Holders

 

As of January 31, 2017, there were 1,235, 85 and 1,300 record holders of our Series A, Series B and Series C 麻豆最新出品 Sirius XM common stock, respectively, 1,128, 51 and 887 record holders of our Series A, Series B and Series C 麻豆最新出品 Braves common stock, respectively, and 859, 70 and 1,260 record holders of our Series A, Series B and Series C 麻豆最新出品 Formula One common stock, respectively. The foregoing numbers of record holders do not include the number of stockholders whose shares are held nominally by banks, brokerage houses or other institutions, but include each such institution as one shareholder.

 

Dividends

 

We have not paid any cash dividends on our common stock, and we have no present intention of so doing. Payment of cash dividends, if any, in the future will be determined by our board of directors in light of our earnings, financial condition and other relevant considerations.

 

Securities Authorized for Issuance Under Equity Compensation Plans

 

Information required by this item is incorporated by reference to our definitive proxy statement for our 2017 Annual Meeting of Stockholders.

 

Purchases of Equity Securities by the Issuer

 

Share Repurchase Programs

 

On January 11, 2013 (ratified February 26, 2013) 麻豆最新出品 announced that its board of directors authorized $450 million of repurchases of 麻豆最新出品 common stock from that day forward. Additionally, in connection with the Broadband Spin-Off, an additional authorization of $300 million in 麻豆最新出品 share repurchases was approved by the 麻豆最新出品 board of directors on October 9, 2014. In August 2015, our board of directors authorized an additional $1 billion of 麻豆最新出品 common stock repurchases. The amount previously authorized for share repurchases may be used to repurchase Series A and Series C of each of 麻豆最新出品 SiriusXM common stock, 麻豆最新出品 Braves common stock and 麻豆最新出品 Formula One common stock.

 

There were no repurchases of 麻豆最新出品 Media common stock (presently known as 麻豆最新出品 Formula One common stock), 麻豆最新出品 SiriusXM common stock or 麻豆最新出品 Braves common stock during the three months ended December 31, 2016. As of December 31, 2016, $1.3 billion was available to be used for share repurchases of Series A and Series C of each of 麻豆最新出品 SiriusXM common stock, 麻豆最新出品 Braves common stock and 麻豆最新出品 Media common stock (presently known as 麻豆最新出品 Formula One common stock) under the Company’s share repurchase program.

During the three months ended December 31, 2016, 1,189 shares and 2,376 shares of Series A and Series C 麻豆最新出品 Media common stock (presently known as 麻豆最新出品 Formula One common stock), respectively, 4,746 shares and 9,490 shares of Series A and Series C 麻豆最新出品 SiriusXM common stock, respectively, and 476 shares and 951 shares of Series A and Series C 麻豆最新出品 Braves common stock, respectively, were surrendered by certain of our officers and employees to pay withholding taxes and other deductions in connection with the vesting of their restricted stock and restricted stock units. 

 

 

Item 6.Selected Financial Data.

 

The following tables present selected historical financial statement information relating to our financial condition and results of operations for the past five years. Certain prior period amounts have been reclassified for comparability with the current year presentation. The following data should be read in conjunction with the accompanying consolidated financial statements.

 

 

 

 

 

 

 

 

Following the creation of the tracking stocks, Series A, Series B and Series C 麻豆最新出品 SiriusXM common stock trade under the symbols LSXMA/B/K, respectively; Series A, Series B and Series C 麻豆最新出品 Braves common stock trade or are quoted under the symbols BATRA/B/K respectively; and Series A, Series B and Series C 麻豆最新出品 Media common stock traded or were quoted under the symbols LMCA/B/K, respectively. Shortly following the Second Closing, the 麻豆最新出品 Media Group and 麻豆最新出品 Media common stock were renamed the 麻豆最新出品 Formula One Group (the “Formula

One Group”) and the 麻豆最新出品 Formula One common stock, respectively, and the corresponding ticker symbols for the Series A, Series B and Series C 麻豆最新出品 Media common stock were changed to FWONA/B/K, respectively. Each series (Series A, Series B and Series C) of the 麻豆最新出品 SiriusXM common stock trades on the Nasdaq Global Select Market. Series A and Series C 麻豆最新出品 Braves common stock trade on the Nasdaq Global Select Stock Market, and Series B 麻豆最新出品 Braves common stock is quoted on the OTC Markets. Series A and Series C 麻豆最新出品 Formula One common stock continue to trade on the Nasdaq Global Select Market, and the Series B 麻豆最新出品 Formula One common stock continues to be quoted on the OTC Markets.

 

 

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion and analysis provides information concerning our results of operations and financial condition. This discussion should be read in conjunction with our accompanying consolidated financial statements and the notes thereto. See note 3 in the accompanying consolidated financial statements for an overview of accounting standards that we have adopted or that we plan to adopt that have had or may have an impact on our financial statements.

 

Explanatory Note

On November 4, 2014, 麻豆最新出品 completed the Broadband Spin-Off. Shares of 麻豆最新出品 Broadband were distributed to the shareholders of 麻豆最新出品 as of a record date of October 29, 2014. At the time of the Broadband Spin-Off, 麻豆最新出品 Broadband was comprised of, among other things, (i) 麻豆最新出品’s former interest in Charter, (ii) 麻豆最新出品’s former subsidiary Skyhook, (iii) 麻豆最新出品’s former minority equity investment in 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 entered into prior to the completion of the Broadband Spin-Off. Prior to the transaction, 麻豆最新出品 Broadband borrowed funds under margin loans and made a final distribution to 麻豆最新出品 of approximately $300 million in cash. The Broadband Spin-Off was intended to be tax-free to stockholders of 麻豆最新出品, and in September 2015, 麻豆最新出品 entered into a closing agreement with the IRS which provides that the Broadband Spin-Off qualified for tax-free treatment.  In the Broadband Spin-Off, record holders of Series A, Series B and Series C 麻豆最新出品 common stock received one share of the corresponding series of 麻豆最新出品 Broadband common stock for each 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. The Company’s former investments in and results of Charter and Time Warner Cable are no longer included in the results of 麻豆最新出品 from the date of the completion of the Broadband Spin-Off forward. Based on the relative significance of Skyhook to 麻豆最新出品, the Company concluded that discontinued operations presentation of Skyhook is not necessary.

