XM Radio 2011 Annual Report Download - page 112

SIRIUS XM RADIO INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
amortized on a straight-line basis through 2020, the end of the expected term of the agreements. As of
December 31, 2011 and December 31, 2010, the carrying value of deferred revenue related to this agreement was
$24,517 and $28,792, respectively.
The Cdn$45,000 standby credit facility we extended to XM Canada was paid and terminated as a result of
the Canada Merger. We received $38,815 in cash upon payment of this facility. As a result of the repayment of
the credit facility and completion of the Canada Merger, we released a $15,649 valuation allowance related to the
absorption of our share of the net loss from our investment in XM Canada as of June 21, 2011.
As of December 31, 2010, amounts due from XM Canada also included $7,201 attributable to deferred
programming costs and accrued interest, all of which is reported as Related party long-term assets.
We recorded the following revenue from XM Canada as Other revenue in our consolidated statements of
operations:
For the Years Ended December 31,
2011* 2010 2009
Amortization of XM Canada deferred income .................. $ 1,388 $ 2,776 $ 2,776
Subscriber and activation fee royalties ....................... 5,483 10,313 11,603
Licensing fee revenue ..................................... 3,000 4,500 6,000
Advertising reimbursements ............................... 833 1,083 1,067
Total revenue from XM Canada ........................... $10,704 $18,672 $21,446
* XM Canada combined with Sirius Canada in June 2011.
Our share of net earnings or losses of XM Canada is recorded to Interest and investment income in our
consolidated statements of operations on a one month lag. Our share of XM Canada’s net loss was $6,045,
$12,147 and $2,292 for the years ended December 31, 2011, 2010 and 2009, respectively.
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. As part of the agreement, 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
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