XM Radio 2011 Annual Report Download - page 65

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Loss on Extinguishment of Debt and Credit Facilities, Net, includes losses incurred as a result of the
conversion and retirement of certain debt.
•2011 vs. 2010: For the years ended December 31, 2011 and 2010, loss on extinguishment of debt and
credit facilities, net, was $7,206 and $120,120, respectively, a decrease of 94%, or $112,914. During the
year ended December 31, 2011, the loss was incurred on the repayment of our 11.25% Senior Secured
Notes due 2013 and our 3.25% Convertible Notes due 2011. During the year ended December 31, 2010,
the loss was incurred on the repayment of our Senior Secured Term Loan due 2012 and 9.625% Senior
Notes due 2013 and XM’s 10% Senior PIK Secured Notes due 2011 and 9.75% Senior Notes due 2014,
as well as the partial repayment of XM’s 11.25% Senior Secured Notes due 2013 and our 3.25%
Convertible Notes due 2011.
•2010 vs. 2009: For the years ended December 31, 2010 and 2009, loss on extinguishment of debt and
credit facilities, net, was $120,120 and $267,646, respectively, a decrease of 55%, or $147,526. During
the year ended December 31, 2010, the loss was incurred on the repayment of our Senior Secured Term
Loan due 2012 and 9.625% Senior Notes due 2013 and XM’s 10% Senior PIK Secured Notes due 2011
and 9.75% Senior Notes due 2014, as well as the partial repayment of XM’s 11.25% Senior Secured
Notes due 2013 and our 3.25% Convertible Notes due 2011. During the year ended December 31, 2009,
the loss was incurred on the retirement of our 2.5% Convertible Notes due 2009, the extinguishment of
our Term Loan and Purchase Money Loan with Liberty Media, the repayment of the XM’s Amended and
Restated Credit Agreement due 2011, the partial repayment of XM’s 10% Convertible Senior Notes due
2009 and the termination of XM’s Second Lien Credit Agreement.
Interest and Investment Income (Loss) includes realized gains and losses, dividends, interest income, our
share of Sirius Canada’s and XM Canada’s pre-merger net losses, our share of the income (loss) of Sirius XM
Canada and gains related to the Canada Merger.
•2011 vs. 2010: For the years ended December 31, 2011 and 2010, interest and investment income (loss)
was $73,970 and ($5,375), respectively, an increase of $79,345. The increase was attributable to a net
gain realized as a result of the Canada Merger. This transaction resulted in the recognition of a $75,768
gain recorded in interest and investment income. The gain was partially offset by our share of net losses
at our Canadian affiliate.
•2010 vs. 2009: For the years ended December 31, 2010 and 2009, interest and investment (loss) income
was ($5,375) and $5,576, respectively, a decrease of 196%, or $10,951. The decrease in income was
primarily attributable to higher net losses at XM Canada and Sirius Canada and a decrease in payments
received from Sirius Canada in excess of the carrying value of our investments, partially offset by the
gain on sale of auction rate securities during the year ended December 31, 2010. In addition, we recorded
an impairment charge on our investment in XM Canada during the year ended December 31, 2009.
Income Taxes
Income Tax Expense primarily represents the deferred tax liability related to the difference in accounting for
our FCC licenses, which are amortized over 15 years for tax purposes but not amortized for book purposes in
accordance with GAAP, foreign withholding taxes on royalty income and the state tax impact of the suspension
of net operating loss (“NOL”) use in California and Illinois.
•2011 vs. 2010: For the years ended December 31, 2011 and 2010, income tax expense was $14,234 and
$4,620, respectively, an increase of 208%, or $9,614, primarily due to an increase in the applicable state
effective tax rate, foreign withholding taxes on royalty income and the state tax impact of the suspension
of NOL use in California and Illinois.
•2010 vs. 2009: For the years ended December 31, 2010 and 2009, income tax expense was $4,620 and
$5,981, respectively, a decrease of 23%, or $1,361, primarily as a result of a decrease in the applicable
state effective tax rate and foreign withholding taxes on royalty income.
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