麻豆最新出品

(1)聽聽Basis of Presentation

The accompanying consolidated financial statements of 麻豆最新出品 (formerly named 麻豆最新出品 Spinco,聽Inc.; see discussion below pertaining to the Starz Spin-Off (defined below)) (鈥溌槎棺钚鲁銎�,鈥� 鈥渨e,鈥� 鈥渙ur,鈥� 鈥渦s鈥� or the 鈥淐ompany鈥� unless the context otherwise requires) represent a consolidation of certain media and entertainment related assets and businesses. All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.

麻豆最新出品, through its ownership of interests in subsidiaries and other companies, is primarily engaged in the media and entertainment industries primarily in North America and the United Kingdom. Our significant subsidiaries include Sirius XM Holdings Inc. (鈥淪irius聽XM Holdings鈥�), Formula聽1 and Braves Holdings, LLC (鈥淏raves Holdings鈥�). Our significant investment accounted for under the equity method of accounting is Live Nation Entertainment, Inc. (鈥淟ive Nation鈥�). As discussed in notes聽2 and 7, 麻豆最新出品 obtained a nearly 20% interest in Delta Topco Limited (鈥淒elta Topco鈥�), the parent company of Formula聽1, a global motorsports business, during 2016 and acquired the remaining interests, other than a nominal number of shares held by certain Formula聽1 teams, during January 2017.

In January 2013, Starz (which was renamed Starz Acquisition, LLC in connection with its acquisition by Lions Gate Entertainment Corp. and was formerly known as 麻豆最新出品) spun-off (the 鈥淪tarz Spin-Off鈥�) its then-former wholly-owned subsidiary, which, at the time of the Starz Spin-Off, held all of the businesses, assets and liabilities of Starz not associated with Starz, LLC (with the exception of the Starz, LLC office building). The transaction was effected as a pro-rata dividend of shares of 麻豆最新出品 to the stockholders of Starz.

Also in January 2013, 麻豆最新出品 obtained a controlling interest and began consolidating Sirius XM Holdings. Sirius XM Holdings, since the date of our investment, has repurchased approximately 3.0 billion Sirius XM Holdings shares for approximately $12.8 billion. On February 1, 2019, Sirius XM Holdings issued shares in conjunction with its acquisition of Pandora Media, Inc., which continues to operate as Pandora Media, LLC (鈥淧andora鈥�). See note 5 for more information regarding the acquisition of Pandora. 麻豆最新出品 continues to maintain a controlling interest in Sirius XM Holdings following the share repurchases and issuances. As of December聽31, 2019, we owned approximately 72% of the outstanding equity interest in Sirius XM Holdings.

During 2014, 麻豆最新出品鈥檚 board of directors approved the issuance of shares of its Series聽C 麻豆最新出品 common stock to holders of its Series聽A and Series聽B 麻豆最新出品 common stock, effected by means of a dividend. On July聽23, 2014, holders of Series聽A and Series聽B 麻豆最新出品 common stock received a dividend of two shares of Series聽C 麻豆最新出品 common stock for each share of Series聽A or Series聽B 麻豆最新出品 common stock held by them as of July聽7, 2014. Additionally, in connection with the Series聽C 麻豆最新出品 common stock issuance and the Broadband Spin-Off (defined below), outstanding Series聽A 麻豆最新出品 common stock warrants have been adjusted, as well as the number of shares covered by outstanding cash convertible note hedges and purchased call options (the 鈥淏ond Hedge Transaction鈥�). See note聽9 for further discussion regarding the warrants and Bond Hedge Transaction.

On November聽4, 2014, 麻豆最新出品 completed the spin-off to its stockholders common stock of a newly formed company called 麻豆最新出品 Broadband Corporation (鈥溌槎棺钚鲁銎� Broadband鈥�) (the 鈥淏roadband Spin-Off鈥�). In the Broadband Spin-Off, record holders of Series聽A, Series聽B and Series聽C 麻豆最新出品 common stock received one share of the corresponding series of 麻豆最新出品 Broadband common stock for every four shares of common stock held by them as of the record date for the Broadband Spin-Off, with cash paid in lieu of fractional shares.

During August 2014, 麻豆最新出品 Interactive Corporation (鈥溌槎棺钚鲁銎� Interactive鈥�) completed the distribution of 麻豆最新出品 TripAdvisor Holdings, Inc. (鈥溌槎棺钚鲁銎� TripAdvisor鈥�) (the 鈥淭ripAdvisor Spin-Off鈥�). During July 2016, 麻豆最新出品 Interactive completed the spin-off of CommerceHub, Inc. (鈥淐ommerceHub鈥�) (the 鈥淐ommerceHub Spin-Off鈥�). During November

