XM Radio 2010 Annual Report Download - page 114

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Our share of net earnings or losses of the Canadian Entities is recorded to Interest and investment income (loss)
in our consolidated statements of operations. As it relates to XM Canada, this is done on a one month lag. We
evaluate the Canadian Entities periodically and record an impairment charge to Interest and investment income
(loss) in our consolidated statements of operations if we determine that decreases in fair value are considered to be
other-than temporary. In addition, any payments received from the Canadian Entities in excess of the carrying value
of our investments in, advances to and commitments to such entity is recorded to Interest and investment income
(loss) in our consolidated statements of operations.
We recorded the following related party amounts to Interest and investment income (loss):
2010 2009 2008
For the Years Ended December 31,
Share of SIRIUS Canada net loss......................... $(10,257) $ (6,636) $ (4,745)
Payments received from SIRIUS Canada in excess of carrying
value ............................................ 10,281 13,738 —
Release of liability with SIRIUS Canada ................... — 1,351 —
Share of XM Canada net loss ........................... (12,147) (2,292) (9,309)
Impairment of XM Canada ............................. — (4,734) (16,453)
Realized gain on sale of auction rate certificates ............. 425 — —
Other ............................................. — 504 —
Total ............................................ $(11,698) $ 1,931 $(30,507)
In addition, during the years ended December 31, 2010 and 2009, we recorded $149 and $543, respectively, of
a foreign exchange gain to Accumulated other comprehensive loss, net of tax, related to our investment in XM
Canada.
We hold an investment in Cdn$4,000 face value of 8% convertible unsecured subordinated debentures issued
by XM Canada, for which the embedded conversion feature is bifurcated from the host contract. The host contract is
accounted for at fair value as an available-for-sale security with changes in fair value recorded to Accumulated other
comprehensive loss, net of tax. The embedded conversion feature is accounted for at fair value as a derivative with
changes in fair value recorded in earnings as Interest and investment income (loss). As of December 31, 2010, the
carrying values of the host contract and embedded derivative related to our investment in the debentures was $3,302
and $11, respectively. As of December 31, 2009, the carrying values of the host contract and embedded derivative
related to our investment in the debentures was $2,961 and $9, respectively.
Auction Rate Certificates
Auction rate certificates are long-term securities structured to reset their coupon rates by means of an auction.
We accounted for our investment in auction rate certificates as available-for-sale securities. In January 2010, our
investment in the auction rate certificates was called by the issuer at par plus accrued interest, or $9,456, resulting in
a gain of $425 in the year ended December 31, 2010.
Restricted Investments
Restricted investments relate to reimbursement obligations under letters of credit issued for the benefit of
lessors of office space. As of December 31, 2010 and 2009, Long-term restricted investments were $3,396 and
$3,400, respectively.
F-26
SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)