Starz Acquisition LLC - 10-Q filing on 2015-04-30

Other Information

3 Months Ended

Mar. 31, 2015

Accrued Liabilities

Accrued liabilities consist of the following (in millions):



	March 31, 2015		December 31, 2014
Program rights payable	$	120.6	$	89.0
Royalties, residuals and participations	88.3		74.6
Participations payable to Weinstein	40.8		59.6
Advertising and marketing	31.9		41.1
Payroll and related costs	15.6		27.5
Other	48.0		35.6
	$	345.2	$	327.4

Supplemental Disclosure of Cash Flow Information

The following table presents the supplemental disclosure of cash flow information (in millions):



	Three Months Ended March 31,
	2015		2014
Cash paid for interest, net of amounts capitalized	$	19.0	$	19.4
Cash paid for income taxes	$	1.8	$	2.6

Net Income Attributable to Common Stockholders

Basic net income per common share (“EPS”) is computed by dividing net income attributable to stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented. The following is a reconciliation between basic and diluted weighted average shares outstanding (in millions):



	Three Months Ended March 31,
	2015	2014
Basic weighted average shares outstanding	101.1	108.2
Effect of dilution:
Stock options	4.8	5.5
Restricted shares	0.6	1.3
Restricted stock units	0.1	—
Diluted weighted average shares outstanding	106.6	115.0

For the three months ended March 31, 2015, and 2014, approximately 1.3 million shares and none, respectively, have been excluded from the diluted weighted average shares outstanding since the shares would have been anti-dilutive.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued the Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (Topic 606). ASU 2014-09 replaces the majority of all U.S. GAAP guidance that currently exists on revenue recognition with a single model to be applied to all contracts with customers. The core principle of ASU 2014-09 is that “an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” For a public entity, ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. An entity must apply ASU 2014-09 using either the full retrospective approach, by restating all years presented, or the cumulative effect at the date of adoption approach. Starz is currently assessing the impact that these changes will have on its consolidated financial statements and therefore are unable to quantify such impact or determine the method of adoption.

In April 2015, the FASB issued ASU 2015-03 Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. For a public entity, ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted for financial statements that have not been previously issued. As of March 31, 2015, Starz had $9.2 million of debt issuance costs which are included in other assets, net in the accompanying condensed consolidated balance sheets.