 unchanged sentence

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.

32.2 Certificate of Thomas D.

Barry, 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 (furnished herewith).

97.1 Incentive Compensation Clawback Policy (filed 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.

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** Pursuant to the Commission’s Orders Granting Confidential Treatment under Rule 406 of the Securities Act of 1933 or Rule 24(b)-2 under the Securities Exchange Act of 1934, certain confidential portions of this Exhibit were omitted by means of redacting a portion of the text.

Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K.

Holdings hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the Securities and Exchange Commission (“SEC”);

provided, however, that Holdings may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules so furnished.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for any other purpose.

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 2nd day of February 2023.

SIRIUS XM HOLDINGS INC.

/s/ Thomas D.

Executive Vice President and Chief Financial Officer

8 unchanged sentences

Chief Executive Officer and Director (Principal Executive Officer) February 1, 2024

Executive Vice President and Chief Financial Officer

(Principal Financial Officer) February 2, 2023

/s/ T HOMAS D.

Executive Vice President and Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

February 1, 2024

/s/ C ARY K REFETZ

Senior Vice President and Controller

(Principal Accounting Officer) February 2, 2023

February 1, 2024

(Cary Krefetz)

/s/ D AVID A.

Director February 1, 2024

Director February 2, 2023

Director and Lead Independent Director

February 1, 2024

/s/ R OBIN S.

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

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:

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:

(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 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.

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.

Sufficiency of audit evidence over certain subscriber and advertising revenues

As discussed in Notes 2 and 18 to the consolidated financial statements, and disclosed in the consolidated statements of comprehensive income, the Company generated $9,003 million of revenues, of which $6,370 million was Sirius XM subscriber revenue and $1,576 million was Pandora (Pandora Media, LLC and subsidiaries, the successor to Pandora Media, Inc.

and subsidiaries) advertising revenue, for the year ended December 31, 2022.

As discussed in Notes 2 and 18 to the consolidated financial statements, and disclosed in the consolidated statements of comprehensive income, the Company generated $ 8,953 million of revenues, of which $ 6,342 million was Sirius XM subscriber revenue and $ 1,589 million was Pandora advertising revenue, for the year ended December 31, 2023.

The Company’s accounting for these subscriber and advertising revenues involved multiple information technology (IT) systems.

We identified the evaluation of the sufficiency of audit evidence related to Sirius XM subscriber revenue and Pandora advertising revenue as a critical audit matter.

We identified the evaluation of the sufficiency of audit evidence related to Sirius XM subscriber and Pandora advertising revenue as a critical audit matter.

Evaluating the sufficiency of audit evidence obtained required auditor judgment due to the number of IT applications used by the Company that involved IT professionals with specialized skills and knowledge.

2 unchanged sentences

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Sirius XM subscriber and Pandora advertising revenue recognition processes.

We involved IT professionals with specialized skills and knowledge, who assisted in testing certain IT application controls and general IT controls used by the Company in its revenue recognition processes and testing the interface of relevant revenue data between different IT systems used in the revenue

recognition processes.

For Sirius XM subscriber revenue, we assessed the recorded revenue by comparing the total cash received during the year, adjusted for reconciling items, to the revenue recorded in the general ledger.

For Sirius XM subscriber revenue, we assessed the recorded revenue by comparing the total cash

received during the year, adjusted for reconciling items, to the revenue recorded in the general ledger.

For a sample of Pandora advertising revenues, we traced the recorded amounts to underlying source documents and system reports.

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.

107 unchanged sentences

9,000 shares authorized;

3,891 and 3,968 shares issued;

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

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

Treasury stock, at cost;

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

3,843 and 3,891 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

Accumulated other comprehensive loss, net of tax

Accumulated deficit ( 2,572 ) ( 3,351 )

18 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 )

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

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

2 unchanged sentences

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

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

Cash dividends paid on common stock, $ 0.3400845 per share

— — — ( 103 ) — — ( 1,236 ) ( 1,339 )

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

Common stock repurchased — — — — 103 ( 639 ) — ( 639 )

1 unchanged sentence

Balance at December 31, 2022 3,891 $ 4 $ ( 4 ) $ — — $ — $ ( 3,351 ) $ ( 3,351 )

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

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

Comprehensive income, net of tax — — 7 — — — 1,258 1,265

Share-based payment expense — — — 202 — — — 202

1 unchanged sentence

Withholding taxes on net share settlement of stock-based compensation — — — ( 63 ) — — — ( 63 )

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

Capital contribution from Liberty Media related to Tax Sharing Agreement — — — — — — 35 35

Cash dividends paid on common stock, $ 0.0992 per share

— — — ( 143 ) — — ( 240 ) ( 383 )

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

Common stock repurchased — — — — 69 ( 274 ) — ( 274 )

11 unchanged sentences

Depreciation and amortization 554 536 533

Impairment and restructuring costs, net 61 24 1,000

Non-cash impairment and restructuring costs 26 61 24

Non-cash interest expense, net of amortization of premium 14 15 21

1 unchanged sentence

Provision for doubtful accounts 59 59 53

Amortization of deferred income related to equity method investment — — ( 3 )

Loss on extinguishment of debt — — 83

1 unchanged sentence

Dividend received from unconsolidated entity investment — 8 2

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

(Gain) loss on other investments ( 7 ) 10 ( 5 )

