United states securities and exchange commission


Other Long-Term Obligations



Download 6.39 Mb.
Page99/105
Date31.05.2016
Size6.39 Mb.
1   ...   95   96   97   98   99   100   101   102   ...   105

Other Long-Term Obligations

Other contractual commitments for the years ending March 31, 2013 through 2017 and thereafter are approximately $4.0 million, $2.7 million, $2.6 million, $1.4 million, $1.0 million, and $0.6 million, respectively, relating to service and data license agreements. The Company also has contractual commitments of $3.5 million, $3.5 million, $3.5 million, $3.5 million, and $1.2 million, for the years ending March 31, 2013 through 2017, respectively, to be paid to a related party for acquired programming, as discussed in Note 11.



9. Mandatorily Redeemable Preferred Units, Members' Equity (Deficit), and Share-Based Compensation

The Company had 100,000 mandatorily redeemable Preferred Units and 100,000 B-1 Common Units outstanding at March 31, 2012.

The Preferred Units are mandatorily redeemable and carry a dividend rate of 10% compounded annually. These units are redeemable in May 2019 at the stated value plus the dividend return and any additional capital contributions less previous distributions. The Preferred Units were
17


9. Mandatorily Redeemable Preferred Units, Members' Equity (Deficit), and Share-Based Compensation (continued)

initially recorded based on their estimated fair value, as determined using an option pricing model methodology, as a liability in the accompanying consolidated balance sheets.

The Preferred Units and the 10% dividend are being accreted, through charges to interest expense, up to their redemption amounts, over the 10-year period to the redemption date. During the years ended March 31, 2012 and 2011, the Company paid $0 and $20 million of accrued dividends to the Preferred Unit holders.

The Preferred Units and Series B-1 Common Units are nonvoting units; however, only the Preferred Unit holders can elect the board of managers. Assuming no additional distributions, dividends, or additional capital contributions, the redemption amount would be $618.6 million at May 2019. The redemption value as of March 31, 2012, based on the stated value and the dividend earned through that date, would be $312.5 million. The fair value as of March 31, 2012 was $284.4 million.

The board of managers has authorized the issuance of up to 8,889 Series B-2 Common Units (“B-2 Common Units”) that vest over five years and 2,223 B-2 Common Units that may be granted through a junior unit that only vests if there is an exit event, as defined, with a return to Members upon exit of between 350% and 500% or more of the Members' investment. During the year ended March 31, 2010, the Company granted 3,556 B-2 Common Units to an employee. These units granted were valued at fair value at grant date and are being expensed as earned over the five-year vesting period. Total compensation expense recorded for these units amounted to $0.5 million and $0.5 million during the years ended March 31, 2012 and 2011, respectively. The fair values of the units were determined based on the value of the Company's May 28, 2009 sale of Lions Gate's 49% interest to OEP. The fair value per unit was $706 at the time of grant. Unrecognized compensation expense as of March 31, 2012 is $1.1 million.

10. Interest Expense

Interest expense, net (in thousands) consists of the following:




























 

Year Ended March 31

 

2012

2011

Interest expense:

 

 

Preferred Units and dividend accretion

$

29,687




$

27,704




Equipment under capital lease

656




717




Acquired programming

1,186




1,173




 

31,529




29,594




Interest income

(11

)

(38

)

 

$

31,518




$

29,556



18



11. Related-Party Transactions

Amounts due to related parties total approximately $13.6 million and $12.7 million at March 31, 2012 and 2011, respectively, including $11.9 million and $11.9 million due to Lions Gate for accrued programming costs at March 31, 2012 and 2011, respectively. The Company is subject to various advertising and other media agreements with Lions Gate. For the years ended March 31, 2012 and 2011, under the agreements, the Company recognized approximately $1.9 million and $2.1 million in advertising revenue, respectively. The Company also recognized $0.5 million in other revenue for the year ended March 31, 2012, related to a television distribution agreement with Lions Gate.

The Company entered into various acquired programming agreements with Lions Gate. Under the agreements, the Company recognized approximately $7.8 million and $1.6 million in programming expenses for the years ended March 31, 2012 and 2011, respectively.

In addition, the Company is charged a shared service fee by Lions Gate for human resource, payroll management, corporate finance, information technology support, and general management services. The shared service fee for the years ended March 31, 2012 and 2011 was $1.0 million and $1.3 million, respectively. The Company is also charged a fee for allocated insurance premiums. The insurance charge was $0.4 million for each of the years ended March 31, 2012 and 2011.



12. Litigation and Other Contingencies

The Company is, from time to time, involved in various claims, legal proceedings, and complaints arising in the ordinary course of business. The Company does not believe that adverse decisions in any such pending or threatened proceedings, or any amount which the Company might be required to pay by reason thereof, would have a material adverse effect on the financial condition or future operating results of the Company.



13. Employee Benefit Plan

The Company has a defined contribution plan under Internal Revenue Code Section 401(k) covering all eligible employees. The plan includes a discretionary match provision, matching employees' voluntary contributions up to $1,000 per employee. The Company incurred charges of $0.1 million and $0.2 million for employer matching contributions to the plan for the years ended March 31, 2012 and 2011, respectively.



14. Supplemental Cash Flow Information

The Company paid $1.0 million and $0.9 million in interest for the years ended March 31, 2012 and 2011, respectively.

19


Exhibit 99.3








CONSOLIDATED FINANCIAL STATEMENTS

TV Guide Entertainment Group, LLC

Years Ended March 31, 2011 and 2010

With Report of Independent Auditors


TV Guide Entertainment Group, LLC

Consolidated Financial Statements

Years Ended March 31, 2011 and 2010



Contents




















Report of Independent Auditors

1

 

 

Consolidated Financial Statements

 

 

 

Consolidated Balance Sheets

2

Consolidated Statements of Operations

3

Consolidated Statements of Changes in Members’ Equity (Deficit)

4

Consolidated Statements of Cash Flows

5

 

 

Notes to Consolidated Financial Statements

6



Share with your friends:
1   ...   95   96   97   98   99   100   101   102   ...   105




The database is protected by copyright ©essaydocs.org 2020
send message

    Main page