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Satellite radio operator Sirius XM books $25.1M loss, cites major tax reversal

TORONTO – Sirius XM Canada Holdings Inc. has reported a more than $25-million net loss in its most recent quarter, citing a decision by the Canada Revenue Agency that required it to book a non-cash, one-time income tax expense of $19.1 million.

The parent of satellite radio company Sirius XM Canada Inc. says the loss of $25.1 million amounted to 19 cents per share and compared with a net profit of $6.2 million or five cents per share in the second quarter of fiscal 2014.

Revenue for the three months ended Feb. 20 totalled $80.1 million, up from $75.5 million in the year-earlier period.

Sirius XM said it received a notice of reassessment from the CRA for the company’s Aug. 31, 2006 tax return which denied the full amount of non-capital losses and eligible capital expenditures related to its share issuances to Sirius XM and certain OEM partners.

The CRA also informed the company it intends to assess it for withholding tax and related penalties and interest on the share issuance to Sirius XM. Subsequent to the quarter, a formal notice of reassessment was received and the company recorded a provision of $16 million in its interim consolidated financial statements.

Sirius XM said it “completely disagrees with the position taken by the CRA.”

“We are confident that our current tax filing position is correct,” chief financial officer Michael Washinushi said in the company’s earnings release. “We intend to vigorously defend our position and appeal the CRA’s decision.”