Share-based payment expense 184 197 202

Deferred income tax expense 202 131 238

Deferred income tax (benefit) expense ( 64 ) 202 131

Amortization of right-of-use assets 45 49 50

13 unchanged sentences

Proceeds from insurance recoveries — — 225

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

(Purchase) sale of other investments 3 1 ( 4 )

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

6 unchanged sentences

Taxes paid from net share settlements for stock-based compensation ( 63 ) ( 114 ) ( 103 )

Revolving credit facility, net 80 ( 653 ) 649

Revolving credit facility borrowings

1,670 2,300 1,177

Revolving credit facility repayments

( 1,750 ) ( 2,220 ) ( 1,830 )

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

3 unchanged sentences

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

Other financing activities ( 4 ) — —

Common stock repurchased and retired ( 274 ) ( 647 ) ( 1,523 )

1 unchanged sentence

Net cash used in financing activities ( 1,005 ) ( 1,562 ) ( 1,682 )

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

Net increase (decrease) in cash, cash equivalents and restricted cash 159 ( 134 ) 116

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

12 unchanged sentences

Non-cash investing and financing activities:

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

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

Finance lease obligations incurred to acquire assets

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

Capital contribution from Liberty Media pursuant to Tax Sharing Agreement

(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 - 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 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.

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

Our SiriusXM 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.

SiriusXM packages include live, curated and certain exclusive and on demand programming.

The SiriusXM 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 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.

We also derive revenue from advertising on select non-music channels, which is sold under the SXM Media brand, direct sales of our satellite radios and accessories, and other ancillary services.

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

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

We also derive revenue from advertising on select non-music channels, which is sold under the SiriusXM Media brand, direct sales of our satellite radios and accessories, and other ancillary services.

As of December 31, 2023, our SiriusXM business had approximately 33.9 million subscribers.

In addition to our audio entertainment businesses, we provide connected vehicle services to several automakers.

These services are designed to enhance the safety, security and driving experience of consumers.

We also offer a suite of data services that includes graphical weather, fuel prices, sports schedules and scores and movie listings, a traffic information service that includes information as to road closings, traffic flow and incident data to consumers with compatible in-vehicle navigation systems, and real-time weather services in vehicles, boats and planes.

Sirius XM also holds a 70 % equity interest and 33 % voting interest in Sirius XM Canada Holdings Inc.

We also offer a suite of data services that includes graphical weather and fuel prices, a traffic information service, and real-time weather services in boats and airplanes.

SiriusXM also holds a 70 % equity interest and 33 % voting interest in Sirius XM Canada Holdings Inc.

(“Sirius XM Canada”).

1 unchanged sentence

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.

Our Pandora and Off-platform 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, vehicle speakers or connected devices.

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

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

As of December 31, 2023, Pandora had approximately 6.0 million subscribers.

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.

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

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

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,

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

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

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

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.

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

As of December 31, 2022, Liberty Media Corporation (“Liberty Media”) beneficially owned, directly and indirectly, approximately 82 % of the outstanding shares of our common stock.

As of December 31, 2023, Liberty Media Corporation (“Liberty Media”) beneficially owned, directly and indirectly, 83.4 % of the outstanding shares of our common stock.

As a result, we are a “controlled company” for the purposes of the NASDAQ corporate governance requirements.

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All significant intercompany transactions have been eliminated in consolidation.

Certain numbers in our prior period consolidated financial statements and footnotes have been reclassified or consolidated to conform to our current period presentation.

Public companies are required to disclose certain information about their reportable operating segments.

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For a discussion of subsequent events that do not require adjustment to our consolidated financial statements refer to Note 19.

We identified an error in our previously issued consolidated financial statements related to the presentation of cash flows associated with borrowings and repayments related to our Senior Secured Credit Facility.

We have corrected this error in the accompanying consolidated statements of cash flows for the years ended December 31, 2022 and 2021 to present on a gross basis the borrowings from the revolving credit facility of $ 2,300 and $ 1,177 , respectively, and repayments of the revolving credit facility of $ 2,220 and $ 1,830 , respectively.

The corrections had no impact to the total net cash used in financing activities in either period.

We evaluated the materiality of these errors both qualitatively and quantitatively and have concluded that this error is immaterial to all impacted periods.

Use of Estimates

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Significant Accounting Policy Note # Page #

Acquisition 3 F- 15

Fair Value Measurements 4 F- 16

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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, 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.

As of December 31, 2023, less than seven 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 , and self-pay customers who prepay for their audio subscriptions for up to three years .

These amounts are recognized on a straight-line basis as our services are provided.

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satellite digital audio radio subscribers, and advertising revenue from channels other than those channels that make only incidental performances of sound recordings.

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

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

For our Pandora business, we have entered into direct license agreements with major and independent music labels and distributors for a significant majority of the sound recordings that stream on the Pandora ad-supported service, Pandora Plus and Pandora Premium.

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

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.

Recent Accounting Pronouncements

Accounting Standard Update 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”) .

In December 2023, the FASB issued ASU 2023-09, which requires more detailed income tax disclosures.

The guidance requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction.

The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively.

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are evaluating the disclosure requirements related to the new standard.

Accounting Standard Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures ("ASU 2023-07").

In November 2023, the FASB issued ASU 2023-07, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

We are evaluating the disclosure requirements related to the new standard.

