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These excerpts taken from the SIRI 10-K filed Mar 10, 2009. Research & Development Costs Research and development costs are expensed as incurred and primarily include the cost of new product development, chip set design, software development and engineering. During the years ended December 31, 2008, 2007 and 2006, we recorded research and development costs of $41,362, $38,082 and $46,460, respectively. These costs are reported as a component of Engineering, design and development expense in our consolidated statements of operations. Research & Development Costs and engineering. During the years ended December 31, 2008, 2007 and 2006, we recorded research and development costs of $41,362, $38,082 and $46,460, respectively. These costs are reported as a component of Engineering, design and development expense in our consolidated statements of operations. This excerpt taken from the SIRI 10-Q filed Nov 12, 2008. Research & Development Costs Research and development costs are expensed as incurred and primarily include the cost of new product development, chip set design, software development and engineering. During the three and nine months ended September 30, 2008, we recorded research and development costs of $13,932 and $30,006, respectively. For the comparable periods in 2007, we recorded research and development costs of $9,487 and $30,019, respectively. These costs are reflected in Engineering, design and development expense in our unaudited condensed consolidated statements of operations. This excerpt taken from the SIRI 10-Q filed Nov 1, 2007. Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs for the three months ended September 30, 2007 and 2006 were $9,487 and $13,454, respectively, and $30,019 and $37,310 for the nine months ended September 30, 2007 and 2006, respectively. These costs are included in engineering, design and development expenses in our accompanying unaudited consolidated statements of operations.
This excerpt taken from the SIRI 10-Q filed Aug 9, 2007. Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs for the three months ended June 30, 2007 and 2006 were $10,482 and $9,428, respectively, and $20,532 and $23,856 for the six months ended June 30, 2007 and 2006, respectively. These costs are included in engineering, design and development expenses in our accompanying unaudited consolidated statements of operations.
This excerpt taken from the SIRI 10-Q filed May 10, 2007. Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs for the three months ended March 31, 2007 and 2006 were $10,050 and $14,428, respectively. These costs are included in engineering, design and development expenses in our accompanying unaudited consolidated statements of operations.
This excerpt taken from the SIRI 10-K filed Mar 1, 2007. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs for the years ended December 31, 2006, 2005 and 2004 were $46,460, $53,401 and $26,121, respectively, and are included in engineering, design and development expenses. This excerpt taken from the SIRI 10-Q filed Nov 8, 2006. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs for the three months ended September 30, 2006 and 2005 were $12,431 and $6,291, respectively, and $26,575 and $22,119 for the nine months ended September 30, 2006 and 2005, respectively. These costs are included in engineering, design and development expenses in our accompanying unaudited consolidated statements of operations. Net (Loss) Income Per Share We compute net (loss) income per share in accordance with SFAS No. 128, “Earnings Per Share.” Basic net (loss) income per share is calculated using the weighted average common shares outstanding during each reporting period. Diluted net (loss) income per share adjusts the weighted average common shares outstanding for the potential dilution that could occur if common stock equivalents (convertible debt, warrants, stock options and restricted stock units) were exercised or converted into common stock. Common stock equivalents of approximately 193,000,000 and 197,000,000 for the three and nine months ended September 30, 2006, respectively, and 239,000,000 and 235,000,000 for the three and nine months ended September 30, 2005, respectively, were not considered in the calculation of diluted net loss per share as the effect would have been anti-dilutive. Comprehensive (Loss) Income We report comprehensive (loss) income in accordance with SFAS No. 130, “Reporting Comprehensive Income.” SFAS No. 130 established a standard for reporting and displaying other comprehensive (loss) income and its components within financial statements. Unrealized gains and losses on available-for-sale securities are the only component of our other comprehensive loss. Comprehensive loss for the three months ended September 30, 2006 and 2005 was $162,898 and $180,450, respectively, and $859,270 and $551,584 for the nine months ended September 30, 2006 and 2005, respectively. Marketable Securities We account for marketable securities in accordance with the provisions of SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities.” Marketable securities consist of certificates of deposit and auction rate securities. The basic