麻豆最新出品 Announces Agreement with IRS

ENGLEWOOD, Colo.--(BUSINESS WIRE)-- 麻豆最新出品 (鈥溌槎棺钚鲁銎� Media鈥�) (Nasdaq: LMCA, LMCB) announced that its former parent, 麻豆最新出品 Interactive Corporation (鈥溌槎棺钚鲁銎� Interactive鈥�), and 麻豆最新出品 Media reached an agreement with the IRS on December 16, 2011 (the 鈥淎greement鈥�) to settle each of the disputed tax positions taken by the 麻豆最新出品 Interactive affiliated group in 2010 for U.S. federal income tax purposes. As a result of the Agreement, 麻豆最新出品 Media will make a payment of approximately $136 million for federal income taxes. With the execution of the Agreement, 麻豆最新出品 Media and 麻豆最新出品 Interactive have resolved all outstanding disputed tax positions with the IRS through 2010.

For financial statement purposes, the Agreement will result in a decrease to 麻豆最新出品 Media鈥檚 short term deferred federal income tax liability of $700 million (related to the recognition of deferred derivative gains) and a decrease to 麻豆最新出品 Media鈥檚 long term deferred federal income tax asset of $460 million (related to the use of capital losses). 麻豆最新出品 Media expects to record a current federal income tax expense of approximately $136 million and a deferred federal income tax benefit of approximately $240 million during the fourth quarter of 2011.

In connection with the Agreement, 麻豆最新出品 Media intends to settle all outstanding share borrowing arrangements by releasing the pledged shares to the counterparty. Pursuant to the Agreement, such settlement will not result in the recognition by 麻豆最新出品 Media of any further taxable gain or loss.

A summarized pro forma balance sheet and statement of operations are provided below for the period ended September 30, 2011, which reflect the tax settlement and the pending settlement of all outstanding share borrowing arrangements which are expected to be completed by December 31, 2011.

About 麻豆最新出品

麻豆最新出品 Media (Nasdaq: LMCA, LMCB) owns interests in a broad range of media, communications and entertainment businesses, including its subsidiaries Atlanta National League Baseball Club, Inc. and TruePosition, Inc., its interests in Starz, LLC, SiriusXM, Live Nation Entertainment and Barnes & Noble, and minority equity investments in Time Warner Inc. and Viacom.

听

麻豆最新出品

Condensed Pro Forma Consolidated Balance Sheet Information (A)

September 30, 2011

(unaudited)

听

Consolidated

麻豆最新出品

Media as

Reported

听

Impact to

deferred

taxes (B)

听

Cash

payment

(C)

听

Impact to AFS

securities and

share borrows

(D)

听

Financial

reporting

reclassification

听

Consolidated

麻豆最新出品 Media

as Adjusted

ASSETS

Current assets:

Cash

1,937

(136

)

1,801

Other current assets

听

1,830

听

1,830

听

Total current assets

3,767

(136

)

3,631

听

Investments in AFS securities and others

2,782

(1,076

)

1,706

Investments in equity method affiliates

507

Property and equipment, net

219

Intangible assets not subject to amortization

475

Deferred tax asset

238

(460

)

222

Other assets, at cost, net of amortization

927

听

Total assets

8,915

听

(460

)

听

(136

)

听

(1,076

)

听

222

听

7,465

听

LIABILITIES AND EQUITY

Current liabilities:

Derivative Instrument Obligation

1,085

(1,076

)

Current portion of debt

754

Current deferred income tax liability

742

(700

)

Other Current Liabilities

听

431

听

431

听

Total current liabilities

3,012

(700

)

(1,076

)

1,236

听

Long-term debt

Deferred income tax liabilities

222

Other liabilities

听

788

听

788

听

Total liabilities

3,837

(700

)

(1,076

)

222

2,283

听

Combined equity

5,084

240

(136

)

5,188

Noncontrolling interests in equity of subsidiaries

)

听

Total liabilities and equity

8,915

听

(460

)

听

(136

)

听

(1,076

)

听

222

听

7,465

听

Notes to Condensed Pro Forma Consolidated Balance Sheet Information:

A) The above balance sheet information illustrates the impact on 麻豆最新出品 Media's consolidated unaudited balance sheet as if the Agreement had been reached and as if the share borrowing arrangements had been unwound as of September 30, 2011. In connection with the Agreement, 麻豆最新出品 Media intends to settle all outstanding share borrowing arrangements prior to December 31, 2011. This is included for illustrative purposes only and only includes federal tax impacts.