 

Overview

 

We own controlling and non-controlling interests in a broad range of media and entertainment companies. Our most significant operating subsidiary, which is our reportable segment, is SIRIUS XM. SIRIUS XM provides a subscription based satellite radio service.  SIRIUS XM transmits its music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services, in the United States on a subscription fee basis through its two proprietary satellite radio systems - the Sirius system and the XM system. Subscribers can also receive music and other channels, plus features such as SiriusXM On Demand and MySXM, over SIRIUS XM’s Internet radio service, including through applications for mobile devices, home devices and other consumer electronic equipment.

 

Our "Corporate and Other" category includes our consolidated subsidiary, Braves Holdings, LLC (“Braves Holdings”) and corporate expenses. Skyhook was also included in the “Corporate and Other” category for the periods prior to the Broadband Spin-Off. 

 

In addition to the foregoing businesses, we hold an ownership interest in Live Nation Entertainment, Inc. ("Live Nation"), which we account for as an equity method investment at December 31, 2016. We also maintain minority positions in other public companies such as Time Warner, Inc. (“Time Warner”) and Viacom, Inc. (“Viacom”), which are accounted for at their respective fair market values and are included in corporate and other.

As discussed in note 2 of the accompanying consolidated financial statements, on April 15, 2016, 麻豆最新出品 completed the Recapitalization. Upon completion of the Second Closing, as discussed below, the 麻豆最新出品 Media Group was renamed the Formula One Group. Although the Recapitalization was not effective for all periods presented herein, information has been presented among the tracking stock groups for all periods presented as if the Recapitalization had been completed as of January 1, 2014. This attribution of historical financial information does not purport to be what actual results and balances would have been if the Recapitalization had actually occurred and been in place during the periods prior to April 15, 2016. Operating results prior to the Recapitalization are attributed to 麻豆最新出品 stockholders in the aggregate.

On September 7, 2016 麻豆最新出品, through its indirect wholly owned subsidiary 麻豆最新出品 GR Cayman Acquisition Company, entered into two definitive stock purchase agreements relating to the acquisition of Delta Topco, the parent company of Formula 1. The transactions contemplated by the first purchase agreement were completed on September 7, 2016, resulting in the acquisition of slightly less than a 20% minority stake in Formula 1 on an undiluted basis. On October 27, 2016 under the terms of the first purchase agreement, 麻豆最新出品 acquired an additional incremental equity interest of Delta Topco, maintaining 麻豆最新出品’s investment in Delta Topco on an undiluted basis and increasing slightly to 19.1% on a fully diluted basis.  麻豆最新出品 acquired 100% of the fully diluted equity interests of Delta Topco, other than a nominal number of shares held by certain Formula 1 teams, in a closing under the second purchase agreement (and following the unwind of the first purchase agreement) on January 23, 2017. 麻豆最新出品’s acquired interest in Delta Topco and by extension Formula 1, along with existing Formula 1 cash and debt (which is non-recourse to 麻豆最新出品), was attributed to the Formula One Group upon completion of the Second Closing.

A tracking stock is a type of common stock that the issuing company intends to reflect or "track" the economic performance of a particular business or "group," rather than the economic performance of the company as a whole. While the 麻豆最新出品 SiriusXM Group, 麻豆最新出品 Braves Group (the “Braves Group”) and Formula One Group have separate collections of businesses, assets and liabilities attributed to them, no group is a separate legal entity and therefore cannot own assets, issue securities or enter into legally binding agreements. Therefore, the 麻豆最新出品 SiriusXM Group, Braves Group and Formula One Group do not represent separate legal entities, but rather represent those businesses, assets and liabilities that have been attributed to each respective group. Holders of tracking stock have no direct claim to the group's stock or assets and therefore, do not own, by virtue of their ownership of a 麻豆最新出品 tracking stock, any equity or voting interest in a company, such as SIRIUS XM, Formula 1 or Live Nation, in which 麻豆最新出品 holds an interest and that is attributed to a 麻豆最新出品 tracking stock group, such as the 麻豆最新出品 SiriusXM Group or the Formula One Group. Holders of tracking stock are also not represented by separate boards of directors. Instead, holders of tracking stock are stockholders of the parent corporation, with a single board of directors and subject to all of the risks and liabilities of the parent corporation.

The term "麻豆最新出品 SiriusXM Group" does not represent a separate legal entity, rather it represents those businesses, assets and liabilities that have been attributed to that group. Following the Recapitalization, the 麻豆最新出品 SiriusXM Group is primarily comprised of 麻豆最新出品’s subsidiary, SIRIUS XM, corporate cash and a margin loan obligation incurred by a wholly-owned special purpose subsidiary of 麻豆最新出品. As of December 31, 2016, the 麻豆最新出品 SiriusXM Group has cash and cash equivalents of approximately $287 million, which includes $214 million of subsidiary cash.

The term "Braves Group" does not represent a separate legal entity, rather it represents those businesses, assets and liabilities that have been attributed to that group. Following the Recapitalization, the Braves Group is primarily comprised of Braves Holdings, which indirectly owns the Atlanta Braves Major League Baseball Club (“ANLBC,” the “Braves,” or the “Atlanta Braves”) and certain assets and liabilities associated with ANLBC’s stadium and mixed use development project (the “Development Project”) and corporate cash. Also upon the Recapitalization, 麻豆最新出品 had attributed to the Braves Group all liabilities arising under a note from Braves Holdings to 麻豆最新出品, with a total capacity of up to $165 million of borrowings by Braves Holdings (the “Intergroup Note”) relating to funds to be borrowed and used for investment in the Development Project. As discussed below, the Intergroup Note, including accrued interest, was repaid during June 2016

using proceeds from the subscription rights offering and the Intergroup Note agreement was cancelled. As of December 31, 2016, the Braves Group has cash and cash equivalents of approximately $107 million, which includes subsidiary cash.