objectives of our investment policy are the preservation of capital, maintaining sufficient liquidity to meet operating requirements and maximizing yield. We classify our marketable securities as available-for-sale securities. Available-for-sale securities are carried at fair market value. Unrealized gains and losses are included in accumulated other comprehensive (loss) income as a separate component of stockholders’ equity. Realized gains and losses, dividends and interest income, including amortization of the premium and discount arising at purchase, are included in interest and investment income. The specific-identification method is used to determine the cost of all securities and the basis by which amounts are reclassified from accumulated comprehensive (loss) income into earnings. While the underlying securities of auction rate securities have contractual maturities of more than 20 years, the interest rates on such securities reset at intervals of 28 or 35 days. Auction rate securities are priced and subsequently trade as short-term investments because of such interest rate reset feature. We received proceeds from the sale or maturity of marketable securities of $201,340 and $9,935 for the nine months ended September 30, 2006 and 2005, respectively. There were no unrealized holding gains or losses on marketable securities as of September 30, 2006 and December 31, 2005. Restricted Investments As of September 30, 2006 and December 31, 2005, short-term restricted investments of $25,000 and $25,165, respectively, primarily included certificates of deposit placed in escrow for the benefit of a third party pursuant to a programming agreement. As of September 30, 2006 and December 31, 2005, long-term restricted investments of $58,300 and $82,450, respectively, primarily included certificates of deposit and money market funds deposited in escrow for the benefit of third parties pursuant to programming agreements and certificates of deposit placed in escrow to secure our reimbursement obligations under letters of credit issued for the benefit of lessors of office space. 9 SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES Property and Equipment Property and equipment is stated at cost and depreciated on a straight-line basis over the estimated useful lives of the related assets, which range from 2 to 30 years. Our satellite system is depreciated on a straight-line basis over the respective remaining useful lives of our satellites from the date we launched our service in February 2002, or, in the case of our spare satellite, from the date it was delivered to ground storage in April 2002. Leasehold improvements and equipment under capital leases is depreciated using the straight-line method over the lesser of the lease term or the estimated useful life. We capitalize a portion of the interest on funds borrowed to finance the construction and launch of our satellites. Capitalized interest is recorded as part of the asset’s cost and depreciated over the satellite’s useful life. Capitalized interest costs for the three and nine months ended September 30, 2006 were $1,134 and $2,532, respectively. We had no capitalized interest for the three and nine months ended September 30, 2005. The expected useful lives of our three in-orbit satellites were originally 15 years from the date they were placed into orbit. In June 2006, we entered into an agreement with Space Systems/Loral to design and construct a new satellite. In connection with this agreement, we adjusted the useful lives of two of our in-orbit satellites to 13 years to reflect the way we intend to operate the constellation. We continue to expect our spare satellite to operate effectively for 15 years from the date of launch. Our satellites have experienced circuit failures on their solar arrays. We continue to monitor the operating condition of our satellites. If events or circumstances indicate that the useful lives of our satellites have changed we will modify the depreciable life accordingly. In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” we review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset is not recoverable. At the time an impairment in value of a long-lived asset is identified, the impairment is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value. To determine fair value, we employ an expected present value technique, which utilizes multiple cash flow scenarios that reflect the range of possible outcomes and an appropriate discount rate. In connection with our new satellite agreement, in June 2006 we wrote-off $10,917 for the net book value of certain satellite long-lead time parts purchased in 1999 that we will no longer need. Reclassifications Certain amounts in the prior period unaudited consolidated financial statements have been reclassified to conform to the current period presentation, including the reclassification of equity granted to third parties and employees from a separate line item disclosure to being included in other operating expense line items in order to comply with the requirements of SFAS No. 123R. Recent Accounting Pronouncements In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which defines fair value, establishes a framework for measuring