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SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In September 2012, Liberty Media converted 6,249,900 shares of the Series B Preferred Stock into
1,293,467,684 shares of common stock. For a discussion of subsequent events refer to Note 18.
(4) Accounts Receivable, net
Accounts receivable, net, are stated at amounts due from customers net of an allowance for doubtful
accounts. Our allowance for doubtful accounts is based upon our assessment of various factors. We consider
historical experience, the age of the receivable balances, current economic conditions and other factors that may
affect the counterparty’s ability to pay. Bad debt is included in Customer service and billing expense in our
consolidated statements of comprehensive income.
Accounts receivable, net, consists of the following:
December 31,
2012
December 31,
2011
Gross accounts receivable ..................................... $117,853 $111,637
Allowance for doubtful accounts ................................ (11,711) (9,932)
Total accounts receivable, net ................................ $106,142 $101,705
Receivables from distributors include billed and unbilled amounts due from OEMs for radio services
included in the sale or lease price of vehicles, as well as billed amounts due from retailers. Receivables from
distributors consist of the following:
December 31,
2012
December 31,
2011
Billed ..................................................... $ 53,057 $44,618
Unbilled ................................................... 51,368 40,199
Total .................................................... $104,425 $84,817
(5) Inventory, net
Inventory consists of finished goods, refurbished goods, chip sets and other raw material components used
in manufacturing radios. Inventory is stated at the lower of cost, determined on a first-in, first-out basis, or
market. We record an estimated allowance for inventory that is considered slow moving, obsolete or whose
carrying value is in excess of net realizable value. The provision related to products purchased for resale in our
direct to consumer distribution channel and components held for resale by us is reported as a component of Cost
of equipment in our consolidated statements of comprehensive income. The provision related to inventory
consumed in our OEM and retail distribution channel is reported as a component of Subscriber acquisition costs
in our consolidated statements of comprehensive income.
Inventory, net, consists of the following:
December 31,
2012
December 31,
2011
Raw materials ............................................... $17,717 $ 24,134
Finished goods .............................................. 23,779 28,007
Allowance for obsolescence ................................... (16,159) (15,430)
Total inventory, net ........................................ $25,337 $ 36,711
F-16