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Basis Of Presentation
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12 Months Ended |
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Dec. 31, 2013
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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.
In September 2011, 猫咪社区 Interactive completed the split-off of its former wholly-owned subsidiary (then known as 猫咪社区) from its 猫咪社区 Interactive tracking stock group (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.
In January 2013, the entity then known as 猫咪社区 (now named Starz) spun-off (the 鈥淪pin-Off鈥) its then-former wholly owned subsidiary, now known as 猫咪社区, 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 猫咪社区 to the stockholders of 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 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 猫咪社区 continue to be the historical financial statements of 猫咪社区, and Starz, LLC is presented as discontinued operations for all periods prior to the completion of the Spin-Off. Therefore, for purposes of these consolidated financial statements, 猫咪社区 is treated as the spinnor for purposes of discussion and as a practical matter for describing all the historical information contained herein.
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 and Spin-Off, 猫咪社区, 猫咪社区 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, 猫咪社区 entered into certain agreements with 猫咪社区 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 猫咪社区 Interactive were assigned from Starz to 猫咪社区 in connection with the Spin-Off.
The Reorganization Agreements provide for, among other things, provisions governing the relationships between 猫咪社区 and each of 猫咪社区 Interactive and Starz following the Split-Off and Spin-Off, respectively, including certain cross-indemnities. Pursuant to the Services Agreements, 猫咪社区 provides 猫咪社区 Interactive and Starz with general and administrative services including legal, tax, accounting, treasury and investor relations support. 猫咪社区 Interactive and Starz 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 and Starz's 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. Prior to the Split-Off, these costs were 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 Agreements, 猫咪社区 shares office space and related amenities with 猫咪社区 Interactive and Starz at 猫咪社区's corporate headquarters. Under these various agreements approximately $16 million and $10 million of these allocated expenses were reimbursed to 猫咪社区 during the years ended December听31, 2013 and 2012. Under the Lease Agreement, Starz leases its corporate headquarters from 猫咪社区. 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. The Lease Agreement expires on December 31, 2023 and contains an extension option.
The Tax Sharing Agreements provide for the allocation and indemnification of tax liabilities and benefits between 猫咪社区 and each of 猫咪社区 Interactive and Starz as well as other agreements related to tax matters. Among other things, pursuant to the Tax Sharing Agreements, 猫咪社区 has agreed to indemnify 猫咪社区 Interactive and Starz, subject to certain limited exceptions, for losses and taxes resulting from the Split-Off and the Spin-Off, respectively, except 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 Interactive (applicable to actions or failures to act by 猫咪社区 and its subsidiaries following the completion of the Split-Off) or Starz, (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 or the Spin-Off as a result of the Split-Off of Spin-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). With respect to the Split-Off, the IRS has examined the transaction, and during 2012, the IRS and 猫咪社区 Interactive entered into a Closing Agreement which provides that the Split-Off qualified for tax-free treatment to 猫咪社区 Interactive and Starz. In February 2014, the IRS and Starz entered into a Closing Agreement which provides that the Spin-Off qualified for tax-free treatment to Starz and 猫咪社区.
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. Our significant subsidiaries include Sirius XM Holdings Inc., the Atlanta National League Baseball Club, Inc. (the "Atlanta Braves" or "ANLBC") and TruePosition, Inc. ("TruePosition"). Our significant investments accounted for under the equity method include Charter Communications, Inc. ("Charter") and Live Nation Entertainment, Inc. ("Live Nation").
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