XM Radio 2010 Annual Report Download - page 109

Satellites
We own four orbiting satellites and one spare satellite, FM-4, for use in the SIRIUS system. These satellites are
of the Loral FS-1300 model series. Space Systems/Loral is constructing a sixth satellite for use in this system. We
have an agreement with International Launch Services to launch this satellite on a Proton rocket.
During the fourth quarter of 2010, we recorded an other than temporary impairment charge of $56,100 to
Restructuring, impairments, and related costs in the statement of operations for FM-4, a ground spare satellite held
in storage since 2002. We determined that the probability of launching FM-4 is remote due to the launch of XM-5 in
the fourth quarter of 2010 and our business plan.
We own five orbiting satellites for use in the XM system. Four of these satellites were manufactured by Boeing
Satellite Systems International and one was manufactured by Space Systems/Loral.
During the year ended December 31, 2010, we capitalized interest of $63,880 and expenditures of $184,727
related to the construction of our satellites and related launch vehicles for FM-6 and XM-5.
(9) Related Party Transactions
We had the following related party transaction balances at December 31, 2010 and 2009:
2010 2009 2010 2009 2010 2009 2010 2009 2010 2009
Related party
Current Assets
Related Party
Long-Term Assets
Related Party
Current Liabilities
Related Party
Long-Term
Liabilities
Related Party
Long-Term Debt
Liberty Media. . . . . . . . $ — $ — $ 1,571 $ 1,974 $ 9,765 $ 8,523 $ — $ — $325,907 $263,579
SIRIUS Canada . . . . . . 5,613 2,327 — — 1,805 — — — — —
XM Canada . . . . . . . . . 1,106 1,011 28,591 24,429 4,275 2,775 24,517 28,793 — —
General Motors. . . . . . . — 99,995 — 85,364 — 93,107 — 17,508 — —
American Honda . . . . . . — 2,914 — — — 3,841 — — — —
Total . . . . . . . . . . . . $6,719 $106,247 $30,162 $111,767 $15,845 $108,246 $24,517 $46,301 $325,907 $263,579
Neither General Motors nor American Honda is considered a related party following May 27, 2010, the date on
which the individuals nominated by General Motors and American Honda, respectively, ceased to be members of
our board of directors.
Liberty Media
In February, 2009, we entered into an Investment Agreement (the “Investment Agreement”) with an affiliate of
Liberty Media Corporation, Liberty Radio, LLC (collectively, “Liberty Media”). Pursuant to the Investment
Agreement, in March 2009 we issued to Liberty Radio, LLC 12,500,000 shares of our Convertible Perpetual
Preferred Stock, Series B (the “Series B Preferred Stock”), with a liquidation preference of $0.001 per share in
partial consideration for certain loan investments. Liberty Media has representatives on our board of directors.
The Series B Preferred Stock is convertible into 2,586,976,000 shares of common stock. Liberty Media has
agreed not to acquire more than 49.9% of our outstanding common stock prior to March 2012, except that Liberty
Media may acquire more than 49.9% of our outstanding common stock at any time after March 2011 pursuant to
any cash tender offer for all of the outstanding shares of our common stock that are not beneficially owned by
Liberty Media or its affiliates at a price per share greater than the closing price of the common stock on the trading
day preceding the earlier of the public announcement or commencement of such tender offer. The Investment
Agreement also provides for certain other standstill provisions during the three year period ending in March 2012.
F-21
SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)