XM Radio 2012 Annual Report Download - page 122

SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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. These claims are at various stages of arbitration or adjudication.
State Consumer Investigations. A Multistate Working Group of 31 State Attorneys General, led by the
Attorney General of the State of Ohio, is investigating certain of our consumer practices. The investigation focuses
on practices relating to the cancellation of subscriptions; automatic renewal of subscriptions; charging, billing,
collecting, and refunding or crediting of payments from consumers; and soliciting customers.
A separate investigation into our consumer practices is being conducted by the Attorneys General of the State
of Florida and the State of New York. We are cooperating with these investigations and believe our consumer
practices comply with all applicable federal and state laws and regulations.
One Twelve, Inc. and Don Buchwald v. Sirius XM Radio Inc. In March 2011, One Twelve, Inc., Howard Stern’s
production company, and Don Buchwald, Stern’s agent, commenced an action against us in the Supreme Court of the
State of New York, County of New York. The action alleged that, upon the Merger, we failed to honor our obligations
under the performance-based compensation provisions of our prior agreement dated October 2004 with One Twelve
and Buchwald, as agent; One Twelve and Buchwald each assert a claim of breach of contract. In April 2012, the Court
granted our motion for summary judgment and dismissed with prejudice the suit. The Court found the agreement
unambiguous. One Twelve and Buchwald have appealed this decision.
Other Matters. In the ordinary course of business, we are a defendant in various other lawsuits and 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 patents, trademarks, copyrights or other
intellectual property. None of these other actions are, in our opinion, likely to have a material adverse effect on our
business, financial condition or results of operations.
(16) Income Taxes
Our income tax expense consisted of the following:
For the Years Ended December 31,
2012 2011 2010
Current taxes:
Federal .............................................. $ — $ — $ —
State ................................................ 1,319 3,229 942
Foreign .............................................. 2,265 2,741 1,370
Total current taxes ................................... 3,584 5,970 2,312
Deferred taxes:
Federal .............................................. (2,729,823) 3,991 4,163
State ................................................ (271,995) 4,273 (1,855)
Total deferred taxes .................................... (3,001,818) 8,264 2,308
Total income tax (benefit) expense ...................... $(2,998,234) $14,234 $ 4,620
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