XM Radio 2013 Annual Report Download - page 99

Download and view the complete annual report

Please find page 99 of the 2013 XM Radio annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 136

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollar amounts in thousands, unless otherwise stated)
We recognized acquisition related costs of $2,902 that was expensed in General and administrative expenses
in our consolidated statements of comprehensive income during the year ended December 31, 2013. Pro forma
financial information related to this acquisition has not been provided as it is not material to our consolidated
results of operations.
(3) Summary of Significant Accounting Policies
Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand, money market funds, certificates of deposit, in-transit
credit card receipts and highly liquid investments purchased with an original maturity of three months or less.
Equity Method Investments
We hold equity method investments in Sirius XM Canada and M-Way Solutions GmbH.
Investments in which we have the ability to exercise significant influence but not control are accounted for
pursuant to the equity method of accounting. We recognize our proportionate share of earnings or losses of our
affiliates as they occur as a component of Other income (expense) in our consolidated statements of
comprehensive income on a one month lag.
The difference between our investment and our share of the fair value of the underlying net assets of our
affiliates is first allocated to either finite-lived intangibles or indefinite-lived intangibles and the balance is
attributed to goodwill. We follow ASC 350, Intangibles — Goodwill and Other, which requires that equity
method finite-lived intangibles be amortized over their estimated useful life while indefinite-lived intangibles and
goodwill are not amortized. The amortization of equity method finite-lived intangible assets is recorded in
Interest and investment income in our consolidated statements of comprehensive income. We periodically
evaluate our equity method investments to determine if there has been an other than temporary decline below
carrying value. Equity method finite-lived intangibles, indefinite-lived intangibles and goodwill are included in
the carrying amount of the investment.
Property and Equipment
Property and equipment, including satellites, are stated at cost, less accumulated depreciation. Equipment
under capital leases is stated at the present value of minimum lease payments. Depreciation is calculated using
the straight-line method over the following estimated useful life of the asset:
Satellite system ................................................ 2-15years
Terrestrial repeater network ...................................... 5-15years
Broadcast studio equipment ...................................... 3-15years
Capitalized software and hardware ................................. 3-7years
Satellite telemetry, tracking and control facilities ..................... 3-15years
Furniture, fixtures, equipment and other ............................. 2-7years
Building ...................................................... 20or30years
Leasehold improvements ......................................... Lesser of useful life
or remaining lease term
F-17