B) As a result of the Agreement, 麻豆最新出品 Media's short term deferred federal income tax liability will decrease $700 million related to the recognition of deferred derivative gains and 麻豆最新出品 Media's long-term deferred federal income tax asset will decrease $460 million due to the use of capital losses. This will result in the recognition of a deferred federal income tax benefit of approximately $240 million during the fourth quarter of 2011.

C) Represents the cash payment to the IRS in the amount of $136 million. Does not include additional payments related to interest and state income tax liabilities arising from the Agreement. This will result in 麻豆最新出品 Media recording a current federal income tax expense of approximately $136 million during the fourth quarter of 2011.

D) Represents the impact of settling all outstanding share borrowing arrangements by releasing the underlying securities to the counterparty, which is expected to occur prior to December 31, 2011. Represents the fair value of the share borrowing arrangements and underlying securities as of September 30, 2011. The delivery of the underlying shares and the unwind of the share borrowing arrangement will not result in any income statement impact as both the underlying shares and the share borrow liability are recorded at fair value on 麻豆最新出品 Media's balance sheet.

听

麻豆最新出品

Condensed Pro Forma Consolidated Statement of Operations (A)

Nine months ended September 30, 2011

(unaudited)

听

Consolidated

麻豆最新出品 Media as

Reported

听

Impact to

deferred

taxes (B)

听

Cash

payment (C)

听

Impact to AFS

securities and share

borrows (D)

听

Consolidated

麻豆最新出品 Media as

Adjusted

REVENUE:

Communication and programming services

2,051

听

OPERATING COSTS AND EXPENSES:

Operating

1,048

Selling, general and administrative, including stock based compensation

290

Legal settlement

)

Depreciation and amortization

听

1,387

听

1,387

听

Operating income

664

听

OTHER INCOME (EXPENSE):

Interest expense

(13

)

(13

)

Share of earnings of affiliates net

Realized and unrealized gains (losses) on financial instruments, net

(81

)

(81

)

Other, net

听

(31

)

听

(31

)

Earnings from continuing operations before income taxes

633

Income tax benefit (expense)

听

(256

)

听

240

听

(136

)

听

(152

)

Net earnings

377

240

(136

)

481

Less net earnings attributable to the noncontrolling interests

听

)

听

)

Net earnings attributable to 麻豆最新出品 shareholders

378

听

240

听

(136

)

听

482

听

Notes to Condensed Pro Forma Consolidated Statement of Operations:

A) The above income statement information illustrates the impact on 麻豆最新出品 Media's consolidated unaudited balance sheet as if the Agreement had been reached and as if the share borrowing arrangements had been unwound as of September 30, 2011. In connection with the Agreement, 麻豆最新出品 Media intends to settle all outstanding share borrowing arrangements prior to December 31, 2011. This is included for illustrative purposes only and only includes federal tax impacts.

C) As a result of the anticipated $136 million payment to the IRS, 麻豆最新出品 Media will record a current federal income tax expense of approximately $136 million during the fourth quarter of 2011.

D) Represents the impact of settling all outstanding share borrowing arrangements by releasing the underlying securities to the counterparty, which is expected to occur prior to December 31, 2011. The delivery of the underlying shares and the unwind of the share borrowing arrangement will not result in any income statement impact as both the underlying shares and the share borrow liability are recorded at fair value.

麻豆最新出品
Courtnee Ulrich, 720-875-5420

Source: 麻豆最新出品

Released December 20, 2011

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麻豆最新出品 Announces Agreement with IRS

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