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

Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets

Intangible Assets

9 Months Ended

Sep. 30, 2011

Goodwill and Intangible Assets [Abstract]

Intangible Assets

(5) Intangible Assets

Intangible assets consist of the following:


		September 30, 2011							December 31, 2010
		Gross							Gross
	Weighted Average	Carrying		Accumulated			Net Carrying		Carrying		Accumulated			Net Carrying
	Useful Lives	Value		Amortization			Value		Value		Amortization			Value
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		(179,976	)		200,024		380,000		(144,325	)		235,675
Licensing agreements	9.1 years		78,897		(31,641	)		47,256		78,897		(24,130	)		54,767
Proprietary software	6 years		16,552		(11,073	)		5,479		16,552		(9,566	)		6,986
Developed technology	10 years		2,000		(633	)		1,367		2,000		(483	)		1,517
Leasehold interests	7.4 years		132		(57	)		75		132		(43	)		89


Total intangible assets		$	2,811,235	$	(223,380	)	$	2,587,855	$	2,811,235	$	(178,547	)	$	2,632,688

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 licenses expires:


FCC license		Expiration year
SIRIUS FM-1 satellite		2017
SIRIUS FM-2 satellite		2017
SIRIUS FM-3 satellite		2017
SIRIUS FM-4 satellite⁽¹⁾		2017
SIRIUS FM-5 satellite		2017
SIRIUS FM-6 satellite		(2)
XM-1 satellite		2014
XM-2 satellite		2014
XM-3 satellite		2013
XM-4 satellite		2014
XM-5 satellite		2018


(1)		In 2010, we retired our FM-4 ground spare satellite. We still maintain the FCC license for this satellite.

(2)		We hold an FCC license for our FM-6 satellite, which will expire eight years from launch of this satellite.

Prior to expiration, we are required to apply for a renewal of our FCC licenses. The renewal and extension of our 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.

In connection with the Merger, $250,000 of the purchase price was allocated to the XM trademark. As of September 30, 2011, there were no legal, regulatory or contractual limitations associated with the XM trademark.

Our annual impairment assessment of our indefinite intangible assets is performed as of October 1st of each year. An assessment is made at other times if events or changes in circumstances indicate that it is more likely than not that the assets have been impaired. As of September 30, 2011, there were no indicators of impairment and no impairment loss was recorded for intangible assets with indefinite lives during the three and nine months ended September 30, 2011 and 2010.

Definite Life Intangible Assets

Subscriber relationships are amortized on an accelerated basis over 9 years, which reflects the estimated pattern in which the economic benefits will be consumed. Other definite life intangible assets include certain licensing agreements, which are amortized over a weighted average useful life of 9.1 years on a straight-line basis.

Amortization expense for definite life intangible assets was $14,570 and $16,228 for the three months ended September 30, 2011 and 2010, respectively, and $44,833 and $50,342 for the nine months ended September 30, 2011 and 2010, respectively. Expected amortization expense for the remaining period in 2011, each of the years 2012 through 2015 and for periods thereafter is as follows:


Year ending December 31,	Amount
Remaining 2011	$	14,232
2012		53,680
2013		47,357
2014		38,879
2015		37,553
Thereafter		62,500

Total definite life intangibles assets, net	$	254,201