XM Radio 2012 Annual Report Download - page 111

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SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
General Motors and American Honda
We have a long-term distribution agreement with General Motors Company (“GM”). GM had a
representative on our board of directors and was considered a related party through May 27, 2010. During the
term of the agreement, GM has agreed to distribute our service. We subsidize a portion of the cost of satellite
radios and make incentive payments to GM when the owners of GM vehicles with factory- or dealer- installed
satellite radios become self-paying subscribers. We also share with GM a percentage of the subscriber revenue
attributable to GM vehicles with factory- or dealer- installed satellite radios. GM provides certain call-center
related services directly to subscribers who are also GM customers for which we reimburse GM.
We make bandwidth available to OnStar LLC for audio and data transmissions to owners of enabled GM
vehicles, regardless of whether the owner is a subscriber. OnStar’s use of our bandwidth must be in compliance
with applicable laws, must not compete or adversely interfere with our business, and must meet our quality
standards. We also granted to OnStar a certain amount of time to use our studios on an annual basis and agreed to
provide certain audio content for distribution on OnStar’s services.
We have a long-term distribution agreement with American Honda. American Honda had a representative
on our board of directors and was considered a related party through May 27, 2010. We have an agreement to
make a certain amount of our bandwidth available to American Honda. American Honda’s use of our bandwidth
must be in compliance with applicable laws, must not compete or adversely interfere with our business, and must
meet our quality standards. This agreement remains in effect so long as American Honda holds a certain amount
of investment in us. We make incentive payments to American Honda for each purchaser or a Honda or Acura
vehicle that becomes a self-paying subscriber and we share with American Honda a portion of the subscriber
revenue attributable to Honda and Acura vehicles with installed satellite radios.
We recorded the following total related party revenue from GM and American Honda, primarily consisting
of subscriber revenue, in connection with the agreements above:
For the Year Ended
December 31,
2010 *
GM ............................................................... $12,759
American Honda .................................................... 4,990
Total ............................................................ $17,749
* GM and American Honda were considered related parties through May 2010.
We have incurred the following related party expenses with GM and American Honda:
For the Year Ended December 31,
2010 *
GM American Honda
Sales and marketing ......................................... $13,374 $ —
Revenue share and royalties ................................... 15,823 3,167
Subscriber acquisition costs ................................... 17,514 1,969
Customer service and billing .................................. 125 —
Interest expense, net of amounts capitalized ...................... 1,421 —
Total ................................................... $48,257 $5,136
* GM and American Honda were considered related parties through May 2010.
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