Accounting Standard Update ( “ ASU ” ) 2023-02, Investments—Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method .

In March 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-02 which amended the guidance related to accounting for investments in tax credit structures to allow the use of the proportional amortization method.

The amendment permits reporting entities to elect to account for their equity investments in tax credit structures using the proportional amortization method if certain conditions are met.

This amendment requires entities to make disclosures about all investments in a tax credit program for which they have elected to account for using the proportional amortization method, including those investments in an elected tax credit program that do not meet the conditions to apply the proportional amortization method.

We expect to elect the proportional amortization method for qualifying investments in tax credit structures when the amendments in this ASU become effective in the first quarter of 2024 using the modified retrospective method.

We are evaluating the impact ASU 2023-02 will have on our consolidated financial statements, however, we do not expect the impacts of adoption to materially impact our results from our existing investments.

Future investments could have a material impact to our consolidated assets and liabilities related to the capitalization of unfunded future commitments and results of operations related to the amortization of any investment balance in proportion to the income tax benefits received.

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, 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 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.

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.

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(3) Acquisitions

Other acquisitions

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 .

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

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

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.

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

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 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 .

There were no acquisition related costs recognized for the year ended December 31, 2023.

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

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(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.

During the year ended December 31, 2023, restructuring costs were $ 49 .

In 2023, we initiated measures to pursue greater efficiency and to realign our business and focus on strategic priorities.

As part of these measures, we reduced the size of our workforce by approximately 475 roles, or 8 %.

We recorded a charge of $ 34 primarily related to severance and other related costs.

In addition, we vacated two of our leased locations and recorded impairments of $ 12 to reduce the carrying value of the related right of use assets to their estimated fair value.

Additionally, we accrued expenses of $ 3 for which we will not recognize any future economic benefits.

The restructuring and related impairment charges were recorded to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income.

During the year ended December 31, 2022, we evaluated our office space needs, and, based on this, we vacated certain office spaces and recorded an impairment of $ 16 to reduce the carrying value of the related right of use assets to their estimated 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.

Separately, we performed an analysis surrounding initiatives that we are no longer pursuing and recorded an

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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.

Based on that assessment, the carrying values of the assets were not recoverable, and we recorded an impairment of $ 18 to reduce the carrying value of the assets to their fair values.

impairment of $ 43 associated with terminated software projects and an impairment of $ 6 related to severance.

The total charge of $ 70 was recorded to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income.

During the year ended December 31, 2021, we evaluated our office space needs and, based on this, we vacated certain office spaces and recorded an impairment of $ 18 to reduce the carrying value of the related right of use assets to their estimated fair values.

Additionally, we accrued expenses of $ 6 for which we will not recognize any future economic benefits and wrote off leasehold improvements of $ 1 .

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 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.

The total charge of $ 25 was recorded to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income.

(6) Earnings per Share

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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

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.

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

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ability to pay.

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

Receivables from distributors primarily include billed and unbilled amounts due from automakers for services included in the sale or lease price of vehicles, as well as billed amounts due from wholesale distributors of our satellite radios.

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Our Sirius XM reporting unit, which has an allocated goodwill balance of $ 2,290 , had a negative carrying amount as of December 31, 2023.

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 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 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

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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.

During the year ended December 31, 2023, we elected to perform a qualitative impairment assessment which indicated that the fair value of our reporting units exceeded their carrying values and therefore were not at risk of impairment.

No impairment losses were recorded for goodwill during the years ended December 31, 2023, 2022 and 2021.

As of December 31, 2023, 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 and Off-platform reporting unit.

As of December 31, 2023, 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, 2023 and 2022:

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Balance at January 1, 2022 $ 2,290 $ 861 $ 3,151

Acquisition — 29 29

Balance at December 31, 2022 2,290 959 3,249

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Balance at December 31, 2023 $ 2,290 $ 959 $ 3,249

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(9) Intangible Assets

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We have identified our FCC licenses and XM and Pandora trademarks as indefinite life intangible assets after considering the expected use of the assets, the regulatory and economic environment within which they are used and the effects of obsolescence on their use.

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We hold FCC licenses to operate our satellite digital audio radio service and provide ancillary services.

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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 qualitative assessment of our FCC licenses and Pandora trademarks during the fourth quarter of 2023.

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 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.

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 .

The excess carrying value was written off and recognized in the Impairment, restructuring and acquisition costs line item in our consolidated statements of comprehensive income.

The impairment assessment for our FCC licenses and XM trademark indicate that the fair value of such assets substantially exceeded their carrying value and therefore were not at risk of impairment.

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.

As of the date of our annual assessment, our qualitative impairment assessment of the fair value of our

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indefinite intangible assets indicated that the fair value of such assets exceeded their carrying value and therefore were not at risk of impairment.

Definite Life Intangible Assets

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If the sum of the expected cash flows, undiscounted and without interest, is less than the carrying amount of the asset, an impairment loss is recognized in an amount by which the carrying amount of the asset exceeds its fair value.

No impairment loss was recognized for intangible assets with definite lives during the years ended December 31, 2022, 2021 and 2020.

Amortization expense for all definite life intangible assets was $ 144 , $ 156 and $ 154 for the years ended December 31, 2023, 2022 and 2021, 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 retirements of definite lived intangible assets of $ 44 and we recognized a related impairment loss of $ 1 during year ended December 31, 2023.

