Quarterly report pursuant to Section 13 or 15(d)

Intangible Assets

v2.4.1.9
Intangible Assets
3 Months Ended
Mar. 31, 2015
Goodwill And Intangible Assets Disclosure [Abstract]  
Intangible Assets

(7)

Intangible Assets

Our intangible assets include the following:

 

 

 

 

 

March 31, 2015

 

 

December 31, 2014

 

 

 

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

 

Trademark

 

Indefinite

 

 

250,000

 

 

 

 

 

 

250,000

 

 

 

250,000

 

 

 

 

 

 

250,000

 

Definite life intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subscriber relationships

 

9 years

 

 

380,000

 

 

 

(313,820

)

 

 

66,180

 

 

 

380,000

 

 

 

(305,755

)

 

 

74,245

 

OEM relationships

 

15 years

 

 

220,000

 

 

 

(20,778

)

 

 

199,222

 

 

 

220,000

 

 

 

(17,111

)

 

 

202,889

 

Licensing agreements

 

12 years

 

 

45,289

 

 

 

(24,211

)

 

 

21,078

 

 

 

45,289

 

 

 

(23,290

)

 

 

21,999

 

Proprietary software

 

8 years

 

 

27,215

 

 

 

(16,206

)

 

 

11,009

 

 

 

27,215

 

 

 

(15,691

)

 

 

11,524

 

Developed technology

 

10 years

 

 

2,000

 

 

 

(1,333

)

 

 

667

 

 

 

2,000

 

 

 

(1,283

)

 

 

717

 

Leasehold interests

 

7.4 years

 

 

132

 

 

 

(119

)

 

 

13

 

 

 

132

 

 

 

(114

)

 

 

18

 

Total intangible assets

 

 

 

$

3,008,290

 

 

$

(376,467

)

 

$

2,631,823

 

 

$

3,008,290

 

 

$

(363,244

)

 

$

2,645,046

 

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 satellite licenses expires:

 

FCC satellite licenses

 

Expiration year

 

SIRIUS FM-1

 

 

2017

 

SIRIUS FM-2

 

 

2017

 

SIRIUS FM-3

 

 

2017

 

SIRIUS FM-5

 

 

2017

 

SIRIUS FM-6

 

 

2022

 

XM-1 (1)

 

 

 

 

XM-3

 

 

2021

 

XM-4

 

 

2022

 

XM-5

 

 

2018

 

(1)

The FCC license for this satellite has expired.   The FCC has granted us special temporary authority to operate this satellite and prepare it for deorbiting maneuvers.

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

Our annual impairment assessment of our indefinite 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.  As of March 31, 2015, there were no indicators of impairment, and no impairment loss was recorded for intangible assets with indefinite lives during the three months ended March 31, 2015 and 2014.

Definite Life Intangible Assets

Amortization expense for all definite life intangible assets was $13,223 and $14,084 for the three months ended March 31, 2015 and 2014, respectively.  Expected amortization expense for the remaining period in 2015, each of the fiscal years 2016 through 2019 and for periods thereafter is as follows:

 

 

Years ending December 31,

 

Amount

 

2015 (remaining)

 

$

38,477

 

2016

 

 

48,545

 

2017

 

 

34,882

 

2018

 

 

19,463

 

2019

 

 

19,026

 

Thereafter

 

 

137,776

 

Total definite life intangible assets, net

 

$

298,169