Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

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Commitments and Contingencies
 9 Months Ended
Sep. 30, 2011
Commitments and Contingencies [Abstract]  
Commitments and Contingencies
(14) Commitments and Contingencies
          The following table summarizes our expected contractual cash commitments as of September 30, 2011:
                                                         
    Remaining                                      
    2011     2012     2013     2014     2015     Thereafter     Total  
Long-term debt obligations (1)
  $ 24,363     $ 1,623     $ 779,636     $ 550,178     $ 1,057,000     $ 700,000     $ 3,112,800  
Cash interest payments (1)
    81,399       288,338       288,208       186,935       113,433       160,128       1,118,441  
Satellite and transmission
    9,760       55,680       4,782       13,250       13,156       22,093       118,721  
Programming and content
    47,561       227,048       178,953       151,931       145,531       3,750       754,774  
Marketing and distribution
    28,570       25,070       17,725       12,816       11,644       11,809       107,634  
Satellite incentive payments
    2,826       11,608       12,693       12,901       12,049       87,601       139,678  
Operating lease obligations
    8,522       32,819       28,335       21,973       13,851       5,428       110,928  
Other
    15,119       25,921       9,883       659       268       182       52,032  
 
                                         
Total (2)
  $ 218,120     $ 668,107     $ 1,320,215     $ 950,643     $ 1,366,932     $ 990,991     $ 5,515,008  
 
                                         
 
(1)   Includes captial lease obligations.
 
(2)   The table does not include our reserve for uncertain tax positions, which at September 30, 2011 totaled $1,496, as the specific timing of any cash payments relating to this obligation cannot be projected with reasonable certainty.
          Long-term debt obligations. Long-term debt obligations include principal payments on outstanding debt and capital lease obligations. We paid $23,866 of the 2011 remaining obligations of $24,363 in October 2011 upon the maturity of the 3.25% Notes.
          Cash interest payments. Cash interest payments include interest due on outstanding debt through maturity.
          Satellite and transmission. We have entered into agreements with third parties to operate and maintain the off-site satellite telemetry, tracking and control facilities and certain components of our terrestrial repeater networks. We have also entered into various agreements to design and construct a satellite and related launch vehicle for use in our systems.
          We have an agreement with Space Systems/Loral to design and construct a fifth satellite, FM-6, for use in the SIRIUS system. In January 2008, we entered into an agreement with International Launch Services (ILS) to secure a satellite launch on a Proton rocket for this satellite.
          Programming and content. We have entered into various programming agreements. Under the terms of these agreements, we are obligated to provide payments to other entities that may include fixed payments, advertising commitments and revenue sharing arrangements.
          Marketing and distribution. We have entered into various marketing, sponsorship and distribution agreements to promote our brand and are obligated to make payments to sponsors, retailers, automakers and radio manufacturers under these agreements. Certain programming and content agreements also require us to purchase advertising on properties owned or controlled by the licensors. We also reimburse automakers for certain engineering and development costs associated with the incorporation of satellite radios into vehicles they manufacture. In addition, in the event certain new products are not shipped by a distributor to its customers within 90 days of the distributor’s receipt of goods, we have agreed to purchase and take title to the product.
          Satellite incentive payments. Boeing Satellite Systems International, Inc., the manufacturer of four of XM’s in-orbit satellites, may be entitled to future in-orbit performance payments with respect to two of our satellites. As of September 30, 2011, we have accrued $28,498 related to contingent in-orbit performance payments for XM-3 and XM-4 based on expected operating performance over their fifteen year design life. Boeing may also be entitled to an additional $10,000 if XM-4 continues to operate above baseline specifications during the five years beyond the satellite’s fifteen-year design life.
          Space Systems/Loral may be entitled to future in-orbit performance payments. As of September 30, 2011, we have accrued $11,190 and $21,450 related to contingent performance payments for our FM-5 and XM-5 satellites, respectively, based on expected operating performance over their fifteen-year design life.
          Operating lease obligations. We have entered into cancelable and non-cancelable operating leases for office space, equipment and terrestrial repeaters. These leases provide for minimum lease payments, additional operating expense charges, leasehold improvements and rent escalations that have initial terms ranging from one to fifteen years, and certain leases that have options to renew. The effect of the rent holidays and rent concessions are recognized on a straight-line basis over the lease term, including reasonably assured renewal periods.
          Other. We have entered into various agreements with third parties for general operating purposes. In addition to the minimum contractual cash commitments described above, we have entered into agreements with other variable cost arrangements. These future costs are dependent upon many factors, including subscriber growth, and are difficult to anticipate; however, these costs may be substantial. We may enter into additional programming, distribution, marketing and other agreements that contain similar variable cost provisions.
          We do not have any other significant off-balance sheet arrangements that are reasonably likely to have a material effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.
     Legal Proceedings
          In the ordinary course of business, we are a defendant in various lawsuits and arbitration proceedings, including derivative actions; actions filed by subscribers, both on behalf of themselves and on a class action basis; former employees; parties to contracts or leases; and owners of patents, trademarks, copyrights or other intellectual property. Our significant legal proceedings are discussed under Item 1, Legal Proceedings in Part II, Other Information.