EX-99.1

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The unaudited pro forma condensed combined balance sheet of Sirius XM Radio Inc. and Subsidiaries, combines (i) the historical consolidated balance sheets of Sirius Satellite Radio Inc. and its subsidiaries (“Sirius”) and XM Satellite Radio Holdings Inc. (“Holdings” and its subsidiaries together with Holdings, “XM”), giving effect to the merger of Holdings and Vernon Merger Corporation (the “merger”), pursuant to which Holdings became a wholly-owned subsidiary of Sirius, as well as the refinancing of a substantial portion of XM’s existing indebtedness and raising of certain additional liquidity, which we refer to as the “Refinancing Transactions” as if they had been consummated on June 30, 2008 and (ii) the unaudited pro forma condensed combined statements of operations for the six months ended June 30, 2008 and for the year ended December 31, 2007, giving effect to the merger and the Refinancing Transactions as if they had occurred on January 1, 2007. The historical consolidated financial information has been adjusted to give effect to pro forma events that are (i) directly attributable to the merger, (ii) factually supportable, and (iii) with respect to the statement of operations, expected to have a continuing impact on the combined results. Intercompany transactions have not been eliminated as the preliminary estimates are not material to the unaudited pro forma condensed combined financial statements.

The unaudited pro forma condensed combined financial statements are not necessarily indicative of the operating results or financial position that would have occurred if the merger had been completed at the dates indicated. It may be necessary to further reclassify XM’s financial statements to conform to those classifications that are determined by the combined company to be most appropriate. While some reclassifications of prior periods have been included in the unaudited pro forma condensed combined financial statements, further reclassifications may be necessary.

The unaudited pro forma condensed combined financial statements were prepared using the purchase method of accounting with Sirius treated as the acquiring entity. Accordingly, consideration paid by Sirius to complete the merger with XM will be allocated to XM’s assets and liabilities based upon their estimated fair values as of the date of completion of the merger. The allocation is dependent upon certain valuations and other studies that have not progressed to a stage where there is sufficient information to make a definitive allocation. Additionally, a final determination of the fair value of XM’s assets and liabilities will be based on the actual net tangible and intangible assets of XM that exist as of the date of completion of the merger. Accordingly, the pro forma purchase price adjustments are preliminary, subject to further adjustments as additional information becomes available and as additional analyses are performed and have been made solely for the purpose of providing the unaudited pro forma condensed combined financial information presented below. Sirius estimated the fair value of XM’s assets and liabilities based on discussions with XM’s management, due diligence and information presented in public filings. Certain valuations have not been performed on tangible and intangible assets and liabilities such as property and equipment and deferred revenue and therefore an estimate of fair value is not included as a pro forma adjustment. Final valuations will be performed. Increases or decreases in the fair value of relevant balance sheet amounts including property and equipment, deferred revenue, debt and intangibles will result in adjustments to the balance sheet and/or statement of operations. There can be no assurance that the final determination will not result in material changes.

These pro forma results reflect the impact of the following Refinancing Transactions:

•		the repurchase of the $600 million aggregate principle amount of 9.75% Senior Notes due 2014 (the “9.75% Notes”) of XM Satellite Radio Inc. (“XM Inc.”) for cash,

•		the repurchase of $200 million aggregate principle amount of Senior Floating Rate Notes due 2103 (the “Senior Floating Rate Notes”) of XM Inc. for cash,

•		amendment of the indenture for Holdings’1.75% Convertible Senior Notes due 2009 (the “1.75% Notes”) to increase the interest rate to 10% per annum in return for the noteholders agreeing not to assert any claim that the merger constitutes a Fundamental Change under the existing indenture,

•		issuance by XM Inc. of $550 million aggregate principle amount of 7% Exchangeable Senior Subordinated Notes due 2014 (the “New Exchangeable Notes”),

•		issuance by XM Inc. of $778.5 million aggregate principal amount of 13% Senior Notes due 2014 (the “13% Senior Notes”), the debt balance of which is reflected herein net of original issue discount of approximately $78.4 million, and

•		payment of $309.4 million for XM’s transponder repurchase obligation, for both debt and equity holders of a consolidated variable interest entity.

