Sirius XM Holdings Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Intangible Assets

Intangible Assets

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Our intangible assets include the following:



		December 31, 2018							December 31, 2017
	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	$	2,083,654	$	—		$	2,083,654	$	2,083,654	$	—		$	2,083,654
Trademarks	Indefinite	250,800		—			250,800		250,800		—			250,800
Definite life intangible assets:
Subscriber relationships	9 years	—		—			—		380,000		(380,000		)	—
OEM relationships	15 years	220,000		(75,778		)	144,222		220,000		(61,111		)	158,889
Licensing agreements	12 years	45,289		(38,012		)	7,277		45,289		(34,350		)	10,939
Software and technology	7 years	35,572		(20,164		)	15,408		43,915		(25,351		)	18,564
Total intangible assets		$	2,635,315	$	(133,954	)	$	2,501,361	$	3,023,658	$	(500,812	)	$	2,522,846

Indefinite Life Intangible Assets

We have identified our FCC licenses and the XM and Automatic 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 qualitative assessments of our FCC licenses and XM and, to the extent applicable, Automatic trademarks during the fourth quarter of 2018, 2017 and 2016. As of the date of our annual assessment for 2018, 2017 and 2016, 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, 2018, 2017 and 2016.

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 impairments were recorded for intangible assets with definite lives during the years ended December 31, 2018, 2017 and 2016.

Amortization expense for all definite life intangible assets was $23,185, $37,455 and $48,545 for the years ended December 31, 2018, 2017 and 2016, respectively. We retired definite lived intangible assets of $390,043 during the year ended December 31, 2018 primarily related to fully amortized subscriber relationships and acquired proprietary software. There were no retirements of definite lived intangible assets during the years ended December 31, 2017 and 2016. The expected amortization expense for each of the fiscal years 2019 through 2023 and for periods thereafter is as follows:



Years ending December 31,	Amount
2019	$	23,268
2020	22,687
2021	17,198
2022	15,542
2023	15,446
Thereafter	72,766
Total definite life intangible assets, net	$	166,907