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

The expected amortization expense for each of the fiscal years 2024 through 2028 and for periods thereafter is as follows:

Years ending December 31, Amount

Total definite life intangible assets, net $ 259

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The expected amortization expense for each of the fiscal years 2023 through 2027 and for periods thereafter is as follows:

Years ending December 31, Amount

Thereafter 15

Total definite life intangible assets, net $ 404

(10) Property and Equipment

Property and equipment, including satellites, are stated at cost, less accumulated depreciation.

Equipment under capital leases is stated at the present value of minimum lease payments.

Equipment under leases is stated at the present value of minimum lease payments.

Depreciation is calculated using the straight-line method over the following estimated useful life of the asset:

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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, 2023, we retired property and equipment of $ 289 , and recorded related impairment charges of $ 14 primarily related to terminated software projects.

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.

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Refer to the discussion below for more information.

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

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Property and equipment, net, consists of the following:

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Property and equipment, net $ 1,754 $ 1,499

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Construction in progress consists of the following:

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Depreciation and amortization expense on property and equipment was $ 410 , $ 380 and $ 379 for the years ended December 31, 2023, 2022 and 2021, respectively.

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.

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 in our consolidated statements of comprehensive income.

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

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Capitalized share-based compensation costs were $ 18 , $ 16 and $ 13 for the years ended December 31, 2023, 2022 and 2021, respectively.

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As of December 31, 2022, we operated a fleet of six satellites.

As of December 31, 2023, we operated a fleet of five satellites.

Each satellite requires an FCC license, and prior to the expiration of each license, we are required to apply for a renewal of the FCC satellite license.

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XM-5 2010 2025 2026

SXM-8 2021 2036 2029

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.

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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.

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.

During 2023, we removed our XM-4 satellite from service and in October 2023 we completed the de-orbiting and decommissioning of the satellite.

Our XM-3 satellite remains available as an in-orbit spare.

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

Our leases have remaining lease terms of less than 1 year to 19 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year.

We elected the practical expedient to account for the lease and non-lease components as a single component.

We elected the practical expedient to

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account for the lease and non-lease components as a single component.

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.

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Total lease cost $ 62 $ 74

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Supplemental cash flow information related to leases was as follows:

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Total finance lease liabilities $ 15 $ 12

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December 31, 2023 December 31, 2022

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Finance leases 2.3 % 2.3 %

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Maturities of lease liabilities were as follows:

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Liberty Media

As of December 31, 2022, Liberty Media beneficially owned, directly and indirectly, approximately 82 % of the outstanding shares of our common stock.

As of December 31, 2023, Liberty Media beneficially owned, directly and indirectly, 83.4 % of the outstanding shares of our common stock.

Liberty Media has three of its executives and one of its directors on our board of directors.

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

On December 11, 2023, Holdings entered into definitive agreements whereby, subject to the terms thereof, Liberty Sirius XM Holdings Inc., a Delaware corporation and a wholly owned subsidiary of Liberty Media (“New Sirius”), would split-off from Liberty Media.

The transactions would be effectuated by means of a redemptive split-off of New Sirius (the “Split-Off”), which will own all of the assets and liabilities attributed to Liberty Media’s Series A Liberty SiriusXM common stock (“LSXMA”), Series B Liberty SiriusXM common stock (“LSXMB”) and Series C Liberty SiriusXM common stock (“LSXMK”, together with the LSXMB and LSXMA stock, the “Liberty SiriusXM Group”).

Following the Split-Off, New Sirius will combine with Holdings through the merger of Radio Merger Sub, LLC, a Delaware limited liability company and a wholly owned subsidiary of New Sirius (“Merger Sub”), with Holdings, with Holdings becoming a wholly owned subsidiary of New Sirius (the “Merger” and, together with the Split-Off, the “Transactions”).

As part of the Merger, New Sirius will be renamed “Sirius XM Holdings Inc.”

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To effect the Transactions, on December 11, 2023, Liberty Media entered into (i) a Reorganization Agreement (the “Reorganization Agreement”) with Holdings and New Sirius, and (ii) an Agreement and Plan of Merger (the “Merger Agreement”) with New Sirius, Holdings and Merger Sub.

In connection with the Merger Agreement and the Reorganization Agreement, on December 11, 2023, certain trusts related to Dr.

Malone (collectively, the “Malone Stockholders”) entered into a voting agreement (the “Voting Agreement”) with Liberty Media, Holdings and New Sirius, pursuant to which, among other things, the Malone Stockholders agreed, subject to the terms of the Voting Agreement, to vote their respective shares of Liberty Media’s LSXMA and LSXMB in favor of the Split-Off.

The Transactions have been unanimously approved by Liberty Media’s Board of Directors and a Special Committee of the Board of Directors of Holdings and by Holdings’ Board of Directors.

The Transactions are expected to be completed early in the third quarter of 2024, subject to approval by a majority of the aggregate voting power of the shares of Liberty SiriusXM common stock present, whether in-person or by proxy, at a stockholder meeting, the receipt by Liberty Media and New Sirius of tax opinions from their respective tax counsel, as well as the receipt of required regulatory approvals and the satisfaction of other customary closing conditions.

