XM Radio 2009 Annual Report Download - page 179

Our share of net earnings or losses of our Canadian Investments is recorded to Gain (loss) on investments in our
consolidated statements of operations. As it relates to XM Canada, this is done on a one month lag. We evaluate our
Canadian Investments periodically and record an impairment charge to Gain (loss) on investments in our
consolidated statements of operations if we determine that decreases in fair value are considered to be other than
temporary. In addition, any payments received from the Canadian Investments in excess of the carrying value of our
investments in, advances to and commitments to such entity is recorded to Gain (loss) on investments in our
consolidated statements of operations.
We recorded the following amounts to Gain (loss) on investments:
2009 2008 2007
For the Years Ended
December 31,
Share of SIRIUS Canada net loss ............................ $(6,636) $ (4,745) $—
Payments received from SIRIUS Canada in excess of carrying value . . 13,738 — —
Release of liability with SIRIUS Canada ....................... 1,351 — —
Share of XM Canada net loss ............................... (2,292) (9,309) —
Impairment of XM Canada ................................. (4,734) (16,453) —
Other ................................................. 504 — —
Total ............................................... $ 1,931 $(30,507) $—
In addition, during the year ended December 31, 2009, we recorded $543 as a foreign exchange gain to
Accumulated other comprehensive loss, net of tax, related to our investment in XM Canada.
XM Holdings holds an investment in Cdn$4,000 face value of 8% convertible unsecured subordinated
debentures issued by XM Canada for which the embedded conversion feature is bifurcated from the host contract.
The host contract is accounted for as an available-for-sale security at fair value with changes in fair value recorded
to Accumulated other comprehensive loss, net of tax. The embedded conversion feature is accounted for as a
derivative at fair value with changes in fair value recorded in earnings as Interest and investment income. As of
December 31, 2009, the carrying values of the host contract and embedded derivative related to our investment in
the debentures was $2,961 and $9, respectively. As of December 31, 2008, the carrying values of the host contract
and embedded derivative related to our investment in the debentures was $2,540 and $2, respectively.
Auction Rate Certificates
Auction rate certificates are long-term securities structured to reset their coupon rates by means of an auction.
We account for our investment in auction rate certificates as available-for-sale securities. In January 2010, our
investment in the auction rate certificates was called by the issuer at par plus accrued interest, or $9,456, resulting in
a gain of approximately $900 in the first quarter of 2010.
Restricted Investments
Restricted investments relate to deposits placed into escrow for the benefit of third parties pursuant to
programming agreements and reimbursement obligations under letters of credit issued for the benefit of lessors of
office space.
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SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)