Sirius XM Holdings Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Goodwill and Intangible Assets

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

During the nine months ended September 30, 2016, we completed a business combination that was not material to our condensed consolidated financial statements. During the nine months ended September 30, 2016, we made an adjustment to goodwill and deferred tax liabilities as a result of the impact of final pre-acquisition Ticketfly income tax returns filed. The changes in the carrying amount of goodwill for the nine months ended September 30, 2016, are as follows:



	Goodwill
	(in thousands)
Balance as of December 31, 2015	$	303,875
Goodwill resulting from business combination and purchase price adjustments	2,831
Balance as of September 30, 2016	$	306,706

The following summarizes information regarding the gross carrying amounts and accumulated amortization of intangible assets.



	As of December 31, 2015							As of September 30, 2016
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Value		Gross Carrying Amount		Accumulated Amortization			Net Carrying Value
	(in thousands)							(in thousands)
Finite-lived intangible assets
Patents	$	8,030	$	(1,824	)	$	6,206	$	8,030	$	(2,373	)	$	5,657
Developed technology	56,050		(1,265		)	54,785		56,165		(10,515		)	45,650
Customer relationships - clients	37,300		(777		)	36,523		37,399		(4,309		)	33,090
Customer relationships - users	1,940		(318		)	1,622		1,940		(1,046		)	894
Trade names	11,720		(304		)	11,416		11,735		(1,654		)	10,081
Total finite-lived intangible assets	$	115,040	$	(4,488	)	$	110,552	$	115,269	$	(19,897	)	$	95,372

Indefinite-lived intangible assets
FCC license - Broadcast Radio	$	193	$	—		$	193	$	193	$	—		$	193

Total intangible assets	$	115,233	$	(4,488	)	$	110,745	$	115,462	$	(19,897	)	$	95,565

Amortization expense of intangible assets was $0.4 million and $5.1 million for the three months ended September 30, 2015 and 2016. Amortization expense of intangible assets was $0.8 million and $15.4 million for the nine months ended September 30, 2015 and 2016.

The following is a schedule of future amortization expense related to finite-lived intangible assets as of September 30, 2016.



	As of September 30, 2016
	(in thousands)
Remainder of 2016	$	5,138
2017	20,116
2018	17,654
2019	17,129
2020	15,896
Thereafter	19,439
Total future amortization expense	$	95,372

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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