A subsidiary of Liberty Media owning a majority of the outstanding shares of Holdings has delivered a written consent approving the Transactions on behalf of a majority of Holdings’ stockholders.

Following the Transactions, Liberty Media and New Sirius will operate independently, and neither is expected to have any ownership interest in the other.

All of the executive officers of Holdings immediately prior to consummation of the Transactions will be the initial executive officers of New Sirius, and New Sirius will continue to operate under the SiriusXM name and brand.

The Reorganization Agreement, the Merger Agreement and the Voting Agreement are filed as exhibits to this Annual Report on Form 10-K.

During the year ended December 31, 2023, we recognized costs associated with the Transactions of $ 16 which were recorded to Impairment, restructuring and acquisition costs in our consolidated statements of comprehensive income.

Sirius XM Canada

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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.

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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.

Our related party long-term assets as of December 31, 2023 and December 31, 2022 included the carrying value of our investment balance in Sirius XM Canada of $ 423 and $ 412 , respectively, and, as of each of December 31, 2023 and December 31, 2022, also included $ 8 , for the long-term value of the outstanding loan to Sirius XM Canada.

Sirius XM Canada paid gross dividends to us of $ 1 , $ 9 and $ 2 during the years ended December 31, 2023, 2022 and 2021, 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 $ 104 , $ 111 and $ 101 during the years ended December 31, 2023, 2022 and 2021, respectively.

SIRIUS XM HOLDINGS INC.

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

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 $ 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 $ 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 has appointed two individuals to serve on SoundCloud's ten -member board of managers.

Sirius XM's share of SoundCloud's net loss was $ 2 , $ 6 and $ 2 for the years ended December 31, 2023, 2022 and 2021, respectively, which was recorded in Other (expense) income in our consolidated statements of comprehensive income.

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We recorded revenue share expense related to this agreement of $ 54 , $ 55 and $ 60 for the years ended December 31, 2023, 2022 and 2021, 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.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued

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

We also had related party liabilities of $ 20 and $ 19 as of December 31, 2023 and December 31, 2022, respectively, related to this agreement.

Our debt as of December 31, 2023 and December 31, 2022 consisted of the following:

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(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.

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, 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.

Sirius XM is also required to pay a variable fee on the average daily unused portion of the Credit Facility which is payable on a quarterly basis.

The variable rate for the unused portion of the Credit Facility was 0.25 % per annum as of December 31, 2022.

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.

During the year ended December 31, 2023, certain investors exercised their right to require a Special Repurchase, as defined in the indenture governing such notes, and Pandora repurchased $ 173 in outstanding

SIRIUS XM HOLDINGS INC.

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

principal amount of the 1.75 % Convertible Senior Notes due 2023 with cash for an aggregate purchase price equal to 100 % of the principal amount of the notes repurchased plus accrued and unpaid interest to the date of repurchase.

In December 2023, Pandora retired the remaining $ 20 of outstanding principal amount of the 1.75 % Convertible Senior Notes due 2023 at maturity with cash for 100 % of the principal amount plus accrued and unpaid interest to the date of maturity.

(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 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.

From and after July 1, 2023, Sirius XM borrowings are based on the Secured Overnight Financing Rate (“SOFR”) plus an applicable rate based on its debt to operating cash flow ratio.

Sirius XM is also required to pay a variable fee on the average daily unused portion of the Credit Facility which is payable on a quarterly basis.

The variable rate for the unused portion of the Credit Facility was 0.25 % per annum as of December 31, 2023.

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.

(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.

Interest on the Incremental Term Loan borrowing is based on SOFR 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 .

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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 .

On July 9, 2020, Sirius XM also redeemed $ 1,000 of its then outstanding 5.375 % Senior Notes due 2025 for an aggregate redemption price, including premium and interest, of $ 1,039 .

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.

Covenants and Restrictions

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

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.

At December 31, 2023 and December 31, 2022, we were in compliance with our debt covenants.

Pandora Convertible Notes

Pandora's 1.75 % Convertible Senior Notes due 2023 (the “Pandora 2023 Notes”) are unsecured, senior obligations of Pandora.

Holdings has guaranteed the payment and performance obligations of Pandora under the Pandora 2023 Notes and the indenture governing the Pandora 2023 Notes.

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, 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.

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We are authorized to issue up to 9,000 shares of common stock.

There were 3,891 and 3,968 shares of common stock issued and 3,891 and 3,967 shares of common stock outstanding on December 31, 2022 and December 31, 2021, respectively.

There were 3,843 and 3,891 shares of common stock issued and outstanding on December 31, 2023 and December 31, 2022, respectively.

As of December 31, 2023, there were 211 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, 2022, our board of directors also declared and paid the following dividends:

During the year ended December 31, 2023, our board of directors declared and paid the following dividend:

Declaration Date Dividend Per Share Record Date Total Amount Payment Date

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July 26, 2023 $ 0.0242 August 8, 2023 $ 93 August 30, 2023

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

October 25, 2023 $ 0.0266 November 7, 2023 $ 102 November 29, 2023

Stock Repurchase Program

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Open Market Repurchases

69 $ 274 103 $ 639 245 $ 1,512

Preferred Stock, par value $ 0.001 per share

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

25 % stock options, which awards will vest in equal installments on the first three anniversaries of the date of grant;

25 % restricted stock units, which awards will vest in equal installments on the first three anniversaries of the date of grant;

25 % PRSUs, which will cliff vest on the third anniversary of the date of grant after a two-year performance period if the free cash flow target established by the Compensation Committee is achieved;

and 25 % PRSUs, which will cliff vest after a three-year performance period based on the performance of our common stock relative to the companies included in the S&P 500 Index.

