麻豆最新出品

Annual report pursuant to Section 13 and 15(d)

Sirius XM Transactions (Notes)

v2.4.0.8
Sirius XM Transactions (Notes)
 12 Months Ended
Dec. 31, 2013
Sirius XM Transactions [Abstract] 听
Business Combination Disclosure [Text Block]
Sirius XM Radio, Inc. Transactions
On January 18, 2013, 麻豆最新出品 settled a block transaction with a financial institution taking possession of an additional 50 million shares of SIRIUS XM as well as converting its remaining SIRIUS XM Convertible Perpetual Preferred Stock, Series B-1, par value $0.001 per share, into 1,293,509,076 shares of SIRIUS XM Common Stock. As a result of these two transactions 麻豆最新出品 holds more than 50% of the capital stock of SIRIUS XM and is entitled to vote on any matter, including the election of directors. Following the transactions, 麻豆最新出品 designated and SIRIUS XM's board of directors appointed certain directors to SIRIUS XM's board of directors and 麻豆最新出品 effectively controls the board as of January 18, 2013. This resulted in the application of purchase accounting and the consolidation of SIRIUS XM in the first quarter of 2013. 麻豆最新出品 recorded a gain of approximately $7.5 billion in the first quarter of 2013 associated with application of purchase accounting based on the difference between fair value and the carrying value of the ownership interest 麻豆最新出品 had in SIRIUS XM prior to the acquisition of the controlling interest. The gain on the transaction was excluded from taxable income. Additionally, the difference between the book basis and tax basis of SIRIUS XM, as previously accounted for under the equity method, was relieved as a result of the transaction. The fair value of our ownership interest previously held ($10,215 million) and the fair value of the initial noncontrolling interest ($10,286 million) was determined based on the trading price (level 1) of SIRIUS XM on the last trading day prior to the acquisition of the controlling interest. Additionally, the noncontrolling interest includes the fair value of SIRIUS XM's fully vested options (level 2), the fair value of warrants outstanding (level 2) and the intrinsic value of a beneficial conversion feature accounted for in purchase accounting. Following the transaction date SIRIUS XM is a consolidated subsidiary with just less than a 50% noncontrolling interest accounted for in equity and the consolidated statements of operations. Effective November 15, 2013, SIRIUS XM completed a corporate reorganization whereby SIRIUS XM Holdings Inc. replaced Sirius XM Radio Inc. as its publicly held corporation, and Sirius XM Radio Inc. became a wholly-owned subsidiary of SIRIUS XM Holdings Inc and has no operations independent of its subsidiary SIRIUS XM Radio Inc.
The final purchase price allocation for SIRIUS XM is as follows (amounts in millions):
Fair value of SIRIUS XM equity interests
$
10,372

Fair value of SIRIUS XM debt securities
253

Noncontrolling interest
10,841

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$
21,466

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Cash and cash equivalents
$
569

Receivables
210

Property, plant and equipment
1,714

Goodwill
13,775

FCC Licenses
8,600

Tradenames
930

Intangible assets subject to amortization
930

Other assets
480

Debt
(2,490
)
Deferred revenue
(1,565
)
Deferred income tax liabilities, net
(685
)
Other liabilities assumed
(1,002
)
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$
21,466



Goodwill is calculated as the excess of the consideration transferred over the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships. SIRIUS XM applied purchase accounting for the acquisition of XM Satellite Radio Holdings Inc. in 2008 and has entered into many of its operating agreements at market rates in recent years, therefore, the carrying value of the identifiable assets were reflected at amounts near their fair value in SIRIUS XM's financial statements. Accordingly, a large percentage of 麻豆最新出品's purchase price was allocated to FCC licenses and goodwill. During the year ended December 31, 2013, 麻豆最新出品 adjusted the initial purchase price allocation for SIRIUS XM by recording a decrease to the initial deferred tax liability and an offsetting decrease to goodwill of $227 million. The adjustment was due to the identification of tax attributes not included in SIRIUS XM's deferred tax assets from excess stock-based compensation deductions. Additionally, during the year ended December 31, 2013, 麻豆最新出品 adjusted the carrying value of certain contract fair values that resulted in a change to the initial purchase price allocation to SIRIUS XM goodwill of $18 million. This change resulted in a change to the recognition of the contract value through the statements of operations in prior periods and has been reflected retroactively in the appropriate periods. These adjustments are reflected in 麻豆最新出品's final SIRIUS XM purchase price allocation table above.
The Pro Forma summarized combined unaudited balance sheets and statements of operation of 麻豆最新出品 using the historical financial statements for SIRIUS XM, giving effect to any purchase accounting related adjustments made at the time of acquisition and excluding the impact of the gain, as if the transactions discussed above occurred for the Balance Sheet data as of such dates and for the Statement of Operations data as if they had occurred on January听1, 2011, are as follows:
Summary Balance Sheet Data:
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December听31, 2012
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Amounts in millions (unaudited)
Current assets
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$
3,102

Investments in available-for-sale securities
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$
1,147

Investments in equity method affiliates
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$
851

Property, plant and equipment, net
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$
1,871

Intangible assets not subject to amortization
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$
23,868

Intangible assets subject to amortization, net
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$
1,038

Other assets
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$
805

Total assets
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$
32,682

Long-term debt
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$
2,486

Deferred tax liabilities, net
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$
1,720

Other liabilities
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$
3,656

Noncontrolling interests in equity of subsidiaries
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$
10,833

Stockholders' equity
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$
13,987