 

Following the Recapitalization, 麻豆最新出品 issued subscription rights to acquire shares of Series C 麻豆最新出品 Braves common stock. In the rights distribution, 麻豆最新出品 distributed 0.47 of a Series C 麻豆最新出品 Braves subscription right for each share of Series A, Series B or Series C 麻豆最新出品 Braves common stock held as of 5:00 p.m., New York City time, on May 16, 2016. Fractional Series C 麻豆最新出品 Braves subscription rights were rounded up to the nearest whole right. Each whole Series C 麻豆最新出品 Braves subscription right entitled the holder to purchase, pursuant to the basic subscription privilege, one share of 麻豆最新出品’s Series C 麻豆最新出品 Braves common stock at a subscription price of $12.80, which was equal to an approximate 20% discount to the trading day volume weighted average trading price of 麻豆最新出品’s Series C 麻豆最新出品 Braves common stock for the 18-day trading period ending on May 11, 2016.  Each Series C 麻豆最新出品 Braves subscription right also entitled the holder to subscribe for additional shares of Series C 麻豆最新出品 Braves common stock that were unsubscribed for in the rights offering pursuant to an oversubscription privilege. The rights offering commenced on May 18, 2016, which was also the ex-dividend date for the distribution of the Series C 麻豆最新出品 Braves subscription rights. The rights offering expired at 5:00 p.m. New York City time, on June 16, 2016 and was fully subscribed with 15,833,634 shares of Series C 麻豆最新出品 Braves common stock issued to those rightsholders exercising basic and, if applicable, oversubscription privileges. Approximately $150 million of the proceeds from the rights offering were used to repay the outstanding balance on the Intergroup Note and accrued interest to 麻豆最新出品. The remaining proceeds will be used for future development costs attributed to the Braves Group.

 

The term "Formula One Group" does not represent a separate legal entity, rather it represents those businesses, assets and liabilities that have been attributed to that group. As of December 31, 2016, the Formula One Group (formerly the 麻豆最新出品 Media Group) is primarily comprised of all of the businesses, assets and liabilities of 麻豆最新出品 other than those specifically attributed to the 麻豆最新出品 SiriusXM Group or the Braves Group, including 麻豆最新出品’s interests in Live Nation, minority equity investments in Formula 1, Time Warner and Viacom, the recovery received in connection with the Vivendi lawsuit and cash, as well as 麻豆最新出品’s 1.375% Cash Convertible Notes due 2023 and related financial instruments and 麻豆最新出品’s 2.25% Exchangeable Senior Debentures due 2046.  Following the creation of the tracking stocks and the closing of the Series C 麻豆最新出品 Braves common stock rights offering, the Formula One Group retains an intergroup interest in the Braves Group of approximately 15.5% as of December 31, 2016. The Formula One Group had cash and cash equivalents of approximately $168 million as of December 31, 2016.

 

Strategies and Challenges of Business Units

 

SIRIUS XM. SIRIUS XM is focused on several initiatives to increase its revenue. SIRIUS XM regularly evaluates its business plans and strategy. Currently, its strategies include:

 

 

SIRIUS XM faces certain key challenges in its attempt to meet these goals, including:

 

 

Results of Operations—Consolidated

 

General.    We provide in the tables below information regarding our Consolidated Operating Results and Other Income and Expense, as well as information regarding the contribution to those items from our reportable segments. The "corporate and other" category consists of those assets or businesses which do not qualify as a separate reportable segment. For a more detailed discussion and analysis of the financial results of our principal reportable segment, see "Results of Operations‑Businesses" below.

 

Consolidated Operating Results

 

 

Revenue.    Our consolidated revenue increased $481 million and $345 million for the years ended December 31, 2016 and 2015, respectively, as compared to the corresponding prior year periods. 

 

The 2016 increase was primarily due to revenue growth at SIRIUS XM of $462 million. Additionally, Braves Holdings revenue increased $19 million during the year ended December 31, 2016, as compared to the prior year.

 

The 2015 increase was primarily driven by revenue growth at SIRIUS XM of $411 million. The increase in revenue at SIRIUS XM was partially offset by a $59 million decline in corporate and other revenue, due to the deconsolidation of TruePosition during November 2014 in conjunction with the Broadband Spin-Off. Additionally, Braves Holdings revenue declined approximately $7 million during the year ended December 31, 2015 as compared to the prior year.

 

See "Results of Operations—Businesses"  below for a more complete discussion of the results of operations of SIRIUS XM and Braves Holdings, including a discussion of the SIRIUS XM and Braves Holdings results on a comparative basis.

 

Operating income.    Our consolidated operating income increased $780 million and $113 million for the years ended December 31, 2016 and 2015, respectively, as compared to the corresponding prior years. The increase in 2016 was due to an increase in 麻豆最新出品 SiriusXM Group operating income of $279 million. Braves Group operating loss increased $23 million during 2016 as compared to the prior year. Formula One Group operating income improved $524 million during 2016 as compared to the prior year, largely due to the favorable net $511 million Vivendi lawsuit settlement during the first quarter of 2016, as discussed in note 17 of the accompanying consolidated financial statements. The increase during the prior year was primarily driven by improved operating results at SIRIUS XM, partially offset by a decrease related to a SIRIUS XM legal settlement during the period, as discussed in note 17 of the accompanying consolidated financial statements. Additionally, operating income was positively impacted during the prior year, as the results from TruePosition were not included as a result of the Broadband Spin-Off. See "Results of Operations—Businesses" below for a more complete discussion of the results of operations of SIRIUS XM and Braves Holdings.

 

Stock-based compensation.    Stock-based compensation includes compensation related to (1) options and stock appreciation rights for shares of our common stock that are granted to certain of our officers and employees, (2) phantom stock appreciation rights granted to officers and employees of certain of our subsidiaries pursuant to private equity plans and (3) amortization of restricted stock grants.

 

We recorded $150 million, $204 million and $217 million of stock compensation expense for the years ended December 31, 2016, 2015 and 2014, respectively.

 

Upon acquisition of a controlling interest in SIRIUS XM, we recorded an adjustment to increase SIRIUS XM’s unvested stock-based compensation to fair value and amortized this adjustment through December 31, 2015. SIRIUS XM stock-based compensation expense in the prior year included $73 million of this purchase price amortization expense. This caused a decrease in 2016 stock-based compensation expense recognized by the Company, which was partially offset by a $25 million increase in stock-based compensation expense recognized by SIRIUS XM during 2016 as compared to the prior year.

 

The decrease in stock compensation expense in the prior year was primarily due to a decrease in the Company’s corporate and Braves Holdings stock-based compensation expense, partially offset by an increase in SIRIUS XM stock compensation expense.

