SIRIUS XM HOLDINGS INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. An evaluation was performed under the supervision and with the participation of our management, including Jennifer C. 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, 2024. 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, 2024 at the reasonable assurance level. There has been no change in our internal control over financial reporting (as that term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the year ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 65 Table of Contents Management's Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act. We have performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our internal control over financial reporting. Our management used the Internal Control-Integrated Framework ( 2013 ) issued by the Committee of Sponsoring Organizations of the Treadway Commission to perform this evaluation. 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, 2024. 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. Audit Report of the Independent Registered Public Accounting Firm The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their audit report appearing on page F-4 of this Annual Report on Form 10-K. ITEM 9B. OTHER INFORMATION Rule 10b5-1 Plan Elections On November 1, 2024 , Kristina Salen , a member of our Board of Directors , entered into a 10b5-1 sales plan (the “Salen 10b5-1 Sales Plan”) intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Salen 10b5-1 Sales Plan will be in effect until the earlier of (1) June 30, 2025 and (2) the date on which an aggregate of 3,229 shares of our common stock have been sold under the Salen 10b5-1 Sales Plan. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS None. 66 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information about our executive officers is contained in the discussion entitled “Information About Our Executive Officers” in Part I of this Annual Report on Form 10-K. The additional information required by this Item 10 is incorporated in this report by reference to the applicable information in our definitive proxy statement for the 2025 annual meeting of stockholders set forth under the captions Stock Ownership , Governance of the Company, Item 1. Election of Directors and Item 2. Ratification of Independent Registered Public Accountants , which we expect to file with the Securities and Exchange Commission prior to April 30, 2025. Code of Ethics We have adopted a code of ethics that applies to all employees, including executive officers, and to directors. The Code of Ethics is available on the Corporate Governance page of our website at www.siriusxm.com. If we ever were to amend or waive any provision of our Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or any person performing similar functions, we intend to satisfy our disclosure obligations with respect to any such waiver or amendment by posting such information on our internet website set forth above rather than filing a Form 8-K. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item 11 is incorporated in this report by reference to the applicable information in our definitive proxy statement for the 2025 annual meeting of stockholders set forth under the captions Item 1. Election of Directors and Executive Compensation , which we expect to file with the Securities and Exchange Commission prior to April 30, 2025. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Certain information required by this Item 12 is set forth under the heading “Equity Compensation Plan Information” in Part II, Item 5, of this Annual Report on Form 10-K. The additional information required by this Item 12 is incorporated in this report by reference to the applicable information in our definitive proxy statement for the 2025 annual meeting of stockholders set forth under the caption Stock Ownership , which we expect to file with the Securities and Exchange Commission prior to April 30, 2025. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The information required by this Item 13 is incorporated in this report by reference to the applicable information in our definitive proxy statement for the 2025 annual meeting of stockholders set forth under the captions Governance of the Company and Item 1. Election of Directors , which we expect to file with the Securities and Exchange Commission prior to April 30, 2025. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Our independent registered public accounting firm is KPMG LLP , New York, NY , Auditor ID: 185 . The information required by this Item 14 is incorporated in this report by reference to the applicable information in our definitive proxy statement for the 2025 annual meeting of stockholders set forth under the caption Item 2. Ratification of Independent Registered Public Accountants - Principal Accountant Fees and Services , which we expect to file with the Securities and Exchange Commission prior to April 30, 2025. 67 Table of Contents PART IV ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES Documents filed as part of this report: (1) Financial Statements. See Index to Consolidated Financial Statements appearing on page F-1. (2) Financial Statement Schedules. See Index to Consolidated Financial Statements appearing on page F-1. (3) Exhibits. See Exhibit Index, which is incorporated herein by reference. ITEM 16. FORM 10-K SUMMARY None. 68 Table of Contents EXHIBIT INDEX Exhibit Description 2.1† 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. 001-34295)). 2.2† First Amendment, dated as of June 16, 2024, to the 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 June 17, 2024 (File No. 001-34295)). 2.3† 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. 001-34295)). 2.4† First Amendment, dated as of June 16, 2024, to the 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 June 17, 2024 (File No. 001-34295)). 3.1 Amended and Restated Certificate of Incorporation of Liberty Sirius XM Holdings Inc. (incorporated by reference to Exhibit 3.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 10, 2024 (File No. 001-34295)). 3.2 Amended and Restated Bylaws of Liberty Sirius XM Holdings Inc. (incorporated by reference to Exhibit 3.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 10, 2024 (File No. 001-34295)). 4.1 Indenture, dated as of July 5, 2017, among Sirius XM Radio Inc., the guarantors named therein and U.S. Bank National Association, as trustee, relating to the 5.000% Senior Notes due 2027 (incorporated by reference to Exhibit 4.2 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on July 5, 2017 (File No. 001-34295)). 4.2 Indenture, dated as of June 7, 2019, among Sirius XM Radio Inc., the guarantors named therein and U.S. 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. 001-34295)). 4.3 Indenture, dated as of June 11, 2020, relating to the 4.125% Senior Notes due 2030, among Sirius XM Radio Inc., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated June 11, 2020 (File No. 001-34295)). 4.4 Indenture, dated as of June 21, 2021, relating to the 4.000% Senior Notes due 2028, among Sirius XM Radio Inc., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated June 21, 2021 (File No. 001-34295)). 4.5 Indenture, dated as of August 16, 2021, relating to the 3.125% Senior Notes due 2026, among Sirius XM Radio Inc., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated August 16, 2021 (File No. 001-34295)). 4.6 Indenture, dated as of August 16, 2021, relating to the 3.875% Senior Notes due 2031, among Sirius XM Radio Inc., the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K dated August 16, 2021 (File No. 001-34295)). 4.7 Indenture, dated as of March 10, 2023, between Liberty Media Corporation and U.S. Bank Trust Company, National Association, as trustee, relating to Liberty Media Corporation’s 3.75% Convertible Senior Notes due 2028 (incorporated by reference to Exhibit 4.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 10, 2024 (File No. 001-34295)). 4.8 First Supplemental Indenture, dated as of September 9, 2024, among Liberty Media Corporation, Liberty Sirius XM Holdings Inc. and U.S. Bank Trust Company, National Association, as trustee, relating to Liberty Media Corporation’s 3.75% Convertible Senior Notes due 2028 (incorporated by reference to Exhibit 4.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 10, 2024 (File No. 001-34295)). 69 Table of Contents Exhibit Description 4.9 Indenture, dated as of November 26, 2019, between Liberty Media Corporation and U.S. Bank, National Association, as trustee, relating to Liberty Media Corporation’s 2.75% Exchangeable Senior Debentures due 2049 (incorporated by reference to Exhibit 4.3 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 10, 2024 (File No. 001-34295)). 4.10 First Supplemental Indenture, dated as of August 30, 2024, between Liberty Media Corporation and U.S. Bank Trust Company, National Association, as trustee, relating to Liberty Media Corporation’s 2.75% Exchangeable Senior Debentures due 2049 (incorporated by reference to Exhibit 4.4 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 10, 2024 (File No. 001-34295)). 4.11 Second Supplemental Indenture, dated as of September 9, 2024, among Liberty Media Corporation, Liberty Sirius XM Holdings Inc. and U.S. Bank Trust Company, National Association, as trustee, relating to Liberty Media Corporation’s 2.75% Exchangeable Senior Debentures due 2049 (incorporated by reference to Exhibit 4.5 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 10, 2024 (File No. 001-34295)). 4.12 Investment Agreement, dated as of February 17, 2009, between Sirius XM Radio Inc. and Liberty Radio LLC (incorporated by reference to Exhibit 4.55 to Sirius XM Radio Inc.’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 001-34295)). 4.13 Assignment and Assumption of Investment Agreement among Sirius XM Radio Inc., Sirius XM Holdings Inc. and Liberty Radio LLC, dated as of November 15, 2013 (incorporated by reference to Exhibit 4.15 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 001-34295)). 4.14 Description of Registrant's Securities (incorporated by reference to the Registrant’s Form 8-A filed on September 9, 2024 (File No. 000-56686)). 10.1 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 party thereto (incorporated by reference to Exhibit 10.1 to Sirius XM Radio Inc.’s Current Report on Form 8-K filed on December 10, 2012 (File No. 001-34295)). 10.2 Amendment No. 1, dated as of April 22, 2014, to the Credit Agreement, dated as of December 5, 2012, among Sirius XM Radio Inc., the Lenders party thereto and JPMorgan Chase Bank, N.A. as administrative agent for the Lenders, as collateral agent for the Secured Parties and as an Issuing Bank (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on April 22, 2014 (File No. 001-34295)). 10.3 Amendment No. 2, dated as of June 16, 2015, 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 June 19, 2015 (File No. 001-34295)). 10.4 Amendment No. 3, dated as of June 29, 2018, 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 July 3, 2018 (File No. 001-34295)). 10.5 Amendment No. 5, dated as of August 31, 2021, to the Credit Agreement, dated as of December 5, 2012, among Sirius XM Radio Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the other agents and lenders parties thereto (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 1, 2021 (File No. 001-34295)). 10.6 Amendment No. 6, dated as of April 11, 2022, to the Credit Agreement, dated as of December 5, 2012, among Sirius XM Radio Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the other agents and lenders parties thereto (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on April 11. 2022 (File No. 001-34295)). 10.7 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. 001-34295)). 70 Table of Contents Exhibit Description 10.8 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. 001-34295)). 10.9 Amendment No. 9, dated as of January 26, 2024, 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 29. 2024 (File No. 001-34295)). **10.10 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. 1 to Technology Licensing Agreement (incorporated by reference to Exhibit 10.4 to Amendment No. 1 to XM Satellite Radio Holdings Inc.’s Registration Statement on Form S-1 (File No. 333-83619)). *10.11 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. 001-34295)). *10.12 Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (incorporated by reference to Appendix A to Sirius XM Holdings Inc.’s definitive Proxy Statement on Schedule 14A filed on April 6, 2015 (File No. 001-34295)). *10.13 Form of Director Non-Qualified Stock Option Agreement pursuant to the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.22 to Sirius XM Holdings Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-34295)). *10.14 Form of Non-Qualified Stock Option Agreement pursuant to the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.23 to Sirius XM Holdings Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015 (File No. 001-34295)). *10.15 Form of SVP Restricted Stock Unit Agreement pursuant to the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.24 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016 (001-34295)). *10.16 Form of Performance-Based Restricted Stock Unit Agreement pursuant to the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.25 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016 (001-34295)). *10.17 Form of SVP Non-Qualified Stock Option Agreement pursuant to the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.26 to Sirius XM Holdings Inc.'s Annual Report on Form 10-K for the year ended December 31, 2016 (001-34295)). *10.18 Employment Agreement, dated as of November 21, 2022 between Sirius XM Radio Inc. and Patrick L. 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. 001-34295)). *10.19 Transition Letter to Employment Agreement dated January 2, 2025 between Sirius XM Radio LLC and Patrick L. Donnelly (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on January 3, 2025 (File No. 001-34295)). *10.20 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. 001-34295)). *10.21 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 10.2 to Sirius XM Holdings Inc.'s Current Report on Form 8-K filed on December 15, 2023 (File No. 001-34295)). *10.22 Employment Agreement, dated as of April 17, 2024, between Sirius XM Radio Inc. and Scott A. Greenstein (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on April 18, 2024 (File No. 001-34295)). 71 Table of Contents Exhibit Description *10.23 Transition Letter to Employment Agreement, dated as of June 28, 2024, between Sirius XM Radio Inc. and Joseph A. Verbrugge (incorporated by reference to Exhibit 10.3 to Sirius XM Holdings Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (File No. 001-34295)). *10.24 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. 001-34295)). *10.25 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. 001-34295)). *10.26 Employment Agreement, dated as of December 5, 2024, between Sirius XM Radio LLC and Wayne D. Thorsen (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on December 10, 2024 (File No. 001-34295)). *10.27 Assignment and Assumption Agreement, dated as of November 15, 2013, among Sirius XM Holdings Inc. and Sirius XM Radio Inc. (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on November 15, 2013 (File No. 001-34295)). *10.28 Omnibus Amendment, dated November 15, 2013, to the XM Satellite Radio Holdings Inc. Talent Option Plan, the XM Satellite Radio Holdings Inc. 1998 Shares Award Plan, as amended, the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan, the XM Satellite Radio Holdings Inc. 2007 Stock Incentive Plan and the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan and their Related Stock Option Agreements, Restricted Stock Agreements and Restricted Stock Unit Agreements (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on November 15, 2013 (File No. 001-34295)). *10.29 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on September 10, 2024 (File No. 001-34295)). *10.30 Sirius XM Holdings Inc. Deferred Compensation Plan (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on June 30, 2015 (File No. 001-34295)). 10.31 Tax Sharing Agreement, dated as of September 9, 2024, between Liberty Media Corporation and Liberty Sirius XM Holdings Inc. (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K12B filed on September 10, 2024 (File No. 001-34295)). 10.32 Section 253 Agreement, dated as of November 1, 2021, between Sirius XM Holdings Inc. and Liberty Media Corporation (incorporated by reference to Exhibit 10.2 to Sirius XM Holdings Inc.’s Current Report on Form 8-K filed on November 4, 2021 (File No. 001-34295)). *10.33 Form of Sirius XM Holdings Inc. 2024 Long-Term Stock Incentive Plan (incorporated by reference to Exhibit 10.1 to the Form S-4 filed on July 19, 2024 (File No. 333- 276758)). *10.34 Form of Liberty Sirius XM Holdings Inc. Transitional Stock Adjustment Plan (incorporated by reference to Exhibit 10.2 to the Form S-4 filed on July 19, 2024 (File No. 333-276758)). 19.1 Securities Trading Policy (filed herewith). 21.1 List of Subsidiaries (filed herewith). 23.1 Consent of KPMG LLP (filed herewith). 31.1 Certificate of Jennifer C. Witz, Chief Executive Officer and Director, 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. Witz, Chief Executive Officer and Director, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). 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). 72 Table of Contents Exhibit Description 97.1 Incentive Compensation Clawback Policy (incorporated by reference to Exhibit 97.1 to Sirius XM Holdings Inc.’s Annual Report on Form 10-K filed on February 1, 2024 (File No. 001-34295)). 101.1 The following financial information from our Annual Report on Form 10-K for the year ended December 31, 2024 formatted in Inline eXtensible Business Reporting Language (Inline XBRL): (i) Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022; (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022; (iii) Consolidated Balance Sheets as of December 31, 2024 and 2023; (iv) Consolidated Statements of Equity for the years ended December 31, 2024, 2023 and 2022; (v) Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022; and (vi) Consolidated Notes to Consolidated Financial Statements. 104.1 Cover Page Interactive Data File (Embedded within the Inline XBRL document and included in Exhibit 101.1) _________________ * This document has been identified as a management contract or compensatory plan or arrangement. ** 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. The registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules upon request by the Securities and Exchange Commission (“SEC”); provided, however, that the registrant 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. 