Annual report pursuant to Section 13 and 15(d)

Intangible Assets

v3.20.4
Intangible Assets
 12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets Intangible Assets
Our intangible assets include the following:
    December 31, 2020 December 31, 2019
  Weighted
Average
Useful Lives		 Gross
Carrying
Value		 Accumulated Amortization Net Carrying
Value		 Gross
Carrying
Value		 Accumulated Amortization Net Carrying
Value
Indefinite life intangible assets:
              
FCC licenses Indefinite $ 2,084  $ —  $ 2,084  $ 2,084  $ —  $ 2,084 
Trademarks Indefinite 250  —  250  251  —  251 
Definite life intangible assets:              
OEM relationships 15 years 220  (105) 115  220  (90) 130 
Licensing agreements 12 years 45  (45) —  45  (42) 3 
Software and technology 7 years 31  (16) 15  35  (25) 10 
Due to Pandora and Stitcher Acquisitions:
Indefinite life intangible assets:
Trademarks Indefinite $ 311  $ —  $ 311  $ 331  $ —  $ 331 
Definite life intangible assets:
Customer relationships 8 years 441  (104) 337  403  (49) 354 
Software and technology 5 years 373  (145) 228  373  (69) 304 
Total intangible assets   $ 3,755  $ (415) $ 3,340  $ 3,742  $ (275) $ 3,467 
Indefinite Life Intangible Assets
We have identified our FCC licenses and XM and Pandora trademarks 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. Each of the FCC licenses authorizes us to use radio spectrum, a reusable resource that does not deplete or exhaust over time.
ASC 350-30-35, Intangibles - Goodwill and Other, provides for 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 identifiable indefinite lived 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 a quantitative assessment of our FCC licenses and XM and Pandora trademarks during the fourth quarter of 2020 and qualitative assessments during the fourth quarter of 2019 and 2018. As of the date of our annual assessment for 2020, our impairment assessment of the fair value of our indefinite intangible assets indicated that the carrying value of our Pandora trademark exceeded the fair value of the asset by $20. The excess carrying value has been written off and recognized in the Impairment charges line item in our consolidated statements of comprehensive income. The impairment assessment for our FCC licenses and XM trademark indicate that the fair value of such assets substantially exceeded their carrying value and therefore were not at risk of impairment. As of the date of our annual assessment for 2019 and 2018, our impairment assessment of the fair value of our indefinite intangible assets indicated that the fair value of such assets substantially exceeded their carrying value and therefore were not at risk of impairment.
During the year ended December 31, 2020, we also recognized an impairment loss of less than $1 for intangible assets with indefinite lives related to the termination of the Automatic service.
No impairment loss was recognized for intangible assets with indefinite lives during the years ended December 31, 2019 and 2018.
Definite Life Intangible Assets
Definite-lived intangible assets are amortized over their respective estimated useful lives to their estimated residual values, in a pattern that reflects when the economic benefits will be consumed, and are 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 in an amount by which the carrying amount of the asset exceeds its fair value. No impairment loss was recognized for intangible assets with definite lives during the years ended December 31, 2020, 2019 and 2018.
Amortization expense for all definite life intangible assets was $152, $141 and $23 for the years ended December 31, 2020, 2019 and 2018, respectively. There were retirements of definite lived intangible assets of $17, which included a loss of $4, due to the termination of the Automatic service, during the year ended December 31, 2020. As part of the Simplecast acquisition, $12 was allocated to identifiable intangible assets subject to amortization and related to the assessed fair value of software and technology, which was determined by using the multi-period excess earnings method, as of the acquisition date. As part of the Stitcher acquisition, $38 was allocated to identifiable intangible assets subject to amortization and related to the assessed fair value of advertising relationship of $6, trademark of $3 and talent and content contracts of $29.
The expected amortization expense for each of the fiscal years 2021 through 2025 and for periods thereafter is as follows:
Years ending December 31, Amount
2021 $ 153 
2022 154 
2023 141 
2024 75 
2025 69 
Thereafter 103 
Total definite life intangible assets, net $ 695