Liberty Media Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and Other Intangible Assets

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