Sirius expects to incur significant costs associated with integrating Sirius’ and XM’s businesses. The unaudited pro forma condensed combined financial statements do not reflect the cost of any integration activities or benefits that may result from synergies that may be derived from any integration activities. In addition, the unaudited pro forma combined consolidated financial statements do not reflect one-time fees and expenses of $25 million payable by Sirius as a result of the merger or payments contemplated by the Consent Decrees.

SIRIUS XM RADIO INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Combined Statement of Operations


	For the Six Months Ended June 30, 2008
							Pro Forma
	Sirius			XM			Adjustments			Combined
	(in thousands, except per share amounts)
Revenue:
Subscriber revenue, including effects of rebates	$	522,158		$	559,862		$	10,188	(a)	$	1,092,208
Advertising revenue, net of agency fees		16,740			19,550			—			36,290
Equipment revenue		14,019			11,812			—			25,831
Other revenue		450			35,266			(10,188	) (a)		25,528

Total revenue		553,367			626,490			—			1,179,857
Operating expenses (excludes depreciation shown separately below)(1):
Cost of services:
Satellite and transmission		15,275			26,653			13,269	(b)		55,197
Programming and content		116,939			101,166			—			218,105
Revenue share and royalties		92,043			142,408			—			234,451
Customer service and billing		49,786			70,698			—			120,484
Cost of equipment		14,234			17,606			—			31,840
Broadcast and operations		—			34,785			(34,785	) (b)		—
Sales and marketing		87,598			—			95,779	(c)		183,377
Ad sales		—			9,583			(9,583	) (c)		—
Marketing		—			226,913			(86,196	) (c)		—
								(140,717	)(d)
Subscriber acquisition costs		171,216			—			140,717	(d)		311,933
General and administrative		91,246			61,719			21,516	(b)		174,481
Engineering, design and development		17,684			20,435			—			38,119
Depreciation and amortization		54,019			90,928			63,833	(f)		208,780

Total operating expenses		710,040			802,894			63,833			1,576,767

Loss from operations		(156,673	)		(176,404	)		(63,833	)		(396,910	)
Other Income (Expense):
Interest and investment income		4,227			2,419			—			6,646
Interest expense, net of amounts capitalized		(34,421	)		(59,807	)		(46,289)	(e)		(140,517	)
Loss from impairment of investments		—			—			—			—
Loss from de-leveraging transactions		—			—			—			—
Other income (expense)		(64	)		(14,045	)		—			(14,109	)

Total other income (expense)		(30,258	)		(71,433	)		(46,289	)		(147,980	)

Loss before income taxes		(186,931	)		(247,837	)		(110,122	)		(544,890	)
Income tax (expense) benefit		(1,086	)		(1,004	)		—			(2,090	)

Net loss	$	(188,017	)	$	(248,841	)	$	(110,122	)	$	(546,980	)

Net loss per common share — basic and diluted										$	(0.19	)

Weighted average shares used in computing net loss per common share — basic and diluted											2,948,309


(1) Amounts related to stock-based compensation included in Operating expenses were as follows:
Satellite and transmission	$	1,555		$	1,089		$	1,351	(b)	$	3,995
Programming and content		3,949			4,363			—			8,312
Broadcast and operations		—			2,180			(2,180	) (b)		—
Customer service and billing		541			1,641			—			2,182
Sales and marketing		7,704			—			6,277	(c)		13,981
Ad sales		—			1,044			(1,044	) (c)		—
Marketing		—			5,233			(5,233	) (c)		—
Subscriber acquisition costs		14			—			—			14
General and administrative		23,455			10,737			829	(b)		35,021
Engineering, design and development		2,195			4,164			—			6,359

Total stock-based compensation	$	39,413		$	30,451		$	—		$	69,864

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

SIRIUS XM RADIO INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Combined Statement of Operations


