XM Radio 2013 Annual Report Download - page 98

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Dollar amounts in thousands, unless otherwise stated)
XM, which, except as noted, are essentially identical. Certain numbers in our prior period consolidated financial
statements have been reclassified to conform to our current period presentation. All significant intercompany
transactions and balances between Holdings and Sirius XM and their respective consolidated subsidiaries are
eliminated in both sets of consolidated financial statements. Intercompany transactions between Holdings and
Sirius XM do not eliminate in the Sirius XM consolidated financial statements, but do eliminate in the Holdings
consolidated financial statements.
The preparation of financial statements in conformity with GAAP requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and footnotes. Estimates, by their
nature, are based on judgment and available information. Actual results could differ materially from those
estimates. Significant estimates inherent in the preparation of the accompanying consolidated financial
statements include asset impairment, depreciable lives of our satellites, share-based payment expense, and
valuation allowances against deferred tax assets.
(2) Acquisitions
On November 4, 2013, we purchased all of the outstanding shares of the capital stock of the connected
vehicle business of Agero, Inc. (“Agero”) for $525,352, net of acquired cash of $1,966. Agero’s connected
vehicle business provides services to several automakers, including Acura, BMW, Honda, Hyundai, Infiniti,
Lexus, Nissan and Toyota. The final working capital calculation associated with this transaction is still in
negotiation.
The table below summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition
date:
Acquired Assets:
Cash and cash equivalents .................................................. $ 1,966
Other current assets ........................................................ 8,669
Property and equipment .................................................... 26,251
Intangible assets subject to amortization ....................................... 230,663
Goodwill ................................................................ 389,462
Other assets .............................................................. 2,695
Total assets ............................................................ $659,706
Assumed Liabilities:
Deferred revenue .......................................................... $ (28,404)
Deferred income tax liabilities, net ............................................ (78,127)
Other liabilities ........................................................... (25,857)
Total liabilities ......................................................... $(132,388)
Total consideration .................................................... $527,318
The transaction was accounted for using the acquisition method of accounting. The initial purchase price
allocation is subject to change upon receipt of the final valuation analysis for the connected vehicle business of
Agero. The fair value assessed for the majority of the assets acquired and liabilities assumed equaled their
carrying value. The excess purchase price over identifiable net tangible assets of $389,462 has been recorded to
Goodwill in our consolidated balance sheets as of December 31, 2013. A total of $230,663 has been allocated to
identifiable intangible assets subject to amortization and relates 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.
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