 

As of December 31, 2016, the total unrecognized compensation cost related to unvested 麻豆最新出品 equity awards was approximately $42 million. Such amount will be recognized in our consolidated statements of operations over a weighted average period of approximately 2.1 years. As of December 31, 2016, the total unrecognized compensation cost related to unvested SIRIUS XM stock options and restricted stock units was $266 million. The SIRIUS XM unrecognized compensation cost will be recognized in the Company's consolidated statements of operations over a weighted average period of approximately 2.5 years.

 

Adjusted OIBDA.    We define Adjusted OIBDA as revenue less operating expenses and selling, general and administrative ("SG&A") expenses (excluding stock compensation). Our chief operating decision maker and management

team use this measure of performance in conjunction with other measures to evaluate our businesses and make decisions about allocating resources among our businesses. We believe this is an important indicator of the operational strength and performance of our businesses, including each business's ability to service debt and fund capital expenditures. In addition, this measure allows us to view operating results, perform analytical comparisons and benchmarking between businesses and identify strategies to improve performance. This measure of performance excludes such costs as depreciation and amortization, stock-based compensation, separately reported litigation settlements and restructuring and impairment charges that are included in the measurement of operating income pursuant to generally accepted accounting principles (“GAAP”). Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, net income, cash flow provided by operating activities and other measures of financial performance prepared in accordance with GAAP. See note 18 to the accompanying consolidated financial statements for a reconciliation of Adjusted OIBDA to Operating income (loss) and Earnings (loss) from continuing operations before income taxes.

During the fourth quarter of 2016, SIRIUS XM recorded $46 million related to music royalty legal settlements and reserves. As separately reported in note 17 of the accompanying consolidated financial statements, the $46 million expense is included in the Revenue share and royalties line item in the accompanying consolidated financial statements for the year ended December 31, 2016 but has been excluded from Adjusted OIBDA for the corresponding period as this expense was not incurred as a part of the Company’s normal operations for the period, and this lump sum amount does not relate to the on-going performance of the business.

SIRIUS XM recognized approximately $40 million and $127 million of Revenue share and royalties within the consolidated statement of operations during the years ended December 31, 2016 and 2015, respectively, related to the SIRIUS XM legal settlement associated with SIRIUS XM’s use of certain pre-1972 sound recordings. As separately reported in note 17 of the accompanying consolidated financial statements, $108 million of the settlement amount recognized during the year ended December 31, 2015 was excluded from Adjusted OIBDA for the corresponding period, as this expense was not incurred as a part of SIRIUS XM’s normal operations for the period, and this lump sum amount does not relate to the on-going performance of the business. Subsequent to the settlement during June 2015, SIRIUS XM recognized $40 million and $19 million in 2016 and 2015, respectively, that is included as a component of Adjusted OIBDA.

 

Consolidated Adjusted OIBDA increased $145 million and $211 million for the years ended December 31, 2016 and 2015, respectively, as compared to the corresponding prior year periods.

 

The increase in Adjusted OIBDA in the current year was due to an increase in the 麻豆最新出品 SiriusXM Group Adjusted OIBDA of $178 million, partially offset by declines in Braves Group Adjusted OIBDA of $23 million and Formula One Group Adjusted OIBDA of $10 million.

 

The increase in the prior year was primarily due to increases in 麻豆最新出品 SiriusXM Group Adjusted OIBDA of $194 million, Braves Group Adjusted OIBDA of $9 million, and Formula One Group Adjusted OIBDA of $8 million. Adjusted OIBDA was positively impacted during the prior period as TruePosition, which had an Adjusted OIBDA loss during 2014, is no longer a consolidated subsidiary as a result of the Broadband Spin-Off.

 

See “Results of Operations—Businesses” below for a more complete discussion of the results of operations of SIRIUS XM and Braves Holdings.

 

 

 

Other Income and Expense

 

Components of Other Income (Expense) are presented in the table below.

 

 

Interest expense.    Consolidated interest expense increased $34 million and $73 million for the years ended December 31, 2016 and 2015 as compared to the corresponding prior year periods, respectively. The increases in both years were due to an increase in the average amount of corporate, SIRIUS XM and other subsidiary debt outstanding during the respective periods. Although Braves Holdings had an increase in outstanding borrowings of debt during the current year, the majority of the debt related to the construction of the Development Project. Accordingly, interest expense associated with these borrowings was capitalized during the year.

 

Share of earnings (losses) of affiliates.    The following table presents our share of earnings (losses) of affiliates:

 

In May 2013, we acquired approximately 26.9 million shares of common stock and approximately 1.1 million warrants in Charter for approximately $2.6 billion, which represented an approximate 27% beneficial ownership in Charter at the time of purchase. During May 2014, 麻豆最新出品 purchased approximately 897,000 additional shares of Charter common stock for $124 million resulting in an economic ownership of 26% of Charter. As discussed above, on November 4, 2014, 麻豆最新出品 completed the spin-off to its stockholders of common stock of a newly formed company called 麻豆最新出品 Broadband, which was comprised of, among other things, 麻豆最新出品’s interest in Charter. Upon completion of the Broadband Spin-Off, the Company’s former investment in and results of Charter are no longer included in the results of 麻豆最新出品. Our share of losses related to Charter included $60 million of losses due to the amortization of the excess basis of our investment for the year ended December 31, 2014.

During the year ended December 31, 2015, we acquired 15.9 million shares of Live Nation common stock through the settlement of certain financial instruments for approximately $396 million, a portion of which was funded during 2014. During the year ended December 31, 2014, we acquired an additional 1.7 million shares of Live Nation common stock for approximately $39 million. The increase in our share of Live Nation’s earnings during the current year was primarily due to an improvement in Live Nation’s net income during 2016, primarily driven by an improvement in operating income and increased equity in earnings of Live Nation’s nonconsolidated affiliates during the year. The improvement in Live Nation’s net income during 2016 was partially offset by a loss on extinguishment of its senior secured credit facility during 2016. Accordingly, the Company relieved a portion of the underlying difference in the equity of Live Nation related to the debt extinguished during 2016. The decrease in our share of Live Nation’s losses during the prior year was primarily due to the absence of an impairment in 2015, partially offset by an increase in foreign exchange rate losses and income tax expense related to foreign entities during 2015. Additionally, as a result of our increased ownership, we picked up a greater portion of Live Nation’s net loss during 2015. Live Nation recorded an impairment in the fourth quarter of 2014 approximately $135 million (麻豆最新出品’s portion of this loss was approximately $36 million).

