麻豆最新出品

Quarterly report pursuant to Section 13 or 15(d)

Basis Of Presentation

v2.4.0.6
Basis Of Presentation
 3 Months Ended
Mar. 31, 2013
Organization, Consolidation and Presentation of Financial Statements [Abstract] 听
Basis Of Presentation
Basis of Presentation
The accompanying condensed consolidated financial statements of 麻豆最新出品 (formerly named 麻豆最新出品 Spinco,听Inc.) ("麻豆最新出品" or the "Company" unless the context otherwise requires) represent a combination of the historical financial information of (1) certain video programming and other media related assets and businesses previously attributed to the Starz tracking stock group and the Capital tracking stock group of 麻豆最新出品 Interactive Corporation ("麻豆最新出品 Interactive" and formerly named 麻豆最新出品) further described in note 2 and (2) 麻豆最新出品 and its consolidated subsidiaries for the period following the date of the Split-Off (defined below). See discussion below pertaining to the Spin-Off (defined below). The Split-Off has been accounted for at historical cost due to the pro rata nature of the distribution.
In September 2011, 麻豆最新出品 Interactive completed the split-off of its former wholly-owned subsidiary (then known as 麻豆最新出品), which at the time of the Split-Off held all of the businesses, assets and liabilities attributed to 麻豆最新出品 Interactive's Capital and Starz tracking stock groups. In January 2013, this entity (now named Starz) spun-off (the 鈥淪pin-Off鈥) its former wholly owned subsidiary, 麻豆最新出品 (鈥溌槎棺钚鲁銎封 or the 鈥淐ompany鈥), which, at the time of the 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. Due to the relative significance of 麻豆最新出品 to Starz (the legal spinnor) and senior management's continued involvement with 麻豆最新出品 following the Spin-Off, 麻豆最新出品 is being treated as the "accounting successor" to Starz for financial reporting purposes, notwithstanding the legal form of the Spin-Off previously described. Therefore, the historical financial statements of the company formerly known as 麻豆最新出品 continue to be the historical financial statements of 麻豆最新出品 and Starz, LLC is presented as discontinued operations. Therefore, for purposes of these condensed consolidated financial statements 麻豆最新出品 is treated as the spinnor for purposes of discussion and as a practical matter for describing all the historical information contained herein.

Following the Split-Off and Spin-Off, 麻豆最新出品, 麻豆最新出品 Interactive and Starz operate as separate publicly traded companies, none of which has any stock ownership, beneficial or otherwise, in the other. In connection with the Split-Off and Spin-Off, 麻豆最新出品 entered into certain agreements with 麻豆最新出品 Interactive and Starz, respectively, in order to govern ongoing relationships between the companies and to provide for an orderly transition. These agreements include Reorganization Agreements, Services Agreements, Facilities Sharing Agreements, a Lease Agreement (in the case of the Spin-Off only) and 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 LMC in connection with the Spin-Off.

The Reorganization Agreements provide for, among other things, provisions governing the relationships between 麻豆最新出品 and each of 麻豆最新出品 Interactive and Starz following the Split-Off and Spin-Off, respectively, including certain cross-indemnities. Pursuant to the Services Agreements, 麻豆最新出品 provides 麻豆最新出品 Interactive and Starz with general and administrative services including legal, tax, accounting, treasury and investor relations support. 麻豆最新出品 Interactive and Starz 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 for 麻豆最新出品 Interactive's and Starz's respective allocable portion of costs associated with any shared services or personnel based on an estimated percentage of time spent providing services to each respective company. Under the Facilities Sharing Agreements, 麻豆最新出品 shares office space and related amenities at its corporate headquarters with 麻豆最新出品 Interactive and Starz. Under these various agreements approximately $4 million and $3 million of these allocated expenses were reimbursed to 麻豆最新出品 during the three months ended March听31, 2013 and 2012. 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 $3 million annually, subject to certain increases based on the Consumer Price Index.