We refer to this performance measure as a relative “TSR” or “total stockholder return” metric.

PRSUs based on the relative total stockholder return metric will only vest if our performance achieves at least the 25th percentile, with a target payout requiring performance at the 50th percentile.

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.

stock options, restricted stock units, PRSUs, which will cliff vest after a performance period target established by the Compensation Committee is achieved, and PRSUs, which will cliff vest after a performance period based on the performance of our common stock relative to the companies included in the S&P 500 Index, which we refer to as a relative “TSR” or “total stockholder return” metric.

TSRs based on the relative total stockholder return metric will only vest if our performance achieves at least the 25th percentile, with a target payout requiring performance at the 50th percentile.

The settlement of PRSUs earned in respect of the applicable 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.

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

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.

2011 Equity Incentive Plan, the Pandora Media, Inc.

2004 Stock Plan

SIRIUS XM HOLDINGS INC.

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(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.

2004 Stock Plan and the TheSavageBeast.com, Inc.

and the TheSavageBeast.com, Inc.

2000 Stock Incentive Plan.

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Exercise Price

Per Share (1)

Weighted-Average

Per Share Weighted-Average

Contractual Term (Years) Aggregate

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Exercisable as of December 31, 2023 80 $ 5.50 4.29 $ 36

(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, 2023, 2022 and 2021 was $ 1.23 , $ 1.48 and $ 1.77 , respectively.

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During the years ended December 31, 2023, 2022 and 2021 the number of net settled shares issued as a result of stock option exercises was 2 , 8 and 22 , respectively.

We recognized share-based payment expense associated with stock options of $ 35 , $ 42 and $ 45 for the years ended December 31, 2022, 2021 and 2020, respectively.

We recognized share-based payment expense associated with stock options of $ 30 , $ 35 and $ 42 for each of the years ended December 31, 2023, 2022 and 2021, respectively.

SIRIUS XM HOLDINGS INC.

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During the years ended December 31, 2023, 2022 and 2021 the number of net settled shares issued as a result of restricted stock units vesting totaled 19 , 19 and 16 , respectively.

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

During the years ended December 31, 2023, 2022 and 2021 we granted 4 , 6 and 7 PRSUs to certain employees, respectively.

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, 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.

In connection with the cash dividends paid during the years ended December 31, 2023, 2022 and 2021 we granted 1 , 4 and 1 , respectively, restricted stock units, including PRSUs, in accordance with the terms of existing award agreements.

These grants did not result in any additional incremental share-based payment expense being recognized during the years ended December 31, 2023, 2022 and 2021.

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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, for the years ended December 31, 2022, 2021 and 2020 were $( 1 ), $ 4 and $ 8 , respectively.

Contributions to the DCP, net of withdrawals, were $( 3 ), $( 1 ) and $ 4 for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023 and December 31, 2022, the fair value of the investments held in the trust were $ 53 and $ 47 , respectively, which is included in Other long-term assets in our consolidated balance sheets and classified as trading securities.

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

We recorded gains (losses) on investments held in the trust of $ 7 , $( 10 ) and $ 5 for the years ended December 31, 2023, 2022 and 2021, respectively.

(16) Commitments and Contingencies

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Satellite and transmission.

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

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.

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As of December 31, 2023, we had future fixed commitments related to music royalty and podcast agreements of $ 581 , of which $ 265 will be paid in 2024 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.

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

The cumulative minimum guarantee, based on forecasts, 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.

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

The cost of our common stock acquired in our capital return program but not paid for as of December 31, 2022 was also included in this category.

In addition to the minimum contractual cash commitments described above, we have entered into other variable cost arrangements.

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In such instances, there may be considerable uncertainty regarding the ultimate resolution of such matters, including the likelihood or magnitude of a possible eventual loss, if any.

Pre-1972 Sound Recording Litigation.

On October 2, 2014, Flo & Eddie Inc.

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

New York State v.

Sirius XM Radio Inc.

On December 20, 2023, the People of the State of New York, by Letitia James, Attorney General of the State of New York (the “NY AG”), filed a Petition in the Supreme Court of the State of New York, New York County, against us.

The Petition alleges various violations of New York law and the federal Restore Online

SIRIUS XM HOLDINGS INC.

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(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.

In March 2017, the Ninth Circuit requested certification to the California Supreme Court on the substantive legal questions.

The California Supreme Court accepted certification.

In May 2019, the California Supreme Court issued an order dismissing consideration of the certified questions on the basis that, following the enactment of the Orrin G.

Hatch-Bob Goodlatte Music Modernization Act, Pub.

115-264, 132 Stat.

3676 (2018) (the “MMA”), resolution of the questions posed by the Ninth Circuit Court of Appeals was no longer “necessary to .

settle an important question of law.”

The MMA grants a potential federal preemption defense to the claims asserted in the aforementioned lawsuits.

In July 2019, Pandora took steps to avail itself of this preemption defense, including making the required payments under the MMA for certain of its uses of pre-1972 recordings.

