XM Radio 2001 Annual Report Download - page 59

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57
XM SATELLiTE RADiO 2 001 Annual Report
cannot be estimated, but are expected to be substantial future costs. During the years ended December 31, 19 99,
2000, 2001, the Company incurred expenses of $ 0, $0 and $7,230,000, respectively, in relation to these agreements.
The amount of these costs will vary in future years, but is expected to increase in the next year as the number of
subscribers and revenue increase.
(l) Leases
The Company has noncancelable operating leases for office space and terrestrial repeater sites and noncancelable
capital leases for equipment that expire over the next ten years. Additionally, the Company owns a building and
leases a portion of the space to other entities. The future minimum lease payments and rentals under noncancelable
leases as of December 31 , 2001 are (in thousands):
Capital Operating
Lease Lease Rental
Payments Payments Income
Year ending December 31:
2002 ....................................................... $ 2,974 $ 20,4 71 $ 1,511
2003 ....................................................... 2,8 35 2 0,966 1,427
2004 ....................................................... 1,098 2 1,423 1,716
2005 ....................................................... 141 17,351 1,8 02
2006 ....................................................... — 6,6 87 1,804
Thereafter ................................................. — 9,4 39 26,065
Total ..................................................... 7,048 $ 96,337 $ 34,32 5
Less amount representing interest ................. (890)
Present value of net minimum lease payments ... 6 ,158
Less current maturities ................................. (1,53 0)
Long-term obligations ................................... $ 4,6 28
Rent expense for 1 999, 2000 and 2001 was $649,000, $6,082,000 and $22,724,000, respectively.
As discussed in note 15(h), in December 2001, the Company determined that the planned number of terrestrial
repeater sites could be reduced due to the relative signal strength provided by the Company’s satellites. The
Company recognized a charge of $2 6,300,000 with respect to the terrestrial repeater sites no longer required.
This charge includes a lease termination accrual of $8,595 ,000 for 646 terrestrial site leases, which would reduce
the future minimum lease payments.
FiNANCiALS 2001
81690_XM2001_AR_Financials 4/9/02 12:33 PM Page 39