	For the Year Ended December 31, 2007
							Pro Forma
	Sirius			XM			Adjustments			Combined
	(in thousands, except per share amounts)
Revenue:
Subscriber revenue, including effects of rebates	$	854,933		$	1,005,479		$	19,354	(a)	$	1,879,766
Advertising revenue, net of agency fees		34,192			39,148			—			73,340
Equipment revenue		29,281			28,333			—			57,614
Other revenue		3,660			63,582			(19,354	) (a)		47,888

Total revenue		922,066			1,136,542			—			2,058,608
Operating expenses (excludes depreciation shown separately below)(1):
Cost of services:
Satellite and transmission		27,907			54,434			26,602	(b)		108,943
Programming and content		236,059			183,900			—			419,959
Revenue share and royalties		146,715			256,344			—			403,059
Customer service and billing		93,817			126,776			—			220,593
Cost of equipment		45,458			62,003			—			107,461
Broadcast and operations		—			65,067			(65,067	)(b)		—
Sales and marketing		173,572			—			243,915	(c)		417,487
Marketing		—			482,466			(223,323	) (c)		—
								(259,143	) (d)
Ad sales		—			20,592			(20,592	) (c)		—
Subscriber acquisition costs		407,642			—			259,143	(d)		666,785
General and administrative		155,863			150,109			38,465	(b)		344,437
Engineering, design and development		41,343			33,077			—			74,420
Depreciation and amortization		106,780			213,211			127,667	(f)		447,658

Total operating expenses		1,435,156			1,647,979			127,667			3,210,802

Loss from operations		(513,090	)		(511,437	)		(127,667	)		(1,152,194	)
Other Income (Expense):
Interest and investment income		20,570			14,084			—			34,654
Interest expense, net of amounts capitalized		(70,328	)		(116,605	)		(92,029	) (e)		(278,962	)
Loss from de-leveraging transactions		—			(3,693	)		—			(3,693	)
Loss from impairment of investments		—			(39,665	)		—			(39,665	)
Other income (expense):		31			(26,004	)		—			(25,973	)

Total other income (expense)		(49,727	)		(171,883	)		(92,029	)		(313,639)	)

Loss before income taxes		(562,817	)		(683,320	)		(219,696	)		(1,465,833	)
Income tax (expense) benefit		(2,435	)		939			—			(1,496	)

Net loss	$	(565,252	)	$	(682,381	)	$	(219,696	)	$	(1,467,329	)

Net loss per common share — basic and diluted										$	(0.50	)

Weighted average shares used in computing net loss per common share — basic and diluted											2,906,095


(1) Amounts related to stock-based compensation included in Operating expenses were as follows:
Satellite and transmission	$	2,198		$	2,308		$	2,716	(b)	$	7,222
Programming and content		9,643			8,855			—			18,498
Broadcast and operations		—			4,316			(4,316	)(b)		—
Customer service and billing		708			2,483			—			3,191
Sales and marketing		15,607			—			24,452	(c)		40,059
Advertising and marketing		—			12,833			(12,833	) (c)		—
Ad sales		—			1,910			(1,910	) (c)		—
Marketing		—			9,709			(9,709	) (c)		—
Subscriber acquisition costs		2,843			—			9,167	(d)		12,010
Subsidies and distribution		—			9,167			(9,167	)(d)		—
General and administrative		44,317			26,689			1,600	(b)		72,606
Engineering, design and development		3,584			7,929			—			11,513

Total stock-based compensation	$	78,900		$	86,199		$	—		$	165,099

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

SIRIUS XM RADIO INC. AND SUBSIDIARIES
Unaudited Pro Forma Condensed Combined Balance Sheet


