XM Radio 2009 Annual Report Download - page 134

Future Liquidity and Capital Resource Requirements
The ability to meet our debt and other obligations depends on our future operating performance and on
economic, financial, competitive and other factors. We continually review our operations for opportunities to adjust
the timing of expenditures to ensure that sufficient resources are maintained. Our financial projections are based on
assumptions, which we believe are reasonable but contain significant uncertainties.
We are the sole stockholder of XM Holdings and its business is operated as an unrestricted subsidiary under the
agreements governing our existing indebtedness. Under certain circumstances, SIRIUS may be unwilling or unable
to contribute or loan XM capital. Similarly, under certain circumstances, XM may be unwilling or unable to
contribute or loan SIRIUS capital. To the extent XM’s funds are insufficient to support its business, XM may be
required to seek additional financing, which may not be available on favorable terms, or at all. If XM is unable to
secure additional financing, its business and results of operations may be adversely affected.
We regularly evaluate our plans and strategy. These evaluations often result in changes to our plans and
strategy, some of which may be material and significantly change our cash requirements. These changes in our plans
or strategy may include: the acquisition of unique or compelling programming; the introduction of new features or
services; significant new or enhanced distribution arrangements; investments in infrastructure, such as satellites,
equipment or radio spectrum; and acquisitions, including acquisitions that are not directly related to our satellite
radio business. In addition, our operations will also be affected by the FCC order approving the Merger which
imposed certain conditions upon, among other things, our program offerings and our ability to increase prices.
Off-Balance Sheet Arrangements
We are required under the terms of certain agreements to provide letters of credit and deposit monies in escrow,
which place restrictions on our cash and cash equivalents. As of December 31, 2009 and 2008, $3,400 and
$141,250, respectively, was classified as restricted investments as a result of obligations under these letters of credit
and escrow deposits. In February 2009, we released to programming providers an aggregate of $138,000 held in
escrow in satisfaction of future obligations under our agreements with them.
We do not have any significant off-balance sheet arrangements other than those disclosed in Note 15 to our
consolidated financial statements that are reasonably likely to have a material effect on our financial condition,
results of operations, liquidity, capital expenditures or capital resources.
2009 Long-Term Stock Incentive Plan
In May 2009, our stockholders approved the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan (the
“2009 Plan”). Employees, consultants and members of our board of directors are eligible to receive awards under
the 2009 Plan, which provides for the grant of stock options, restricted stock, restricted stock units and other stock-
based awards that the compensation committee of our board of directors may deem appropriate. Vesting and other
terms of stock-based awards are set forth in the agreements with the individuals receiving the awards. Stock-based
awards granted under the 2009 Plan are generally subject to a vesting requirement. Stock-based awards generally
expire ten years from the date of grant. Each restricted stock unit entitles the holder to receive one share of common
stock upon vesting. As of December 31, 2009, approximately 274,425,000 shares of common stock were available
for future grant under the 2009 Plan.
Other Plans
SIRIUS and XM Holdings maintain four other share-based benefit plans — the XM Holdings 2007 Stock
Incentive Plan, the Amended and Restated Sirius Satellite Radio 2003 Long-Term Stock Incentive Plan, the XM
Holdings 1998 Shares Award Plan and the XM Holdings Talent Option Plan. These plans generally provide for the
grant of stock options, restricted stock, restricted stock units and other stock based awards. No further awards may
be made under these plans. Outstanding awards under these plans will be continued.
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