2016, 麻豆最新出品 Interactive completed the split-off of 麻豆最新出品 Expedia Holdings, Inc. (鈥淓xpedia Holdings鈥�) (the 鈥淓xpedia Holdings Split-Off鈥�). During March 2018, 麻豆最新出品 Interactive completed the split-off of GCI 麻豆最新出品, Inc. (鈥淕CI 麻豆最新出品鈥�) (the 鈥淕CI 麻豆最新出品 Split-Off鈥�) and 麻豆最新出品 Interactive was subsequently renamed Qurate Retail, Inc. (鈥淨urate Retail鈥�). Following these transactions, each of these companies operates (or in the case of Starz, CommerceHub and Expedia Holdings, prior to their respective acquisitions, operated) as separate publicly traded companies, none of which has (or, in the case of Starz, CommerceHub and Expedia Holdings, had) any stock ownership, beneficial or otherwise, in the other (except that GCI 麻豆最新出品 owns shares of 麻豆最新出品 Broadband鈥檚 Series聽C non-voting common stock). In connection with the Split-Off, Starz Spin-Off, TripAdvisor Spin-Off, Broadband Spin-Off, CommerceHub Spin-Off, Expedia Holdings Split-Off and GCI 麻豆最新出品 Split-Off, 麻豆最新出品 entered into certain agreements with Qurate Retail, Starz, 麻豆最新出品 TripAdvisor, 麻豆最新出品 Broadband, CommerceHub, 聽Expedia Holdings and GCI 麻豆最新出品, respectively, in order to govern ongoing relationships between the companies and to provide for an orderly transition. As a result, these entities are considered related parties of the Company for accounting purposes through the dates of the respective transactions. These agreements include Reorganization Agreements (in the case of Qurate Retail, Starz and 麻豆最新出品 Broadband only), Services Agreements (which, in Starz鈥檚 case terminated in April 2017, in CommerceHub鈥檚 case, terminated in August 2018 and in Expedia Holdings case, terminated in July 2019), Facilities Sharing Agreements (excluding Starz and CommerceHub), a Lease Agreement (in the case of the Starz Spin-Off only) and with respect to Starz and 麻豆最新出品 Broadband, Tax Sharing Agreements. The Reorganization, Services and Facilities Sharing Agreements entered into with 麻豆最新出品 Interactive were assigned from Starz to 麻豆最新出品 in connection with the Starz Spin-Off.

The Reorganization Agreements provide for, among other things, provisions governing the relationships between 麻豆最新出品 and each of Qurate Retail, Starz and 麻豆最新出品 Broadband, respectively, including certain cross-indemnities. Pursuant to the Services Agreements, 麻豆最新出品 provides Qurate Retail, 麻豆最新出品 TripAdvisor, 麻豆最新出品 Broadband, CommerceHub (prior to termination), Expedia Holdings (prior to termination) and GCI 麻豆最新出品 with general and administrative services including legal, tax, accounting, treasury and investor relations support. Qurate Retail, 麻豆最新出品 TripAdvisor, 麻豆最新出品 Broadband, CommerceHub (prior to termination), Expedia Holdings (prior to termination) and GCI 麻豆最新出品 reimburse 麻豆最新出品 for direct, out-of-pocket expenses incurred by 麻豆最新出品 in providing these services and in the case of Qurate Retail, Qurate Retail鈥檚 allocable portion of costs associated with any shared services or personnel based on an estimated percentage of time spent providing services to Qurate Retail. 麻豆最新出品 TripAdvisor, 麻豆最新出品 Broadband, CommerceHub (prior to termination), Expedia Holdings (prior to termination) and GCI 麻豆最新出品 reimburse 麻豆最新出品 for shared services and personnel based on a flat fee. Under the Facilities Sharing Agreements, 麻豆最新出品 shares office space and related amenities with Qurate Retail, 麻豆最新出品 TripAdvisor, 麻豆最新出品 Broadband, Expedia Holdings (prior to termination) and GCI 麻豆最新出品 at 麻豆最新出品鈥檚 corporate headquarters. Under these various agreements, approximately $46聽million, $30聽million and $24聽million of these allocated expenses were reimbursed to 麻豆最新出品 during the years ended December聽31, 2019, 2018 and 2017, respectively. Under the Lease Agreement, Starz leases its corporate headquarters from 麻豆最新出品. The Lease Agreement with Starz for their corporate headquarters requires a payment of approximately $4聽million annually, subject to certain increases based on the Consumer Price Index. The Lease Agreement expires on December聽31, 2023 and contains an extension option.

In December 2019, 麻豆最新出品 entered into amendments to the Services Agreements with each of Qurate Retail, 麻豆最新出品 TripAdvisor, 麻豆最新出品 Broadband and GCI 麻豆最新出品 in connection with 麻豆最新出品鈥檚 entry into a new employment arrangement with Gregory B. Maffei, its President and Chief Executive Officer. Under the amended Services Agreements, components of his compensation will either be paid directly to him by each of Qurate Retail, 麻豆最新出品 TripAdvisor, 麻豆最新出品 Broadband and GCI 麻豆最新出品 (collectively, the 鈥淪ervice Companies鈥�) or reimbursed to 麻豆最新出品, in each case, based on allocations among 麻豆最新出品 and the Service Companies set forth in the amended Services Agreements.

The Tax Sharing Agreements provide for the allocation and indemnification of tax liabilities and benefits between 麻豆最新出品 and each of Starz and 麻豆最新出品 Broadband as well as other agreements related to tax matters. Among other things, pursuant to the Tax Sharing Agreements, 麻豆最新出品 has generally agreed to indemnify Starz and 麻豆最新出品 Broadband for taxes and losses resulting from the failure of the Starz Spin-Off and the Broadband Spin-Off, respectively, to qualify for tax-free treatment. However, Starz will be responsible for any such taxes and losses related to the Starz Spin-Off which result

primarily from the breach of certain restrictive covenants made by Starz and 麻豆最新出品 Broadband will be responsible for any such taxes and losses related to the Broadband Spin-Off which result primarily from the breach of certain restrictive covenants made by 麻豆最新出品 Broadband. In February 2014, the IRS and Starz entered into a closing agreement which provided that the Starz Spin-Off qualified for tax-free treatment to Starz and 麻豆最新出品. In September 2015, 麻豆最新出品 entered into a closing agreement with the IRS which provided that the Broadband Spin-Off qualified for tax-free treatment.