Based on the federal preemption contained in the MMA (along with other considerations), Pandora asked the Ninth Circuit to order the dismissal of the Flo & Eddie, Inc.

Pandora Media, Inc.

On October 17, 2019, the Ninth Circuit Court of Appeals issued a memorandum disposition concluding that the question of whether the MMA preempts Flo and Eddie's claims challenging Pandora's performance of pre-1972 recordings “depends on various unanswered factual questions” and remanded the case to the District Court for further proceedings.

In October 2020, the District Court denied Pandora’s renewed motion to dismiss the case under California’s anti-SLAPP statute, finding the case no longer qualified for anti-SLAPP due to intervening changes in the law, and denied Pandora’s renewed attempt to end the case.

Alternatively, the District Court ruled that the preemption defense likely did not apply to Flo & Eddie’s claims, in part because the District Court believed that the MMA did not apply retroactively.

Pandora promptly appealed the District Court’s decision to the Ninth Circuit, and moved to stay appellate briefing pending the appeal of a related case against Sirius XM.

On January 13, 2021, the Ninth Circuit issued an order granting the stay of appellate proceedings pending the resolution of a related case against Sirius XM.

On August 23, 2021, the United States Court of Appeals for the Ninth Circuit issued an Opinion in a related case, Flo & Eddie Inc.

Sirius XM Radio Inc.

The related case also concerned a class action suit brought by Flo & Eddie Inc.

regarding the public performance of pre-1972 recordings under California law.

Relying on California’s copyright statute, Flo & Eddie argued that California law gave it the “exclusive ownership” of its pre-1972 songs, including the right of public performance.

The Ninth Circuit reversed the District Court’s grant of partial summary judgment to Flo & Eddie Inc.

The Ninth Circuit held that the District Court in this related case erred in concluding that “exclusive ownership” under California’s copyright statute included the right of public performance.

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.

Sirius XM Radio Inc.

opinion, on September 3, 2021, the Ninth Circuit lifted the stay of appellate proceedings in Flo & Eddie, Inc.

Pandora Media, LLC .

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.

Shoppers’ Confidence Act (“ROSCA”) arising out of our subscription cancellation practices.

The Petition is the product of a subpoena that the NY AG issued in December 2021 seeking documents relating to our subscription cancellation practices and the related investigation.

In general, the Petition alleges that we require consumers to devote an excessive amount of time to cancel subscriptions and have not implemented cancellation processes that are simple and efficient.

The Petition claims to be brought under certain provisions of New York law that authorize the NY AG to initiate special proceedings seeking injunctive and other equitable relief in cases of persistent business fraud or illegality.

The Petition seeks:

a permanent injunction from us violating provisions of New York law and ROSCA arising out of the alleged fraudulent, deceptive and illegal practices associated with our subscription cancellation procedures;

an accounting of each consumer who cancelled, or sought to cancel, a satellite radio subscription, including the duration of the cancel interaction and the funds collected from such consumers after that interaction;

monetary restitution and damages to aggrieved consumers;

disgorgement of all profits resulting from the alleged illegal, deceptive and fraudulent acts;

civil penalties;

and the NY AG’s costs.

In January 2024, Sirius XM filed to remove this action to the United States District Court for the Southern District of New York.

The NY AG has informed the court that it intends to oppose the removal and seek a remand to the Supreme Court of the State of New York.

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

Music Royalty Fee Actions and Mass Arbitrations .

A number of class actions and mass arbitrations have been commenced against us relating to our pricing, billing and subscription marketing practices.

Although each class action and mass arbitration contains unique allegations;

in general, the actions and arbitrations allege that we falsely advertised our music subscription plans at lower prices than we actually charge, that we allegedly did not disclose our “U.S.

Music Royalty Fee”, and that we have taken other actions to prevent customers from discovering the existence, amount and nature of the U.S.

Music Royalty Fee in violation of various state consumer protection laws.

The plaintiffs and claimants seek to enjoin us from advertising our music subscription plans without specifically disclosing the existence and amount of the U.S.

Music Royalty Fee.

The plaintiffs and claimants also seek disgorgement, restitution and/or damages in the aggregate amount of U.S Music Royalty Fees paid by customers, as well as statutory and punitive damages where available.

To date, the actions and arbitrations filed against us include:

• On April 14, 2023, Ayana Stevenson and David Ambrose, individually, as private attorneys general, and on behalf of all other California persons similarly situated, filed a class action complaint against Sirius XM in the Superior Court of the State of California, County of Contra Costa.

The case was removed to the United States District Court for the Northern District of California which compelled arbitration of all claims on November 9, 2023.

• On May 17, 2023, Robyn Posternock, Muriel Salters and Philip Munning, individually, as private attorneys general, and on behalf of all other New Jersey persons similarly situated, filed a class action complaint against Sirius XM in the United States District Court for the District of New Jersey.

Salters and Mr.

Munning have since withdrawn their claims and a motion to compel arbitration with Ms.

Posternock has been fully briefed.

• On June 5, 2023, Christopher Carovillano and Steven Brandt, individually, as private attorneys general, and on behalf of all other United States persons similarly situated (excluding persons in the states of California, New Jersey and Washington), filed a class action complaint against Sirius XM in the United States District Court for the Southern District of New York.

A motion to dismiss that complaint has been fully briefed.

