seems this subject comes up quite a bit.

Sirius counts as subscribers radios for which they have been paid. In the case of DCX and Ford, this happens as the car is being delivered to the dealer.

Because this payment is tied to a service being delivered, it is booked as deferred revenue until such time that the car sells. at that point, funds are removed from deferred revenue and booked as revenue.

The impacts:

1. Subscriber numbers benefit from this.

2. Sirius recoups their subsidy investment into a radio quickly. They can then easily re-invest dollars into another radio. The structures of these deals are cash flow friendly. Cash flow is VERY IMPORTANT in this phase of Sirius' growth.

3. Longer deals are churn friendly.

4. Longer deals give the consumer more time to experience the product.

5. These deals do carry an impact to ARPU. Although a payment has been received, it can not be booked as revenue until the consumer buys the car, and the service is being delivered. Thus, when the car is at the dealer (right now about 2.7 months worth) there is no revenue. These $0 revenue subs bring down ARPU.

In many ways, the positives of these deal structures outweigh the negatives. The name of the game is recouping dollars as quickly as possible and growing the business. These OEM deals allow this to happen