XM Radio 2014 Annual Report Download - page 124

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Indefinite Life Intangible Assets
We have identified our FCC licenses and the XM trademark as indefinite life intangible assets
after considering the expected use of the assets, the regulatory and economic environment within
which they are used and the effects of obsolescence on their use.
We hold FCC licenses to operate our satellite digital audio radio service and provide ancillary
services. The following table outlines the years in which each of our satellite licenses expires:
FCC satellite licenses
Expiration
year
SIRIUS FM-1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017
SIRIUS FM-2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017
SIRIUS FM-3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017
SIRIUS FM-5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2017
SIRIUS FM-6. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2022
XM-1(1) .......................................................................
XM-3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2021
XM-4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2022
XM-5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2018
(1) The FCC license for this satellite has expired. The FCC has granted us special temporary
authority to operate this satellite and prepare it for deorbiting maneuvers.
Prior to expiration, we are required to apply for a renewal of our FCC licenses. The renewal
and extension of our licenses, including temporary licenses, is reasonably certain at minimal cost,
which is expensed as incurred. Each of the FCC licenses authorizes us to use the broadcast
spectrum, which is a renewable, reusable resource that does not deplete or exhaust over time.
ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment, established an option
to first perform a qualitative assessment to determine whether it is more likely than not that an
asset is impaired. If the qualitative assessment supports that it is more likely than not that the fair
value of the asset exceeds its carrying value, a quantitative impairment test is not required. If the
qualitative assessment does not support the fair value of the asset, then a quantitative assessment
is performed. Our annual impairment assessment of our indefinite intangible assets is performed as
of the fourth quarter of each year. An assessment is performed at other times if an event occurs or
circumstances change that would more likely than not reduce the fair value of the asset below its
carrying value. If the carrying value of the intangible assets exceeds its fair value, an impairment
loss is recognized in an amount equal to that excess.
We completed qualitative assessments of our FCC licenses and XM trademark during the
fourth quarter of 2014, 2013 and 2012. As of the date of our annual assessment for 2014, 2013
and 2012, our qualitative impairment assessment of the fair value of our indefinite intangible assets
indicated that such assets substantially exceeded their carrying value and therefore was not at risk
of impairment. No impairments were recorded for intangible assets with indefinite lives during the
years ended December 31, 2014, 2013 and 2012.
Definite Life Intangible Assets
Definite-lived intangible assets are amortized over their respective estimated useful lives to their
estimated residual values and reviewed for impairment under the provisions of ASC 360-10-35,
Property, Plant and Equipment/Overall/Subsequent Measurement. We review intangible assets
subject to amortization for impairment whenever events or circumstances indicate that the carrying
amount of an asset may not be recoverable. If the sum of the expected cash flows, undiscounted
and without interest, is less than the carrying amount of the asset, an impairment loss is recognized
F-18
SIRIUS XM HOLDINGS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(Dollar amounts in thousands, unless otherwise stated)