Quarterly report pursuant to Section 13 or 15(d)

Acquisition

v3.20.2
Acquisition
 6 Months Ended
Jun. 30, 2020
Business Combinations [Abstract]  
Acquisition Acquisitions
Simplecast
On June 16, 2020, Sirius XM acquired Simplecast for $28 in cash. Simplecast is a podcast management and analytics platform. In connection with the acquisition, we recognized goodwill of $17, amortizable intangible assets of $12, other assets of less than $1 and deferred tax liabilities of $1.
Pandora
On February 1, 2019, through a series of transactions, Pandora Media, Inc., became an indirect wholly owned subsidiary of Sirius XM and continues to operate as Pandora Media, LLC (the “Pandora Acquisition”). In connection with the Pandora Acquisition, we purchased all of the outstanding shares of the capital stock of Pandora for $2,355 by converting each outstanding share of Pandora common stock into 1.44 shares of our common stock and we also canceled our preferred stock investment in Pandora for $524 for total consideration of $2,879. Net cash acquired was $313. As part of the Pandora Acquisition, Holdings unconditionally guaranteed all of the payment obligations of Pandora under its outstanding 1.75% convertible senior notes due 2020 and 1.75% convertible senior notes due 2023.
The table below shows the value of the consideration paid in connection with the Pandora Acquisition:
Total
Pandora common stock outstanding 272   
Exchange ratio 1.44   
Common stock issued 392   
Price per share of Holdings common stock $ 5.83   
Value of common stock issued to Pandora stockholders $ 2,285   
Value of replacement equity awards attributable to pre-combination service $ 70   
Consideration of common stock and replacement equity awards for pre-combination service $ 2,355   
Sirius XM’s Pandora preferred stock investment (related party fair value instrument) canceled $ 524   
Total consideration for Pandora Acquisition $ 2,879   
Value attributed to par at $0.001 par value
 $ 1   
Balance to capital in excess of par value $ 2,354   
We recognized acquisition related costs of $7 and $83 that were expensed in Acquisition and restructuring costs in our unaudited consolidated statements of comprehensive income during the three and six months ended June 30, 2019, respectively.
Pro Forma Financial Information
Pandora was consolidated into our financial statements starting on the acquisition date, February 1, 2019. The aggregate revenue and net loss of Pandora consolidated into our financial statements was $441 and $56, respectively, for the three months ended June 30, 2019 and $692 and $178, respectively, for the six months ended June 30, 2019. The following pro forma financial information presents our results as if the Pandora Acquisition had occurred on January 1, 2019:
For the Three Months Ended June 30, For the Six Months Ended June 30,
2020 2019 2020 2019
Total revenue $ 1,876    $ 1,979    $ 3,830    $ 3,839   
Net income $ 243    $ 265    $ 536    $ 446   
These pro forma results are based on estimates and assumptions, which we believe are reasonable. They are not the results that would have been realized had the acquisition actually occurred on January 1, 2019 and are not indicative of our consolidated results of operations in future periods. The pro forma results primarily include adjustments related to amortization of acquired intangible assets, depreciation of property and equipment, acquisition costs, fair value gain or loss on the Pandora investment and associated tax impacts.