73 Table of Contents SIGNATURES Pursuant to the requirements 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. SIRIUS XM HOLDINGS INC. Dated: January 30, 2025 By: /s/ THOMAS D. BARRY Thomas D. Barry Executive Vice President and Chief Financial Officer (Principal Financial Officer and Authorized Officer) 74 Table of Contents Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ G REGORY B. M AFFEI Chairman of the Board of Directors and Director January 30, 2025 (Gregory B. Maffei) /s/ J AMES E. M EYER Vice Chairman of the Board of Directors and Director January 30, 2025 (James E. Meyer) /s/ J ENNIFER C. W ITZ Chief Executive Officer and Director (Principal Executive Officer) January 30, 2025 (Jennifer C. Witz) /s/ T HOMAS D. B ARRY Executive Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) January 30, 2025 (Thomas D. Barry) /s/ C ARY K REFETZ Senior Vice President and Controller January 30, 2025 (Cary Krefetz) /s/ E DDY W. H ARTENSTEIN Director January 30, 2025 (Eddy W. Hartenstein) /s/ E VAN D. M ALONE Director January 30, 2025 (Evan D. Malone) /s/ J ONELLE P ROCOPE Director January 30, 2025 (Jonelle Procope) /s/ M ICHAEL R APINO Director January 30, 2025 (Michael Rapino) /s/ K RISTINA M. S ALEN Director January 30, 2025 (Kristina M. Salen) /s/ D AVID M. Z ASLAV Director January 30, 2025 (David M. Zaslav) 75 Table of Contents SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firm F- 2 Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022 F- 5 C onsolidated Statem ents of Comp rehensive Income fo r the years ended December 31, 2024 , 2023 and 2022 F- 6 Consolidated Balance Sheets as of December 31, 2024 and 2023 F- 7 Consolidated Statements of Equity for the years ended December 31, 2024, 2023 and 2022 F- 8 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022 F- 10 Notes to Consolidated Financial Statements F- 12 F-1 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Sirius XM Holdings Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Sirius XM Holdings Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three‑year period ended December 31, 2024, and the related notes and financial statement schedule II (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three‑year period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated January 30, 2025 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. 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: (1) relate 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. 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 operations, the Company generated $8,699 million of revenues, of which $6,076 million was Sirius XM subscriber revenue and $1,606 million was Pandora advertising revenue, for the year ended December 31, 2024. 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 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. The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over subscriber and advertising revenues. 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 a sample of F-2 Table of Contents 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. Valuation of goodwill in the Sirius XM reporting unit As discussed in Note 8 to the consolidated financial statements, the Company’s goodwill balance for the Sirius XM reporting unit was $11,431 million as of December 31, 2024. The Company performs goodwill 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 more likely than not exceeds its fair value. The Company identified events that indicated that it was more likely than not that the carrying value of the Sirius XM reporting unit exceeded its fair value. The Company estimated the fair value of the Sirius XM reporting unit using a combination of an income approach and a market approach. As a result, the Company recognized an impairment charge of $2,819 million for the Sirius XM reporting unit goodwill. We identified the evaluation of the goodwill impairment assessment of the Sirius XM reporting unit as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate certain assumptions used by the Company to estimate the fair value of the reporting unit. Specifically, the revenue growth rates, long-term growth rate, and the discount rate 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 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 rate assumptions on the fair value of the Sirius XM reporting unit. 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, projected revenue growth rates for comparable companies, and 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 the long-term growth rate estimates that were independently observed using publicly available market data for the Company’s industry as well as U.S. economic growth rates. • evaluating the Company’s discount rate by comparing it to discount rates that were independently developed using publicly available market data for comparable companies. /s/ KPMG LLP We have served as the Company’s auditor since 2008. New York, New York January 30, 2025 F-3 Table of Contents Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Sirius XM Holdings Inc.: Opinion on Internal Control Over Financial Reporting We have audited Sirius XM Holdings Inc. and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes and financial statement schedule II (collectively, the consolidated financial statements), and our report dated January 30, 2025 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting . Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP New York, New York January 30, 2025 F-4 Table of Contents SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS For the Years Ended December 31, (in millions, except per share data) 2024 2023 2022 Revenue: Subscriber revenue $ 6,616 $ 6,866 $ 6,892 Advertising revenue 1,773 1,758 1,772 Equipment revenue 182 193 189 Other revenue 128 136 150 Total revenue 8,699 8,953 9,003 Operating expenses: Cost of services: Revenue share and royalties 2,835 2,895 2,802 Programming and content 611 618 604 Customer service and billing 448 476 497 Transmission 225 206 214 Cost of equipment 10 14 13 Subscriber acquisition costs 369 359 352 Sales and marketing 894 931 1,075 Product and technology 296 322 285 General and administrative 497 608 563 Depreciation and amortization 578 624 611 Impairment, restructuring and other costs 3,453 92 68 Total operating expenses 10,216 7,145 7,084 (Loss) income from operations ( 1,517 ) 1,808 1,919 Other income (expense), net Interest expense ( 496 ) ( 534 ) ( 503 ) Gain on extinguishment of debt 12 — — Other income (expense), net 136 ( 64 ) 70 Total other expense ( 348 ) ( 598 ) ( 433 ) (Loss) income before income taxes ( 1,865 ) 1,210 1,486 Income tax expense ( 210 ) ( 222 ) ( 368 ) Net (loss) income ( 2,075 ) 988 1,118 Less net (loss) income attributable to noncontrolling interests ( 410 ) 202 210 Net (loss) income attributable to Sirius XM Holdings Inc. $ ( 1,665 ) $ 786 $ 908 Net (loss) income per common share: Basic $ ( 6.14 ) $ 2.91 $ 3.22 Diluted $ ( 6.14 ) $ 2.77 $ 2.96 Weighted average common shares outstanding: Basic 338 339 347 Diluted 338 362 368 See accompanying notes to the consolidated financial statements. F-5 Table of Contents SIRIUS XM HOLDINGS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended December 31, (in millions) 2024 2023 2022 Net (loss) income $ ( 2,075 ) $ 988 $ 1,118 Credit risk on fair value debt instrument losses, net of tax ( 27 ) 1 28 Recognition of previously unrealized gains on debt, net of tax ( 12 ) ( 36 ) ( 6 ) Foreign currency translation adjustment, net of tax ( 14 ) 10 ( 27 ) Total comprehensive (loss) income $ ( 2,128 ) $ 963 $ 1,113 Less: comprehensive (loss) income attributable to noncontrolling interests ( 410 ) 202 205 Comprehensive (loss) income attributable to Sirius XM Holdings Inc. $ ( 1,718 ) $ 761 $ 908 See accompanying notes to the consolidated financial statements. F-6 Table of Contents SIRIUS XM HOLDINGS INC. CONSOLIDATED BALANCE SHEETS (in millions, except per share data) December 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 162 $ 306 Receivables, net 676 709 Related party current assets 21 36 Prepaid expenses and other current assets 290 310 Total current assets 1,149 1,361 Property and equipment, net 2,109 1,791 FCC licenses 8,610 8,600 Other intangible assets, net 1,579 1,710 Goodwill 12,390 15,209 Equity method investments 1,043 715 Other long-term assets 641 670 Total assets $ 27,521 $ 30,056 LIABILITIES AND EQUITY Current liabilities: Accounts payable and accrued expenses $ 1,284 $ 1,303 Accrued interest 172 174 Current portion of deferred revenue 1,050 1,195 Current maturities of debt, including $ — and $ 574 measured at fair value, respectively (Note 13) 61 1,079 Other current liabilities 48 192 Related party current liabilities 116 8 Total current liabilities 2,731 3,951 Long-term deferred revenue 82 88 Long-term debt, including $ 594 and $ 688 measured at fair value, respectively (Note 13) 10,314 10,073 Deferred tax liabilities 2,220 2,414 Other long-term liabilities 1,100 428 Total liabilities 16,447 16,954 Commitments and contingencies (Note 16) Equity: Common stock, par value $ 0.001 per share; 900 shares authorized; 339 and zero shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively — — Former Parent's investment — ( 5,284 ) Accumulated other comprehensive (loss) income, net of tax ( 46 ) 7 Additional paid-in capital — — Treasury stock, at cost; 26 thousand and zero shares of common stock at December 31, 2024 and December 31, 2023, respectively ( 1 ) — Retained earnings 11,121 15,353 Total stockholders' equity/Former Parent's investment 11,074 10,076 Non-controlling interests — 3,026 Total equity 11,074 13,102 Total liabilities and equity $ 27,521 $ 30,056 See accompanying notes to the consolidated financial statements. F-7 Table of Contents SIRIUS XM HOLDINGS INC. CONSOLIDATED STATEMENT OF EQUITY Common Stock Former Parent's Investment Retained earnings Accumulated Other Comprehensive Income (Loss) Additional Paid-in Capital Treasury Stock Noncontrolling interest Total Stockholders’ Equity (Deficit) (in millions) Shares Amount Shares Amount Balance at January 1, 2022 — $ — $ ( 4,104 ) $ 13,639 $ 34 $ — — $ — $ 3,565 $ 13,134 Net income (loss) — — — 908 — — — — 210 1,118 Other comprehensive income (loss) — — — — — — — — ( 5 ) ( 5 ) Share-based compensation — — 187 — — — — — 39 226 Exercise of options and RSU vestings in period — — ( 70 ) — — — — — 77 7 Withholding taxes on net share settlements of share-based compensation — — ( 118 ) — — — — — — ( 118 ) Transactions with Former Parent, net (Note 14) — — ( 1,043 ) — — — — — — ( 1,043 ) Shares repurchased — — ( 173 ) — — — — — ( 467 ) ( 640 ) Dividends paid — — — — — — — — ( 249 ) ( 249 ) Other, net — — ( 47 ) 20 — — — — ( 32 ) ( 59 ) Balance at December 31, 2022 — $ — $ ( 5,368 ) $ 14,567 $ 34 $ — — $ — $ 3,138 $ 12,371 Net income (loss) — — — 786 — — — — 202 988 Other comprehensive income (loss) — — — — ( 27 ) — — — 2 ( 25 ) Share-based compensation — — 187 — — — — — 34 221 Exercise of options and RSU vestings in period — — ( 60 ) — — — — — 65 5 Withholding taxes on net share settlements of share-based compensation — — ( 64 ) — — — — — — ( 64 ) Transactions with Former Parent, net (Note 14) — — ( 3 ) — — — — — — ( 3 ) Shares repurchased — — 45 — — — — — ( 319 ) ( 274 ) Dividends paid — — — — — — — — ( 65 ) ( 65 ) Other, net — — ( 21 ) — — — — — ( 31 ) ( 52 ) Balance at December 31, 2023 — $ — $ ( 5,284 ) $ 15,353 $ 7 $ — — $ — $ 3,026 $ 13,102 See accompanying notes to the consolidated financial statements. F-8 Table of Contents SIRIUS XM HOLDINGS INC. CONSOLIDATED STATEMENT OF EQUITY Common Stock Former Parent's Investment Retained earnings Accumulated Other Comprehensive Income (Loss) Additional Paid-in Capital Treasury Stock Noncontrolling interest Total Stockholders’ Equity (Deficit) (in millions) Shares Amount Shares Amount Balance at December 31, 2023 — $ — $ ( 5,284 ) $ 15,353 $ 7 $ — — $ — $ 3,026 $ 13,102 Net income (loss) — — — ( 1,665 ) — — — — ( 410 ) ( 2,075 ) Change in accounting method — — — ( 1 ) — — — — — ( 1 ) Other comprehensive income (loss) — — — — ( 53 ) — — — ( 3 ) ( 56 ) Share-based compensation — — 131 15 — 53 — — 24 223 Exercise of options and RSU vestings in period — — ( 55 ) — — 55 — Withholding taxes on net share settlements of share-based compensation — — ( 39 ) — — ( 6 ) — — — ( 45 ) Dividends paid — — — ( 45 ) — ( 47 ) — — ( 51 ) ( 143 ) Tax sharing adjustment with Former Parent — — 82 — — — — — — 82 Other, net — — ( 3 ) ( 3 ) — — — — — ( 6 ) Change in capitalization in connection with the Split-Off 339 — 5,168 ( 2,527 ) — — — — ( 2,641 ) — Shares Repurchased — — — — — — — ( 7 ) — ( 7 ) Shares Retired — — — ( 6 ) — — — 6 — — Balance at December 31, 2024 339 $ — $ — $ 11,121 $ ( 46 ) $ — — $ ( 1 ) $ — $ 11,074 See accompanying notes to the consolidated financial statements. F-9 Table of Contents SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, (in millions) 2024 2023 2022 Cash flows from operating activities: Net (loss) income $ ( 2,075 ) $ 988 $ 1,118 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 578 624 611 Non-cash impairment and restructuring costs 3,355 26 65 Non-cash interest expense, net of amortization of premium 24 14 19 Unrealized gains on intergroup interests, net — ( 68 ) 19 Realized and unrealized (gains) losses on financial instruments, net ( 115 ) 126 ( 83 ) Gain on extinguishment of debt ( 12 ) — — Share of losses of equity method investments, net 116 19 5 Share-based payment expense 200 203 209 Deferred income tax (benefit) expense ( 161 ) ( 40 ) 240 Amortization of right-of-use assets 44 45 49 Other charges, net 46 61 69 Changes in operating assets and liabilities: Receivables and other assets ( 128 ) ( 148 ) ( 28 ) Deferred revenue ( 150 ) ( 119 ) ( 149 ) Payables and other liabilities 19 98 ( 163 ) Net cash provided by operating activities 1,741 1,829 1,981 Cash flows from investing activities: Additions to property and equipment ( 728 ) ( 650 ) ( 426 ) Cash proceeds from disposition of investments — — 66 Acquisition of business, net of cash acquired — — ( 136 ) Other investing activities, net ( 242 ) ( 46 ) 3 Net cash used in investing activities ( 970 ) ( 696 ) ( 493 ) Cash flows from financing activities: Taxes paid from net share settlements for stock-based compensation ( 44 ) ( 64 ) ( 147 ) Revolving credit facility borrowings 2,105 1,670 2,300 Revolving credit facility repayments ( 2,105 ) ( 1,750 ) ( 2,220 ) Proceeds from long-term borrowings, net of costs 1,100 1,011 600 Repayments of long-term borrowings ( 1,809 ) ( 2,032 ) ( 419 ) Settlement of intergroup interests — 273 78 Common stock repurchased and retired ( 6 ) ( 274 ) ( 647 ) Dividends paid ( 143 ) ( 65 ) ( 249 ) Transactions with Parent, net (Note 14) — — ( 1,043 ) Other financing activities, net ( 14 ) 43 23 Net cash used in financing activities ( 916 ) ( 1,188 ) ( 1,724 ) Net decrease in cash, cash equivalents and restricted cash ( 145 ) ( 55 ) ( 236 ) Cash, cash equivalents and restricted cash at beginning of period (1) 315 370 606 Cash, cash equivalents and restricted cash at end of period (1) $ 170 $ 315 $ 370 See accompanying notes to the consolidated financial statements. F-10 Table of Contents SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued For the Years Ended December 31, (in millions) 2024 2023 2022 Supplemental Disclosure of Cash and Non-Cash Flow Information Cash paid during the period for: Interest, net of amounts capitalized $ 473 $ 507 $ 487 Income taxes paid $ 218 $ 165 $ 136 Non-cash investing and financing activities: Finance lease obligations incurred to acquire assets $ — $ 8 $ 14 Settlement of debt obligations incurred to acquire assets $ — $ 61 $ — Tax equity investments $ 722 $ — $ — (1) The following table reconciles cash, cash equivalents and restricted cash per the statement of cash flows to the balance sheet. The restricted cash balances are primarily due to letters of credit which have been issued to the landlords of leased office space. The terms of the letters of credit primarily extend beyond one year. As of December 31, (in millions) 2024 2023 2022 Cash and cash equivalents $ 162 $ 306 $ 362 Restricted cash included in Other long-term assets 8 9 8 Total cash, cash equivalents and restricted cash at end of period $ 170 $ 315 $ 370 See accompanying notes to the consolidated financial statements. F-11 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars and shares in millions, except per share amounts or otherwise stated) (1) Business & Basis of Presentation Liberty Media Transactions Sirius XM Holdings Inc., the reporting company under this Annual Report on Form 10-K, is the product of a series of transactions that closed on Monday, September 9, 2024. On September 9, 2024 at 4:05 p.m., New York City time, Liberty Media Corporation (“Liberty Media” or “Former Parent”) completed its previously announced split-off (the “Split-Off”) of its former wholly owned subsidiary, Liberty Sirius XM Holdings Inc. (“SplitCo”). The Split-Off was accomplished by Liberty Media redeeming each outstanding share of Liberty Media’s Series A, Series B and Series C Liberty SiriusXM common stock, par value $ 0.01 per share, in exchange for 0.8375 of a share of SplitCo common stock, par value $ 0.001 per share (the “Redemption”), with cash being paid to entitled record holders of Liberty SiriusXM common stock in lieu of any fractional shares of common stock of SplitCo. Following the Split-Off, on September 9, 2024 at 6:00 p.m., New York City time (the “Merger Effective Time”), a wholly owned subsidiary of SplitCo merged with and into Sirius XM Holdings Inc. (“Old Sirius”), with Old Sirius surviving the merger as a wholly owned subsidiary of SplitCo (the “Merger” and together with the Split-Off, the “Transactions”). Upon consummation of the Merger, each share of common stock of Old Sirius, par value $ 0.001 per share, issued and outstanding immediately prior to the Merger Effective Time (other than shares owned by SplitCo and its subsidiaries) was converted into one-tenth ( 0.1 ) of a share of SplitCo common stock, with cash being paid to entitled record holders of Old Sirius common stock in lieu of any fractional shares of common stock of SplitCo. At the Merger Effective Time, Old Sirius was renamed “Sirius XM Inc.” and SplitCo was renamed “Sirius XM Holdings Inc.” In connection with the Transactions and by operation of Rule 12g-3(a) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), SplitCo became the successor issuer to Old Sirius and succeeded to the attributes of Old Sirius as the registrant, including Old Sirius’s Commission File Number and CIK number. The Transactions are intended to generally be tax-free to holders of Liberty SiriusXM common stock and Sirius XM Holdings common stock (except with respect to any cash received by such holders) and the completion of the Transactions was subject to various conditions, including the receipt of opinions of tax counsel. General The accompanying audited consolidated financial statements represent a combination of the historical financial information of Old Sirius and the assets and liabilities of SplitCo until the date of the Merger Effective Time. Although SplitCo was reported as a combined company until the Merger Effective Time, all periods reported herein are referred to as consolidated. All significant intercompany accounts and transactions have been eliminated in the audited consolidated financial statements. These consolidated financial statements refer to the combination of Old Sirius and the aforementioned assets and liabilities as “Sirius XM Holdings,” “the Company,” “us,” “we” and “our” in these notes to the consolidated financial statements. “Sirius XM” refers to Sirius XM Holdings’ wholly owned subsidiaries, Sirius XM Inc., Sirius XM Radio LLC and its subsidiaries other than Pandora. “Pandora” refers to Sirius XM's wholly owned subsidiary Pandora Media, LLC and its subsidiaries. The Split-Off is being accounted for at historical cost due to the pro rata nature of the distribution to holders of SplitCo common stock. The accompanying consolidated financial statements have been derived from audited financial statements and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). All significant intercompany transactions have been eliminated in consolidation. Public companies are required to disclose certain information about their reportable operating segments. Operating segments are defined as significant components of an enterprise for which separate financial information is available and is evaluated on a regular basis by the chief operating decision maker in deciding how to allocate resources to an individual segment and in assessing performance of the segment. We have determined that we have two reportable segments as our chief operating decision maker, who is the Chief Executive Officer of Sirius XM Holdings, assesses performance and allocates resources based on the financial results of these segments. Refer to Note 18 for information related to our segments. F-12 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) We have evaluated events subsequent to the balance sheet date and prior to the filing of this Annual Report on Form 10-K and have determined that no events have occurred that would require adjustment to our audited consolidated financial statements. For a discussion of subsequent events that do not require adjustment to our consolidated financial statements refer to Note 19. