Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2008 and for the year ended December 31, 2007 combine (i) the historical consolidated statements of operations of Sirius XM Radio Inc. and its subsidiaries (“Sirius”) and XM Satellite Radio Holdings Inc. (“XM Holdings”, and its subsidiaries together with XM Holdings, “XM”), giving effect to the merger of XM Holdings and Vernon Merger Corporation (the “Merger”), pursuant to which XM 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 January 1, 2007. These unaudited pro forma condensed combined financial statements should be read in conjunction with the historical audited consolidated financial information and accompanying notes of Sirius and XM, which have been incorporated by reference into this document. The unaudited pro forma condensed combined statements of operations are not necessarily indicative of the operating results that would have occurred if the Merger had been completed on the date indicated.

The unaudited pro forma condensed combined statements of operations were prepared using the purchase method of accounting with Sirius treated as the acquiring entity. Accordingly, we have adjusted the historical consolidated statements of operations to give effect to pro forma events that are (i) directly attributable to the Merger and Refinancing Transactions, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined results. Intercompany transactions are not significant and as such have not been eliminated.

In addition to adjustments to reflect preliminary valuations of assets and liabilities at fair value at the time of the Merger pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 141, Business Combinations, these pro forma results reflect the impact of the following Refinancing Transactions:

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.

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SIRIUS XM RADIO INC. AND SUBSIDIARIES

Unaudited Pro Forma Condensed Combined Statements of Operations

(in thousands except per share amounts)

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SIRIUS XM RADIO INC. AND SUBSIDIARIES

Unaudited Pro Forma Condensed Combined Statements of Operations—(Continued)

(in thousands except per share amounts)

See Notes to Unaudited Pro Forma Condensed Combined Statements of Operations

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SIRIUS XM RADIO INC. AND SUBSIDIARIES

Unaudited Pro Forma Condensed Combined Statements of Operations

(in thousands except per share amounts)

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SIRIUS XM RADIO INC. AND SUBSIDIARIES

Unaudited Pro Forma Condensed Combined Statements of Operations—(Continued)

(in thousands except per share amounts)

See Notes to Unaudited Pro Forma Condensed Combined Statements of Operations

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Notes to Unaudited Pro Forma Condensed Combined Statements of Operations

(Dollar amounts in thousands, unless otherwise stated)

Note 1. Basis of Presentation

On July 28, 2008, Vernon Merger Corporation, a wholly owned subsidiary of Sirius, merged with and into XM Holdings. As a result, XM Holdings became our wholly-owned subsidiary. The Merger was effected pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated as of February 19, 2007, entered into by Sirius, XM Holdings and Vernon Merger Corporation.

The actual results of operations for XM have been included in our actual consolidated results of operations for the period August 1, 2008 through September 30, 2008. Although the effective date of the Merger was July 28, 2008, due to the immateriality of the actual results of operations for the period July 28, 2008 through July 31, 2008, we have accounted for the Merger as if it had occurred on July 31, 2008, with the actual results of XM included as of July 31, 2008.

The accompanying unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2008 and for the year ended December 31, 2007 present the pro forma consolidated statements of operations of the combined company based upon the historical financial statements of Sirius and XM, after giving effect to the Merger and Refinancing Transactions, and are intended to reflect the impact of the Merger on us.

The accompanying unaudited pro forma condensed combined statements of operations 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 statements of operations reflect the Merger and the Refinancing Transactions as if they were completed on January 1, 2007 and include pro forma adjustments based upon preliminary valuations.

The Merger has been accounted for under the purchase method of accounting pursuant to the provisions of SFAS No. 141, Business Combinations. The application of purchase accounting under SFAS No. 141 resulted in the transaction being valued at $5,836,363, based upon the average closing price of $3.79 of our common stock on The NASDAQ Global Select Market for the two days prior to, including, and two days subsequent to the public announcement of the Merger on February 19, 2007.

On that basis, the table below shows the value of the consideration paid in connection with the Merger:

SFAS No. 141 requires that the total purchase price be allocated to the fair value of assets acquired and liabilities assumed based on their fair values at the acquisition date, with any excess recorded as goodwill. We have preliminarily allocated the purchase price based on current estimates of the fair values of assets acquired and liabilities assumed in connection with the Merger.

The table below summarizes the preliminary estimates of fair value of the XM assets acquired, liabilities assumed and related deferred income taxes as of the acquisition date. These preliminary estimates will be revised in future periods and the revisions may materially affect the presentation of our consolidated financial results. 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. You should not place undue reliance on the preliminary analysis of XM’s tangible and intangible assets and liabilities set forth below.

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In connection with the Merger, we recorded a preliminary estimate of goodwill in the amount of $6,626,504. The price of Sirius common stock declined significantly from February 19, 2007, the measurement date for valuation of the Merger, indicating a potential impairment. Pursuant to SFAS No. 142, Goodwill and Other Intangible Assets, our impairment analysis indicated that the carrying value of goodwill exceeded the implied fair value of goodwill, resulting in an impairment charge of $4,750,859. To the extent there are significant changes in the recorded amount of goodwill as a result of the final allocations of fair value to the acquired assets and assumed liabilities, there may be significant adjustments to this estimate of impairment loss. Additionally, a continued decline in our stock price may result in further goodwill impairment.

In connection with the Merger, $2,250,000 of the purchase price was allocated to certain indefinite lived intangible assets of XM, including $2,000,000 associated with XM’s FCC license and $250,000 associated with trade names.

In connection with the Merger, $378,444 of the purchase price was allocated to certain intangible assets of XM which are subject to amortization on a straight line basis. Acquired definite lived intangible assets include $360,000 associated with subscriber relationships (9-year useful life), $16,444 associated with proprietary software (6-year weighted average useful life), and $2,000 associated with developed technology (10-year useful life).

Note 2. Pro Forma Adjustments

a. Reclassify XM’s activation revenue to subscriber revenue to conform to our presentation.

b. Adjustment to subscriber revenue due to the adjustment of deferred subscription revenue and deferred activation revenue to preliminary fair value.

c. Reclassify XM’s broadcast expense to satellite and transmission to conform to our presentation.

d. Adjustment to programming and content expense, revenue share and royalties expense, sales and marketing, and subscriber acquisition costs due to the adjustment of executory contracts to preliminary fair value.

e. Reclassify (i) ad sales expense, (ii) retention and support and (iii) amortization of GM liability to sales and marketing to conform to our presentation.

f. Reclassify XM’s operation expense, which includes facilities and information technology expense, to general and administrative expenses to conform to our presentation.

g. Adjustment to depreciation and amortization due to the adjustment of tangible assets to preliminary fair value.

h. Adjustment to reflect the additional amortization expense due to the adjustment of certain XM’s intangible assets to preliminary fair value. Pro Forma amortization expense was recorded utilizing the straight-line method of amortization for the following intangible assets:

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i. Reflects the impact of the Refinancing Transactions and adjustment to interest expense due to the adjustment of debt to preliminary fair value as if they had occurred on January 1, 2007. Further, it is assumed that XM did not extinguish any debt during the pro forma periods presented with the exception of the Refinancing Transactions. The following table details the impact to XM’s interest expense related to these transactions:

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j. Reclassify XM’s share-based payment expenses to conform to our presentation. The following table details the impact of these reclassifications:

k. Adjustment of reported amounts due to the adjustment of XM’s employees’ stock options, warrants and restricted stock to fair value at the time of the Merger.

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