Business Combination (Tables)

12 Months Ended

Dec. 31, 2020

The merger consideration of $828.3 million was calculated as follows (amounts in thousands except exchange ratio and share price):

TiVo common shares outstanding as of June 1, 2020		128,132
TiVo exchange ratio		0.455
Xperi Holding Corporation common stock issued in exchange		58,300
Xperi Common Stock closing share price on June 1, 2020	$	14.00
			$	816,201
Fair value of replaced TiVo equity awards relating to pre-acquisition vesting of the equity award holders’ requisite service periods				12,133
Total merger consideration			$	828,334

Schedule of Estimated Fair Value that Allocated to Assets and Liabilities

The table below presents the estimated fair value that was allocated to TiVo’s assets and liabilities based upon fair values as determined by the Company ($ in thousands):

	Estimated Useful Life (years)		Preliminary Fair Value (1)			Measurement Period Adjustments (2)			Adjusted Fair Value
Cash and cash equivalents			$	117,424		$	—		$	117,424
Accounts receivable				105,778						105,778
Unbilled contracts receivable				69,058						69,058
Other current assets				21,690			233			21,923
Long-term unbilled contracts receivable				129						129
Property and equipment				41,307						41,307
Operating lease right-of-use assets				71,444						71,444
Identifiable intangible assets:
Patents	10	457,400
Customer contracts and related relationships	4-9	358,200
Developed technology	5	34,800
Content database	9	6,200
Trademarks and tradenames	N/A	21,400
Total identifiable intangible assets				878,000						878,000
Goodwill				461,129			116			461,245
Other long-term assets				43,700			(141	)		43,559
Accounts payable				(13,258	)					(13,258	)
Accrued legal fees				(5,619	)					(5,619	)
Accrued liabilities				(79,071	)		(530	)		(79,601	)
Current portion of deferred revenue				(29,291	)					(29,291	)
Current portion of long-term debt				(734,609	)					(734,609	)
Deferred revenue, less current portion				(24,319	)					(24,319	)
Long-term deferred tax liabilities				(27,949	)		421			(27,528	)
Long-term debt				(48	)					(48	)
Noncurrent operating lease liabilities				(59,291	)					(59,291	)
Other long-term liabilities				(7,870	)		(99	)		(7,969	)
Total purchase price			$	828,334		$	—		$	828,334

(1) As previously reported in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2020.

(2) All adjustments were recorded in the fourth quarter of 2020. These measurement period adjustments primarily related to current indirect taxes payable, current and non-current income taxes receivable and payable, and deferred taxes as additional information was received and tax returns were finalized. All measurement period adjustments were offset against goodwill.

Schedule of Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information assumes the companies were combined as of January 1, 2019. The unaudited pro forma financial information as presented below is for informational purposes only and is based on estimates and assumptions that have been made solely for purposes of developing such pro forma information. This is not necessarily indicative of the results of operations that would have been achieved if the Mergers had taken place on January 1, 2019, nor is it necessarily indicative of future results. Consequently, actual results could differ materially from the unaudited pro forma financial information presented below. The following table presents the pro forma operating results as if TiVo had been included in the Company's Consolidated Statements of Operations as of January 1, 2019 (unaudited, in thousands):

	Years Ended December 31,
	2020		2019
Revenue	$	1,142,603	$	941,005
Net income (loss) attributable to Xperi Holding Corporation	$	9,775	$	(562,153	)

Schedule of Unaudited Supplemental Pro Forma Information and Adjustments of Mergers

The unaudited supplemental pro forma information above includes the estimated impact of purchase accounting and other material, nonrecurring adjustments directly attributable to the Mergers. These pro forma adjustments primarily include the following (in thousands):

	Years Ended December 31,
	2020			2019
Estimated increase (decrease) to earnings due to revenue adjustments resulting from purchase accounting	$	(4,823	)	$	(7,191	)
Estimated increase (decrease) to earnings to adjust for transaction and other related costs, including facilities impairment charges, incurred in connection with the Mergers	$	34,569		$	(24,651	)
Estimated increase (decrease) to earnings to adjust for severance and retention costs, including related stock-based compensation expense, incurred in connection with the Mergers	$	15,865		$	(16,511	)
Estimated increase (decrease) to earnings to reflect payoff of historical debt and issuance of new debt financing in connection with the Mergers	$	23,121		$	(18,098	)
Estimated decrease to earnings due to pro forma adjustments for income taxes (1)(2)	$	(13,605	)	$	(21,519	)

(1)

For the year ended December 31, 2020, the pro forma tax adjustments primarily reflect the assumption that the combined company placed a valuation allowance on its federal and state deferred tax assets prior to 2020 and the applicability of Base Erosion and Anti-Abuse Tax (“BEAT”) to Xperi tax expense for the period prior to the Mergers.

(2)

For the year ended December 31, 2019, the pro forma tax adjustments primarily reflect the assumption that the combined company placed a valuation allowance on its federal and state deferred tax assets prior to 2019 and the applicability of BEAT to Xperi’s tax expense.