XM Radio 2010 Annual Report Download - page 108

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(7) Interest Costs
We capitalize a portion of the interest on funds borrowed to finance the construction costs of our satellites and
related launch vehicles for our FM-6 and XM-5 satellites. We also incur interest costs on all of our debt instruments
and on our satellite incentive agreements. The following is a summary of our interest costs:
2010 2009 2008
For the Years Ended December 31,
Interest costs charged to expense ....................... $295,643 $315,668 $148,455
Interest costs capitalized .............................. 63,880 61,201 20,872
Total interest costs incurred ......................... $359,523 $376,869 $169,327
Included in interest costs incurred is non-cash interest expense, consisting of amortization related to original
issue discounts, premiums and deferred financing fees of $42,841, $43,066 and $(2,689) for the years ended
December 31, 2010, 2009 and 2008, respectively.
(8) Property and Equipment
Property and equipment, net, consists of the following:
December 31,
2010
December 31,
2009
Satellite system .......................................... $1,943,537 $1,680,732
Terrestrial repeater network ................................. 109,582 108,841
Leasehold improvements ................................... 43,567 43,480
Broadcast studio equipment ................................. 51,985 49,965
Capitalized software and hardware ............................ 163,689 146,035
Satellite telemetry, tracking and control facilities ................. 57,665 55,965
Furniture, fixtures, equipment and other ........................ 63,265 57,536
Land .................................................. 38,411 38,411
Building ............................................... 56,685 56,424
Construction in progress ................................... 297,771 430,543
Total property and equipment .............................. 2,826,157 2,667,932
Accumulated depreciation and amortization ..................... (1,064,883) (956,929)
Property and equipment, net ............................. $1,761,274 $1,711,003
Construction in progress consists of the following:
December 31,
2010
December 31,
2009
Satellite system .......................................... $262,744 $398,425
Terrestrial repeater network ................................. 19,239 19,396
Other .................................................. 15,788 12,722
Construction in progress .................................. $297,771 $430,543
Depreciation and amortization expense on property and equipment was $207,367, $232,863 and $167,963 for
the years ended December 31, 2010, 2009 and 2008, respectively. We retired property and equipment, which
included our SIRIUS FM-4 satellite, with a cost basis of $155,000 during the year ended December 31, 2010.
F-20
SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)