XM Radio 2009 Annual Report Download - page 172

We hold FCC licenses to operate our satellite digital audio radio service and provide ancillary services. The
following table outlines the years in which each of our licenses expire:
FCC License Expiration Year
SIRIUS FM-1 satellite ............................................... 2017
SIRIUS FM-2 satellite ............................................... 2017
SIRIUS FM-3 satellite ............................................... 2017
SIRIUS FM-4 ground spare satellite ..................................... 2017
SIRIUS FM-5 satellite ............................................... 2017
XM-1 satellite ..................................................... 2014
XM-2 satellite ..................................................... 2014
XM-3 satellite ..................................................... 2013
XM-4 satellite ..................................................... 2014
Prior to the expirations, we will be required to apply for a renewal of our FCC licenses. The renewal and
extension of our licenses is reasonably certain at minimal cost which is expensed as incurred. 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 trademark. As of
December 31, 2009, there are no legal, regulatory or contractual limitations associated with the XM trademark.
We evaluate our indefinite life intangible assets for impairment on an annual basis. During the year ended
December 31, 2009, no impairment loss was recorded for intangible assets with indefinite lives.
Definite Life Intangible Assets
Definite life intangible 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 intangible assets include
certain licensing agreements of $75,000, which are being amortized over a weighted average useful life of 9.1 years
on a straight-line basis.
Amortization expense was $76,587, $35,789 and $0 for the years ended December 31, 2009, 2008 and 2007,
respectively. Expected amortization expense for each of the fiscal years through December 31, 2014 and for periods
thereafter is as follows:
Year Ending December 31, Amount
2010 ............................................................... $ 65,916
2011 ............................................................... 58,850
2012 ............................................................... 53,420
2013 ............................................................... 47,097
2014 ............................................................... 38,619
Thereafter ........................................................... 97,559
Total definite life intangibles, net .......................................... $361,461
(6) Subscriber Revenue
Subscriber revenue consists of subscription fees, revenue derived from our agreements with daily rental fleet
programs, non-refundable activation and other fees and the effects of rebates. Revenues received from automakers
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SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)