	As of June 30, 2008
							Pro Forma
	Sirius			XM			Adjustments			Combined
	(in thousands, except per share amounts)
ASSETS
Current Assets:
Cash and cash equivalents	$	220,133		$	183,853		$	38,083	(e)	$	442,069
Accounts receivable, net of allowance for doubtful accounts		27,186			44,711			—			71,897
Receivable from distributors		71,831			—			—			71,831
Inventory, net		23,616			—			7,100	(h)		30,716
Related party current assets		—			102,997			—			102,997
Prepaid and other current assets		86,793			95,717			(7,100	)(h)		175,410

Total current assets		429,559			427,278			38,083			894,920
Property and equipment, net		812,307			660,274			166,786	(i)		1,639,367
System under construction		—			166,786			(166,786	) (i)		—
FCC license		83,654			141,412			1,158,588	(k)		1,383,654
Intangible assets, net		—			2,750			434,250	(k)		437,000
Goodwill		—			—			5,798,406	(l)		5,798,406
Related party prepaid expenses, net of current portion		—			133,496			—			133,496
Other long-term assets		130,965			191,890			(48,130	) (s)		327,186
								52,461	(e)

Total assets	$	1,456,485		$	1,723,886		$	7,433,658		$	10,614,029

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable and accrued expenses	$	349,173		$	219,324		$	16,870	(j)	$	585,367
Accrued interest		24,562			15,907			(31,411	)(e)		9,058
Current portion of long-term debt		302,498			359,672			—			662,170
Due to related parties		—			68,161			—			68,161
Deferred revenue		575,666			447,598			—			1,023,264

Total current liabilities		1,251,899			1,110,662			(14,541	)		2,348,020
Long-term debt		977,369			1,480,226			219,305	(e)		2,676,900
Deferred revenue, net of current portion		110,064			232,771			—			342,835
Other long-term liabilities		24,272			44,499			463,435	(g)		532,206

Total liabilities		2,363,604			2,868,158			668,199			5,899,961

Commitments and contingencies Minority interest		—			60,200			(60,200	)(e)		—
Stockholders’ Equity:
Series A Convertible preferred stock, par value $0.001; 50,000,000 shares authorized, 24,808,959 shares issued and outstanding		—			54			(54	)(m)
								25	(o)		25

Common stock, $0.001 par value; 4,500,000,000 shares authorized, 2,971,234,786 shares issued and outstanding		1,501			3,196			(3,196	)(m)
								1,437	(p)
								33	(n)		2,971

Accumulated other comprehensive income, net of tax		—			8,689			(8,689	) (m)		—
Additional paid-in capital		3,678,369			3,213,287			(3,213,287	) (m)
								110,916	(q)
								126,527	(n)
								5,443,693	(p)
								(61,444	) (r)		9,298,061

Accumulated deficit		(4,586,989	)		(4,429,698	)		4,429,698	(m)		(4,586,989	)

Total stockholders’ (deficit) equity		(907,119	)		(1,204,472	)		6,825,659			4,714,068

Total liabilities and stockholders’ (deficit) equity	$	1,456,485		$	1,723,886		$	7,433,658		$	10,614,029

See Notes to Unaudited Pro Forma Condensed Combined Financial Statements

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

Note 1. Basis of Presentation

On July 28, 2008, Sirius and XM completed their merger. The accompanying unaudited pro forma condensed combined financial statements present the pro forma consolidated financial position and results of operations of the combined company based upon the historical financial statements of Sirius and XM, after giving effect to the merger and adjustments described in these footnotes, and are intended to reflect the impact of the merger on us.

The accompanying unaudited pro forma condensed combined financial statements are presented for illustrative purposes only and do not give effect to any cost savings, revenue synergies or restructuring costs which may result from the integration of our and XM’s operations.

The unaudited pro forma condensed combined balance sheet reflects the merger and the Refinancing Transactions as if they were completed on June 30, 2008 and includes pro forma adjustments for our preliminary valuations of certain intangible assets. The pro forma debt balances do not include $78.4 million of original issue discount relating to the 13% Senior Notes. These adjustments are subject to further adjustment as additional information becomes available and additional analyses are performed. The unaudited pro forma condensed combined statements of operations reflect the merger and the Refinancing Transactions as if they had been completed on January 1, 2007.

