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SIRI » Topics » Indefinite Life Intangibles Assets

These excerpts taken from the SIRI 10-K filed Mar 10, 2009.

Indefinite Life Intangibles Assets

We have identified our FCC licenses and the XM trademark as indefinite life intangibles after considering the expected use of the assets, the regulatory and economic environment within which they are being used, and the effects of obsolescence on their use.

We hold FCC licenses to operate a satellite digital audio radio service and provide ancillary services. SIRIUS’ FCC license for most of its satellites expires in 2010 and the licenses for one of its new satellites expires eight years after SIRIUS certifies the satellite is operating; XM Holdings’ FCC licenses for its satellites expire on various dates from 2009 to 2014. Prior to the expirations, we will be required to apply for a renewal of our FCC licenses. We currently have one such application on file for a license expiring in March 2009. As long as we act within the requirements and constraints of the regulatory authorities, the renewal and extension of our licenses is reasonably certain at minimal cost. The FCC licenses authorize us to use the broadcast spectrum, which is a renewable, reusable resource that does not deplete or exhaust over time.

In connection with the Merger, $250,000 of the purchase price was allocated to the XM trademarks. As of December 31, 2008, there are no legal, regulatory or contractual limitations associated with the XM trademarks.

We evaluate our indefinite life intangible assets for impairment on an annual basis in accordance with SFAS No. 142, Goodwill and Other Intangible Assets. During the year ended December 31, 2008, no impairment loss was recorded for intangible assets with indefinite lives.

Indefinite Life Intangibles Assets

STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%">We have identified our FCC licenses and the XM trademark as indefinite life intangibles after considering the expected use of the assets, the regulatory
and economic environment within which they are being used, and the effects of obsolescence on their use.

We hold FCC licenses to operate a
satellite digital audio radio service and provide ancillary services. SIRIUS’ FCC license for most of its satellites expires in 2010 and the licenses for one of its new satellites expires eight years after SIRIUS certifies the satellite is
operating; XM Holdings’ FCC licenses for its satellites expire on various dates from 2009 to 2014. Prior to the expirations, we will be required to apply for a renewal of our FCC licenses. We currently have one such application on file for a
license expiring in March 2009. As long as we act within the requirements and constraints of the regulatory authorities, the renewal and extension of our licenses is reasonably certain at minimal cost. The FCC licenses authorize us to use the
broadcast spectrum, which is a renewable, reusable resource that does not deplete or exhaust over time.

In connection with the Merger,
$250,000 of the purchase price was allocated to the XM trademarks. As of December 31, 2008, there are no legal, regulatory or contractual limitations associated with the XM trademarks.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">We evaluate our indefinite life intangible assets for impairment on an annual basis in accordance with SFAS No. 142, Goodwill and Other
Intangible Assets. During the year ended December 31, 2008, no impairment loss was recorded for intangible assets with indefinite lives.

SIZE="2">Finite-Lived Intangibles Assets

Finite-lived intangibles assets consist primarily of subscriber relationships of $380,000
that were acquired as a result of the Merger. Subscriber relationships are amortized on an accelerated basis over 9 years, which reflects the estimated pattern in which the economic benefits will be consumed. Other definite life intangibles include
certain licensing agreements of $75,000, which will be amortized over a weighted average of 9.1 years on a straight-line basis.

 


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Table of Contents



SIRIUS XM RADIO INC. AND SUBSIDIARIES

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Dollar amounts in
thousands, unless otherwise stated)

 


Amortization expense for the years ended December 31, 2008 was $35,789. Expected amortization
expense for each of the fiscal years through December 31, 2013 and for periods thereafter is as follows:

 


























































Year ending December 31,

  Amount

2009

  $76,765

2010

   66,143

2011

   59,021

2012

   53,467

2013

   47,097

Thereafter

   136,178
    

Total intangibles, net

  $438,671
    

EXCERPTS ON THIS PAGE:

10-K (2 sections)
Mar 10, 2009

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