XM Radio 2013 Annual Report Download - page 109

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollar amounts in thousands, unless otherwise stated)
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 expires:
FCC satellite licenses Expiration year
SIRIUS FM-1 .......................................................... 2017
SIRIUS FM-2 .......................................................... 2017
SIRIUS FM-3 .......................................................... 2017
SIRIUS FM-5 .......................................................... 2017
SIRIUS FM-6 (1)
XM-1 ................................................................ 2014
XM-2 ................................................................ 2014
XM-3 ................................................................ 2021
XM-4 ................................................................ 2014
XM-5 ................................................................ 2018
(1) The FCC license for our FM-6 satellite will be issued for a period of eight years, beginning on the date we certify to the
FCC that the satellite has been successfully placed into orbit and that the operations of the satellite fully conform to the
terms and conditions of the space station radio authorization.
Prior to expiration, we are 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. Each of the FCC licenses
authorizes 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, 2013, there were no legal, regulatory or contractual limitations associated with the XM trademark.
Our annual impairment assessment of our indefinite intangible assets is performed as of the fourth quarter of
each year. 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. If the carrying value of the intangible
assets exceeds its fair value, an impairment loss is recognized. As of the date of our annual assessment for 2013,
our qualitative impairment assessment of fair value of our indefinite intangible assets indicated that such assets
substantially exceeded their carrying value and therefore was not at risk of impairment.
There were no indicators of impairment, and no impairment loss was recorded for intangible assets with
indefinite lives during the years ended December 31, 2013, 2012 and 2011.
Definite Life Intangible Assets
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, which are amortized over a weighted average useful life of 9.1 years on a straight-line
basis. The fair value of the OEM relationships and proprietary software acquired in November 2013 are being
amortized over their estimated weighted average useful lives of 15 and 10 years, respectively.
Amortization expense for all definite life intangible assets was $50,011, $53,620 and $59,050 for the years
ended December 31, 2013, 2012 and 2011, respectively. In 2013, we retired $33,200 in gross carrying value of
definite life intangible assets related to licensing agreements that were fully amortized.
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