Quarterly report pursuant to Section 13 or 15(d)


6 Months Ended
Jun. 30, 2019

(3)  Acquisitions

SIRIUS XM Holdings acquisition of Pandora

On February 1, 2019, SIRIUS XM Holdings purchased all of the outstanding shares of Pandora for $2.4 billion, by converting each outstanding share of Pandora common stock into 1.44 shares of SIRIUS XM Holdings common stock and by cancelling SIRIUS XM Holdings’ investment in Pandora’s preferred stock with a fair value of $524 million, for total consideration of approximately $2.9 billion. Net cash acquired by SIRIUS XM Holdings was $313 million. Pandora operates an internet-based music discovery platform, offering a personalized experience for listeners.

The table below shows the value of the consideration paid in connection with the acquisition (in millions, except for exchange ratio and price per share of SIRIUS XM Holdings common stock):

Pandora common stock outstanding at January 31, 2019


Exchange ratio


Sirius XM Holdings common stock issued


Price per share of Sirius XM Holdings common stock as of January 31, 2019



Value of Sirius XM Holdings common stock issued to Pandora stockholders pursuant to the transactions


Value of Sirius XM Holdings replacement equity awards attributable to pre-combination service


Sirius XM Holdings' Pandora preferred stock investment cancelled


Total consideration



The preliminary acquisition price allocation for Pandora is as follows (in millions):

Cash and cash equivalents



Trade and other receivables, net


Other current assets


Property and equipment




Intangible assets not subject to amortization


Intangible assets subject to amortization, net


Other assets


Accounts payable and accrued liabilities


Current portion of debt


Deferred revenue


Other current liabilities


Long-term debt (a)


Other liabilities




(a) In order to present the assets acquired and liabilities assumed, the conversion feature associated with Pandora’s convertible notes for $62 million has been included within long-term debt in the table above and included within noncontrolling interest in equity of subsidiaries within the condensed consolidated statement of equity. See note 9 for details regarding Pandora’s convertible notes.

Goodwill is calculated as the excess of the consideration transferred over the identifiable net assets acquired and represents synergies and economies of scale expected from the combination of services. None of the acquired goodwill is expected to be deductible for tax purposes. Pandora’s amortizable intangible assets are comprised of customer relationships and software and technology, with estimated weighted average useful lives of 8 years and 5 years, respectively. The fair value assessed for the majority of the remaining assets acquired and liabilities assumed equaled their carrying value. Additionally, in connection with the acquisition, SIRIUS XM Holdings acquired gross net operating loss carryforwards of approximately $1,199 million for federal income tax purposes available to offset future taxable income. The acquired net operating losses are limited by Section 382 of the Internal Revenue Code. Those limitations are not expected to impact our ability to fully utilize those net operating losses within the carryforward period.

As of June 30, 2019, the valuation related to the acquisition of Pandora is not final, and the acquisition price allocation is preliminary and subject to revision. The primary areas of the acquisition price allocation that are not yet finalized are related to certain current assets, contingencies and tax balances. SIRIUS XM Holdings recognized $7 million and $83 million of costs related to the acquisition of Pandora during the three and six months ended June 30, 2019, respectively.

The amounts of revenue and net loss of Pandora included in Liberty’s condensed consolidated statement of operations since the date of acquisition were $441 million and $56 million, respectively, for the three months ended June 30, 2019 and $692 million and $178 million, respectively, for the six months ended June 30, 2019.

The unaudited pro forma revenue and net earnings of Liberty, prepared utilizing the historical financial statements of Pandora, giving effect to acquisition accounting related adjustments made at the time of acquisition, as if the acquisition of Pandora discussed above occurred on January 1, 2018, are as follows:

Three months ended

Six months ended

June 30,

June 30,





amounts in millions







Net earnings (loss)






Net earnings (loss) attributable to Liberty stockholders






The pro forma results primarily include adjustments related to the amortization of acquired intangible assets, depreciation of property and equipment, acquisition costs and associated tax impacts. The pro forma information is not representative of the Company’s future results of operations nor does it reflect what the Company’s results of operations would have been if the acquisition of Pandora had occurred previously and the Company consolidated Pandora during the entirety of the periods presented.