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Estimates, by their nature, are based on judgment and available information. Actual results could differ materially from those estimates. Significant estimates inherent in the preparation of the accompanying audited consolidated financial statements include asset impairment, fair value measurement of non-financial instruments, depreciable lives of our satellites, share-based payment expense and income taxes. Business Sirius XM Holdings operates two complementary audio entertainment businesses - one of which it refers to as “Sirius XM” and the second of which it refers to as “Pandora and Off-platform”. Sirius XM The Sirius XM business features music, sports, entertainment, comedy, talk, and news 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 Sirius XM’s 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 Sirius XM’s website. The Sirius XM service is also available through an in-car user interface, called “360L”, that combines Sirius XM’s satellite and streaming services into a single, cohesive in-vehicle entertainment experience. The primary source of revenue from the Sirius XM business is subscription fees, with most of its customers subscribing to monthly or annual plans. SiriusXM also derives revenue from advertising on select non-music channels, which is sold under the SiriusXM Media brand, direct sales of satellite radios and accessories, and other ancillary services. As of December 31, 2024, the SiriusXM business had approximately 33.2 million subscribers. In addition to the audio entertainment businesses, Sirius XM Holdings provides connected vehicle services to several automakers. These services are designed to enhance the safety, security and driving experience of consumers. Sirius XM Holdings also offers 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. Sirius XM holds a 70 % equity interest and 33 % voting interest in Sirius XM Canada Holdings Inc. (“Sirius XM Canada”). Sirius XM Canada's subscribers are not included in SiriusXM’s subscriber count or subscriber-based operating metrics. Pandora and Off-platform The 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, 2024, Pandora had approximately 5.8 million subscribers. The majority of revenue from Pandora is generated from advertising on Pandora’s ad-supported radio service which is sold under the SiriusXM Media brand. Pandora also derives subscription revenue from its Pandora Plus and Pandora Premium subscribers. SiriusXM also sells advertising on other audio platforms and in widely distributed podcasts, which it considers to be off-platform services. SiriusXM has 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. It also has arrangements to serve as the ad sales representative for certain podcasts. In addition, through AdsWizz Inc., SiriusXM provides a comprehensive digital audio and programmatic advertising technology platform, which connects audio publishers and advertisers with a variety of ad insertion, campaign trafficking, yield optimization, programmatic buying, marketplace and podcast monetization solutions. F-13 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Effects of the Transactions Prior to the closing of the Transactions, a portion of Liberty Media’s general and administrative expenses, including certain legal, tax, accounting, treasury and investor relations support of $ 15 and $ 32 for the years ended December 31, 2024 and 2023, respectively, were allocated to SplitCo and are included in General and administrative in the audited consolidated statements of operations. In addition, during the years ended December 31, 2024 and 2023, we incurred costs related to the Transactions of $ 71 and $ 16 , respectively, which were recorded to Impairment, restructuring and other costs in our audited consolidated statements of operations. Following the closing of the Transactions, Liberty Media and Sirius XM Holdings operate as separate, publicly traded companies, and neither has any continuing stock ownership, beneficial or otherwise, in the other. In connection with the Transactions, Liberty Media and Sirius XM Holdings entered into certain agreements, including a tax sharing agreement, governing the relationship between the two companies. Refer to Note 17 for more information regarding the tax sharing agreement. Reclasses Certain prior period amounts have been reclassified for comparability with the current year presentation . (2) Summary of Significant Accounting Policies In addition to the significant accounting policies discussed in this Note 2, the following table includes our significant accounting policies that are described in other notes to our consolidated financial statements, including the number and page of the note: Significant Accounting Policy Note # Page # Acquisitions 3 F- 19 Fair Value Measurements 4 F- 19 Goodwill 8 F- 21 Intangible Assets 9 F- 22 Property and Equipment 10 F- 24 Equity Method Investments 12 F- 27 Share-Based Compensation 15 F- 34 Legal Reserves 16 F- 38 Income Taxes 17 F- 41 Cash and Cash Equivalents Our cash and cash equivalents consist of cash on hand, money market funds, certificates of deposit, in-transit credit card receipts and highly liquid investments purchased with an original maturity of three months or less. Revenue Recognition Revenue is measured according to Accounting Standards Codification (“ASC”) 606, Revenue - Revenue from Contracts with Customers , and is recognized based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. We recognize revenue when we satisfy a performance obligation by transferring control over a service or product to a customer. We report revenues net of any tax assessed by a governmental authority that is both imposed on, and concurrent with, a specific revenue-producing transaction between a seller and a customer in our consolidated statements of operations. Collected taxes are recorded within Other current liabilities until remitted to the relevant taxing authority. For equipment sales, we are responsible for arranging for shipping and handling. Shipping and handling costs billed to customers are recorded as revenue and are reported as a component of Cost of equipment. The following is a description of the principal activities from which we generate our revenue, including from self-pay and paid promotional subscribers, advertising, and sales of equipment. F-14 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Subscriber revenue consists primarily of subscription fees and other ancillary subscription based revenues. Revenue is recognized on a straight line basis when the performance obligations to provide each service for the period are satisfied, which is over time as our subscription services are continuously transmitted and can be consumed by customers at any time. Consumers purchasing or leasing a vehicle with a factory-installed satellite radio may receive between a three and twelve month subscription to our service. In certain cases, the subscription fees for these consumers are prepaid by the applicable automaker. Prepaid subscription fees received from automakers or directly from consumers are recorded as deferred revenue and amortized to revenue ratably over the service period which commences upon sale. Activation fees are recognized over one month as the activation fees are non-refundable and do not provide for a material right to the customer. There is no revenue recognized for unpaid trial subscriptions. In some cases we pay a loyalty fee to the automakers when we receive a certain amount of payments from self-pay customers acquired from that automaker. These fees are considered incremental costs to obtain a contract and are, therefore, recognized as an asset and amortized to Subscriber acquisition costs over an average subscriber life. Revenue share and loyalty fees paid to an automaker offering a paid trial are accounted for as a reduction of revenue as the payment does not provide a distinct good or service. Music royalty fee primarily consists of U.S. music royalty fees (“MRF”) collected from subscribers. The related costs we incur for the right to broadcast music and other programming are recorded as Revenue share and royalties expense. Fees received from subscribers for the MRF are recorded as deferred revenue and amortized to Subscriber revenue ratably over the service period. We recognize revenue from the sale of advertising as performance obligations are satisfied, which generally occurs as ads are delivered. For our satellite radio service, ads are delivered when they are aired. For our streaming services, ads are delivered primarily based on impressions. Agency fees are calculated based on a stated percentage applied to gross billing revenue for our advertising inventory and are reported as a reduction of advertising revenue. Additionally, we pay certain third parties a percentage of advertising revenue. Advertising revenue is recorded gross of such revenue share payments as we control the advertising service, including the ability to establish pricing, and we are primarily responsible for providing the service. Advertising revenue share payments are recorded to Revenue share and royalties during the period in which the advertising is transmitted. Equipment revenue and royalties from the sale of satellite radios, components and accessories are recognized upon shipment, net of discounts and rebates. Shipping and handling costs billed to customers are recorded as revenue. Shipping and handling costs associated with shipping goods to customers are reported as a component of Cost of equipment. Other revenue primarily includes revenue recognized from royalties received from Sirius XM Canada. Customers pay for the services in advance of the performance obligation and therefore these prepayments are recorded as deferred revenue. The deferred revenue is recognized as revenue in our consolidated statement of operations as the services are provided. Changes in the deferred revenue balance during the year ended December 31, 2024 were not materially impacted by other factors. 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, 2024, 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. Revenue Share We share a portion of our subscription revenues earned from self-pay subscribers with certain automakers. The terms of the revenue share agreements vary with each automaker, but are typically based upon the earned audio revenue as reported or gross billed audio revenue. Revenue share on self-pay revenue is recognized as an expense and recorded in Revenue share and royalties in our consolidated statements of operations. We also pay revenue share to certain talent on non-music stations on our satellite radio service and to podcast talent based on advertising revenue for the related channel or podcast. Revenue share on non-music channels and podcasts is recognized in Revenue share and royalties in our consolidated statements of operations when it is earned. In some cases, we pay minimum guarantees for revenue share to podcast creators which is recorded in Prepaid and other current assets in our consolidated balance sheets. The minimum guarantee is recognized in Revenue share F-15 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) and royalties primarily on a straight line basis over the contractual term. The prepaid balance is regularly reviewed for recoverability and any amount not deemed to be recoverable is recognized as an expense in the period. Royalties In connection with our businesses, we must enter into royalty arrangements with two sets of rights holders: holders of musical compositions copyrights (that is, the music and lyrics) and holders of sound recordings copyrights (that is, the actual recording of a work). Our Sirius XM and Pandora businesses use both statutory and direct music licenses as part of their businesses. We license varying rights - such as performance and mechanical rights - for use in our Sirius XM and Pandora businesses based on the various radio and interactive services they offer. The music rights licensing arrangements for our Sirius XM and Pandora businesses are complex. Musical Composition Copyrights We pay performance royalties for our Sirius XM and Pandora businesses to holders and rights administrators of musical compositions copyrights, including performing rights organizations and other copyright owners. These performance royalties are based on agreements with performing rights organizations which represent the holders of these performance rights. Our Sirius XM and Pandora businesses have arrangements with these performance rights organizations. Arrangements with Sirius XM generally include fixed payments during the term of the agreement and arrangements with Pandora for its ad-supported radio service have variable payments based on usage and ownership of a royalty pool. Pandora must also license reproduction rights, which are also referred to as mechanical rights, to offer the interactive features of the Pandora services. For our Pandora subscription services, copyright holders receive payments for these rights at the rates determined in accordance with the statutory license set forth in Section 115 of the United States Copyright Act. These mechanical royalties are calculated as the greater of a percentage of our revenue or a percentage of our payments to record labels. Sound Recording Copyrights For our non-interactive satellite radio or streaming services we may license sound recordings under direct licenses with the owners of sound recordings or based on the royalty rate established by the Copyright Royalty Board (“CRB”). For our Sirius XM business, the royalty rate for sound recordings has been set by the CRB. The revenue subject to royalty includes subscription revenue from our U.S. 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 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. For sound recordings that we stream and for which we have not entered into a direct license agreement with the sound recording rights holders, the sound recordings are streamed pursuant to the statutory royalty rates set by the CRB. Pandora pays royalties to owners of sound recordings on either a per-performance fee, based on the number of sound recordings transmitted, or a percentage of revenue associated with the applicable service. Certain of these agreements also require Pandora to pay a per-subscriber minimum amount. Programming Costs Programming costs which are for a specified number of events are amortized on an event-by-event basis; programming costs which are for a specified season or include programming through a dedicated channel are amortized over the season or period on a straight-line basis. We allocate a portion of certain programming costs which are related to sponsorship and marketing activities to Sales and marketing expense on a straight-line basis over the term of the agreement. F-16 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Advertising Costs Media is expensed when aired and advertising production costs are expensed as incurred. Advertising production costs include expenses related to marketing and retention activities, including expenses related to direct mail, outbound telemarketing and email communications. We also incur advertising production costs related to cooperative marketing and promotional events and sponsorships. During the years ended December 31, 2024, 2023 and 2022, we recorded advertising costs of $ 374 , $ 421 and $ 513 , respectively. These costs are reflected in Sales and marketing expense in our audited consolidated statements of operations. Subscriber Acquisition Costs Subscriber acquisition costs consist of costs incurred to acquire new subscribers which include hardware subsidies paid to radio manufacturers, distributors and automakers, including subsidies paid to automakers who include a satellite radio and a prepaid subscription to our service in the sale or lease price of a new vehicle; subsidies paid for chipsets and certain other components used in manufacturing radios; device royalties for certain radios and chipsets; commissions paid to retailers and automakers as incentives to purchase, install and activate radios; product warranty obligations; freight; and provisions for inventory allowance attributable to inventory consumed in our automotive and retail distribution channels. Subscriber acquisition costs do not include advertising costs, loyalty payments to distributors and dealers of radios and revenue share payments to automakers and retailers of radios. Subsidies paid to radio manufacturers and automakers are expensed upon installation, shipment, receipt of product or activation and are included in Subscriber acquisition costs because we are responsible for providing the service to the customers. Commissions paid to retailers and automakers are expensed upon either the sale or activation of radios. Chipsets that are shipped to radio manufacturers and held on consignment are recorded as inventory and expensed as Subscriber acquisition costs when placed into production by radio manufacturers. Costs for chipsets are expensed as Subscriber acquisition costs when the automaker confirms receipt. Research & Development Costs Research and development costs are expensed as incurred and primarily include the cost of new product development, chipset design, software development and engineering. During the years ended December 31, 2024, 2023 and 2022, we recorded research and development costs of $ 252 , $ 276 and $ 246 , respectively. These costs are reported as a component of Product and technology expense in our audited consolidated statements of operations. Recent Accounting Pronouncements Accounting Standard Update (“ASU”) 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”) . In December 2023, the Financial Accounting Standards Board (“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. ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures . In November 2024, the FASB issued ASU 2024-03, which requires public business entities to disclose, on an annual and interim basis, disaggregated information about certain income statement expense line items in the notes to the financial statements. Public business entities are required to apply the guidance prospectively and may elect to apply it retrospectively. This ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027. We are currently evaluating the effect of adopting this new accounting guidance. ASU 2024-04, Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments . In November 2024, the FASB issued ASU 2024-04, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as induced conversions rather than as debt extinguishments. This update is effective for annual periods beginning after December 15, 2025, including interim periods within those fiscal years, though early adoption is permitted. We do not expect this update to have a material effect on our consolidated financial statements. F-17 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Recently Adopted Accounting Policies In March 2023, the FASB issued ASU 2023-02, Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method , which expands the population of investments for which an investor may elect to apply the proportional amortization method. Under this ASU, an investor in a tax equity investment may elect the proportional amortization method for qualifying investments on a tax credit program-by-program basis. We adopted ASU 2023-02 as of January 1, 2024 using the modified retrospective approach. Adoption of the new standard resulted in the recording of additional Equity method investments, Related party current liabilities, Other Long-term liabilities, Deferred tax liabilities and a cumulative effect adjustment to opening retained earnings. The effects of the changes made to our audited consolidated balance sheet as of January 1, 2024 for the adoption of ASU 2023-02 are included in the table below. Balance at December 31, 2023 Adjustments Due to ASU 2023-02 Balance at January 1, 2024 Balance Sheet Equity method investments $ 715 $ 122 $ 837 Related party current liabilities $ 8 $ 15 $ 23 Other long-term liabilities $ 428 $ 109 $ 537 Deferred tax liabilities $ 2,414 $ ( 3 ) $ 2,411 Retained earnings $ 15,353 $ 1 $ 15,354 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 was effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. We adopted this ASU for the annual period ended December 31, 2024 and the amendments have be applied retrospectively to all prior periods presented in the financial statements by expanding the disclosure of expenses included in our segment measures of profitability. Refer to our segments disclosure in Note 18 for more information. (3) Net (Loss) Income per Share Basic net (loss) income per common share is calculated by dividing the (loss) income available to common stockholders by the weighted average common shares outstanding during each reporting period. Diluted net (loss) income per common share adjusts the weighted average number of common shares outstanding for the potential dilution that could occur if common stock equivalents (stock options, restricted stock units and convertible debt) were exercised or converted into common stock, calculated using the treasury stock method. We had no participating securities during the years ended December 31, 2024, 2023 and 2022. In calculating basic net (loss) income per common share, we used 339 and 347 common shares for the years ended December 31, 2023 and 2022, respectively, which was the weighted average number of shares of Liberty Media's Series A, Series B, and Series C Liberty SiriusXM common stock and Old Sirius's common stock as converted by the Redemption and Merger exchange ratios, respectively, as no SplitCo shares were outstanding during that period. In calculating diluted net (loss) income per common share, we used 362 and 368 of diluted common shares for the years ended December 31, 2023 and 2022, respectively, which was the weighted average number of shares of Liberty Media's Series A, Series B, and Series C Liberty SiriusXM common stock and Old Sirius's common stock adjusted for the impact of dilutive instruments as converted by the Redemption and Merger exchange ratios, respectively, as no SplitCo shares were outstanding during that period. Common stock equivalents of 47 , 37 and 30 for the years ended December 31, 2024, 2023 and 2022, respectively, were excluded from the calculation of diluted net income per common share as the effect would have been anti-dilutive. F-18 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) For the Years Ended December 31, 2024 2023 2022 Numerator: Net (loss) income available to common stockholders for basic net (loss) income per common share $ ( 1,665 ) $ 786 $ 908 Net (loss) income attributable to noncontrolling interest ( 410 ) 202 210 Total net (loss) income ( 2,075 ) 988 1,118 Effect of assumed conversions of convertible notes, net of tax — 13 ( 27 ) Net (loss) income available to common stockholders for dilutive net (loss) income per common share $ ( 2,075 ) $ 1,001 $ 1,091 Denominator: Weighted average common shares outstanding for basic net (loss) income per common share 338 339 347 Weighted average impact of assumed convertible and exchangeable notes — 21 17 Weighted average impact of dilutive equity instruments — 2 4 Weighted average shares for diluted net (loss) income per common share 338 362 368 Net (loss) income per common share: Basic $ ( 6.14 ) $ 2.91 $ 3.22 Diluted $ ( 6.14 ) $ 2.77 $ 2.96 (4) 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 assets of $ 23 . The other assets represent acquired content which will be amortized over its estimated useful life to Programming and content in our audited consolidated statements of operations. On January 12, 2022, we completed an acquisition for total cash consideration of $ 43 . We recognized goodwill of $ 29 , other definite-lived intangible assets of $ 19 and liabilities of $ 4 . There were no acquisition related costs recognized for the years ended December 31, 2024 and 2023. Acquisition related costs for the year ended December 31, 2022 was $ 2 . (5) Fair Value Measurements The fair value of a financial instrument is the amount at which the instrument could be exchanged in an orderly transaction between market participants. As of December 31, 2024 and December 31, 2023, the carrying amounts of cash and cash equivalents, receivables, and accounts payable approximated fair value due to the short-term nature of these instruments. Due to the variable rate nature of the Credit Facility (including the Incremental Term Loan) and Margin Loan, each as defined in Note 13, we believe that the carrying amount approximated fair value at December 31, 2024 and December 31, 2023. Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures , establishes a fair value hierarchy for input into valuation techniques as follows: i. Level 1 input: unadjusted quoted prices in active markets for identical instrument; ii. Level 2 input: observable market data for the same or similar instrument but not Level 1, including quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and iii. Level 3 input: unobservable inputs developed using management's assumptions about the inputs used for pricing the asset or liability. F-19 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Our assets and liabilities measured at fair value were as follows: December 31, 2024 December 31, 2023 Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3 Total Fair Value Cash equivalents $ 1 $ — $ — $ 1 $ 266 $ — $ — $ 266 Financial instruments (a) $ 60 $ — $ — $ 60 $ 53 $ — $ — $ 53 Debt (b) $ — $ 594 $ — $ 594 $ — $ 1,262 $ — $ 1,262 (a) Level 1 financial instrument assets are comprised of our deferred compensation plan assets. Refer to Note 15 for additional discussion. (b) The fair values of the Exchangeable Notes and Convertible Notes are based on quoted market prices but are not considered to be traded on “active markets,” as defined by GAAP. Refer to Note 13 for additional discussion related to our debt. Realized and Unrealized Gains (Losses) on Financial Instruments, net Realized and unrealized gains (losses) on financial instruments, net, are comprised of changes in the fair value of the following and are included in Other income, net, on the audited consolidated statements of operations: Years Ended December 31, 2024 2023 2022 Equity securities $ — $ ( 15 ) $ — Debt measured at fair value (a) 115 ( 5 ) 329 Change in fair value of bond hedges — ( 114 ) ( 236 ) Other — 8 ( 10 ) Total $ 115 $ ( 126 ) $ 83 (a) We elected to account for the Exchangeable Notes and Convertible Notes using the fair value option. The Exchangeable Notes and the Convertible Notes were the obligations of Sirius XM Holdings. Sirius XM was not an obligor or guarantor of either the Exchangeable Notes of the Convertible Notes. Changes in the fair value of the Exchangeable Notes and Convertible Notes recognized in the audited consolidated statements of operations are primarily due to market factors primarily driven by changes in the fair value of the underlying shares into which the debt is exchangeable or convertible. We isolate the portion of the unrealized gain (loss) attributable to changes in the instrument specific credit risk and recognizes such amount in other comprehensive earnings (loss). The change in the fair value of the Exchangeable Notes and Convertible Notes attributable to changes in the instrument specific credit risk was a loss of $ 27 , loss of $ 6 , and gain of $ 36 for the years ended December 31, 2024, 2023 and 2022, respectively. During the years ended December 31, 2024, 2023 and 2022 we recognized $ 12 , $ 46 , and $ 7 , respectively, of previously unrecognized gains related to the retirement of a portion of Liberty Media's 1.375 % Cash Convertible Senior Notes due 2023, Liberty Media's 2.125 % Exchangeable Senior Debentures due 2048 and our 2.75 % Exchangeable Senior Debentures due 2049 , which was recognized through Other income, net in the audited consolidated statements of operations. The cumulative change since issuance was a loss of $ 10 as of December 31, 2024, net of the recognition of previously unrecognized gains and losses. (6) Impairment, Restructuring and Other Costs During the year ended December 31, 2024, impairment, restructuring and other costs were $ 3,453 which consisted of impairment charges of $ 3,355 primarily related to impairments of goodwill and equity method investments, costs associated with the Transactions of $ 71 , and a charge of $ 27 associated with severance and other restructuring costs . Refer to Notes 8 and 12 for more information on the goodwill and equity method investment impairment charges, respectively. During the year ended December 31, 2023, impairment, restructuring and other costs were $ 92 which consisted of a charge of $ 34 primarily related to severance and other related costs, costs associated with the Transactions of $ 26 , impairments primarily related to terminated software projects of $ 15 , vacated office space impairments of $ 12 , accrued expenses of $ 3 for which we will not recognize any future economic benefit, and a cost-method investment impairment of $ 2 . The restructuring and related impairment charges were recorded to Impairment, restructuring and other costs in our audited consolidated statements of operations. During the year ended December 31, 2022, impairment, restructuring and other costs were $ 68 which consisted of an impairment of $ 43 associated with terminated software projects, $ 16 related to certain vacated office spaces, $ 5 in connection F-20 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) with furniture and equipment located at the impaired office spaces, and $ 6 related to personnel severance as well as acquisition related costs of $ 2 , partially offset by $ 4 from a gain on sale of real estate. The restructuring and related impairment charges were recorded to Impairment, restructuring and other costs in our audited consolidated statements of operations. (7) Receivables, net Receivables, net, includes customer accounts receivable, receivables from distributors and other receivables. No single customer accounts for more than ten percent of our total receivables. Customer accounts receivable, net, includes receivables from our subscribers and advertising customers, including advertising agencies and other customers, and is stated at amounts due, net of an allowance for doubtful accounts. Our allowance for doubtful accounts is based upon our assessment of various factors. We consider historical experience, the age of the receivable balances, current economic conditions, industry experience and other factors that may affect the counterparty’s ability to pay. Bad debt expense is included in Customer service and billing expense in our audited consolidated statements of operations. 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. Other receivables primarily include amounts due from manufacturers of our radios, modules and chipsets where we are entitled to subsidies and royalties based on the number of units produced. We have not established an allowance for doubtful accounts for our receivables from distributors or other receivables as we have historically not experienced any significant collection issues with automakers or other third parties and do not expect issues in the foreseeable future. Receivables, net, consists of the following: December 31, 2024 December 31, 2023 Gross customer accounts receivable $ 606 $ 631 Allowance for doubtful accounts ( 10 ) ( 15 ) Customer accounts receivable, net $ 596 $ 616 Receivables from distributors 56 56 Other receivables 24 37 Total receivables, net $ 676 $ 709 (8) Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired in business combinations. Our annual impairment assessment of our two reporting units is performed as of the fourth quarter of each year, and an assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. ASC 350, Intangibles - Goodwill and Other , states that an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. In connection with the close of the Transactions our market capitalization sustained a decrease during the third quarter of 2024 and we concluded that, in accordance with ASC 350, a triggering event occurred indicating that a potential impairment exists, which required us to conduct an interim test of the fair value of the goodwill for the Sirius XM and Pandora and Off-platform reporting units. In accordance with ASC 350, we performed a quantitative goodwill impairment test 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, employing a guideline public company approach. The discounted cash flow model, which estimates fair value based on the present value of future cash flows, requires us to make various assumptions regarding the timing and amount of these cash flows, including growth rates, operating margins and capital expenditures for a projection period, plus the terminal value of the business at the end of the projection period. The terminal value is estimated using a long-term growth rate, which is based on expected trends and projections. A discount rate is determined for the reporting unit based on the risks of achieving the future cash flows, including risks applicable to the industry and market as a whole, as well as the capital structure of F-21 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) comparable entities. The results of our goodwill impairment test indicated that the estimated fair value of the Pandora reporting unit exceeded its carrying amount, whereas the carrying amount of the Sirius XM reporting unit exceeded its estimated fair value. As a result, we recorded a goodwill impairment charge of $ 2,819 during 2024 to write down the carrying amount of the Sirius XM goodwill in the Impairment, restructuring and other costs line item in our audited consolidated statements of operations. As of December 31, 2024, the cumulative balance of goodwill impairments recorded was $ 3,775 , $ 2,819 of which was recognized during 2024 and is included in the carrying amount of the goodwill allocated to our Sirius XM reporting unit and $ 956 of which 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, 2024, the carrying amount of goodwill for our Sirius XM and Pandora and Off-platform reporting units was $ 11,431 and $ 959 , respectively, and as of December 31, 2023, the carrying amount of goodwill for our Sirius XM and Pandora and Off-platform reporting units was $ 14,250 and $ 959 , respectively. No impairment losses were recorded for goodwill during the years ended December 31, 2023 and 2022. Refer to the table below for our goodwill activity for the years ended December 31, 2024 and December 31, 2023: Sirius XM Pandora and Off-platform Total Balance at January 1, 2023 $ 14,250 $ 959 $ 15,209 Acquisition — — — Impairment charge — — — Balance at December 31, 2023 14,250 959 15,209 Acquisition — — — Impairment ( 2,819 ) — ( 2,819 ) Balance at December 31, 2024 $ 11,431 $ 959 $ 12,390 (9) Intangible Assets Our intangible assets include the following: December 31, 2024 December 31, 2023 Weighted Average Useful Lives Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Recorded to Sirius XM Reporting Unit: Indefinite life intangible assets: FCC licenses Indefinite $ 8,610 $ — $ 8,610 $ 8,600 $ — $ 8,600 Trademarks Indefinite 930 — 930 930 — 930 Definite life intangible assets: Customer relationships 15 years 570 ( 456 ) 114 570 ( 418 ) 152 OEM relationships 15 years 220 ( 164 ) 56 220 ( 149 ) 71 Licensing agreements 15 years 285 ( 245 ) 40 285 ( 228 ) 57 Software and technology 7 years 28 ( 23 ) 5 28 ( 22 ) 6 Due to Acquisitions recorded to Pandora and Off-platform Reporting Unit: Indefinite life intangible assets: Trademarks Indefinite 312 — 312 312 — 312 Definite life intangible assets: Customer relationships 8 years 442 ( 331 ) 111 442 ( 279 ) 163 Software and technology 5 years 391 ( 380 ) 11 391 ( 372 ) 19 Total intangible assets $ 11,788 $ ( 1,599 ) $ 10,189 $ 11,778 $ ( 1,468 ) $ 10,310 F-22 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Indefinite Life Intangible Assets We have identified our Federal Communications Commission (“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. We hold FCC licenses to operate our satellite digital audio radio service and provide ancillary services. Each of the FCC licenses authorizes us to use radio spectrum, a reusable resource that does not deplete or exhaust over time. Our annual impairment assessment of our identifiable indefinite lived intangible assets is performed as of the fourth quarter of each year. An assessment is performed at other times if an event occurs or circumstances change that would more likely than not reduce the fair value of the asset below its carrying value. If the carrying value of the intangible assets exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. As a result of the Sirius XM goodwill impairment discussed in Note 8, we evaluated our FCC licenses, Sirius XM trademark, and Pandora trademark for impairment using a quantitative assessment during the quarter ended September 30, 2024. The results of the assessment indicated that the estimated fair values for these indefinite-lived assets exceeded their carrying values and no impairment loss was recognized for intangible assets with indefinite lives during the years ended December 31, 2024, 2023 and 2022. Definite Life Intangible Assets Definite-lived intangible assets are amortized over their respective estimated useful lives to their estimated residual values, in a pattern that reflects when the economic benefits will be consumed, and are reviewed for impairment under the provisions of ASC 360-10-35, Property, Plant and Equipment/Overall/Subsequent Measurement . We review intangible assets subject to amortization for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. 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. Amortization expense for all definite life intangible assets was $ 133 , $ 199 and $ 212 for the years ended December 31, 2024, 2023 and 2022, respectively. There were no retirements or impairments of definite lived intangible assets during the year ended December 31, 2024. 