The pro forma condensed combined balance sheet has been adjusted to reflect the preliminary allocation of the purchase price to identifiable net assets acquired and the excess purchase price to goodwill. The purchase price allocation included within these unaudited pro forma condensed combined financial statements is based upon a purchase price of approximately $5.7 billion. This amount was derived from the estimated number of shares of our common stock to be issued of approximately 1.5 billion, based on the outstanding shares of XM common stock, preferred stock and restricted stock on June 30, 2008 and the exchange ratio of 4.6 per each XM share, at a price of $3.79 per share, the average closing price of our shares of common stock for the two days prior to, including and two days subsequent to the public announcement of the merger. The actual number of newly issued shares of our common stock delivered in connection with the merger was 1,436,709,642, which were based upon 312,328,183 of XM shares issued and outstanding when the merger closed. The purchase price also includes the estimated fair value of warrants, restricted stock and stock options issued as of the closing date of the merger in exchange for similar securities of XM. XM options, restricted stock and warrants were exchanged for stock options, restricted stock and warrants in us and the price per share was adjusted for the 4.6 exchange ratio. Vested stock options, restricted stock and warrants issued by us in exchange for options, restricted stock and warrants held by employees and directors of XM were considered part of the purchase price. Accordingly, the purchase price included an estimated fair value of stock options, restricted stock and warrants of approximately $221 million.

The fair value of the Sirius options that were issued in exchange for XM options was estimated by using the Black-Scholes option pricing model with market assumptions. Option pricing models require the use of highly subjective market assumptions, including expected stock price volatility, which if changed can materially affect fair value estimates. The more significant assumptions used in estimating the fair value include volatility of 58 percent, an expected life of 1-6 years based on the age of the original award, and a risk-free interest rate of 3.36%.

The preliminary consideration is as follows:


					Additional
	Common		Preferred		Paid In
	Stock		Stock		Capital		Total
	(In thousands)
Total consideration
Issuance of Sirius common stock to XM stockholders (1.4 billion shares at $3.79)	$	1,437	$	—	$	5,443,693	$	5,445,130
Issuance of Sirius preferred stock to XM stockholders (24.8 million shares at $3.79)		—		25		—		25
Issuance of Sirius common stock to XM restricted stockholders (43.6 million shares at $3.79)		33		—		126,527		126,560
Estimated fair value of outstanding XM stock options and restricted stock (See Note 2q)		—		—		75,515		75,515
Estimated fair value of outstanding XM warrants (See Note 2q)		—		—		35,401		35,401

Total consideration	$	1,470	$	25	$	5,681,136	$	5,682,631

The table below represents a preliminary allocation of the total consideration to XM’s tangible and intangible assets and liabilities based on management’s preliminary estimate of their respective fair values as of June 30, 2008.


	Total
	(In thousands)
XM historical net book value of assets and liabilities assumed	$	(1,144,272	)
XM minority interest assumed		(60,200	)
Elimination of XM historical FCC license		(141,412	)
Adjustment to fair value FCC license		1,300,000
Elimination of XM historical intangible asset related to subscriber and advertiser relationships and trademarks		(2,750	)
Adjustment to fair value intangible assets related to subscriber and advertiser relationships and trademarks		437,000
Adjustment to deferred taxes related to increased FCC license carrying value		(463,435	)
Estimated transaction costs		(65,000	)
Residual goodwill created from the merger		5,798,406
Unrecognized compensation on unvested stock options and restricted stock		61,444
Loss on commitment to purchase transponders of XM-4 satellite		(16,057	)
Write-off of debt issuance costs		(21,093	)

Total consideration allocated	$	5,682,631

Upon completion of the fair value assessment after the merger, we anticipate that the ultimate price allocation will differ from the preliminary assessment outlined above. Any changes to the initial estimates of the fair value of the assets and liabilities will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill.

