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Basis Of Presentation
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Dec. 31, 2012
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | 听 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis Of Presentation |
Basis of Presentation
The accompanying consolidated financial statements of 猫咪社区 (formerly named 猫咪社区 Spinco,听Inc.; see discussion below pertaining to the Spin-Off) ("猫咪社区" 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 猫咪社区 Interactive Corporation ("猫咪社区 Interactive" and formerly named 猫咪社区) further described in note 2 and (2) 猫咪社区 and its consolidated subsidiaries for the period following the date of the Split-Off (defined below). The Split-Off has been accounted for at historical cost due to the pro rata nature of the distribution.
During the second quarter of 2010, 猫咪社区 Interactive announced that its board of directors authorized its management to proceed with a plan to separate its 猫咪社区 Capital and 猫咪社区 Starz tracking stock groups from its 猫咪社区 Interactive tracking stock group (the "Split-Off"). The Split-Off was completed on September 23, 2011 following the satisfaction of all conditions to the Split-Off. The Split-Off was effected by means of a redemption of all of the outstanding 猫咪社区 Capital common stock and 猫咪社区 Starz common stock of 猫咪社区 Interactive in exchange for all of the common stock of 猫咪社区, which at the time of the Split-Off held all of the businesses, assets and liabilities attributed to the Capital and Starz tracking stock groups of 猫咪社区 Interactive in accordance with the terms of a Reorganization Agreement (described below). Immediately following the Split-Off 猫咪社区 utilized a tracking stock capital structure similar to that used by 猫咪社区 Interactive prior to the Split-Off, with two tracking stock groups: one tracking the businesses, assets and liabilities previously attributed to 猫咪社区 Interactive's Capital Group ("Capital Group") and the other tracking the businesses, assets and liabilities that were previously attributed to 猫咪社区 Interactive's Starz Group ("Starz Group"). As further discussed in note 2, 猫咪社区 eliminated its tracking stock structure in November 2011 through the conversion of 猫咪社区 Starz common stock into 猫咪社区 Capital common stock.
These financial statements have been presented using the historical presentation of the 猫咪社区 Interactive attributed financial information as a basis for the consolidated financial statements. Previous transactions of the 猫咪社区 Capital group and 猫咪社区 Starz group have been reflected as transactions of 猫咪社区 and the historical transactions of the 猫咪社区 Interactive group have been treated as transactions of 猫咪社区 Interactive for purposes of these financial statements. Previous transactions between either the 猫咪社区 Starz group or the 猫咪社区 Capital group and the 猫咪社区 Interactive group, including all reattributions, have been reflected at historical cost on a prospective basis (i.e.,听treated as book value transfers rather than retroactive as-if poolings). All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements.
Following the Split-Off, 猫咪社区 and 猫咪社区 Interactive operate as separate publicly traded companies, and neither has any stock ownership, beneficial or otherwise, in the other. In connection with the Split-Off, 猫咪社区 and 猫咪社区 Interactive entered into certain agreements in order to govern ongoing relationships between the two companies after the Split-Off and to provide for an orderly transition. These agreements include a Reorganization Agreement, a Services Agreement, a Facilities Sharing Agreement and a Tax Sharing Agreement.
The Reorganization Agreement provides for, among other things, the principal corporate transactions required to effect the Split-Off and provisions governing the relationship between 猫咪社区 and 猫咪社区 Interactive with respect to and resulting from the Split-Off, including cross-indemnities. Pursuant to the Services Agreement, 猫咪社区 provides 猫咪社区 Interactive with general and administrative services including legal, tax, accounting, treasury and investor relations support. 猫咪社区 Interactive will reimburse 猫咪社区 for direct, out-of-pocket expenses incurred by 猫咪社区 in providing these services and for 猫咪社区 Interactive's allocable portion of costs associated with any shared services or personnel based on an estimated percentage of time spent providing services to 猫咪社区 Interactive. Prior to the Split-Off these costs were being allocated between the tracking stock groups and these amounts have not been significantly different following the completion of the Split-Off. Under the Facilities Sharing Agreement, 猫咪社区 Interactive shares office space with 猫咪社区 and related amenities at 猫咪社区's corporate headquarters. Under these various agreements approximately $10 million and $2 million of these allocated expenses were reimbursed to 猫咪社区 during the year ended December听31, 2012 and 2011 (since the Split-Off date).