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 year ended December 31, 2022. The expected amortization expense for each of the fiscal years 2025 through 2029 and for periods thereafter is as follows: Years ending December 31, Amount 2025 $ 124 2026 123 2027 75 2028 15 2029 — Thereafter — Total definite life intangible assets, net $ 337 F-23 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) (10) Property and Equipment Property and equipment, including satellites, are stated at cost, less accumulated depreciation. 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: Satellite system 15 years Capitalized software and hardware 2 - 7 years Other (a) 3 - 30 years (a) Includes leasehold improvements which are depreciated over the lesser of useful life or remaining lease term. We review long-lived assets, such as property and equipment, for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. 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, 2024, we retired property and equipment of $ 25 , and recorded related impairment charges of $ 1 primarily related to terminated software projects. During the year ended December 31, 2023, we retired property and equipment of $ 289 primarily related to the retirement of our XM-4 satellite 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. Refer to the Note 6 for more information. Property and equipment, net, consists of the following: December 31, 2024 December 31, 2023 Satellite system $ 1,598 $ 1,598 Capitalized software and hardware 2,429 2,178 Construction in progress 988 538 Other 718 627 Total property and equipment 5,733 4,941 Accumulated depreciation ( 3,624 ) ( 3,150 ) Property and equipment, net $ 2,109 $ 1,791 Construction in progress consists of the following: December 31, 2024 December 31, 2023 Satellite system $ 751 $ 490 Capitalized software and hardware 197 17 Other 40 31 Construction in progress $ 988 $ 538 Depreciation and amortization expense on property and equipment was $ 445 , $ 425 and $ 399 for the years ended December 31, 2024, 2023 and 2022, respectively. 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 $ 4 which has been recorded to Impairment, restructuring and acquisition costs line item in our audited consolidated statements of operations. We capitalize a portion of the interest on funds borrowed to finance the construction and launch of our satellites. Capitalized interest is recorded as part of the asset’s cost and depreciated over the satellite’s useful life. Capitalized interest costs were $ 27 , $ 16 and $ 5 for the years ended December 31, 2024, 2023 and 2022, respectively, which related to the F-24 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) construction of our SXM-9, SXM-10, SXM-11 and SXM-12 satellites. We also capitalize a portion of share-based compensation related to employee time for capitalized software projects. Capitalized share-based compensation costs were $ 28 , $ 18 and $ 16 for the years ended December 31, 2024, 2023 and 2022, respectively. Satellites As of December 31, 2024, 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. The renewal and extension of our licenses is reasonably certain at minimal cost, which is expensed as incurred. The chart below provides certain information on our satellites as of December 31, 2024: Satellite Description Year Delivered Estimated End of Depreciable Life FCC License Expiration Year SIRIUS FM-5 2009 2024 2025 SIRIUS FM-6 2013 2028 2030 XM-3 2005 2020 2026 XM-5 2010 2025 2026 SXM-8 2021 2036 2029 On December 5, 2024, our SXM-9 satellite was successfully launched and has completed in-orbit testing. Our SXM-9 satellite will replace our SXM-8 satellite in the XM constellation, with SXM-8 becoming an in-orbit spare. 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. (11) Leases 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. Additionally, we elected the practical expedient to not recognize right-of-use assets or lease liabilities for short-term leases, which are those leases with a term of twelve months or less at the lease commencement date. During the years ended December 31, 2024, 2023 and 2022, we ceased using certain leased locations and recorded an impairment charge of $ 8 , $ 12 and $ 16 , respectively, to write down the carrying value of the right-of-use assets for these locations to their estimated fair values. Refer to Note 5 for additional information. The components of lease expense were as follows: For the Years Ended December 31, 2024 2023 Operating lease cost $ 61 $ 61 Finance lease cost 6 5 Sublease income ( 3 ) ( 3 ) Total lease cost $ 64 $ 63 F-25 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Supplemental cash flow information related to leases was as follows: For the Years Ended December 31, 2024 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 62 $ 77 Financing cash flows from finance leases $ 5 $ 5 Right-of-use assets obtained in exchange for lease obligations: Operating leases $ 16 $ 16 Supplemental balance sheet information related to leases was as follows: December 31, 2024 December 31, 2023 Operating Leases Operating lease right-of-use assets $ 277 $ 279 Operating lease current liabilities 48 46 Operating lease liabilities 291 292 Total operating lease liabilities $ 339 $ 338 December 31, 2024 December 31, 2023 Finance Leases Property and equipment, gross $ 35 $ 33 Accumulated depreciation ( 19 ) ( 12 ) Property and equipment, net $ 16 $ 21 Current maturities of debt $ 6 $ 5 Long-term debt 5 10 Total finance lease liabilities $ 11 $ 15 December 31, 2024 December 31, 2023 Weighted Average Remaining Lease Term Operating leases 8 years 7 years Finance leases 2 years 3 years December 31, 2024 December 31, 2023 Weighted Average Discount Rate Operating leases 5.2 % 5.2 % Finance leases 2.4 % 2.3 % F-26 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Maturities of lease liabilities were as follows: Operating Leases Finance Leases Year ending December 31, 2025 $ 63 $ 5 2026 67 5 2027 63 1 2028 55 — 2029 53 — Thereafter 115 — Total future minimum lease payments 416 11 Less imputed interest ( 77 ) — Total $ 339 $ 11 (12) Related Party Transactions In the normal course of business, we enter into transactions with our equity method investments (tax equity investments, Sirius XM Canada and SoundCloud) and our Former Parent which are considered related party transactions. Tax Equity Investments We have entered into certain tax-effective clean energy technology investments. We invested $ 244 and $ 50 during the years ended December 31, 2024 and 2023, respectively, in these clean energy projects. As of January 1, 2024, we adopted ASU 2023-02 using the modified retrospective approach and have accounted for these investments using the proportional amortization method. The unamortized investment balance as of December 31, 2024 was $ 881 and was recorded to Equity method investments in our audited consolidated balance sheets. Under the proportional amortization method, the investment balance will be amortized over the term of the investments based on the current period income tax benefits as a proportion to the total expected income tax benefits. We also recorded liabilities of $ 735 related to future contractual payments and contingent payments which we determined to be probable, of which $ 88 is recorded in Related party current liabilities and the balance is recorded in Other long-term liabilities in our audited consolidated balance sheets. Sirius XM Canada Sirius XM holds a 70 % equity interest and 33 % voting interest in Sirius XM Canada, a privately held corporation. We own 591 shares of preferred stock of Sirius XM Canada, which has a liquidation preference of one Canadian dollar per share. Sirius XM Canada is accounted for as an equity method investment, and its results are not consolidated in our audited consolidated financial statements. Sirius XM Canada does not meet the requirements for consolidation as we do not have the ability to direct the most significant activities that impact Sirius XM Canada's economic performance. On March 15, 2022, Sirius XM and Sirius XM Canada entered into an amended and restated services and distribution agreement. Pursuant to the amended and restated services and distribution agreement, the fee payable by Sirius XM Canada to Sirius XM was modified from a fixed percentage of revenue to a variable fee, based on a target operating profit for Sirius XM Canada. Such variable fee is expected to be evaluated annually based on comparable companies. In accordance with the amended and restated services and distribution agreement, the fee is payable on a monthly basis, in arrears, beginning January 1, 2022. During the year ended December 31, 2024, we evaluated our investment in Sirius XM Canada for impairment and determined that the carrying value of our equity method investment exceeded its fair value. We performed a quantitative impairment test and determined the fair value of our investment using a combination of an income approach, employing a discounted cash flow model, and a market approach, employing a guideline public company approach. The discounted cash flow model relies on making assumptions, such as expected growth in profitability and discount rate, which we believe are appropriate. As a result, we recorded an impairment of our equity method investment in Sirius XM Canada of $ 500 . This loss F-27 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) from impairment was included in Impairment, restructuring and other costs within our audited consolidated statement of operations for the year ended December 31, 2024. Our Equity method investments as of December 31, 2024 and December 31, 2023 included the carrying value of our investment balance in Sirius XM Canada of $ 89 and $ 604 , respectively, and, as of each of December 31, 2024 and December 31, 2023, also included $ 7 and $ 8 , respectively, for the long-term value of the outstanding loan to Sirius XM Canada. We recorded revenue from Sirius XM Canada as Other revenue in our audited consolidated statements of operations of $ 99 , $ 104 and $ 111 during the years ended December 31, 2024, 2023 and 2022, respectively. SoundCloud In February 2020, we completed a $ 75 investment in Series G Membership Units of SoundCloud. The Series G Units are convertible at the option of the holders at any time into shares of ordinary membership units of SoundCloud at a ratio of one ordinary membership unit for each Series G Unit. The investment in SoundCloud is accounted for as an equity method investment as we do not have the ability to direct the most significant activities that impact SoundCloud's economic performance. Our investment in SoundCloud is recorded in Equity method investments in our audited consolidated balance sheets. Sirius XM has appointed two individuals to serve on SoundCloud's ten -member board of managers. In addition to our investment in SoundCloud, Pandora has an agreement with SoundCloud to be its exclusive ad sales representative in the US and certain European countries. Through this arrangement, Pandora offers advertisers the ability to execute campaigns across the Pandora and SoundCloud platforms. We recorded revenue share expense related to this agreement of $ 59 , $ 54 and $ 55 for the years ended December 31, 2024, 2023 and 2022, respectively. We also had related party liabilities of $ 20 as of each of December 31, 2024 and December 31, 2023, related to this agreement. Former Parent Liberty Media has one of its advisors and one of its directors on our board of directors. Gregory B. Maffei, an advisor to Liberty Media, is the Chairman of our board of directors. Sirius XM Holdings Inc. is the product of a series of transactions that closed on Monday, September 9, 2024 with its Former Parent. Refer to Note 1 for additional information regarding the Transactions. In connection with the Transactions, we entered into several agreements with Liberty Media and its subsidiaries, including a Reorganization Agreement, an Agreement and Plan of Merger and a new Tax Sharing Agreement. Refer to Note 17 for more information regarding the Tax Sharing Agreement. F-28 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) (13) Debt Our debt as of December 31, 2024 and December 31, 2023 consisted of the following: Principal Amount at Carrying value (a) at Issuer / Borrower Issued Debt Maturity Date Interest Payable December 31, 2024 December 31, 2024 December 31, 2023 Sirius XM Holdings notes and loans: Sirius XM Holdings (b) March 2023 3.75 % Convertible Senior Notes March 15, 2028 Semi-annually in arrears on March 15 and September 15 $ 575 $ 594 $ 688 Sirius XM Holdings (b) November 2019 2.75 % Exchangeable Senior Debentures December 1, 2049 quarterly in arrears on March 1, June 1, September 1, and December 1 — — 574 Sirius XM Holdings Various Margin Loan Various n/a — — 695 Sirius XM notes and loans: Sirius XM (c) April 2022 Incremental Term Loan April 11, 2024 variable fee paid monthly — — 500 Sirius XM (c) September 2024 Incremental Term Loan September 9, 2027 variable fee paid quarterly 1,086 1,086 — Sirius XM December 2012 Senior Secured Revolving Credit Facility (the "Credit Facility") August 31, 2026 variable fee paid quarterly — — — Sirius XM (c) August 2021 3.125 % Senior Notes September 1, 2026 semi-annually on March 1 and September 1 1,000 996 994 Sirius XM (c) July 2017 5.00 % Senior Notes August 1, 2027 semi-annually on February 1 and August 1 1,500 1,495 1,494 Sirius XM (c) June 2021 4.00 % Senior Notes July 15, 2028 semi-annually on January 15 and July 15 2,000 1,988 1,985 Sirius XM (c) June 2019 5.500 % Senior Notes July 1, 2029 semi-annually on January 1 and July 1 1,250 1,243 1,241 Sirius XM (c) June 2020 4.125 % Senior Notes July 1, 2030 semi-annually on January 1 and July 1 1,500 1,490 1,488 Sirius XM (c) August 2021 3.875 % Senior Notes September 1, 2031 semi-annually on March 1 and September 1 1,500 1,488 1,487 Sirius XM Various Finance leases Various n/a n/a 11 15 Total debt 10,391 11,161 Less: total current maturities 61 1,079 Less: total deferred financing costs, net 16 9 Total long-term debt $ 10,314 $ 10,073 (a) The carrying value of the obligations is net of any remaining unamortized original issue discount except for the debt measured at fair value noted in (b) below. (b) Measured at fair value. (c) On September 3, 2024, Sirius XM added a parent guarantee from Sirius XM Inc. to each series of Sirius XM notes in connection with the conversion of Sirius XM into a Delaware limited liability company. All material domestic subsidiaries, including Pandora and its subsidiaries, that guarantee the Credit Facility have guaranteed the Incremental Term Loan and these notes. F-29 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Sirius XM Holdings notes and loans: 3.75 % Convertible Senior Notes due 2028 On March 10, 2023, Liberty Media issued $ 575 aggregate principal amount of its 3.75 % convertible notes due 2028 (the “Convertible Notes”). In connection with the Transactions, we assumed all of the obligations of Liberty Media under the indenture governing the Convertible Notes and the Convertible Notes. The Convertible Notes accrue interest at a rate of 3.75 % per annum and mature on March 15, 2028. As of December 31, 2024, the conversion rate for the Convertible Notes was 29.9941 shares (not in millions) of our common stock per $1,000 principal amount (not in millions) of Convertible Notes, equivalent to a conversion price of approximately $ 33.34 per share of our common stock (not in millions). Holders of the Convertible Notes may convert their Convertible Notes, in integral multiples of $1,000 principal amount, at their option, under the following circumstances: (i) during any calendar quarter (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is equal to or more than 130 % of the conversion price of the Convertible Notes on the last day of such preceding calendar quarter; (ii) during the five business-day period after any five consecutive trading-day period (the “Measurement Period”), in which the trading price per $1,000 principal amount of Convertible Notes for each trading day of that Measurement Period was less than 98 % of the product of the last reported sale price of our common stock and the applicable conversion rate for the Convertible Notes on each such trading day; (iii) if the Company calls the Convertible Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date, but only with respect to the Convertible Notes called (or deemed called) for redemption; or (iv) upon the occurrence of specified corporate events described in the Convertible Notes Indenture. In addition, holders may convert their Convertible Notes at their option at any time on or after December 15, 2027 and ending on the close of business on the second scheduled trading day immediately preceding the stated maturity date for the Convertible Notes, without regard to the foregoing circumstances. Upon a conversion of the Convertible Notes, we may elect to pay or deliver, as the case may be, cash, shares of the Company's common stock or a combination of cash and shares of our common stock. We elected to account for the Convertible Notes using the fair value option. See Note 5 for information related to unrealized gains (losses) on debt measured at fair value. 2.75 % Exchangeable Senior Debentures due 2049 On November 26, 2019, Liberty Media issued approximately $ 604 aggregate principal amount of its 2.75 % exchangeable senior debentures due 2049 (the “Exchangeable Notes”). In connection with the Transactions, Liberty Media transferred and assigned its rights and liabilities as obligor and maker of the Exchangeable Notes and its obligations under the indenture governing the Exchangeable Notes to us. Pursuant to the terms of the indenture governing the Exchangeable Notes and as a result of the Transactions, certain holders of the Exchangeable Notes exercised their right to require us to repurchase their Exchangeable Notes. During the three months ended December 31, 2024, we repurchased or redeemed the remaining $ 604 original principal amount ($ 585 adjusted principal amount) of Exchangeable Notes with cash for an aggregate purchase price of $ 589 . We elected to account for the Exchangeable Notes using the fair value option. See Note 5 for information related to unrealized gains (losses) on debt measured at fair value. As a result of the repurchases and redemption, we recognized a gain on extinguishment of $ 12 in our audited consolidated statements of operations. Margin Loan In February 2021, Liberty Siri MarginCo, LLC (“Siri MarginCo”), a wholly-owned subsidiary of SplitCo which merged with and into SplitCo following the Transactions, borrowed $ 125 pursuant to an amendment to its margin loan agreement secured by shares of our common stock (the “Margin Loan”) that was comprised of an $ 875 term loan and an $ 875 revolving line of credit. The term loan and any drawn portion of the revolver carried an interest rate of the London Inter-Bank Offer Rate plus 2.00 % with the undrawn portion carrying a fee of 0.50 %. In March 2023, Siri MarginCo amended the Margin Loan, increasing the revolving line of credit to $ 1,075 , extending the maturity to March 2026 and changing the interest rate to the Secured Overnight Financing Rate (“SOFR”) plus 2.25 %. During the year ended December 31, 2024, Siri MarginCo repaid all of the $ 695 of borrowings outstanding under the term loan. F-30 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Sirius XM notes and loans: The Credit Facility 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 by Sirius XM Inc. 