fair value and expands the related disclosure requirements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and for interim periods within those years. We do not believe the adoption of SFAS No. 157 will have a material impact on our consolidated results of operations or financial position. In September 2006, the EITF issued EITF No. 06-1, “Accounting for Consideration Given by a Service Provider to Manufacturers or Resellers of Equipment Necessary for an End-Customer to Receive Service from the Service Provider.” The EITF concluded that if consideration given by a service provider to a third-party manufacturer or a reseller that is not the service provider’s customer can be linked contractually to the benefit received by the service provider’s customer, a service provider should account for the consideration in accordance with EITF No. 01-9, “Accounting for Consideration Given by a Vendor to a Customer.” EITF No. 06-1 is effective for annual reporting periods beginning after June 15, 2007. We are currently evaluating the effects that EITF No. 06-1 will have on our consolidated results of operations and financial position. In June 2006, the EITF issued EITF No. 06-3, “How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement (That Is, Gross versus Net Presentation),” to clarify diversity in practice on the presentation of different types of taxes in the financial statements. The EITF concluded that for taxes within the scope of the issue, a company may include charges to customers for taxes within revenues and the charge for the taxes from the taxing authority within cost of sales, or, alternatively, it may net the charge to the customer and the charge from the taxing authority. If taxes subject to EITF No. 06-3 are significant, a 10 SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES company is required to disclose its accounting policy for presenting taxes and the amounts of such taxes that are recognized on a gross basis. EITF No. 06-3 is effective for the first interim reporting period beginning after December 15, 2006. We will adopt EITF No. 06-3 effective January 1, 2007. We do not believe the adoption of EITF No. 06-3 will have a material impact on our consolidated results of operations or financial position. In June 2006, the FASB issued FIN No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109,” which prescribes a recognition threshold and measurement attribute for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, as well as criteria on derecognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. We will adopt FIN No. 48 effective January 1, 2007. We do not believe the adoption of FIN No. 48 will have a material impact on our consolidated results of operations or financial position. This excerpt taken from the SIRI 10-Q filed Aug 9, 2006. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs for the three months ended June 30, 2006 and 2005 were $6,749 and $8,371, respectively, and $14,144 and $15,828 for the six months ended June 30, 2006 and 2005, respectively. These costs are included in engineering, design and development expenses in our accompanying unaudited consolidated statements of operations. This excerpt taken from the SIRI 10-Q filed May 9, 2006. Research and Development Costs 7 SIRIUS SATELLITE RADIO INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS—(Continued) Research and development costs are expensed as incurred. Research and development costs for the three months ended March 31, 2006 and 2005 were $7,395 and $7,457, respectively. These costs are included in engineering, design and development expenses in our accompanying unaudited consolidated statements of operations. This excerpt taken from the SIRI 10-K filed Mar 13, 2006. Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs for the years ended December 31, 2005, 2004 and 2003 were $31,865, $21,154 and $18,054, respectively, and are included in engineering, design and development expenses.
This excerpt taken from the SIRI 10-Q filed Aug 3, 2005. Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs for the three months ended June 30, 2005 and 2004 were $8,371 and $5,678, respectively, and $15,828 and $10,041 for the six months ended June 30, 2005 and 2004, respectively, and are included in engineering, design and development expenses in our accompanying unaudited consolidated statements of operations.
This excerpt taken from the SIRI 10-Q filed May 9, 2005. Research and Development Costs Research and development costs are expensed as incurred. Research and development costs for the three months ended March 31, 2005 and 2004 were $5,637 and $4,363, respectively, and are included in engineering, design and development expenses in the accompanying unaudited consolidated statements of operations. This excerpt taken from the SIRI 10-K filed Mar 16, 2005. Research and Development Costs
Research and development costs are expensed as incurred. Research and development costs for the years ended December 31, 2004, 2003 and 2002 were $21,154, $18,054 and $21,004, respectively, and are included in engineering, design and development expenses in the accompanying consolidated statements of operations.
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