Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangible Assets

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Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2018
Goodwill and Other Intangible Assets  
Goodwill and Other Intangible Assets

(9)  Goodwill and Other Intangible Assets

Goodwill

Changes in the carrying amount of goodwill are as follows:

 

 

 

 

 

 

 

 

 

 

 

SIRIUS XM

 

Formula 1

    

Other

    

Total

 

 

amounts in millions

 

Balance at January 1, 2017

$

14,165

 

 —

 

180

 

14,345

 

Acquisitions (a) (b)

 

82

 

3,956

 

 —

 

4,038

 

Balance at December 31, 2017

 

14,247

 

3,956

 

180

 

18,383

 

Acquisitions

 

 3

 

 —

 

 —

 

 3

 

Balance at December 31, 2018

$

14,250

 

3,956

 

180

 

18,386

 


(a)

On April 18, 2017, SIRIUS XM acquired Automatic Labs Inc., a connected vehicle device and mobile application company, for an aggregate purchase price of approximately $108 million, net of cash and restricted cash acquired. The excess purchase price over identifiable net assets of $82 million was recorded to goodwill.

(b)

See note 5 for details regarding the Formula 1 acquisition.

Other Intangible Assets Not Subject to Amortization

Other intangible assets not subject to amortization, not separately disclosed, are tradenames ($931 million) at December 31, 2018 and 2017 and franchise rights owned by Braves Holdings ($143 million) as of December 31, 2018 and 2017. We identified these assets 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. SIRIUS XM’s Federal Communications Commission (“FCC”) licenses are currently scheduled to expire in 2021, 2022 and 2028. Prior to expiration, SIRIUS XM is required to apply for a renewal of its FCC licenses. The renewal and extension of its licenses is reasonably certain at minimal cost, which is expensed as incurred. Each of the FCC licenses authorizes SIRIUS XM to use the broadcast spectrum, which is a renewable, reusable resource that does not deplete or exhaust over time.

Intangible Assets Subject to Amortization

Intangible assets subject to amortization are comprised of the following:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

December 31, 2017

 

 

    

Gross

    

 

    

Net

    

Gross

    

 

    

Net

 

 

 

carrying

 

Accumulated

 

carrying

 

carrying

 

Accumulated

 

carrying

 

 

 

amount

 

amortization

 

amount

 

amount

 

amortization

 

amount

 

 

 

amounts in millions

 

FIA Agreement

 

$

3,630

 

(346)

 

3,284

 

3,630

 

(157)

 

3,473

 

Customer relationships

 

 

2,684

 

(795)

 

1,889

 

2,684

 

(501)

 

2,183

 

Licensing agreements

 

 

351

 

(182)

 

169

 

330

 

(138)

 

192

 

Other

 

 

1,012

 

(639)

 

373

 

879

 

(535)

 

344

 

Total

 

$

7,677

 

(1,962)

 

5,715

 

7,523

 

(1,331)

 

6,192

 

The FIA Agreement is amortized over 35 years, customer relationships are amortized over 10-15 years and licensing agreements are amortized over 15 years. Amortization expense was $654 million, $594 million and $168 million for the years ended December 31, 2018,  2017 and 2016, respectively. Based on its amortizable intangible assets as of December 31, 2018, Liberty expects that amortization expense will be as follows for the next five years (amounts in millions):

 

 

 

 

 

2019

    

$

669

 

2020

 

$

640

 

2021

 

$

477

 

2022

 

$

416

 

2023

 

$

388