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's borrowings are based on the 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, 2024. All of Sirius XM's outstanding borrowings under the Credit Facility are classified as Long-term debt within our audited consolidated balance sheets due to the long-term maturity of this debt. In April 2022, Sirius XM entered into an amendment to the Credit Facility to incorporate an Incremental Term Loan borrowing of $ 500 . Interest on the Incremental Term Loan borrowing was based on the SOFR plus an applicable rate. On April 11, 2024, the Incremental Term Loan matured and was retired with cash for 100 % the principal amount plus accrued and unpaid interest to the date of maturity. On January 26, 2024, Sirius XM entered into an amendment to the Credit Facility to, among other things, incorporate a $ 1,100 delayed draw incremental term loan. Subject to the conditions described in the amendment, the delayed draw incremental term loan was available to be drawn by Sirius XM in up to three separate drawings until December 31, 2024. Once drawn, interest on the delayed draw incremental term loan is based on SOFR plus an applicable rate. On September 3, 2024, Sirius XM entered into a technical amendment to the Credit Facility to add a parent guarantee from Sirius XM Inc. to the Credit Facility in connection with the conversion of Sirius XM into a Delaware limited liability company. As of December 31, 2024, there was no outstanding balance under the Credit Facility and the outstanding amount under the incremental term loan was $ 1,086 . Covenants and Restrictions Under the Credit Facility, Sirius XM, our wholly owned subsidiary, must comply with a debt maintenance covenant that it cannot exceed a total leverage ratio, calculated as consolidated total debt to consolidated operating cash flow, of 5.0 to 1.0. The Credit Facility generally requires compliance with certain covenants that restrict Sirius XM's ability to, among other things, (i) incur additional indebtedness, (ii) incur liens, (iii) pay dividends or make certain other restricted payments, investments or acquisitions, (iv) enter into certain transactions with affiliates, (v) merge or consolidate with another person, (vi) sell, assign, lease or otherwise dispose of all or substantially all of Sirius XM's assets, and (vii) make voluntary prepayments of certain debt, in each case subject to exceptions. The indentures governing Sirius XM's notes restrict Sirius XM's non-guarantor subsidiaries' ability to create, assume, incur or guarantee additional indebtedness without such non-guarantor subsidiary guaranteeing each such series of notes on a pari passu basis. The indentures governing the notes also contain covenants that, among other things, limit Sirius XM's ability and the ability of its subsidiaries to create certain liens; enter into sale/leaseback transactions; and merge or consolidate. Under Sirius XM's debt agreements, the following generally constitute an event of default: (i) a default in the payment of interest; (ii) a default in the payment of principal; (iii) failure to comply with covenants; (iv) failure to pay other indebtedness after final maturity or acceleration of other indebtedness exceeding a specified amount; (v) certain events of bankruptcy; (vi) a judgment for payment of money exceeding a specified aggregate amount; and (vii) voidance of subsidiary guarantees, subject to grace periods where applicable. If an event of default occurs and is continuing, our debt could become immediately due and payable. Fair Value of Debt The fair values, based on quoted market prices of the same instruments but not considered to be active markets (Level 2), of Sirius XM’s debt securities, not reported at fair value, whose carrying value does not approximate fair value, are as follows: F-31 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) December 31, 2024 December 31, 2023 Sirius XM 3.125 % Senior Notes due 2026 $ 960 $ 932 Sirius XM 5.0 % Senior Notes due 2027 $ 1,459 $ 1,444 Sirius XM 4.0 % Senior Notes due 2028 $ 1,843 $ 1,827 Sirius XM 5.50 % Senior Notes due 2029 $ 1,198 $ 1,202 Sirius XM 4.125 % Senior Notes due 2030 $ 1,311 $ 1,326 Sirius XM 3.875 % Senior Notes due 2031 $ 1,258 $ 1,277 (14) Equity Common Stock, par value $ 0.001 per share We are authorized to issue up to 900 shares of common stock. There were 339 and zero shares of common stock issued and outstanding on December 31, 2024 and December 31, 2023, respectively. As of December 31, 2024, there were 30 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. Transactions with Former Parent, net An intergroup interest represents a quasi-equity interest which is not represented by outstanding shares of common stock; rather, one of the Former Parent’s tracking stock groups has an attributed interest in another of the Former Parent’s tracking stock groups, which is generally stated in terms of a number of shares of such tracking stock. Through prior year transactions with the Former Parent, intergroup interests in other tracking stock groups were established. As of December 31, 2021, approximately 5.3 notional shares represented an 2.2 % intergroup interest in the Formula One Group held by the Liberty SiriusXM Group and approximately 2.3 notional shares represented a 3.7 % intergroup interest in the Braves Group held by the Liberty SiriusXM Group. Liberty Media assumed that the notional shares (if and when issued) related to the Liberty SiriusXM Group interest in the Formula One Group would be comprised of Series A Liberty Formula One common stock and the notional shares (if and when issued) related to the Liberty SiriusXM Group interest in the Braves Group would be comprised of Series A Liberty Braves common stock. Therefore, the market prices of Series A Liberty Formula One and Series A Liberty Braves common stock were used for the mark-to-market adjustment for the intergroup interests held by Liberty SiriusXM Group, included in Other income, net in the audited consolidated statements of operations. As of December 31, 2022, approximately 1.8 notional shares represented a 2.9 % intergroup interest in the Liberty Braves Group previously held by SplitCo and approximately 4.2 notional shares represented a 1.7 % intergroup interest in the Liberty Formula One Group ("Formula One Group") previously held by the SplitCo. During September 2022, the Formula One Group and the Braves Group paid approximately $ 64 and $ 14 , respectively, to the Liberty SiriusXM Group to settle a portion of the intergroup interests in the Formula One Group and Braves Group held by the Liberty SiriusXM Group, as a result of the repurchase of a portion of the Convertible Notes, as described in Note 13. During March 2023, the Formula One Group paid approximately $ 202 to SplitCo to settle a portion of the intergroup interest in the Formula One Group held by SplitCo, as a result of the repurchase of a portion of Liberty Media's 1.375 % Cash Convertible Senior Notes due 2023. On July 12, 2023, the Formula One Group paid approximately $ 71 to SplitCo to settle and extinguish the remaining intergroup interest in the Formula One Group held by SplitCo. On July 18, 2023, Liberty Media completed the split-off of Atlanta Braves Holdings, Inc. through a redemption of each outstanding share of Liberty Braves common stock in exchange for one share of the corresponding series of Atlanta Braves Holdings, Inc. common stock. The intergroup interest in the Liberty Braves Group attributed to SplitCo was settled and extinguished through the attribution of Atlanta Braves Holdings, Inc. Series C common stock on a one-for-one basis equal to the number of notional shares representing the intergroup interest. Purchases of Common Stock of Former Parent There were no repurchases of Liberty SiriusXM common stock during the years ended December 31, 2024 and 2023. F-32 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) During the year ended December 31, 2022, Liberty Media repurchased 3.5 shares of Series A Liberty SiriusXM common stock for aggregate cash consideration of $ 161 and 4.5 shares of Series C Liberty SiriusXM common stock for aggregate cash consideration of $ 197 under the authorized repurchase program. Cash Distributions to Parent During the years ended December 31, 2024, 2023 and 2022, we paid cash distributions of $ — , $ 3 and $ 685 , respectively, to the Former Parent. Sirius XM Holdings equity activity All share and per share amounts have been adjusted to reflect the conversion of Old Sirius shares into SplitCo common stock on a one-for-ten basis. Quarterly Dividends During the year ended December 31, 2024 and 2023, our board of directors declared and paid the following dividends: Declaration Date Dividend Per Share Record Date Total Amount (1) Payment Date 2024 dividends January 24, 2024 $ 0.266 February 9, 2024 $ 102 February 23, 2024 April 24, 2024 $ 0.266 May 10, 2024 $ 103 May 29, 2024 July 24, 2024 $ 0.266 August, 9, 2024 $ 103 August 26, 2024 October 22, 2024 $ 0.270 November 5, 2024 $ 92 November 21, 2024 2023 dividends January 25, 2023 $ 0.242 February 9, 2023 $ 94 February 24, 2023 April 19, 2023 $ 0.242 May 5, 2023 $ 94 May 24, 2023 July 26, 2023 $ 0.242 August 8, 2023 $ 93 August 30, 2023 October 25, 2023 $ 0.266 November 7, 2023 $ 102 November 29, 2023 (1) During the years ended December 31, 2024 and 2023, we paid dividends of $ 143 and $ 65 , respectively, to noncontrolling interests. Stock Repurchase Program As of December 31, 2024, our board of directors approved for repurchase an aggregate of $ 1,166 of our common stock. The board of directors did not establish an end date for this stock repurchase program. Shares of common stock may be purchased from time to time on the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Exchange Act, in privately negotiated transactions, including in accelerated stock repurchase transactions, or otherwise. We intend to fund any stock repurchases through a combination of cash on hand, cash generated by operations and future borrowings. The size and timing of any purchases will be based on a number of factors, including price and business and market conditions. Prior to the closing of the Transactions, the board of directors of Old Sirius had approved the repurchase of an aggregate of $ 18,000 of its common stock. As of the closing of the Transactions, Old Sirius' cumulative repurchases since December 2012 under that stock repurchase program totaled 373 shares for $ 16,834 , and $ 1,166 remained available under that stock repurchase program. The stock repurchase program of Old Sirius was terminated on the closing date of the Transactions. Following the closing of the Transactions, on September 9, 2024, our board of directors authorized for repurchase an aggregate of $ 1,166 of our common stock. As of December 31, 2024, our cumulative repurchases since the closing of the Transactions under our stock repurchase program totaled 301 thousand shares for $ 7 , and $ 1,160 remained available for additional repurchases under our existing stock repurchase program authorization. F-33 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) The following table summarizes our total share repurchase activity for the years ended: December 31, 2024 December 31, 2023 December 31, 2022 Share Repurchase Type Shares (in thousands) Amount Shares (in thousands) Amount Shares (in thousands) Amount Open Market Repurchases (a) 301 $ 7 6,938 $ 274 10,279 $ 640 (a) As of December 31, 2024, $ 1 of common stock repurchases had not settled, nor been retired, and were recorded as Treasury stock within our audited consolidated balance sheets and audited consolidated statement of equity. (15) Benefit Plans Included in the accompanying audited consolidated statements of operations are the following amounts of share-based compensation expense: For the Years Ended December 31, 2024 2023 2022 Cost of services: Programming and content $ 36 $ 34 $ 34 Customer service and billing 5 5 6 Transmission 5 6 6 Sales and marketing 45 45 52 Product and technology 44 46 39 General and administrative 65 67 72 $ 200 $ 203 $ 209 We account for equity instruments granted in accordance with ASC 718, Compensation - Stock Compensation . ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on fair value. We use the Black-Scholes-Merton option-pricing model to value stock option awards, and have elected to treat awards with graded vesting as a single award. Share-based compensation expense is recognized ratably over the requisite service period, which is generally the vesting period. We measure restricted stock unit awards using the fair market value of the restricted shares of common stock on the day the award is granted. We measure the value of restricted units that will vest depending a relative total stockholder return metric – that is, the performance of our common stock as compared other companies included in the S&P 500 Index – using a special option-based valuation method, known as a Monte Carlo simulation. Since the results of such awards depend on future results, which are not known on the grant date, the Monte Carlo simulation attempts to take into consideration the terms of the awards, potential future returns, payout rates, and other factors to estimate a fair value of the award. The Monte Carlo simulation method uses factual data for the company and employs various assumptions. Stock-based awards granted to employees, non-employees and members of our board of directors include stock options and restricted stock units. Fair value as determined using the Black-Scholes-Merton model varies based on assumptions used for the expected life, expected stock price volatility, expected dividend yield and risk-free interest rates. For the years ended December 31, 2024, 2023 and 2022, we estimated the fair value of awards granted using the hybrid approach for volatility, which weights observable historical volatility and implied volatility of qualifying actively traded options on our common stock. The expected life assumption represents the weighted-average period stock-based awards are expected to remain outstanding. These expected life assumptions are established through a review of historical exercise behavior of stock-based award grants with similar vesting periods. Where historical patterns do not exist for non-employees, contractual terms are used. Dividend yield is based on the current expected annual dividend per share and our stock price. The risk-free interest rate represents the daily treasury yield curve rate at the grant date based on the closing market bid yields on actively traded U.S. treasury securities in the over-the-counter market for the expected term. Our assumptions may change in future periods. F-34 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) SplitCo Awards Liberty Media granted, to certain of its directors and employees, restricted stock awards ("RSAs"), restricted stock units ("RSUs") and stock options to purchase shares of SplitCo common stock (collectively, "SplitCo Awards"). SplitCo measured the cost of employee services received in exchange for an equity classified SplitCo Award based on the grant-date fair value (“GDFV”) of the SplitCo Award and recognized that cost over the period during which the employee is required to provide service (usually the vesting period of the SplitCo Award). SplitCo measured the cost of employee services received in exchange for a liability classified SplitCo Award based on the current fair value of the SplitCo Award and remeasures the fair value of the SplitCo Award at each reporting date. At the time of the Split-Off, outstanding stock options to purchase shares of SplitCo common stock were accelerated and became fully vested and exchanged into stock options to purchase shares of our common stock adjusted based on the exchange ratio identified in the Liberty Sirius XM Holdings Inc. Transitional Stock Adjustment Plan (the “SplitCo Award Exchange Ratio”). The RSAs and RSUs with respect to shares of SplitCo common stock accelerated, became fully vested, and are treated as outstanding shares of our common stock and as such were exchanged into shares of our common stock based on the SplitCo Award Exchange Ratio. Following the Split-Off, a portion of the outstanding stock options to purchase shares of our common stock are to be settled in cash as the underlying shares were not registered, and therefore these awards were classified as liability awards and will be remeasured at each reporting date. As of December 31, 2024, we recognized a liability of $ 2 related to these awards. The following table presents the number and weighted average exercise price ("WAEP") of options to purchase shares of our common stock granted to certain officers, employees and directors of Liberty Media, as well as the weighted average remaining life and aggregate intrinsic value of the options. The shares and WAEP have been adjusted for the exchange ratio of 0.8375 shares of Sirius XM Holdings per share of SplitCo. Refer to Note 1 for more information. Options (000's) WAEP Weighted average remaining life (years) Aggregate intrinsic value Outstanding at January 1, 2024 5 $ 34.78 Exercised ( 1 ) $ 30.98 Forfeited/Cancelled — $ — Transfer to Sirius XM Holdings (1) ( 4 ) $ 35.56 Outstanding at December 31, 2024 — (1) As discussed in the paragraph above, outstanding stock options to purchase shares of SplitCo common stock were accelerated and became fully vested and exchanged into stock options to purchase shares of our common stock, adjusted based on the SplitCo Award Exchange Ratio. Liberty Media calculated the GDFV for its equity classified options using the Black-Scholes Model. Liberty Media estimated the expected term of the options based on historical exercise and forfeiture data. The volatility used in the calculation for options was based on the historical volatility of SplitCo common stock and, when available, the implied volatility of publicly traded SplitCo options. SplitCo uses a zero-dividend rate and the risk-free rate for Treasury Bonds with a term similar to that of the subject options. As of December 31, 2024, we reserved 4.1 shares of our common stock for issuance under exercise privileges of outstanding stock options previously granted by Liberty Media. Sirius XM Holdings Awards 2024 Long-Term Stock Incentive Plan In connection with the Transactions, Liberty Media, as the sole stockholder of SplitCo, approved the Sirius XM Holdings Inc. 2024 Long-Term Stock Incentive Plan (the “2024 Plan”). Employees, consultants and non-employee members of Sirius XM Holdings’ board of directors are eligible to receive awards under the 2024 Plan. The 2024 Plan provides for the grant of stock options, stock appreciation rights (“SARs”), RSAs, RSUs and other stock-based awards that the compensation committee (the “Compensation Committee”) of our board of directors deems appropriate. Stock-based awards granted under the 2024 Plan are generally subject to a graded vesting requirement. Stock options generally expire ten years from the date of grant. RSUs include performance-based RSUs (“PRSUs”), the vesting of which are subject to the achievement of performance goals F-35 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) and the employee’s continued employment. Each RSU entitles the holder to receive one share of common stock upon vesting. As of December 31, 2024, 35 shares of our common stock were available for future grants under the 2024 Plan. Transitional Stock Adjustment Plan In connection with the Transactions, Liberty Media, as the sole stockholder of SplitCo, approved the