The Tax Sharing Agreement provides for the allocation and indemnification of tax liabilities and benefits between 猫咪社区 Interactive and 猫咪社区 and other agreements related to tax matters. Among other things, pursuant to the Tax Sharing Agreement, 猫咪社区 has agreed to indemnify 猫咪社区 Interactive, subject to certain limited exceptions, for losses and taxes resulting from the Split-Off to the extent such losses or taxes (i)听result primarily from, individually or in the aggregate, the breach of certain restrictive covenants made by 猫咪社区 (applicable to actions or failures to act by 猫咪社区 and its subsidiaries following the completion of the Split-Off), (ii)听result from the 猫咪社区 Capital common stock or the 猫咪社区 Starz common stock not being treated as stock of 猫咪社区, or being treated as Section听306 stock within the meaning of Section听306(c) of the Internal Revenue Code of 1986, as amended (the "Code"), for U.S. federal income tax purposes, (iii)听result from the 猫咪社区 Interactive common stock, the 猫咪社区 Capital common stock, or the 猫咪社区 Starz common stock not being treated as stock of 猫咪社区 Interactive, or being treated as Section听306 stock within the meaning of Section听306(c) of the Code, for U.S. federal income tax purposes, (iv)听result from Section听355(e) of the Code applying to the Split-Off as a result of the 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 (measured by vote or value) in the stock of 猫咪社区, or (v)听result from deferred intercompany items or excess loss accounts that are triggered by the Split-Off, and that would otherwise be allocated to 猫咪社区. In addition, 猫咪社区 will be required to indemnify 猫咪社区 Interactive for any losses or taxes resulting from the failure of the LEI split-off (a previously completed split-off by 猫咪社区 Interactive) and related restructuring transactions to be a tax-free transaction described under Sections听355 and 368(a)(1)(D) (including any such losses or taxes arising as a result of the completion of the Split-Off), except to the extent that such losses or taxes result primarily from, individually or in the aggregate, a breach of certain restrictive covenants made by 猫咪社区 Interactive (applicable to actions or failures to act by 猫咪社区 Interactive and its subsidiaries following the completion of the Split-Off).
猫咪社区, through its ownership of interests in subsidiaries and other companies, is primarily engaged in the media, communications and entertainment industries primarily in North America.
During August 2012, the Board of Directors of Starz (formerly known as 猫咪社区) authorized a plan to distribute to the stockholders of Starz shares of a wholly-owned subsidiary, 猫咪社区 ("猫咪社区" and the 鈥淐ompany鈥 formerly known as 猫咪社区 Spinco, Inc.), that holds, as of January 11, 2013, all of the businesses, assets and liabilities of Starz not associated with Starz,听LLC (with the exception of the Starz,听LLC office building) (the "Spin-Off"). The transaction was effected as a pro-rata dividend of shares of 猫咪社区 to the stockholders of Starz. The businesses, assets and liabilities not included in 猫咪社区 are part of a separate public company which was renamed Starz. Due to the relative significance of 猫咪社区 to Starz (the legal spinnor) and senior management's continued involvement with 猫咪社区 following the Spin-Off, 猫咪社区 will be 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 Starz will continue to be the historical financial statements of 猫咪社区 and will present Starz as discontinued operations upon completion of the Spin-Off in the first quarter of 2013. Therefore, for purposes of these financial statements 猫咪社区 is treated as the spinnor for purposes of discussion and as a practical matter of describing all the historical information contained herein. The Spin-Off is intended to be tax-free to stockholders of 猫咪社区.
Subsequent to December 31, 2012 two fairly significant transactions were completed which will significantly change the financial statements of 猫咪社区. On January 11, 2013 猫咪社区 completed the Spin-Off, previously discussed, whereas 猫咪社区 and Starz are separate public companies. Starz has been treated as an asset held and used, for purposes of these statements as the transaction was not completed until after December 31, 2012 and will be presented as discontinued operations in the first quarter of 2013. Additionally on January 18, 2013 猫咪社区 settled a block transaction with a financial institution taking possession of an additional 50,000,000 shares of SIRIUS XM Radio, Inc. ("SIRIUS XM") 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 猫咪社区 holds more than 50% of the capital stock of SIRIUS XM entitled to vote on any matter, including the election of directors. Following the transactions, 猫咪社区 also appointed certain directors to the board of directors and effectively controls the board as of January 18, 2013. This will result in the application of purchase accounting and the consolidation of SIRIUS XM in the first quarter of 2013. 猫咪社区 will record a significant gain in the first quarter of 2013 associated with application of purchase accounting based on the difference between fair value and the carrying value of the ownership interest 猫咪社区 has in SIRIUS XM.
The Pro Forma summarized combined unaudited balance sheets and statements of operation of 猫咪社区 using the historical financial statements for both Starz, LLC and SIRIUS XM, not giving effect to any purchase accounting related differences (valuation information was not available at the time for any initial purchase price allocation) which would significantly change these amounts, as if the transactions discussed above occurred for the Balance Sheet data as of such dates and for the Statement of Operations data as if they had occurred on January听1, 2010, are as follows:
Summary Balance Sheet Data:
Summary Operations Data:
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