XM Radio 2014 Annual Report Download - page 123

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value then goodwill is not impaired; otherwise, an impairment loss will be recorded by the amount the
carrying value exceeds the implied fair value. At the date of our annual assessment for 2014 and
2013, the fair value of our single reporting unit substantially exceeded its carrying value and therefore
was not at risk of failing step one of ASC 350-20, Goodwill.
As of December 31, 2014, there were no indicators of impairment and no impairment loss was
recorded for goodwill during the years ended December 31, 2014, 2013 and 2012. During the year
ended December 31, 2014, the purchase price allocation and working capital calculation associated
with the connected vehicle business we purchased from Agero were adjusted. These adjustments
resulted in a net increase to Goodwill of $554. As of December 31, 2014, the cumulative balance of
goodwill impairments recorded since the July 2008 merger (the “Merger”) between our wholly owned
subsidiary, Vernon Merger Corporation, and XM Satellite Radio Holdings Inc. (“XM”), was
$4,766,190, which was recognized during the year ended December 31, 2008.
During the years ended December 31, 2014 and 2013, we reduced goodwill by $0 and $274,
respectively. The goodwill reduction during the year ended December 31, 2013, related to the
subsequent exercise of certain stock options and vesting of certain restricted stock units that were
recorded at fair value in connection with the Merger.
(9) Intangible Assets
We recorded intangible assets at fair value related to the Merger that were formerly held by
XM. In November 2013, we recorded intangible assets at fair value as a result of the acquisition of
the connected vehicle business of Agero. Our intangible assets include the following:
Weighted
Average
Useful Lives
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
December 31, 2014 December 31, 2013
Due to the Merger:
Indefinite life intangible
assets:
FCC licenses ....... Indefinite $2,083,654 $ — $2,083,654 $2,083,654 $ — $2,083,654
Trademark .......... Indefinite 250,000 — 250,000 250,000 — 250,000
Definite life intangible
assets:
Subscriber
relationships ...... 9 years 380,000 (305,755) 74,245 380,000 (271,372) 108,628
Licensing
agreements ....... 9.1 years 45,289 (23,290) 21,999 45,289 (19,604) 25,685
Proprietary software . 6 years 16,552 (13,973) 2,579 16,552 (13,384) 3,168
Developed
technology ........ 10 years 2,000 (1,283) 717 2,000 (1,083) 917
Leasehold interests. . 7.4 years 132 (114) 18 132 (96) 36
Due to the acquisition
of the connected
vehicle business of
Agero:
Definite life intangible
assets:
OEM relationships. . . 15 years 220,000 (17,111) 202,889 220,000 (2,444) 217,556
Proprietary software . 10 years 10,663 (1,718) 8,945 10,663 (245) 10,418
Total intangible
assets .......... $3,008,290 $(363,244) $2,645,046 $3,008,290 $(308,228) $2,700,062
F-17
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollar amounts in thousands, unless otherwise stated)