• Commencing on June 5, 2023, the law firm of Hattis & Lukacs filed a series of mass arbitration claims against Sirius XM before the American Arbitration Association (the “AAA”), they currently purport to act on behalf of approximately 23,000 claimants.

Currently, only claims for approximately 1,425 claimants in California and New Jersey remain pending before the AAA.

The AAA has declined to administer the other claims.

• Other law firms have since threatened mass arbitration claims against Sirius XM before the AAA on behalf of approximately 28,000 additional claimants, many of which have added potential causes of action under the Electronic Funds Transfer Act.

SIRIUS XM HOLDINGS INC.

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

We believe we have substantial defenses to the claims asserted in these actions and arbitrations, and we intend to defend these actions vigorously.

Other Matters .

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(17) Income Taxes

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.

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 benefit 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.

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We provided deferred taxes on temporary differences and on any carryforwards that we could claim on our hypothetical return and assess the need for a valuation allowance on the basis of our projected separate return results.

Any difference between the tax expense (or benefit) allocated to us under the separate return method and payments to be made for (or received from) Liberty Media for tax expense are treated as either dividends or capital contributions.

Any difference between the tax expense (or benefit) allocated to us under the separate return method and payments to be made to (or received from) Liberty Media for tax expense are treated as either dividends or capital contributions.

Income tax expense consisted of the following:

24 unchanged sentences

Impact of nondeductible compensation 0.7 % 0.8 % 0.6 %

Automatic worthless stock deduction — % — % ( 3.5 ) %

Goodwill impairment — % — % 53.7 %

Uncertain tax positions 0.4 % ( 0.8 ) % ( 0.1 ) %

2 unchanged sentences

Effective tax rate 17.1 % 24.4 % 13.9 %

Our effective tax rate of 17.1 % for the year ended December 31, 2023 was primarily driven by federal and state income tax expense, partially offset by the benefits related to research and development and certain other credits, as well as a release in state valuation allowance.

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.

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.

29 unchanged sentences

Net operating loss carryforwards and tax credits decreased as a result of the utilization of net operating losses related to current year taxable income.

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, 2023, our gross federal net operating loss carryforwards were approximately $ 284 which are subject to Section 382 limitations.

As of December 31, 2023 and 2022, we had a valuation allowance related to deferred tax assets of $ 88 and $ 113 , 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.

During the year ended December 31, 2023, our valuation allowance decreased primarily as a result of the impact of an increase in forecasted earnings, resulting in higher projected utilization of net operating losses.

ASC 740, Income Taxes , requires a company to first determine whether it is more likely than not that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information.

5 unchanged sentences

We record interest and penalties related to uncertain tax positions in Income tax expense in our consolidated statements of comprehensive income.

As of December 31, 2023 and 2022, we had unrecognized tax benefits and uncertain tax positions of $ 171 and $ 198 , respectively.

If recognized, $ 171 of unrecognized tax benefits would affect our effective tax rate.

Uncertain tax positions are

SIRIUS XM HOLDINGS INC.

2 unchanged sentences

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

As of December 31, 2022 and 2021, we had unrecognized tax benefits and uncertain tax positions of $ 198 and $ 179 , respectively.

If recognized, $ 198 of unrecognized tax benefits would affect our effective tax rate.

Uncertain tax positions are recognized in Other long-term liabilities which, as of December 31, 2022 and 2021, were $ 81 and $ 35 , respectively, including accrued interest.

recognized in Other long-term liabilities which, as of December 31, 2023 and 2022 were $ 50 and $ 81 , respectively, including accrued interest.

We have state income tax audits pending.

9 unchanged sentences

Decreases in tax positions for prior years ( 2 ) ( 15 )

Decreases in tax positions for current years ( 3 ) —

Decreases related to settlement with taxing authorities ( 58 ) —

Balance, end of year $ 171 $ 198

As part of our ESG strategies, w e have made, and expect to make, certain tax-efficient investments in clean energy technologies.

These include investments in entities that own projects and technologies related to industrial carbon capture and storage.

These investments will produce tax credits under Section 45Q of the Internal Revenue Code and related tax losses.

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.

Beginning in 2023, our net stock repurchases were 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.

9 unchanged sentences

There are planned intersegment advertising campaigns which will be eliminated.

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

We had $ 3 of intersegment advertising revenue during the year ended December 31, 2023 and less than $ 1 of intersegment advertising revenue during each of the years ended December 31, 2022 and 2021.

SIRIUS XM HOLDINGS INC.

86 unchanged sentences

On January 24, 2024, our board of directors declared a quarterly dividend on our common stock in the amount of $ 0.0266 per share of common stock payable on February 23, 2024 to stockholders of record as of the close of business on February 9, 2024.

Credit Facility Modification

On January 26, 2024, Sirius XM entered into an amendment (“Amendment No.

9”) to its existing Credit Facility.

Prior to Amendment No.

9, the Credit Facility consisted of a (i) $ 1,750 senior secured revolving credit facility, from which Sirius XM could borrow and reborrow from time to time and (ii) a $ 500 incremental term loan, borrowings from each of which Sirius XM could use for working capital and other general corporate purchases, including share repurchases, dividends and the financing of acquisitions.

Amendment No.

9 provides for certain changes to the Credit Agreement, including the addition of a $ 1,100 incremental term loan.

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