| Summary of assets and liabilities measured at fair value |
Our assets and liabilities measured at fair value were as follows:
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March 31, 2018 |
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December 31, 2017 |
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Level 1 |
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Level 2 |
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Level 3 |
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Total Fair
Value |
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Level 1 |
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Level 2 |
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Level 3 |
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Total Fair
Value |
Assets: |
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Pandora Media, Inc. (“Pandora”) - investment (a)
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— |
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$ |
511,847 |
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— |
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$ |
511,847 |
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— |
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480,472 |
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— |
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$ |
480,472 |
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Liabilities: |
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Debt (b)
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— |
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$ |
6,756,559 |
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— |
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$ |
6,756,559 |
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— |
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$ |
6,987,473 |
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— |
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$ |
6,987,473 |
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(a) |
During the year ended December 31, 2017, Sirius XM completed a $480,000 investment in Pandora. We have elected the fair value option to account for this investment. Refer to Note 10 for information on this transaction.
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(b) |
The fair value for non-publicly traded debt is based upon estimates from a market maker and brokerage firm. Refer to Note 11 for information related to the carrying value of our debt as of March 31, 2018 and December 31, 2017.
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| Schedule of new ASU adoption impact on financial statements |
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Balance at
December 31, 2017 |
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Adjustments Due to ASU 2014-09 |
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Adjustments Due to ASU 2018-02 |
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Balance at
January 1, 2018
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Balance Sheet |
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Assets |
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Prepaid expenses and other current assets |
$ |
129,669 |
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$ |
8,262 |
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$ |
— |
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$ |
137,931 |
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Other long-term assets |
118,671 |
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2,576 |
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— |
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121,247 |
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Deferred tax assets |
505,528 |
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(5,915 |
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— |
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499,613 |
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Liabilities: |
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Accounts payable and accrued expenses |
794,341 |
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32,399 |
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— |
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826,740 |
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Current portion of deferred revenue |
1,881,825 |
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(41,902 |
) |
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— |
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1,839,923 |
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Deferred revenue |
174,579 |
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(3,990 |
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— |
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170,589 |
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Equity: |
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Accumulated deficit |
(3,243,473 |
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18,416 |
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(4,013 |
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(3,229,070 |
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AOCI, net of tax |
18,407 |
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— |
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4,013 |
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22,420 |
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The following table illustrates the impact that adopting ASU 2014-09 has had on our reported results in the unaudited consolidated statement of comprehensive income. The adoption of ASU 2018-02 did not impact our unaudited consolidated statement of comprehensive income.
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For the Three Months Ended March 31, 2018 |
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As Reported |
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Impact of Adopting ASU 2014-09 |
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Balances Without Adoption of ASU 2014-09 |
Income Statement |
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Revenues |
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Subscriber revenue |
$ |
1,117,084 |
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$ |
24,392 |
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$ |
1,141,476 |
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Expenses |
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Revenue share and royalties |
310,132 |
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22,069 |
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332,201 |
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Subscriber acquisition costs |
122,693 |
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1,046 |
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123,739 |
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Income tax expense |
(80,249 |
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(277 |
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(80,526 |
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Net Income |
$ |
289,441 |
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$ |
1,000 |
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$ |
290,441 |
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