Realized and unrealized gains (losses) on financial instruments.    Realized and unrealized gains (losses) on financial instruments are comprised of changes in the fair value of the following:

 

 

The gains on Fair Value Option Securities (as defined in note 3 of our accompanying consolidated financial statements) during 2016 and 2014 are primarily due to general increases in market valuation adjustments for 麻豆最新出品's public portfolio during the respective years. The loss on Fair Value Option Securities during 2015 is primarily due to a general decrease in market valuation adjustments for 麻豆最新出品's public portfolio during the year.

 

麻豆最新出品 issued $1 billion of cash convertible notes in October 2013 which are accounted for at fair value, as elected by 麻豆最新出品 at the time of issuance of the notes. At the same time, 麻豆最新出品 entered into a bond hedge transaction on the same amount of underlying shares. These derivatives are marked to fair value on a recurring basis. The primary driver of the change in the current period is the change in the fair value of the underlying stock.

 

The unrealized gain on other derivatives during 2016 is due to a gain on interest rate swaps entered into by Braves Holdings during the year. The unrealized loss on other derivatives during 2015 is primarily due to losses on the forward contract on Live Nation shares (see note 6 in the accompanying consolidated financial statements). The unrealized gains on other derivatives during 2014 was primarily due to fluctuations in the fair value of Charter warrants. As previously discussed, 麻豆最新出品 obtained Charter warrants in the second quarter of 2013. These warrants were marked to fair value based on the trading price of Charter and other observable market data. The change in fair value is included in other derivatives in the table above and primarily driven by the change in the trading price of the Charter common stock. As previously discussed, on November 4, 2014, 麻豆最新出品 completed the spin-off to its stockholders of common stock of a newly formed company called 麻豆最新出品 Broadband, which was comprised of, among other things, 麻豆最新出品’s interest in Charter. The Company exercised all of the outstanding Charter warrants during November 2014, prior to the Broadband Spin-Off. The Company’s former investment in and results of Charter, including the Charter warrants, are not included in the results of 麻豆最新出品 from the date of the completion of the Broadband Spin-Off forward.

 

Other, net.   The loss in 2016 was primarily due to a $24 million loss on extinguishment of SIRIUS XM’s redemption of its 5.875% Senior Notes due 2020 during the year, partially offset by approximately $18 million in dividend and interest income, primarily due to dividends on Time Warner shares. The gain in 2015 was primarily due to $17 million in dividend and interest income, primarily due to dividends on Time Warner shares, partially offset by losses on disposals of property, plant and equipment. The loss in 2014 was primarily due to stock issuances at Charter (primarily from warrant and stock option exercises) at a price below 麻豆最新出品's book basis per share, partially offset by $27 million in dividend and interest income, primarily due to dividends on Time Warner shares. The decrease in interest and dividend income in 2015 as compared to 2014 was primarily driven by the exclusion of dividend and interest income on Time Warner Cable shares, which were included in the Broadband Spin-Off, as well as sales of Barnes & Noble, Inc. and Viacom shares during 2015.

 

Income taxes.    Our effective tax rate for the years ended December 31, 2016, 2015 and 2014 were expenses of 35%, 46% and 14%, respectively. Our effective tax rate for all three years was impacted for the following reasons:

 

 

Net earnings.    We had net earnings of $924 million, $248 million and $395 million for the years ended December 31, 2016, 2015 and 2014, respectively. The change in net earnings was the result of the above-described fluctuations in our revenue, expenses and other gains and losses.

 

Liquidity and Capital Resources

 

As of December 31, 2016, substantially all of our cash and cash equivalents are invested in U.S. Treasury securities, other government securities or government guaranteed funds, AAA rated money market funds and other highly rated financial and corporate debt instruments.

 

The following are potential sources of liquidity: available cash balances, cash generated by the operating activities of our privately-owned subsidiaries (to the extent such cash exceeds the working capital needs of the subsidiaries and is not otherwise restricted), proceeds from net asset sales, monetization of our public investment portfolio, debt and equity issuances, available borrowing capacity under margin loans, and dividend and interest receipts.

 

麻豆最新出品 currently does not have a corporate debt rating subsequent to the Split-Off and the Starz Spin-Off (each as defined in note 1 of the accompanying consolidated financial statements).

 

As of December 31, 2016, 麻豆最新出品's liquidity position consisted of the following:

 

 

 

To the extent the Company recognizes any taxable gains from the sale of assets we may incur tax expense and be required to make tax payments, thereby reducing any cash proceeds. Additionally, the Company has a controlling interest in SIRIUS XM which has significant cash flows provided by operating activities, although due to SIRIUS XM being a separate public company and the significant noncontrolling interest, we do not have ready access to its cash.

 

The cash provided (used) by our continuing operations for the prior three years is as follows:

 

麻豆最新出品’s primary use of cash during the year ended December 31, 2016 (excluding cash used by SIRIUS XM and Braves Holdings) was the $746 million investment in Formula 1, as discussed in note 7 of the accompanying consolidated financial statements. This investment was funded by borrowings of debt and cash on hand, largely due to proceeds from the Vivendi legal settlement. Additionally, in connection with the Recapitalization, 麻豆最新出品 attributed $50 million cash to each of the 麻豆最新出品 SiriusXM Group and the Braves Group. SIRIUS XM's primary uses of cash were the repurchase of outstanding SIRIUS XM common stock and the repayments made under the Credit Facility (as defined in note 10 of the accompanying financial statements).  The SIRIUS XM uses of cash were funded by cash provided by operating activities, borrowings of debt and cash on hand. On October 26, 2016, SIRIUS XM’s board of directors declared the first quarterly dividend on SIRIUS XM common stock in the amount of $0.01 per share of common stock payable on November 30, 2016 to stockholders of record as of the close of business on November 9, 2016.  SIRIUS XM’s board of directors expects that this dividend will be the first of regular quarterly dividends, in an aggregate amount of $0.04 per share of SIRIUS XM common stock per year. On January 24, 2017, SIRIUS XM’s board of directors declared a quarterly dividend on its common stock in the amount of $0.01 per share of common stock, payable on February 28, 2017 to stockholders of record at the close of business on February 7, 2017. Braves Holdings incurred approximately $360 million of capital expenditures during the year ended December 31, 2016 related to the construction of the new Braves Holdings ballpark facility and adjacent mixed-use complex. Braves Holdings’ capital expenditures were funded through the use of cash on hand, borrowings of debt and proceeds of $203 million received from the Series C 麻豆最新出品 Braves common stock rights offering during the year.