Sirius XM Holdings Inc. Transitional Stock Adjustment Plan (the “Transitional Plan”). Current and former employees and consultants of Liberty Media or a former direct or indirect subsidiary of Liberty Media, any successor of any such former subsidiary, and the parent company (directly or indirectly) of any such former subsidiary or successor (collectively, a “Qualifying Subsidiary”) or a member of the board of directors of Liberty Media or a Qualifying Subsidiary and in each case, who, as of September 9, 2024, (a) held an outstanding option of any series of Liberty Media’s Liberty SiriusXM common stock (a “Liberty Media SiriusXM Option Award”) pursuant to (i) the Liberty Media Corporation 2013 Incentive Plan (Amended and Restated as of March 31, 2015), as amended, (ii) the Liberty Media Corporation 2013 Nonemployee Director Plan (Amended and Restated as of December 17, 2015), as amended, (iii) the Liberty Media Corporation 2017 Omnibus Incentive Plan, as amended, (iv) the Liberty Media Corporation 2022 Omnibus Incentive Plan, as amended, and/or (v) any other stock option or incentive plan adopted or assumed by Liberty Media (each, a “Liberty Media Incentive Plan”) and (b) received an option under the Transitional Plan in accordance with the terms of the Reorganization Agreement were eligible to receive awards under the Transitional Plan. The Transitional Plan provided for the grant of stock options. Stock options were subject to all the terms and conditions of the applicable Liberty Media Incentive Plan and associated instrument under which the corresponding Liberty Media SiriusXM Option Award was made. As of December 31, 2024, 3 shares of our common stock were reserved for issuance in connection with outstanding stock based awards in connection with the Transitional Plan. Other Plans We maintain four share-based benefit plans in addition to the 2024 Plan and the Transitional Plan — the Sirius XM Holdings Inc. 2015 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. and the Pandora Media, Inc. 2011 Equity Incentive Plan. Excluding dividend equivalent units granted as a result of a declared dividend, no further awards may be made under these plans. The following table summarizes the weighted-average assumptions used to compute the fair value of options granted to employees, members of our board of directors and non-employees under the Sirius XM Awards: For the Years Ended December 31, 2024 2023 2022 Risk-free interest rate 4.4 % 4.0 % 2.0 % Expected life of options — years 3.76 3.80 3.40 Expected stock price volatility 40 % 32 % 31 % Expected dividend yield 2.8 % 2.0 % 1.3 % The following table summarizes stock option activity under our share-based plans for the years ended December 31, 2024: Options WAEP Weighted-Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding as of January 1, 2024 12 $ 56.02 Granted 3 $ 41.95 Exercised — $ 33.57 Forfeited, cancelled or expired ( 1 ) $ 49.89 Transfer in from SplitCo (1) 4 $ 35.56 Outstanding as of December 31, 2024 18 $ 49.69 4.38 $ — Exercisable as of December 31, 2024 14 $ 50.60 3.44 $ — F-36 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) (1) As discussed above, outstanding stock options to purchase shares of SplitCo common stock were accelerated and became fully vested and exchanged into stock options to purchase shares of our common stock adjusted based on the SplitCo Award Exchange Ratio under the Transitional Plan. The weighted average GDFV per stock option granted during the years ended December 31, 2024, 2023 and 2022 was $ 12.31 , $ 1.23 and $ 1.48 , respectively. The total intrinsic value of stock options exercised during the years ended December 31, 2024, 2023 and 2022 was $ 1 , $ 15 and $ 77 , respectively. During the years ended December 31, 2024, 2023 and 2022, the number of net settled shares issued as a result of stock option exercises was less than 1 , 2 and 8 , respectively. The following table summarizes the RSUs, including PRSUs, activity under our share-based plans for the years ended December 31, 2024: Shares GDFV Per Share Nonvested as of January 1, 2024 9 $ 55.91 Granted 7 $ 33.21 Vested ( 3 ) $ 56.69 Forfeited ( 1 ) $ 52.59 Nonvested as of December 31, 2024 12 $ 42.33 The total intrinsic value of RSUs, including PRSUs, vesting during the years ended December 31, 2024, 2023 and 2022 was $ 113 , $ 147 and $ 207 , respectively. During the years ended December 31, 2024, 2023 and 2022 , the number of net settled shares issued as a result of RSUs vesting totaled 2 , 19 and 19 , respectively. During the years ended December 31, 2024, 2023 and 2022, we granted 1 , 4 and 6 , respectively, PRSUs to certain employees. We believe it is probable that the performance target applicable to these PRSUs will be achieved. In connection with the cash dividends paid during the years ended December 31, 2024, 2023 and 2022, we granted less than 1 , 1 and 4 , respectively, RSUs, 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, 2024. Total unrecognized compensation costs related to unvested share-based payment awards for our stock options and RSUs, including PRSUs, granted to employees, members of our board of directors and third parties at December 31, 2024 and December 31, 2023 was $ 402 and $ 423 , respectively. The total unrecognized compensation costs at December 31, 2024 are expected to be recognized over a weighted-average period of 2.6 years. 401(k) Savings Plans We sponsor the Sirius XM Radio Inc. 401(k) Savings Plan (the “Sirius XM Plan”) for eligible employees. The Sirius XM Plan allows eligible employees to voluntarily contribute from 1 % to 50 % of their pre-tax eligible earnings, subject to certain defined limits. We match 50 % of an employee’s voluntary contributions per pay period on the first 6 % of an employee’s pre-tax salary up to a maximum of 3 % of eligible compensation. We may also make additional discretionary matching, true-up matching and non-elective contributions to the Sirius XM Plan. Employer matching contributions under the Sirius XM Plan vest at a rate of 33.33 % for each year of employment and are fully vested after three years of employment for all current and future contributions. Our cash employer matching contributions are not used to purchase shares of our common stock on the open market, unless the employee elects our common stock as their investment option for this contribution. We recognized expenses of $ 20 , $ 20 and $ 19 for the years ended December 31, 2024, 2023 and 2022, respectively, in connection with the Sirius XM Plan. Sirius XM Holdings Inc. Deferred Compensation Plan The Sirius XM Holdings Inc. Deferred Compensation Plan (the “DCP”) allows members of our board of directors and certain eligible employees to defer all or a portion of their base salary, cash incentive compensation and/or board of directors’ cash compensation, as applicable. Pursuant to the terms of the DCP, we may elect to make additional contributions beyond amounts deferred by participants, but we are under no obligation to do so. We have established a grantor (or “rabbi”) trust to facilitate the payment of our obligations under the DCP. F-37 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Contributions to the DCP, net of withdrawals, for the years ended December 31, 2024, 2023 and 2022, were $( 1 ), $( 3 ) and $( 1 ), respectively. As of December 31, 2024 and December 31, 2023, the fair value of the investments held in the trust were $ 60 and $ 53 , respectively, which is included in Other long-term assets in our audited consolidated balance sheets and classified as trading securities. Trading gains and losses associated with these investments are recorded in Other (expense) income within our audited consolidated statements of operations. The associated liability is recorded within Other long-term liabilities in our audited consolidated balance sheets, and any increase or decrease in the liability is recorded in General and administrative expense within our audited consolidated statements of operations. We recorded gains (losses) on investments held in the trust of $ 6 , $ 7 and $( 10 ) for the years ended December 31, 2024, 2023 and 2022, respectively. (16) Commitments and Contingencies The following table summarizes our expected contractual cash commitments as of December 31, 2024: 2025 2026 2027 2028 2029 Thereafter Total Debt obligations $ 61 $ 1,059 $ 2,477 $ 2,575 $ 1,250 $ 3,000 $ 10,422 Cash interest payments 469 462 410 280 189 178 1,988 Satellite and transmission 228 117 42 1 1 3 392 Programming and content 408 269 173 88 43 20 1,001 Sales and marketing 42 27 10 2 2 — 83 Satellite incentive payments 8 3 3 3 2 10 29 Operating lease obligations 58 55 50 42 37 37 279 Royalties, minimum guarantees and other 669 692 351 291 199 77 2,279 Total (1) $ 1,943 $ 2,684 $ 3,516 $ 3,282 $ 1,723 $ 3,325 $ 16,473 (1) The table does not include our reserve for uncertain tax positions, which at December 31, 2024 totaled $ 76 . Debt obligations. Debt obligations include principal payments on outstanding debt and finance lease obligations. Cash interest payments. Cash interest payments include interest due on outstanding debt and finance lease payments through maturity. Satellite and transmission. We have entered into agreements for the design, construction, launch and insurance of three additional satellites 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. Programming and content. We have entered into various programming and content agreements. Under the terms of these agreements, our obligations include fixed payments, advertising commitments and revenue sharing arrangements. In certain of these agreements, the future revenue sharing costs are dependent upon many factors and are difficult to estimate; therefore, they are not included in our minimum contractual cash commitments. Sales and marketing. We have entered into various marketing, sponsorship and distribution agreements to promote our brands and are obligated to make payments to sponsors, retailers, automakers, radio manufacturers and other third parties under these agreements. Certain programming and content agreements also require us to purchase advertising on properties owned or controlled by the licensors. Satellite incentive payments. Maxar Technologies (formerly Space Systems/Loral), the manufacturer of certain of our in-orbit satellites, may be entitled to future in-orbit performance payments upon XM-5, SIRIUS FM-5, SIRIUS FM-6, and SXM-8 meeting their fifteen-year design life, which we expect to occur. Operating lease obligations. We have entered into both cancelable and non-cancelable operating leases for office space, terrestrial repeaters, data centers and equipment. These leases provide for minimum lease payments, additional operating expense charges, leasehold improvements and rent escalations that have initial terms ranging from one to fifteen years , and F-38 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) certain leases have options to renew. Total rent recognized in connection with leases for the years ended December 31, 2024, 2023 and 2022 was $ 63 , $ 64 and $ 68 , respectively. Royalties, Minimum Guarantees and Other. We have entered into music royalty arrangements that include fixed payments. In addition, certain of our podcast agreements also contain minimum guarantees. As of December 31, 2024, we had future fixed commitments related to music royalty and podcast agreements of $ 837 , of which $ 311 will be paid in 2025 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 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 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. We have entered into certain tax equity investments in which we expect to make future contributions. These future contributions are expected to be made over the remaining respective terms of the investments and totaled $ 735 as of December 31, 2024, of which $ 88 is expected to be paid in 2025 and the remainder thereafter. Several of our content agreements also include provisions related to the royalty payments and structures of those agreements relative to other content licensing arrangements, which, if triggered, cause our payments under those agreements to escalate. In addition, record labels, publishers and performing rights organizations with whom we have entered into direct license agreements have the right to audit our content payments, and such audits often result in disputes over whether we have paid the proper content costs. We have also entered into various agreements with third parties for general operating purposes. In addition to the minimum contractual cash commitments described above, we have entered into other variable cost arrangements. These future costs are dependent upon many factors and are difficult to anticipate; however, these costs may be substantial. We may enter into additional programming, distribution, marketing and other agreements that contain similar variable cost provisions. We do not have any other significant off-balance sheet financing arrangements that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources. Legal Proceedings In the ordinary course of business, we are a defendant or party to various claims and lawsuits, including those discussed below. We record a liability when we believe that it is both probable that a liability will be incurred, and the amount of loss can be reasonably estimated. We evaluate developments in legal matters that could affect the amount of liability that has been previously accrued and make adjustments as appropriate. Significant judgment is required to determine both probability and the estimated amount of a loss or potential loss. We may be unable to reasonably estimate the possible loss or range of loss for a particular legal contingency for various reasons, including, among others, because: (i) the damages sought are indeterminate; (ii) the proceedings are in the relative early stages; (iii) there is uncertainty as to the outcome of pending proceedings (including motions and appeals); (iv) there is uncertainty as to the likelihood of settlement and the outcome of any negotiations with respect thereto; (v) there remain significant factual issues to be determined or resolved; (vi) the relevant law is unsettled; or (vii) the proceedings involve novel or untested legal theories. 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. 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 Sirius XM. The Petition alleges various violations of New York law and the federal Restore Online Shoppers’ Confidence Act (“ROSCA”) arising out of Sirius XM's subscription cancellation practices. In general, the Petition alleges that Sirius XM requires consumers to devote an excessive amount of time to cancel subscriptions and have not implemented cancellation processes that are simple and efficient. F-39 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) 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 against violating provisions of New York law and ROSCA arising out of the alleged deceptive practices associated with Sirius XM's 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 improper acts; civil penalties; and the NY AG’s costs. Sirius XM filed an Answer to the Petition and cross moved for summary judgment with respect to various claims asserted in the Petition. In November 2024, a New York Court granted Sirius XM summary judgment on all but one of the NY AG's claims. The New York Court did find that Sirius XM's cancellation practices violated the “simple mechanism requirement” for subscription cancellations contained in ROSCA. As a result of the Court's findings, Sirius XM now permits New York residents who purchase a subscription online to also cancel that subscription online, a cancellation mechanism that is at least as easy to use as the method the consumer used to initiate the subscription. The NY AG has filed a notice of appeal relating to the four counts in the Petition that the Court granted Sirius XM summary judgment with respect to. Sirius XM has also filed a notice of appeal relating to the one count in the Petition, the violation of ROSCA, that the Court granted the State of New York summary judgment with respect to. Sirius XM believes it has substantial defenses to the action and intends to defend this action vigorously. U.S. Music Royalty Fee Actions and Mass Arbitrations . A number of class actions and mass arbitrations have been commenced against Sirius XM relating to its pricing, billing and subscription marketing practices. Although each class action and mass arbitration contains unique allegations; in general, the actions and arbitrations allege that Sirius XM falsely advertised its music subscription plans at lower prices than it actually charges, that it allegedly did not disclose its “U.S. Music Royalty Fee”, and that Sirius XM has 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 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 Sirius XM 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 issued an Order on November 9, 2023 granting Sirius XM’s Motion to Compel Arbitration and dismissed the complaint. Plaintiffs appealed the Court’s granting of the Motion, and Sirius XM cross-appealed the Court’s dismissal in lieu of the issuance of a stay pending arbitration. The appeal and cross-appeal have been dismissed leaving the District Court’s order compelling arbitration in place. • 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. Sirius XM filed a Motion to Compel Arbitration on August 18, 2023. Sirius XM renewed that motion on June 14, 2024 and the renewed motion remains pending. • On June 5, 2023, Christopher Carovillano and Steven Brandt, individually, as private attorneys general, and on behalf of all other U.S. 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. On February 6, 2024, the Court issued an Order denying Sirius XM’s Motion to Dismiss and Sirius XM filed an Answer to the complaint on February 20, 2024. On May 24, 2024, Sirius XM filed a Motion for Partial Summary Judgement and to Strike Class Allegations. On July 18, 2024, the Court issued an Opinion and Order granting Sirius XM's motion for partial summary judgement and striking the plaintiffs' class allegations. Sirius XM has filed another motion for summary judgment as to plaintiff's remaining individual claims. • On June 1, 2024, Elenamarie Burns, Jacqueline Gardner, and Lynne Silver filed a petition on behalf of 7,628 individuals in the Commercial Division of the Supreme Court of New York, County of New York, seeking to compel Sirius XM to arbitrate and advance the payment of American Arbitration Association (the "AAA") arbitration fees in F-40 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) connection with individual arbitrations. On July 3, 2024, those petitioners filed an amended petition seeking the same relief on behalf of a revised list of 7,628 petitioners. The Court has not taken any action in connection with the amended petition. • On June 14, 2024, Kara Kirkpatrick, Gillian Maxfield, Anna Demarco and Cody Michael, individually and on behalf of all other Oregon persons similarly situated, filed a class action complaint against Sirius XM in the United States District Court for the District of Oregon. • On June 21, 2024, Cindy Balmores, Justin Braswell, Deborah Garvin, and Thea Anderson, individually, as private attorneys general, and on behalf of all other Washington persons similarly situated, filed a class action complaint against Sirius XM in the United States District Court for the Western District of Washington. • On June 25, 2024, Denise Woods and Sherry Tapia, 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 United States District Court for the Northern District of California. • On June 26, 2024, Bonnie Wilson, individually and on behalf of all other U.S. persons similarly situated, filed a class action complaint against Sirius XM in the United States District Court for the Southern District of New York. • Commencing in June 2023, various law firms began filing mass arbitration claims against Sirius XM before the AAA. Collectively, the law firms purport to act on behalf of approximately 70,000 claimants. Several of the law firms have asserted additional causes of action under the Electronic Funds Transfer Act. Sirius XM believes it has substantial defenses to the claims asserted in these actions and arbitrations, and it intends to defend these actions vigorously. Other Matters . In the ordinary course of business, Sirius XM Holdings, Sirius XM and its subsidiaries, such as Pandora, are defendants in various other lawsuits, mass arbitration and individual arbitration proceedings, including derivative actions; actions filed by subscribers, both on behalf of themselves and on a class action basis; former employees; parties to contracts or leases; and owners of purported patents, trademarks, copyrights or other intellectual property. None of these other matters, in our opinion, is likely to have a material adverse effect on our business, financial condition or results of operations. (17) Income Taxes Current federal income tax expense or benefit represents the amounts expected to be reported on 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. The current state income tax provision is primarily related to taxable income in certain states that have suspended or limited the ability to use net operating loss carryforwards or where net operating losses have been fully utilized. