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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 午夜寻花 (formerly named 午夜寻花 Spinco,听Inc.; see discussion below pertaining to the Spin-Off) ("午夜寻花" 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 午夜寻花 Interactive Corporation ("午夜寻花 Interactive" and formerly named 午夜寻花) further described in note 2 and (2) 午夜寻花 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, 午夜寻花 Interactive announced that its board of directors authorized its management to proceed with a plan to separate its 午夜寻花 Capital and 午夜寻花 Starz tracking stock groups from its 午夜寻花 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 午夜寻花 Capital common stock and 午夜寻花 Starz common stock of 午夜寻花 Interactive in exchange for all of the common stock of 午夜寻花, 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 午夜寻花 Interactive in accordance with the terms of a Reorganization Agreement (described below). Immediately following the Split-Off 午夜寻花 utilized a tracking stock capital structure similar to that used by 午夜寻花 Interactive prior to the Split-Off, with two tracking stock groups: one tracking the businesses, assets and liabilities previously attributed to 午夜寻花 Interactive's Capital Group ("Capital Group") and the other tracking the businesses, assets and liabilities that were previously attributed to 午夜寻花 Interactive's Starz Group ("Starz Group"). As further discussed in note 2, 午夜寻花 eliminated its tracking stock structure in November 2011 through the conversion of 午夜寻花 Starz common stock into 午夜寻花 Capital common stock.
These financial statements have been presented using the historical presentation of the 午夜寻花 Interactive attributed financial information as a basis for the consolidated financial statements. Previous transactions of the 午夜寻花 Capital group and 午夜寻花 Starz group have been reflected as transactions of 午夜寻花 and the historical transactions of the 午夜寻花 Interactive group have been treated as transactions of 午夜寻花 Interactive for purposes of these financial statements. Previous transactions between either the 午夜寻花 Starz group or the 午夜寻花 Capital group and the 午夜寻花 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, 午夜寻花 and 午夜寻花 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, 午夜寻花 and 午夜寻花 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 午夜寻花 and 午夜寻花 Interactive with respect to and resulting from the Split-Off, including cross-indemnities. Pursuant to the Services Agreement, 午夜寻花 provides 午夜寻花 Interactive with general and administrative services including legal, tax, accounting, treasury and investor relations support. 午夜寻花 Interactive will reimburse 午夜寻花 for direct, out-of-pocket expenses incurred by 午夜寻花 in providing these services and for 午夜寻花 Interactive's allocable portion of costs associated with any shared services or personnel based on an estimated percentage of time spent providing services to 午夜寻花 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, 午夜寻花 Interactive shares office space with 午夜寻花 and related amenities at 午夜寻花's corporate headquarters. Under these various agreements approximately $10 million and $2 million of these allocated expenses were reimbursed to 午夜寻花 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 午夜寻花 Interactive and 午夜寻花 and other agreements related to tax matters. Among other things, pursuant to the Tax Sharing Agreement, 午夜寻花 has agreed to indemnify 午夜寻花 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 午夜寻花 (applicable to actions or failures to act by 午夜寻花 and its subsidiaries following the completion of the Split-Off), (ii)听result from the 午夜寻花 Capital common stock or the 午夜寻花 Starz common stock not being treated as stock of 午夜寻花, 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 午夜寻花 Interactive common stock, the 午夜寻花 Capital common stock, or the 午夜寻花 Starz common stock not being treated as stock of 午夜寻花 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 午夜寻花, 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 午夜寻花. In addition, 午夜寻花 will be required to indemnify 午夜寻花 Interactive for any losses or taxes resulting from the failure of the LEI split-off (a previously completed split-off by 午夜寻花 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 午夜寻花 Interactive (applicable to actions or failures to act by 午夜寻花 Interactive and its subsidiaries following the completion of the Split-Off).
午夜寻花, 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 午夜寻花) authorized a plan to distribute to the stockholders of Starz shares of a wholly-owned subsidiary, 午夜寻花 ("午夜寻花" and the 鈥淐ompany鈥 formerly known as 午夜寻花 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 午夜寻花 to the stockholders of Starz. The businesses, assets and liabilities not included in 午夜寻花 are part of a separate public company which was renamed Starz. Due to the relative significance of 午夜寻花 to Starz (the legal spinnor) and senior management's continued involvement with 午夜寻花 following the Spin-Off, 午夜寻花 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 午夜寻花 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 午夜寻花 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 午夜寻花.
Subsequent to December 31, 2012 two fairly significant transactions were completed which will significantly change the financial statements of 午夜寻花. On January 11, 2013 午夜寻花 completed the Spin-Off, previously discussed, whereas 午夜寻花 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 午夜寻花 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 午夜寻花 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, 午夜寻花 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. 午夜寻花 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 午夜寻花 has in SIRIUS XM.
The Pro Forma summarized combined unaudited balance sheets and statements of operation of 午夜寻花 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:
This Pro Forma information is not representative of 午夜寻花's future financial position, future results of operations or future cash flows nor does it reflect what 午夜寻花's financial position, results of operations or cash flows would have been as if these transactions happened previously and 午夜寻花 controlled or discontinued owning these entities during the periods presented.
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