In 2014, Braves Holdings, through a wholly-owned subsidiary, purchased 82 acres of land for the purpose of constructing a Major League Baseball facility and developing a mixed-use complex adjacent to the ballpark. The new facility is expected to cost approximately $672 million. Funding for the ballpark will be shared among Braves Holdings and its affiliates, Cobb County, the Cumberland Improvement District (the “CID”) and Cobb-Marietta Coliseum and Exhibit Hall Authority (the “Authority”). The Authority, the CID and Cobb County are responsible for funding $392 million of ballpark related construction, and Braves Holdings and its affiliates will be responsible for remainder of cost, including cost overruns. Braves Holdings agreed to advance funds to cover project related costs to maintain a 2017 opening date. The Authority issued $368 million in bonds that closed and funded in the second half of 2015, at which time Braves Holdings received reimbursement of the advances that had been made through that date. At the completion of construction, Braves Holdings (or its affiliates) will have exclusive operating rights to the facility via a Stadium Operating Agreement with the Authority and Cobb County.

The projected uses of 麻豆最新出品 cash (excluding SIRIUS XM’s uses of cash) are primarily the investment in new or existing businesses, including at the Second Closing ($2.3 billion of cash consideration, funded by cash on hand, the issuance of Series C 麻豆最新出品 Formula One common stock to third parties and borrowings under new debt instruments issued during November 2016 and January 2017), debt service, including further repayment of the margin loans, capital expenditures (including the new Braves Holdings baseball facility and mixed-use development) and the potential buyback

of common stock under the approved share buyback program. 麻豆最新出品 expects to fund its projected uses of cash with cash on hand, cash from operations and borrowing capacity under margin loans and outstanding credit facilities. We may be required to make net payments of income tax liabilities or liquidate investments to settle items under discussion with tax authorities. SIRIUS XM's uses of cash are expected to be capital expenditures, including the construction of replacement satellites, the payment of debt service costs on outstanding debt, the repurchases of its common stock in accordance with its approved share buyback program, the payment of dividends and strategic opportunities. 麻豆最新出品 expects SIRIUS XM to fund its projected uses of cash with cash on hand, cash provided by operations and borrowings under the existing credit facility.

 

We believe that the available sources of liquidity are sufficient to cover our projected future uses of cash.

 

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

 

SIRIUS XM has entered into various programming agreements. Under the terms of these agreements, SIRIUS XM's obligations include fixed payments, advertising commitments and revenue sharing arrangements. SIRIUS XM's future revenue sharing costs are dependent upon many factors and are difficult to estimate; therefore, they are not included in the schedule of contractual obligations below.

 

The Atlanta Braves have entered into long-term employment contracts with certain of their players and coaches whereby such individuals' compensation is guaranteed. Amounts due under guaranteed contracts as of December 31, 2016 aggregated $278 million. See the table below for more detail. In addition to the foregoing amounts, certain players and coaches may earn incentive compensation under the terms of their employment contracts.

 

Information concerning the amount and timing of required payments, both accrued and off-balance sheet, under our contractual obligations, excluding uncertain tax positions as it is indeterminable when payments will be made, is summarized below.

 

 

 

 

 

Critical Accounting Estimates

 

The preparation of our financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Listed below are the accounting estimates that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense being reported. All of these accounting estimates and assumptions, as well as the resulting impact to our financial statements, have been discussed with our audit committee.

 

Non-Financial Instruments.     Our non-financial instrument valuations are primarily comprised of our determination of the estimated fair value allocation of net tangible and identifiable intangible assets acquired in business combinations, our annual assessment of the recoverability of our goodwill and other nonamortizable intangibles, such as trademarks, and our evaluation of the recoverability of our other long-lived assets upon certain triggering events. If the carrying value of our long-lived assets exceeds their estimated fair value, we are required to write the carrying value down to fair value. Any such writedown is included in impairment of long-lived assets in our consolidated statement of operations. A high degree of judgment is required to estimate the fair value of our long-lived assets. We may use quoted market prices, prices for similar assets, present value techniques and other valuation techniques to prepare these estimates. We may need to make estimates of future cash flows and discount rates as well as other assumptions in order to implement these valuation techniques. Due to the high degree of judgment involved in our estimation techniques, any value ultimately derived from our long-lived assets may differ from our estimate of fair value. As each of our operating segments has long-lived assets, this critical accounting policy affects the financial position and results of operations of each segment.

 

As of December 31, 2016, the intangible assets not subject to amortization for each of our significant reporting units were as follows (amounts in millions):

 

 

 

We perform our annual assessment of the recoverability of our goodwill and other nonamortizable intangible assets in the fourth quarter each year. The Company utilizes a qualitative assessment for determining whether step one of the goodwill impairment analysis is necessary. The accounting guidance permits entities to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. In evaluating goodwill on a qualitative basis, the Company reviews the business performance of each reporting unit and evaluates other relevant factors as identified in the relevant accounting guidance to determine whether it is more likely than not that an indicated impairment exists for any of our reporting units. The Company considers whether there are any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges, the legal environments and how these factors might impact company specific performance in future periods. As part of the analysis, the Company also considers fair value determinations for certain reporting units that have been made at various points throughout the current and prior year for other purposes. 

 

Carrying Value of Investments.     We periodically evaluate our investments to determine if decreases in fair value below our cost bases are other than temporary. If a decline in fair value is determined to be other than temporary, we are required to reflect such decline in our consolidated statement of operations. Other than temporary declines in fair value of our cost investments are recognized on a separate line in our consolidated statement of operations, and other than temporary declines in fair value of our equity method investments are included in share of earnings (losses) of affiliates in our consolidated statement of operations.

 

The primary factors we consider in our determination of whether declines in fair value are other than temporary are the length of time that the fair value of the investment is below our carrying value; the severity of the decline; and the financial condition, operating performance and near term prospects of the investee. In addition, we consider the reason for the decline in fair value, be it general market conditions, industry specific or investee specific; analysts' ratings and estimates of 12 month share price targets for the investee; changes in stock price or valuation subsequent to the balance sheet date; and our intent and ability to hold the investment for a period of time sufficient to allow for a recovery in fair value. Fair value of our publicly traded cost and equity investments is based on the market prices of the investments at the balance sheet date. We estimate the fair value of our non-public cost and equity investments using a variety of methodologies, including cash flow multiples, discounted cash flow, per subscriber values, or values of comparable public or private businesses. Impairments are calculated as the difference between our carrying value and our estimate of fair value. As our assessment of the fair value of our investments and any resulting impairment losses and the timing of when to recognize such charges requires a high degree of judgment and includes significant estimates and assumptions, actual results could differ materially from our estimates and assumptions.