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities. We have historically filed a consolidated federal income tax return for all of our wholly owned subsidiaries, including Sirius XM and Pandora. On February 1, 2021, we entered into a tax sharing agreement with Liberty Media governing the allocation of consolidated U.S. income tax liabilities and setting forth agreements with respect to other tax matters. The tax sharing agreement contained provisions that we believed were customary for tax sharing agreements between members of a consolidated group. On November 3, 2021, Liberty Media informed us that it beneficially owned over 80 % of the outstanding shares of our common stock, as a result of this, we were included in the consolidated tax return of Liberty Media beginning November 4, 2021. In connection with the closing of the Transactions, on September 9, 2024, this existing Tax Agreement with Liberty Media was terminated, when Liberty Media completed the Split-Off and ceased to own any shares of our common stock. As a result, we ceased to be a member of Liberty Media’s consolidate tax group beginning on September 9, 2024 and ceased to file a consolidated tax return with Liberty Media on such date. In connection with the Transactions, we entered into a new Tax Sharing Agreement with Liberty Media. The Tax Sharing Agreement generally allocates taxes, tax benefits, tax items, and tax-related losses between Liberty Media and us in a manner consistent with the tax sharing policies of Liberty Media in effect prior to the Split-Off, with taxes, tax benefits and tax items attributable to the assets, liabilities and activities attributed to the Liberty Formula One Group and the Liberty Live Group being allocated to Liberty Media, and taxes, tax benefits and tax items attributable to the assets, liabilities and activities attributed to the Liberty SiriusXM Group being allocated to us. In addition, the Tax Sharing Agreement includes additional F-41 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) provisions related to the manner in which any taxes or tax-related losses arising from the Split-Off will be allocated between the parties and provides restrictive covenants intended to preserve the generally tax-free treatment of the Transactions. The failure by a party to comply with its restrictive covenants may change the general allocation of taxes, tax benefits and tax items between the parties related to the Transactions. The parties have agreed to indemnify each other for taxes and losses allocated to them under the Tax Sharing Agreement and for taxes and losses arising from a breach by them of their respective covenants and obligations under the Tax Sharing Agreement. The Tax Sharing Agreement also includes provisions addressing the filing of tax returns, control of tax audits, cooperation on tax matters, retention of tax records, indemnification, and other tax matters. For the period January 1, 2024 through September 9, 2024, our current tax expense is the amount of tax payable on the basis of a hypothetical, current-year separate return. We provided deferred taxes on temporary differences and on any carryforwards that we could claim on our hypothetical and actual returns 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 short year one 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. Subsequent to September 9, 2024 and as a result of the Split-Off, our current tax expense represents taxes attributable to the business carried on by us on a standalone basis. Income tax expense consisted of the following: For the Years Ended December 31, 2024 2023 2022 Current taxes: Federal $ 297 $ 205 $ 80 State 72 57 48 Foreign 2 — — Total current taxes expense 371 262 128 Deferred taxes: Federal ( 165 ) ( 30 ) 203 State 4 ( 10 ) 37 Total deferred taxes (benefit) expense ( 161 ) ( 40 ) 240 Total income tax expense $ 210 $ 222 $ 368 The following table presents a reconciliation of the U.S. federal statutory tax rate and our effective tax rate: For the Years Ended December 31, 2024 2023 2022 Federal tax expense, at statutory rate 21.0 % 21.0 % 21.0 % State income tax expense, net of federal benefit 4.0 % 4.9 % 4.2 % Tax equity Investments, Inclusive of Tax Equity Credit 1.9 % ( 1.5 ) % — % R&D Tax Credits 1.9 % ( 8.3 ) % ( 1.7 ) % Change in valuation allowance ( 0.3 ) % ( 2.1 ) % 2.3 % Share-based compensation ( 1.3 ) % 1.8 % ( 1.0 ) % Impact of nondeductible compensation ( 0.4 ) % 1.0 % 1.0 % Goodwill impairment ( 37.8 ) % — % — % Uncertain tax positions ( 0.3 ) % 0.6 % ( 0.8 ) % Convertible Notes 1.3 % 2.7 % ( 0.5 ) % Intergroup interests — % ( 1.2 ) % 0.3 % Other, net ( 1.3 ) % ( 0.6 ) % — % Effective tax rate ( 11.3 ) % 18.3 % 24.8 % Our effective tax rate of ( 11.3 )% for the year ended December 31, 2024 was primarily driven by federal and state income tax expense, offset by the nondeductible impairment of goodwill. Our effective tax rate of 18.3 % for the year ended F-42 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) 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 24.8 % for the year ended December 31, 2022 was primarily driven 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. 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. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences can be carried forward under tax law. Our evaluation of the realizability of deferred tax assets considers both positive and negative evidence, including historical financial performance, scheduled reversal of deferred tax assets and liabilities, projected taxable income and tax planning strategies. The weight given to the potential effects of positive and negative evidence is based on the extent to which it can be objectively verified. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities, shown before jurisdictional netting, are presented below: For the Years Ended December 31, 2024 2023 Deferred tax assets: Net operating loss carryforwards and tax credits $ 321 $ 368 Other accrued liabilities 44 89 Accrued stock compensation 53 56 Deferred revenue 46 42 Investments 102 — Other future deductible amounts 117 127 Total deferred tax assets 683 682 Deferred tax liabilities: Intangible assets ( 2,550 ) ( 2,576 ) Fixed assets ( 124 ) ( 233 ) Debt ( 3 ) ( 15 ) Investments — ( 29 ) Total deferred tax liabilities ( 2,677 ) ( 2,853 ) Net deferred tax liabilities before valuation allowance ( 1,994 ) ( 2,171 ) Valuation allowance ( 93 ) ( 88 ) Total net deferred tax liability $ ( 2,087 ) $ ( 2,259 ) 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, 2024 and 2023, we recorded $ 183 and $ 76 for state and federal tax credits, respectively. As of December 31, 2024, our gross federal net operating loss carryforwards were approximately $ 199 which are subject to Section 382 limitations. As of December 31, 2024 and 2023, we had a valuation allowance related to deferred tax assets of $ 93 and $ 88 , respectively, which were not likely to be realized due to the timing of certain state net operating loss limitations. During the year ended December 31, 2024, our valuation allowance increased primarily as a result of the impact of a decrease in forecasted earnings, resulting in lower 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 F-43 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority. If the tax position is not more likely than not to be sustained, the gross amount of the unrecognized tax position will not be recorded in the financial statements but will be shown in tabular format within the uncertain income tax positions. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs due to the following conditions: (1) the tax position is “more likely than not” to be sustained, (2) the tax position, amount, and/or timing is ultimately settled through negotiation or litigation, or (3) the statute of limitations for the tax position has expired. A number of years may elapse before an uncertain tax position is effectively settled or until there is a lapse in the applicable statute of limitations. We record interest and penalties related to uncertain tax positions in Income tax expense in our audited consolidated statements of operations. 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. During the year ended December 31, 2024, we recognized net tax benefits of $ 32 related to our tax equity investments. These recognized net tax benefits were recorded to Income tax expense in our audited consolidated statement of operations. During the year ended December 31, 2024, the net tax benefits included tax credits and other income tax benefits of $ 153 which was partially offset by amortization expense of $ 121 . As of December 31, 2024 and 2023, we had unrecognized tax benefits and uncertain tax positions of $ 201 and $ 171 , respectively. If recognized, $ 201 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, 2024 and 2023 were $ 76 and $ 50 , respectively, including accrued interest. We have state income tax audits pending. We do not expect the ultimate outcome of these audits to have a material adverse effect on our financial position or results of operations. We also do not currently anticipate that our existing reserves related to uncertain tax positions as of December 31, 2024 will significantly increase or decrease during the year ending December 31, 2025. Various events could cause our current expectations to change. Should our position with respect to the majority of these uncertain tax positions be upheld, the effect would be recorded in our consolidated statements of operations as part of the income tax provision. We recorded interest expense of $ 4 and $ 2 for the years ended December 31, 2024 and 2023, respectively, related to unrecognized tax benefits. Changes in our unrecognized tax benefits and uncertain tax positions from January 1 through December 31 are set forth below: 2024 2023 Balance, beginning of year $ 171 $ 198 Increases in tax positions for prior years 5 4 Increases in tax positions for current year 27 32 Decreases in tax positions for prior years — ( 2 ) Decreases in tax positions for current years ( 2 ) ( 3 ) Decreases related to settlement with taxing authorities — ( 58 ) Balance, end of year $ 201 $ 171 (18) Segments and Geographic Information In accordance with FASB ASC Topic 280, Segment Reporting , we disaggregate our operations into two reportable segments: Sirius XM and Pandora and Off-platform. The financial results of these segments are utilized by the chief operating decision maker, who is our Chief Executive Officer, for evaluating segment performance and allocating resources. We report our segment information based on the "management" approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reportable segments. For additional information on our segments refer to Note 1. F-44 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) Segment results include the revenues and cost of services which are directly attributable to each segment. There are no indirect revenues or costs incurred that are allocated to the segments. There are planned intersegment advertising campaigns which will be eliminated. We had $ 4 , $ 3 and less than $ 1 of intersegment advertising revenue during the years ended December 31, 2024, 2023 and 2022, respectively. Segment revenue and gross profit were as follows during the periods presented: For the Year Ended December 31, 2024 Sirius XM Pandora and Off-platform Total Revenue Subscriber revenue $ 6,076 $ 540 $ 6,616 Advertising revenue 167 1,606 1,773 Other revenue 310 — 310 Total revenue 6,553 2,146 8,699 Cost of services Revenue share and royalties $ ( 1,565 ) $ ( 1,270 ) $ ( 2,835 ) Programming and content (a) ( 517 ) ( 58 ) ( 575 ) Other (a)(b) ( 560 ) ( 113 ) ( 673 ) Total cost of services ( 2,642 ) ( 1,441 ) ( 4,083 ) Segment gross profit $ 3,911 $ 705 $ 4,616 The reconciliation between reportable segment gross profit to consolidated loss before income tax is as follows: For the Year Ended December 31, 2024 Segment Gross Profit $ 4,616 Subscriber acquisition costs ( 369 ) Sales and marketing (a) ( 849 ) Product and technology (a) ( 252 ) General and administrative (a) ( 432 ) Depreciation and amortization ( 578 ) Share-based payment expense ( 200 ) Impairment, restructuring and acquisition costs ( 3,453 ) Total other (expense) income ( 348 ) Consolidated loss before income taxes $ ( 1,865 ) (a) Share-based payment expense of $ 46 related to cost of services, $ 45 related to sales and marketing, $ 44 related to product and technology and $ 65 related to general and administrative has been excluded for the year ended December 31, 2024. (b) Sirius XM other costs of services related to customer service and billing of $ 364 , transmission costs of $ 186 and cost of equipment of $ 10 . Pandora other costs of services related to customer service and billing of $ 79 and transmission costs of $ 34 . F-45 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) For the Year Ended December 31, 2023 Sirius XM Pandora and Off-platform Total Revenue Subscriber revenue $ 6,342 $ 524 $ 6,866 Advertising revenue 169 1,589 1,758 Other revenue 329 — 329 Total revenue 6,840 2,113 8,953 Cost of services Revenue share and royalties $ ( 1,603 ) $ ( 1,292 ) $ ( 2,895 ) Programming and content (c) ( 518 ) ( 66 ) ( 584 ) Other (c)(d) ( 568 ) ( 117 ) ( 685 ) Total cost of services ( 2,689 ) ( 1,475 ) ( 4,164 ) Segment gross profit $ 4,151 $ 638 $ 4,789 The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows: For the Year Ended December 31, 2023 Segment Gross Profit $ 4,789 Subscriber acquisition costs ( 359 ) Sales and marketing (c) ( 886 ) Product and technology (c) ( 276 ) General and administrative (c) ( 541 ) Depreciation and amortization ( 624 ) Share-based payment expense ( 203 ) Impairment, restructuring and acquisition costs ( 92 ) Total other (expense) income ( 598 ) Consolidated income before income taxes $ 1,210 (c) Share-based payment expense of $ 45 related to cost of services, $ 45 related to sales and marketing, $ 46 related to product and technology and $ 67 related to general and administrative has been excluded for the year ended December 31, 2023. (d) Sirius XM other costs of services related to customer service and billing of $ 388 , transmission costs $ 166 and cost of equipment $ 14 . Pandora other costs of services related to customer service and billing of $ 83 and transmission costs $ 34 . F-46 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) For the Year Ended December 31, 2022 Sirius XM Pandora and Off-platform Total Revenue Subscriber revenue $ 6,370 $ 522 $ 6,892 Advertising revenue 196 1,576 1,772 Other revenue 339 — 339 Total revenue 6,905 2,098 9,003 Cost of services Revenue share and royalties $ ( 1,552 ) $ ( 1,250 ) $ ( 2,802 ) Programming and content (e) ( 514 ) ( 56 ) ( 570 ) Other (e)(f) ( 575 ) ( 137 ) ( 712 ) Total cost of services ( 2,641 ) ( 1,443 ) ( 4,084 ) Segment gross profit $ 4,264 $ 655 $ 4,919 The reconciliation between reportable segment gross profit to consolidated income before income tax is as follows: For the Year Ended December 31, 2022 Segment Gross Profit $ 4,919 Subscriber acquisition costs ( 352 ) Sales and marketing (e) ( 1,023 ) Product and technology (e) ( 246 ) General and administrative (e) ( 491 ) Depreciation and amortization ( 611 ) Share-based payment expense ( 209 ) Impairment, restructuring and acquisition costs ( 68 ) Total other (expense) income ( 433 ) Consolidated income before income taxes $ 1,486 (e) Share-based payment expense of $ 46 related to cost of services, $ 52 related to sales and marketing, $ 39 related to product and technology and $ 72 related to general and administrative has been excluded for the year ended December 31, 2022. (f) Sirius XM other costs of services related to customer service and billing of $ 409 , transmission costs $ 153 and cost of equipment $ 13 . Pandora other costs of services related to customer service and billing of $ 82 and transmission costs $ 55 . The segment gross profit above is regularly provided to Chief Operating Decision Maker to assess which segment is more profitable as well as to identify opportunities and risks to profitability within the segments to determine resource allocations accordingly. A measure of segment assets is not currently provided to the Chief Operating Decision Maker and has therefore not been provided. As of December 31, 2024, long-lived assets were predominantly located in the United States. No individual foreign country represented a material portion of our consolidated revenue during the year ended December 31, 2024. F-47 Table of Contents SIRIUS XM HOLDINGS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (Dollars and shares in millions, except per share amounts or otherwise stated) (19) Subsequent Events Capital Return Program On January 22, 2025, our board of directors declared a quarterly dividend on our common stock in the amount of $ 0.27 per share of common stock payable on February 25, 2025 to stockholders of record as of the close of business on February 7, 2025. For the period from January 1, 2025 to January 28, 2025, we repurchased 501 thousand shares of our common stock on the open market for an aggregate purchase price of $ 11 , including fees and commissions. F-48 Table of Contents SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES Schedule II - Schedule of Valuation and Qualifying Accounts (in millions) Description Balance January 1, Charged to Expenses Write-offs/ Payments/ Other Balance December 31, 2024 Allowance for doubtful accounts $ 15 52 ( 57 ) $ 10 Deferred tax assets—valuation allowance $ 88 21 ( 16 ) $ 93 2023 Allowance for doubtful accounts $ 11 59 ( 55 ) $ 15 Deferred tax assets—valuation allowance $ 113 — ( 25 ) $ 88 2022 Allowance for doubtful accounts $ 10 59 ( 58 ) $ 11 Deferred tax assets—valuation allowance $ 83 35 ( 5 ) $ 113 F-49