XM Radio 2012 Annual Report Download - page 103

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SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(6) Goodwill
Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and
identifiable intangible assets acquired in business combinations. Our annual impairment assessment is performed
as of the fourth quarter of each year, and an assessment is performed at other times if an event occurs or
circumstances change that would more likely than not reduce the fair value of the asset below its carrying value.
At the date of our annual assessment for 2012 and 2011, the fair value of our single reporting unit substantially
exceeded its carrying value and therefore was not at risk of failing step one of ASC 350-20, Goodwill.
As of December 31, 2012, there were no indicators of impairment and no impairment loss was recorded for
goodwill during the years ended December 31, 2012, 2011 and 2010. The cumulative balance of goodwill
impairment that has been recorded since the Merger is $4,766,190, which was recognized during the year ended
December 31, 2008.
During the year ended December 31, 2012, with the release of our deferred income tax valuation allowance,
we reduced goodwill by $19,491 related to the subsequent exercise of certain stock options and vesting of certain
restricted stock units that were recorded at fair value in connection with the Merger. There were no changes in
the carrying value of our goodwill during the year ended December 31, 2011.
(7) Intangible Assets
Intangible assets consist of the following:
Weighted
Average
Useful Lives
December 31, 2012 December 31, 2011
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
Indefinite life
intangible assets:
FCC licenses .... Indefinite $2,083,654 $ — $2,083,654 $2,083,654 $ — $2,083,654
Trademark ...... Indefinite 250,000 — 250,000 250,000 — 250,000
Definite life
intangible assets:
Subscriber
relationships . . 9 years 380,000 (233,317) 146,683 380,000 (191,201) 188,799
Licensing
agreements .... 9.1years 78,489 (44,161) 34,328 78,897 (34,145) 44,752
Proprietary
software ...... 6years 16,552 (12,777) 3,775 16,552 (11,507) 5,045
Developed
technology .... 10years 2,000 (883) 1,117 2,000 (683) 1,317
Leasehold
interests ...... 7.4years 132 (79) 53 132 (61) 71
Total intangible
assets ...... $2,810,827 $(291,217) $2,519,610 $2,811,235 $(237,597) $2,573,638
Indefinite Life Intangible Assets
We have identified our FCC licenses and the XM trademark as indefinite life intangible assets after
considering the expected use of the assets, the regulatory and economic environment within which they are used
and the effects of obsolescence on their use.
F-17