This excerpt taken from the SIRI 8-K filed Dec 30, 2008.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS
The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2008 and for the year ended December 31, 2007 combine (i) the historical consolidated statements of operations of Sirius XM Radio Inc. and its subsidiaries (Sirius) and XM Satellite Radio Holdings Inc. (XM Holdings, and its subsidiaries together with XM Holdings, XM), giving effect to the merger of XM Holdings and Vernon Merger Corporation (the Merger), pursuant to which XM Holdings became a wholly-owned subsidiary of Sirius, as well as the refinancing of a substantial portion of XMs existing indebtedness and raising of certain additional liquidity, which we refer to as the Refinancing Transactions, as if they had been consummated on January 1, 2007. These unaudited pro forma condensed combined financial statements should be read in conjunction with the historical audited consolidated financial information and accompanying notes of Sirius and XM, which have been incorporated by reference into this document. The unaudited pro forma condensed combined statements of operations are not necessarily indicative of the operating results that would have occurred if the Merger had been completed on the date indicated.
The unaudited pro forma condensed combined statements of operations were prepared using the purchase method of accounting with Sirius treated as the acquiring entity. Accordingly, we have adjusted the historical consolidated statements of operations to give effect to pro forma events that are (i) directly attributable to the Merger and Refinancing Transactions, (ii) factually supportable, and (iii) expected to have a continuing impact on the combined results. Intercompany transactions are not significant and as such have not been eliminated.
In addition to adjustments to reflect preliminary valuations of assets and liabilities at fair value at the time of the Merger pursuant to Statement of Financial Accounting Standards (SFAS) No. 141, Business Combinations, these pro forma results reflect the impact of the following Refinancing Transactions:
The unaudited pro forma condensed combined financial statements do not reflect the cost of any integration activities or benefits that may result from synergies that may be derived from any integration activities.