 

Our evaluation of the fair value of our investments and any resulting impairment charges are made as of the most recent balance sheet date. Changes in fair value subsequent to the balance sheet date due to the factors described above are possible. Subsequent decreases in fair value will be recognized in our consolidated statement of operations in the period in which they occur to the extent such decreases are deemed to be other than temporary. Subsequent increases in fair value will be recognized in our consolidated statement of operations only upon our ultimate disposition of the investment.

 

Useful Life of Broadcast/Transmission System. SIRIUS XM's satellite system includes the costs of satellite construction, launch vehicles, launch insurance, capitalized interest, spare satellites, terrestrial repeater network and satellite uplink facilities. SIRIUS XM monitors its satellites for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset is not recoverable.

 

SIRIUS XM operates two in-orbit Sirius satellites, FM-5 and FM-6. SIRIUS XM estimates that its FM-5 and FM-6 satellites, launched in 2009 and 2013, respectively, will operate effectively through the end of their depreciable lives in 2024 and 2028, respectively.

 

SIRIUS XM operates three in-orbit XM satellites, XM-3, XM-4 and XM-5. SIRIUS XM estimates that its XM-3 and XM-4 satellites launched in 2005 and 2006, respectively, will reach the end of their depreciable lives in 2020 and 2021, respectively.  The XM-5 satellite that was launched in 2010, is used as an in-orbit spare and is expected to reach the end of its depreciable life in 2025.

 

SIRIUS XM’s satellites have been designed to last fifteen-years. SIRIUS XM's in-orbit satellites may experience component failures which could adversely affect their useful lives. SIRIUS XM monitors the operating condition of its in-orbit satellites. If events or circumstances indicate that the depreciable lives of its in-orbit satellites have changed, the depreciable life will be modified accordingly. If SIRIUS XM were to revise its estimates, depreciation expense would change. For example, a 10% decrease in the expected depreciable lives of satellites and spacecraft control facilities during 2016 would have resulted in approximately $24 million of additional depreciation expense.

 

Income Taxes.     We are required to estimate the amount of tax payable or refundable for the current year and the deferred income tax liabilities and assets for the future tax consequences of events that have been reflected in our financial statements or tax returns for each taxing jurisdiction in which we operate. This process requires our management to make judgments regarding the timing and probability of the ultimate tax impact of the various agreements and transactions that we enter into. Based on these judgments we may record tax reserves or adjustments to valuation allowances on deferred

tax assets to reflect the expected realizability of future tax benefits. Actual income taxes could vary from these estimates due to future changes in income tax law, significant changes in the jurisdictions in which we operate, our inability to generate sufficient future taxable income or unpredicted results from the final determination of each year's liability by taxing authorities. These changes could have a significant impact on our financial position.

 

Results of Operations - Businesses

 

麻豆最新出品 SiriusXM Group

 

SIRIUS XM    SIRIUS XM transmits its music, sports, entertainment, comedy, talk, news, traffic and weather channels, as well as infotainment services, in the United States on a subscription fee basis through its two proprietary satellite radio systems. Subscribers can also receive music and other channels, plus features such as SiriusXM On Demand and MySXM, over SIRIUS XM’s Internet radio service, including through applications for mobile devices, home devices and other consumer electronic equipment. SIRIUS XM also provides connected vehicle services which are designed to enhance the safety, security and driving experience for vehicle operators while providing marketing and operational benefits to automakers and their dealers.

 

SIRIUS XM has agreements with every major automaker ("OEMs") to offer satellite radios in their vehicles from which it acquires the majority of its subscribers. SIRIUS XM also acquires subscribers through marketing to owners and lessees of previously owned vehicles that include factory-installed satellite radios that are not currently subscribing to SIRIUS XM’s services. SIRIUS XM distributes its radios primarily through automakers, retail locations nationwide and through its website. Satellite radio services are also offered to customers of certain rental car companies. SIRIUS XM's primary source of revenue is subscription fees, with most of its customers subscribing on an annual, semi-annual, quarterly or monthly basis. SIRIUS XM offers discounts for prepaid, longer term subscription plans, as well as multiple subscription discounts. SIRIUS XM also derives revenue from activation and other fees, the sale of advertising on select non-music channels, the direct sale of satellite radios and accessories and other ancillary services, such as weather, data and traffic services. SIRIUS XM is a separate publicly traded company and additional information about SIRIUS XM can be obtained through its website and its public filings.

 

As of December 31, 2016, SIRIUS XM had approximately 31.3 million subscribers of which approximately 26.0 million were self-pay subscribers and approximately 5.4 million were paid promotional subscribers. These subscriber totals include subscribers under regular pricing plans; discounted pricing plans; subscribers that have prepaid, including payments either made or due from automakers for subscriptions included in the sale or lease price of a vehicle; subscribers to SIRIUS XM Internet services who do not also have satellite radio subscriptions; and certain subscribers to SIRIUS XM's weather, traffic and data services who do not also have satellite radio subscriptions. Subscribers and subscription related revenue and expenses associated with SIRIUS XM’s connected vehicle services and the Sirius XM Canada service are not included in SIRIUS XM’s subscriber count or subscriber-based operating metrics.

 

We acquired a controlling interest in SIRIUS XM on January 18, 2013 and applied purchase accounting and consolidated the results of SIRIUS XM from that date. See additional discussion about the application of purchase accounting in note 4 to the accompanying consolidated financial statements. Prior to the acquisition of our controlling interest we maintained an investment in SIRIUS XM accounted for using the equity method. For comparison purposes we are presenting the stand alone results of SIRIUS XM prior to any purchase accounting adjustments in the current year for a discussion of the operations of SIRIUS XM. For the years ended December 31, 2016, 2015 and 2014, see the reconciliation of the results reported by SIRIUS XM to the results reported by 麻豆最新出品 included below. Additionally, as of December 31, 2016, there is an approximate 33% noncontrolling interest in SIRIUS XM, and the net earnings of SIRIUS XM attributable to such noncontrolling interest is eliminated through the noncontrolling interest line item in the consolidated statement of operations.