In connection with the Spin-Off, 麻豆最新出品 and Starz entered into a Tax Sharing Agreement which provides for the allocation and indemnification of tax liabilities and benefits between 麻豆最新出品 and Starz and other agreements related to tax matters. Among other things, pursuant to the Tax Sharing Agreement, 麻豆最新出品 has agreed to indemnify Starz, subject to certain exceptions, for taxes and tax-related losses resulting from the Spin-Off and the Split-Off, except to the extent such taxes or losses result from (i) the breach of certain restrictive covenants made by Starz or (ii) Section 355(e) of the Code applying to the Spin-Off or the Split-Off as a result of the Spin-Off or Split-Off being part of a plan (or series of related transactions) pursuant to which one or more persons acquire a 50-percent or greater interest in the stock of Starz. With respect to the Split-Off, the IRS has examined the transaction, and during 2012, the IRS and 麻豆最新出品 Interactive entered into a Closing Agreement which provides that the Split-Off qualified for tax-free treatment to 麻豆最新出品 Interactive and Starz.听听 In April 2013, the IRS completed its review of the Spin-Off and notified the parties that it agreed with the nontaxable characterization of the transaction.
麻豆最新出品, through its ownership of interests in subsidiaries and other companies, is primarily engaged in the media, communications and entertainment industries primarily in North America.
The accompanying (a) condensed consolidated balance sheet as of December 31, 2012, which has been derived from audited financial statements, and (b) the interim unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form听10-Q and Article听10 of Regulation听S-X as promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the results for such periods have been included. The results of operations for any interim period are not necessarily indicative of results for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in 麻豆最新出品's Annual Report on Form听10-K for the year ended December听31, 2012.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The Company considers (i)听fair value measurement, (ii)听accounting for income taxes, (iii)听assessments of other-than-temporary declines in fair value of its investments and (iv)听the expected depreciable lives of satellites and spacecraft control facilities to be its most significant estimates.
麻豆最新出品 holds investments that are accounted for using the equity method. 麻豆最新出品 does not control the decision making process or business management practices of these affiliates. Accordingly, 麻豆最新出品 relies on management of these affiliates to provide it with accurate financial information prepared in accordance with GAAP that the Company uses in the application of the equity method. In addition, 麻豆最新出品 relies on audit reports that are provided by the affiliates' independent auditors on the financial statements of such affiliates. The Company is not aware, however, of any errors in or possible misstatements of the financial information provided by its equity affiliates that would have a material effect on 麻豆最新出品's condensed consolidated financial statements.
On January 18, 2013, 麻豆最新出品 settled a block transaction with a financial institution taking possession of an additional 50 million common shares of SIRIUS XM Radio, Inc. ("SIRIUS XM"), for cash consideration of approximately $161 million, as well as converting its remaining SIRIUS XM Convertible Perpetual Preferred Stock, Series B-1, par value $0.001 per share, into 1,293,509,076 shares of SIRIUS XM Common Stock. As a result of these two transactions 麻豆最新出品 holds more than 50% of the common stock of SIRIUS XM entitled to vote on any matter, including the election of directors. Following the transactions, 麻豆最新出品 designated and SIRIUS XM's board of directors appointed certain directors and 麻豆最新出品 effectively controls the board as of January 18, 2013. This resulted in the application of purchase accounting and the consolidation of SIRIUS XM in the first quarter of 2013. 麻豆最新出品 recorded a gain in the three months ended March 31, 2013 of approximately $7.5 billion associated with the application of purchase accounting based on the difference between fair value and the carrying value of the ownership interest 麻豆最新出品 had in SIRIUS XM prior to the acquisition of the controlling interest. The fair value of our ownership interest previously held ($10,215 million) and the fair value of the initial noncontrolling interest ($10,286 million) was determined based on the trading price (level 1) of SIRIUS XM on the last trading day prior to the acquisition of the controlling interest. Additionally, the noncontrolling interest includes the fair value of SIRIUS XM's fully vested options (level 2), the fair value of warrants outstanding (level 2) and the intrinsic value of a beneficial conversion feature accounted for in purchase accounting. Following the transaction date SIRIUS XM is a consolidated subsidiary with just less than a 50% noncontrolling interest accounted for in equity and the condensed consolidated statements of operations.
Initial purchase price allocation for SIRIUS XM is as follows (amounts in millions):
Fair value of SIRIUS XM equity interests
$
10,372

Fair value of SIRIUS XM debt securities
253

Noncontrolling interest
10,841

听
$
21,466

听
听
Cash and cash equivalents
$
569

Receivables
210

Property, plant and equipment
1,700

Goodwill
14,015

FCC Licenses
8,600

Tradenames
930

Intangible assets subject to amortization
945

Other assets
480

Debt
(2,490
)
Deferred revenue
(1,565
)
Deferred income tax liabilities, net
(903
)
Other liabilities assumed
(1,025
)
听
$
21,466


The initial purchase price allocation is subject to change upon receipt of the final valuation analysis for SIRIUS XM. The primary balances still subject to analysis are the property, plant and equipment, deferred revenue and other liabilities. Goodwill is calculated as the excess of the consideration transferred over the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce and noncontractual relationships. SIRIUS XM applied purchase accounting for the acquisition of XM Satellite Radio Holdings, Inc. in 2008 and has entered into many of its operating agreements at market rates in recent years, therefore, the carrying value of the identifiable net assets are reflected at amounts near their fair value. Accordingly, a large percentage of 麻豆最新出品's purchase price was allocated to goodwill.
The Pro Forma summarized combined unaudited balance sheet and statement of operations of 麻豆最新出品 using the historical financial statements for SIRIUS XM, giving effect to purchase accounting related adjustments made at the time of acquisition and excluding the impact of the gain, as if the transaction discussed above occurred for the Balance Sheet data as of such date and for the Statement of Operations data as if they had occurred on January听1, 2012, are as follows:
Summary Pro Forma Balance Sheet Data:
听
December 31, 2012
听
amounts in millions
(unaudited)
Current assets
$
4,039

Investments in equity method affiliates
$
855

Property, plant and equipment, net
$
1,857

Intangible assets not subject to amortization
$
23,889

Intangible assets subject to amortization, net
$
1,028

Other assets
$
1,974

Total assets
$
33,642

Long-term debt
$
2,486

Deferred tax liabilities, net
$
2,939

Other liabilities
$
3,890

Noncontrolling interests in equity of subsidiaries
$
10,833

Stockholders' Equity
$
13,494

Summary Pro Forma Operations Data:
听
Three months ended
听
March 31, 2012
听
amounts in millions
(unaudited)
Revenue
$
838

Operating income (loss)
146

Interest expense
(57
)
Share of earnings (loss) of affiliates
(21
)
Earnings (loss) attributable to the noncontrolling interests
45

Net Earnings (loss) from continuing operations attributable to 麻豆最新出品 stockholders
116

听
听
听
Pro Forma basic net earnings (loss) from continuing operations attributable to 麻豆最新出品 stockholders per common share (note听4):
听
听
Series A and B common stock
$
0.96

Pro Forma diluted net earnings (loss) from continuing operations attributable to 麻豆最新出品 stockholders per common share (note听4):
听
听
Series A and B common stock
$
0.93


This Pro Forma information is not representative of 麻豆最新出品's future financial position, future results of operations or future cash flows nor does it reflect what 麻豆最新出品's financial position, results of operations or cash flows would have been if these transactions happened previously and 麻豆最新出品 controlled or discontinued owning these entities during the periods presented.