1091530--3/3/2006--XM_SATELLITE_RADIO_HOLDINGS

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{capital, credit, financial}

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You could lose money on your investment because we are in the early stages of generating revenues. Our cumulative expenditures and losses have been significant and are expected to grow. Demand for our service may be insufficient for us to become profitable. Large payment obligations under our distribution agreement with General Motors and other agreements may prevent us from becoming profitable or from achieving profitability in a timely manner. We need to obtain rights to programming, which are expensive and could be more costly than anticipated. We must maintain and pay license fees for music rights, and we may have disputes with copyright holders. We may need additional funding for our business plan and additional financing might not be available. Our inability to retain customers, including those who purchase or lease vehicles that include a subscription to our service, could adversely affect our financial performance. Failure to timely replace our existing satellites could damage our business. Potential losses may not be covered by insurance. Competition from Sirius Satellite Radio and traditional and emerging audio entertainment providers could adversely affect our revenues. Our business could be adversely affected by the performance of our business partners. One of our major business partners is experiencing financial difficulties. Higher than expected subscriber acquisition costs could adversely affect our financial performance. Our substantial indebtedness could adversely affect our financial health, which could reduce the value of our securities. Weaker than expected market and advertiser acceptance of our XM Radio service could adversely affect our advertising revenue and results of operations. Our business may be impaired by third party intellectual property rights. Rapid technological and industry changes could make our service obsolete. Failure to comply with FCC requirements could damage our business. Interference from other users could damage our business. The FCC has not issued final rules authorizing terrestrial repeaters. Our service network or other ground facilities could be damaged by natural catastrophes. Consumers could steal our service. We depend on certain on-air talent and other people with special skills. If we cannot retain these people, our business could suffer. The market price of our securities could be hurt by substantial price and volume fluctuations. The holders of our Series C convertible redeemable preferred stock issued in January 2003 have consent rights that may prevent us from engaging in transactions otherwise beneficial to holders of our securities. Future issuances of our Class A common stock could lower our stock price and impair our ability to raise funds in new stock offerings. It may be hard for a third party to acquire us, and this could depress our stock price.

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1091530--3/3/2006--XM_SATELLITE_RADIO_HOLDINGS_INC