猫咪社区

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(1)听听听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 Starz Spin-Off (defined below)) ("猫咪社区" or the "Company" 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.

猫咪社区, through its ownership of interests in subsidiaries and other companies, is primarily engaged in the media and entertainment industries primarily in North America. Our significant subsidiaries include Sirius XM Holdings Inc. (鈥淪IRIUS XM鈥�) 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. ("Live Nation"). Additionally, as discussed in notes 2 and 7, 猫咪社区 obtained a nearly 20% interest in Delta Topco Limited (鈥淒elta Topco鈥�), the parent company of Formula 1, a global motorsports business, during 2016 and acquired the remaining interests, other than a nominal number of shares held by certain Formula 1 teams, during January 2017.

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In September 2011, 猫咪社区 Interactive Corporation ("猫咪社区 Interactive" and formerly named 猫咪社区) 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").

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In January 2013, Starz (now known as Starz Acquisition, LLC and formerly known as 猫咪社区) 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 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 Starz 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 Starz 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 has been treated as discontinued operations upon completion of the Starz Spin-Off in the first quarter of 2013. 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.

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Also in January 2013, 猫咪社区 obtained a controlling interest and began consolidating SIRIUS XM, as further discussed in note 4.

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During 2014, 猫咪社区鈥檚 board of directors approved the issuance of shares of its Series C 猫咪社区 common stock to holders of its Series A and Series B 猫咪社区 common stock, effected by means of a dividend. On July 23, 2014, holders of Series A and Series B 猫咪社区 common stock as of 5:00 p.m., New York City, time on July 7, 2014, the record date for the dividend, received a dividend of two shares of Series C 猫咪社区 common stock for each share of Series A or Series B 猫咪社区 common stock held by them as of the record date. The impact of the Series C 猫咪社区 common stock issuance has been reflected retroactively in these consolidated financial statements due to the treatment of the dividend as a stock split for accounting purposes. Additionally, in connection with the Series C 猫咪社区 common stock issuance and the Broadband Spin-Off (defined below), outstanding Series A 猫咪社区 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 10 for further discussion regarding the warrants and Bond Hedge Transaction.

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On November 4, 2014, 猫咪社区 completed the spin-off to its stockholders common stock of a newly formed company called 猫咪社区 Broadband Corporation ("猫咪社区 Broadband") (the 鈥淏roadband Spin-Off鈥�). Shares of 猫咪社区 Broadband were distributed to the shareholders of 猫咪社区 as of a record date of 5:00 p.m., New York City time, on October 29, 2014. At the time of the Broadband Spin-Off, 猫咪社区 Broadband was comprised of, among other things, (i) 猫咪社区鈥檚 former interest in Charter Communications, Inc. (鈥淐harter鈥�), (ii) 猫咪社区鈥檚 former subsidiary TruePosition, Inc. (鈥淭ruePosition鈥�) (now known as Skyhook Holding, Inc. (鈥淪kyhook鈥�)), (iii) 猫咪社区鈥檚 former minority equity investment in Time Warner Cable, Inc. ("Time Warner Cable"), (iv) certain deferred tax liabilities, as well as liabilities related to Time Warner Cable call options and (v) initial indebtedness, pursuant to margin loans, described in note 10, entered into prior to the completion of the Broadband Spin-Off.听听Prior to the transaction, 猫咪社区 Broadband borrowed funds under margin loans and made a final distribution to 猫咪社区 of approximately $300 million in cash. The Broadband Spin-Off was intended to be tax-free to stockholders of 猫咪社区, and in September 2015, 猫咪社区 entered into a closing agreement with the Internal Revenue Service (鈥淚RS鈥�) which provides that the Broadband Spin-Off qualified for tax-free treatment.听听In the Broadband Spin-Off, record holders of Series A, Series B and Series C 猫咪社区 common stock received one share of the corresponding series of 猫咪社区 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.

As of the date of the completion of the Broadband Spin-Off, the Company鈥檚 former investments in and results of Charter and Time Warner Cable are no longer included in the results of 猫咪社区. Based on the relative significance of TruePosition to 猫咪社区, the Company concluded that discontinued operations presentation of TruePosition is not necessary. However, the table below includes the historical financial information of TruePosition, which is included in the consolidated statements of operations for the year ended December 31, 2014.

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