Summary Operations Data:
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Years ended December 31,
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2012
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2011
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amounts in millions
(unaudited)
Revenue
$
3,730

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$
4,416

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Operating income (loss)
686

听
1,087

听
Interest expense
(162
)
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(215
)
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Share of earnings (loss) of affiliates
(21
)
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(7
)
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Less earnings (loss) attributable to the noncontrolling interests
1,736

听
210

听
Net Earnings (loss) from continuing operations attributable to 麻豆最新出品 stockholders:
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听
听
听
听
麻豆最新出品 common stock
$
2,052

听
788

听
听
麻豆最新出品 Starz common stock
NA

听
(39
)
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听
听
听
听
听
听
Pro Forma basic net earnings (loss) from continuing operations attributable to 麻豆最新出品 stockholders per common share (note听3):
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听
听
听
听
麻豆最新出品 common stock
$
17.10

听
9.27

听
听
麻豆最新出品 Starz common stock
NA

听
(0.76
)
听
听
听
听
听
听
听
Pro Forma diluted net earnings (loss) from continuing operations attributable to 麻豆最新出品 stockholders per common share (note听3):
听
听
听
听
听
麻豆最新出品 common stock
$
16.55

听
8.95

听
听
麻豆最新出品 Starz common stock
NA

听
(0.76
)
听

This Pro Forma information is not representative of 麻豆最新出品's future financial position, future results of operations or future cash flows nor does it reflect what 麻豆最新出品's financial position, results of operations or cash flows would have been as if these transactions happened previously and 麻豆最新出品 controlled or discontinued owning these entities during the periods presented.

On October 9, 2013, 麻豆最新出品 entered into a share repurchase agreement with SIRIUS XM in which SIRIUS XM will acquire 136,600,826 SIRIUS XM shares for $500 million, in three separate tranches between the fourth quarter of 2013 and second quarter of 2014, at a price of $3.6603 per share (which was based on a 1.5% discount to the average of the daily volume weighted average price (VWAP) per share of SIRIUS XM common stock over a period of ten days beginning on the third trading day following the date of the public release of SIRIUS XM's third quarter 2013 earnings subject to a cap on the average VWAP of $4.18 and a floor on the average VWAP of $3.64). The repurchase of shares will approximate 2% of the outstanding shares of SIRIUS XM on an as adjusted basis as the shares will be retired at the SIRIUS XM level. The first tranche of shares in the amount of 43,712,265 was repurchased on November 14, 2013. The retirement of SIRIUS XM shares on a consolidated basis will not significantly impact the consolidated results except for an adjustment to noncontrolling interest as the shares are repurchased and retired. 麻豆最新出品 expects to continue holding a majority of the SIRIUS XM common stock after the completion of the share repurchases.
On January 3, 2014, 麻豆最新出品 made a proposal ("the Proposal") to SIRIUS XM that outlines the terms by which SIRIUS XM public shareholders would become shareholders of 麻豆最新出品 in a tax-free transaction in which each share of SIRIUS XM common stock would be converted into 0.0760 of a new share of 麻豆最新出品 Series C common stock, and, immediately prior to such conversion, 麻豆最新出品 intends to distribute, on a 2:1 basis, shares of 麻豆最新出品's Series C common stock to all holders of record of 麻豆最新出品's Series A and B common stock to create a liquid trading market for 麻豆最新出品's Series C common stock. (The foregoing exchange ratio would be equivalent to a 0.0253 exchange ratio prior to the distribution of the 麻豆最新出品 Series C common stock dividend.) Upon the completion of the proposed transaction, 麻豆最新出品 expects that SIRIUS XM's public shareholders would own approximately 39% of 麻豆最新出品's then-outstanding common stock. SIRIUS XM's Board of Directors has formed a special committee of independent directors to consider 麻豆最新出品鈥檚 proposal. The transaction is subject to the approval of both the special committee and a majority of the public stockholders of SIRIUS XM, other than 麻豆最新出品. Approval by the existing 麻豆最新出品 shareholders of the issuance of the Series C common shares in the proposed transaction is also required under applicable Nasdaq Stock Market requirements.
In connection with the Proposal made to SIRIUS XM, 麻豆最新出品 and SIRIUS XM agreed on January 23, 2014 to defer the second tranche of SIRIUS XM鈥檚 repurchase of $240 million of its shares of common stock from 麻豆最新出品 pursuant to the share repurchase agreement from January 27, 2014 to April 25, 2014 (the final repurchase date pursuant to the share repurchase agreement). As a result of this deferral, SIRIUS XM would repurchase $340 million of its shares of common stock from 麻豆最新出品 on the final repurchase date.
On November 4, 2013, SIRIUS XM announced the completion of the acquisition of Agero, Inc. ("Agero"), pursuant to a stock purchase agreement in which SIRIUS XM agreed to acquire the connected vehicle business of Agero for an aggregate purchase price of approximately $525 million, net of cash acquired. Agero's connected vehicle business is a leader in implementing the next generation of connected vehicle services. The business offers a portfolio of location-based services through two-way wireless connectivity, including safety, security, convenience, maintenance and data services and remote vehicle diagnostics. The excess purchase price over identifiable net tangible assets of $389 million has been recorded to Goodwill in our consolidated balance sheets as of December 31, 2013. A total of $247 million was allocated to identifiable intangible assets subject to amortization related to the assessed fair value of the acquired OEM relationships and proprietary software and is being amortized over the estimated weighted average useful lives of 15 and 10 years, respectively. Pro forma financial information related to this acquisition has not been provided as it is not material to our consolidated results of operations.