Note 2. Pro Forma Adjustments

a.		Reclassify XM’s activation revenue which was reported in XM’s other revenue to subscriber revenue to conform to our presentation.

b.		Reclassify XM’s broadcast expense included in broadcast and operation expenses to satellite and transmission and reclassify XM’s operation expense, which includes facilities and information technology expense, included in broadcast and operation expense to general and administrative expenses to conform to our presentation.

c.		Reclassify (i) ad sales expense and (ii) advertising and marketing and retention and support included in marketing to sales and marketing to conform to our presentation.

d.		Reclassify subsidies and distribution included in marketing to subscriber acquisition costs to conform to our presentation.

e.		Reflects the impact of the refinancing transactions. The following table details the impact to long-term debt and interest expense related to these transactions (in thousands):


	Actual						Pro Forma
	Debt		Interest		Interest		Debt		Interest		Interest
	Outstanding		Expense		Expense		Outstanding		Expense		Expense
	at June 30,		for June 30,		for December 31,		at June 30,		for June 30,		for December 31,
	2008		2008		2008		2008		2008		2007
9.75% Senior Notes	$	600,000	$	29,250	$	58,500	$	—	$	—	$	—
1.75% Notes		400,000		3,500		7,000		400,000		20,000		40,000
Senior Floating Rate Notes		200,000		8,000		19,717		—		—		—
Variable Interest Entity		230,800		11,498		20,293		—		—		—
7% Exchangeable Notes		—		—		—		550,000		19,250		38,500
13% Senior Notes		—		—		—		700,105		56,008		112,017

Totals	$	1,430,800	$	52,248	$	105,510	$	1,650,105	$	95,258	$	190,517

The impact to outstanding debt is an increase of $219,305. Interest expense also increases by $43,010 and $85,007 for the six months ended June 30, 2008 and the twelve months ended December 31, 2007, respectively.

The debt issuance costs resulting from these refinancing activities totaling $69,238 are reflected in the pro forma condensed combined balance sheet in Other long-term assets. Interest expense also increased by $3,279 and $7,022 for the six months ended June 30, 2008 and the twelve months ended December 31, 2007, respectively.

As a result of the merger, XM is required to make an offer to repurchase the transponders of our XM-4 satellite in accordance with the terms of a sale-leaseback transaction. The expected payout to settle this obligation is $76,257 which is comprised of a minority interest payable of $60,200 at June 30, 2008 and a loss on the redemption of $16,057.

At June 30, 2008, there was $31,411 of accrued interest expense.

The 13% Senior Notes are reflected net of original issue discount of $78,394.

f. Adjustment to reflect the additional amortization expense due to the adjustment of certain XM’s intangible assets to fair value at the time of the merger (See Note 1). Pro Forma amortization expense for the twelve months ended December 31, 2007 and six months ended June 30, 2008 of $128 million and $64 million, respectively, was recorded utilizing the straight-line method of amortization for the following intangible assets:


							Pro Forma
					Pro Forma		Amortization
					Amortization		Expense for
	Fair Value at		Estimated Useful		Expense for		December 31,
	Acquisition		Lives (Years)		June 30, 2008		2007
	(Dollars in thousands)
Subscriber relationships	$	350,000		3	$	58,334	$	116,667
Advertiser relationships		7,000		7		500		1,000
Trademarks		80,000		8		5,000		10,000

Pro forma amortization expense					$	63,834	$	127,667

g. reflects the adjustment to record the deferred tax liability for the incremental fair value adjustment of the FCC license included as a pro forma adjustment in the balance sheet calculated as follows (in thousands):


Net adjustment to fair value FCC license	$	1,158,588
Combined federal and state rate		40	%

Deferred tax liability	$	463,435

h. Reflects the estimated reclassification of XM’s net inventory included in prepaid and other current assets to inventory to conform to our presentation.

i. Reflects the estimated reclassification of XM’s system under construction costs to property and equipment to conform to our presentation.