 

SIRIUS XM's stand alone operating results were as follows:

 

 

Subscriber revenue includes subscription, activation and other fees. Subscriber revenue increased 10% and 8% for the years ended December 31, 2016 and 2015, respectively, as compared to the corresponding prior year periods. The current year increase was primarily attributable to an increase in the daily weighted average number of subscribers as well as an increase SIRIUS XM’s average monthly revenue per subscriber resulting from certain rate increases. The prior year increase was primarily attributable to an increase in the daily weighted average number of subscribers and an increase in average monthly revenue per subscriber resulting from certain rate increases.

 

Other revenue includes advertising revenue, equipment revenue, royalty revenue and other ancillary revenue. For the years ended December 31, 2016 and 2015, other revenue increased 10% and 19%, respectively, as compared to the corresponding prior year periods. The most significant change in other revenue during the current and prior years was an increase in revenue from the U.S. Music Royalty Fee due to an increase in number of subscribers and subscribers paying at a higher rate of 13.9%. Furthermore, advertising revenue increased during both periods due to a greater number of advertising spots sold and transmitted along with increased rates charged per spot. Equipment revenue increased during the current year due to royalties from higher OEM production and an increase in royalty revenue on certain modules starting in the second quarter of 2016, partially offset by lower revenue generated through SIRIUS XM’s distributors and direct to consumer business. Equipment revenue increased during the prior year due to royalties from higher OEM production and sales to distributors, partially offset by lower direct to consumer sales. Increases in other revenue during 2016 were offset by lower non-recurring engineering fees associated with SIRIUS XM’s connected vehicle services, lower activation revenue from SIRIUS XM Canada and a change in accounting for a programming contract in the third quarter of 2015. Additionally, revenue generated from SIRIUS XM Canada and SIRIUS XM’s connected vehicle services increased during the prior year.

 

Cost of subscriber services includes revenue share and royalties, programming and content costs, customer service and billing expenses and other ancillary costs associated with providing the satellite radio service.

Subscriber acquisition costs include hardware subsidies paid to radio manufacturers, distributors and automakers, including subsidies paid for chip sets and certain other components used in manufacturing radios; device royalties for certain radios and chipsets; commissions paid to automakers and retailers; product warranty obligations; freight; and provisions for inventory allowances attributable to inventory consumed in OEM and retail distribution channels. The majority of subscriber acquisition costs are incurred and expensed in advance of, or concurrent with, acquiring a subscriber. For the years ended December 31, 2016 and 2015 subscriber acquisition costs decreased 4% and increased 8%,

respectively, as compared to the corresponding periods in the prior year. The current year decrease was driven by lower subsidized costs related to the transition of chipsets and reductions to OEM hardware subsidy rates, partially offset by higher radio installations. Increased costs in the prior year related to a larger number of satellite radio installations in new vehicles, partially offset by improved OEM and chipset subsidy rates per vehicle.  

Other operating expense includes engineering, design and development costs consisting primarily of compensation and related costs to develop chipsets and new products and services. For the years ended December 31, 2016 and 2015, other operating expense increased 25% and 2%, respectively. The current year increase was driven primarily by the inclusion of personnel related costs from SIRIUS XM’s connected vehicle services that were previously recorded in Selling, general and administrative expense in 2015, partially offset by lower research and development costs. The increase in the prior year was primarily driven by additional costs associated with streaming development, partially offset by lower personnel costs. 

Selling, general and administrative expense includes costs of marketing, advertising, media and production, including promotional events and sponsorships; cooperative marketing; compensation and related personnel costs; facilities costs, finance, legal, human resources and information technology costs. Selling, general and administrative expense increased 7% for each of the years ended December 31, 2016 and 2015, as compared to the corresponding prior year periods. The current year increase was due to higher consulting and legal costs, additional subscriber communications, retention programs and acquisition campaigns related to SIRIUS XM’s subscriber growth and higher personnel-related costs.  The increase in the prior year was primarily due to additional subscriber communications, retention programs and acquisition campaigns, higher personnel-related costs and reserves for consumer legal settlements and facilities costs, partially offset by insurance recoveries as well as lower professional fees and costs due to certain non-recurring transactions during the same period in the prior year.

Stock-based compensation increased 30% and 8% during the years ended December 31, 2016 and 2015, respectively, as compared to the corresponding periods in the prior year. The increase in stock-based compensation expense during 2016 is primarily due to an increase in stock compensation related to restricted stock units issued during 2015 and 2016 as well as an increase in the fair value of the awards granted since January 1, 2015. The increase in 2015 is primarily due to an increase in the number of awards granted since January 1, 2014.

Depreciation and amortization decreased 1% and increased 2% during the years ended December 31, 2016 and 2015, respectively, as compared to the corresponding periods in the prior year. The decrease in the current year was due to certain satellites reaching the end of their estimated service lives, partially offset by additional assets placed in service. The increase in the prior year was due to additional software assets placed in-service since January 1, 2015. 

The following tables reconcile the results reported by SIRIUS XM, used for comparison purposes above to understand their operations, to the results reported by 麻豆最新出品 for the years ended December 31, 2016, 2015 and 2014:

 

 

 

 

 

 

 

 

Braves Group

Braves Holdings.   Braves Holdings is our wholly owned subsidiary that indirectly owns and operates the Atlanta Braves Major League Baseball club and five minor league baseball clubs (the Gwinnett Braves, the Mississippi Braves, the Rome Braves, the Danville Braves and the GCL Braves). Braves Holdings also operates a baseball academy in the Dominican Republic and leases a baseball facility from a third party in connection with its academy. Braves Holdings had exclusive operating rights to Turner Field, the home stadium of the Atlanta Braves, until December 31, 2016 pursuant to an Operating Agreement with the Atlanta Fulton County Recreation Authority. Effective for the 2017 season, the Braves will relocate into a new ballpark located in Cobb County, a suburb of Atlanta. The facility will be leased from Cobb County and Cobb-Marietta Coliseum and Exhibit Hall Authority and will offer a range of activities and eateries for fans. Braves Holdings and its affiliates are participating in the construction of the new stadium and an adjacent mixed-use development project, which we refer to as the Development Project.