j. Reflects the adjustment to record as liabilities the estimated transaction cost to be incurred by us. Included in the pro forma adjustment is Sirius’ estimated investment banking, attorney and independent accountant fees, and other transaction-related costs.

k. Reflects a preliminary allocation of the purchase price to XM’s FCC License and certain long-lived intangible assets. The remaining unallocated purchase price was allocated to Goodwill (See Note 1). The preliminary allocation of the purchase price was calculated as follows (in thousands):


	Book Value as of		Fair Value as of		Pro Forma
	June 30, 2008		June 30, 2008		Adjustment		Fair Value Range
FCC License	$	141,412	$	1,300,000	$	1,158,588	$	1,000,000 - $1,500,000
Intangibles, net		3,064		437,000		433,936	$	381,000 - $495,000

The fair value of XM’s FCC license was based on the Greenfield Method. The key assumptions in building the model included projected revenues and estimated start up costs, which were based primarily on the operating histories of XM and Sirius. The fair value of XM’s trademarks was estimated based on the Relief from Royalty Method. The royalties relieved for the use of the XM trademarks were computed by multiplying the projected revenues by a hypothetical royalty rate. The resulting royalties relieved represent the cost saved by XM from not having to license the trademarks from another owner. The estimation of a hypothetical royalty rate was based on comparable licensing agreements and the perceived impact the trademarks have on the expected cash flow of XM. The fair values of XM’s subscriber and advertising relationships were based on projected discounted cash flows, which were derived from projected revenues after adjusting for attrition rates based on XM’s historical experience. Each of these calculations included an estimated discount rate which incorporates the difficulties and uncertainties associated with the satellite radio industry.

The final purchase price allocations may result in different allocations for tangible and intangible assets than presented in the unaudited pro forma condensed combined financial statements, and those differences could be material.

l. Residual goodwill created from the merger (See Note 1).

m. Eliminate the historical stockholders’ deficit accounts of XM at June 30, 2008.

n. Reflect the issuance of 4.6 shares of our common stock for each share of XM restricted shares outstanding as follows (in thousands except for share data):


XM restricted shares outstanding at June 30, 2008		7,259,419
Exchange ratio		4.6
Sirius common shares to be issued		33,393,327
Price per share	$	3.79
Aggregate value of Sirius consideration	$	126,560
Value attributed to par at $.001 par value	$	33
Balance to capital in excess of par value	$	126,527

o. Reflect the issuance of 4.6 shares of our preferred stock for each share of XM preferred stock outstanding as follows (in thousands except for share data):


XM preferred shares outstanding at June 30, 2008		5,393,252
Exchange ratio		4.6
Sirius preferred shares to be issued		24,808,959
Value attributed to par at $.001 par value	$	25

p. Reflect the issuance of 4.6 shares of our common stock for each share of XM common stock outstanding as follows (in thousands except for share data):


XM common shares outstanding at June 30, 2008		312,328,183
Exchange ratio		4.6
Sirius common shares to be issued		1,436,709,642
Price per share	$	3.79
Aggregate value of Sirius consideration	$	5,445,130
Value attributed to par at $.001 par value	$	1,437
Balance to capital in excess of par value	$	5,443,693

q. Reflect the fair value of XM’s employees’ stock options, warrants and restricted stock. The fair value of XM’s options to be exchanged for Sirius options was estimated using a Black Scholes pricing model. Option pricing models require the use of highly subjective assumptions including expected stock price and volatility, that when changed, can materially affect fair value estimates. The more significant assumptions used in estimating the fair value include volatility of 58 percent, an expected life of 1-6 years based on the age of the original award, and a risk-free interest rate of 3.36%.

r. Reflect the revaluation of XM’s unvested stock options and restricted stock as of June 30, 2008. The original valuation of these awards, were determined by XM at the original grant dates. Upon completion of the merger, these awards will be revalued using current market assumptions. The fair value of these awards approximates $61 million at June 30, 2008. Annual compensation expense related to these awards is expected to approximate the historic compensation expense.