e10vq
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-Q
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
June 30, 2009
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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For the transition period
from to
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Commission File Number
001-34176
ASCENT
MEDIA CORPORATION
(Exact name of Registrant as
specified in its charter)
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State of Delaware
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26-2735737
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(State or other jurisdiction
of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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12300 Liberty Boulevard
Englewood, Colorado
(Address of principal
executive offices)
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80112
(Zip Code)
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Registrants telephone number, including area code:
(720) 875-5622
Indicate by check mark whether the Registrant: (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past
90 days. Yes þ No o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
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Large
accelerated
filer o
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Accelerated
filer o
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Non-accelerated
filer þ
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Smaller
reporting
company o
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(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, any
Interactive Data File required to be submitted and posted
pursuant to Rule 405 of
Regulation S-T
(Section 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant
was required to submit and post such
files). Yes o No o
Indicate by check mark whether the Registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange
Act). Yes o No þ
The number of outstanding shares of Ascent Media
Corporations common stock as of July 31, 2009 was:
Series A common stock 13,421,669 shares; and
Series B common stock 659,156 shares.
TABLE OF CONTENTS
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance
Sheets
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June 30,
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December 31,
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2009
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2008
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Amounts in thousands
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(Unaudited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$
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308,913
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341,517
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Trade receivables, net
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103,184
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114,154
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Prepaid expenses
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11,064
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12,223
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Deferred income tax assets, net
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9,979
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10,826
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Income taxes receivable
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19,707
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9,122
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Other current assets
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2,134
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2,776
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Total current assets
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454,981
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490,618
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Investments in marketable securities
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32,173
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Property and equipment, net
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215,731
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223,928
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Deferred income tax assets, net
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20,001
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22,545
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Other assets, net
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13,157
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8,213
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Total assets
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$
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736,043
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745,304
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LIABILITIES AND STOCKHOLDERS EQUITY
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Current liabilities:
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Accounts payable
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$
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21,285
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22,633
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Accrued payroll and related liabilities
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22,940
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22,258
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Other accrued liabilities
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27,471
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31,172
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Deferred revenue
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13,793
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15,139
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Total current liabilities
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85,489
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91,202
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Other liabilities
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31,237
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28,792
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Total liabilities
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116,726
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119,994
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Commitments and contingencies (note 9)
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Stockholders Equity:
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Preferred stock, $.01 par value. Authorized
5,000,000 shares; no shares issued
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Series A common stock, $.01 par value. Authorized
45,000,000 shares; issued and outstanding
13,421,146 shares at June 30, 2009
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134
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134
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Series B common stock, $.01 par value. Authorized
5,000,000 shares; issued and outstanding
659,679 shares at June 30, 2009
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7
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7
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Series C common stock, $.01 par value. Authorized
45,000,000 shares; no shares issued
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Additional paid-in capital
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1,459,928
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1,459,078
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Accumulated deficit
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(839,608
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)
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(825,956
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)
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Accumulated other comprehensive loss
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(1,144
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)
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(7,953
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)
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Total stockholders equity
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619,317
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625,310
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Total liabilities and stockholders equity
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$
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736,043
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745,304
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See accompanying notes to condensed consolidated financial
statements.
2
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Operations and
Comprehensive Earnings (Loss)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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2009
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2008
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2009
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2008
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Amounts in thousands, except per share amounts
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(Unaudited)
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Net revenue
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$
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118,677
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163,421
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237,944
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326,456
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Operating expenses:
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Cost of services
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85,312
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121,243
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169,898
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244,045
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Selling, general, and administrative, including stock-based and
long-term incentive compensation (note 6)
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28,017
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28,999
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57,392
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57,634
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Restructuring and other charges
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1,088
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156
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1,486
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1,263
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Depreciation and amortization
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14,984
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15,415
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29,466
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30,682
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129,401
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165,813
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258,242
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333,624
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Operating loss
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(10,724
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)
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(2,392
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)
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(20,298
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)
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(7,168
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)
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Other income, net
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155
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643
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439
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2,192
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Loss from continuing operations before income taxes
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(10,569
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)
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(1,749
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)
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(19,859
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)
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(4,976
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)
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Income tax benefit (expense) from continuing operations
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3,365
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(1,467
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)
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6,207
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(4,539
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)
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Net loss from continuing operations
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(7,204
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)
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(3,216
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)
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(13,652
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)
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(9,515
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)
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Discontinued operations (note 3):
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Earnings from discontinued operations
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3,416
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6,379
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Income tax expense
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|
|
|
|
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(1,743
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)
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|
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(2,922
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)
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Earnings from discontinued operations, net of income tax
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1,673
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3,457
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Net loss
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(7,204
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)
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(1,543
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)
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(13,652
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)
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|
(6,058
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)
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|
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|
|
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Other comprehensive earnings (loss):
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|
|
|
|
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|
|
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Foreign currency translation adjustments
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6,722
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80
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5,426
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|
567
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Unrealized holding gains arising during the period, net of
income tax
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1,317
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1,317
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|
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Minimum pension liability adjustment
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|
33
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|
66
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|
|
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|
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|
|
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|
|
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Other comprehensive earnings
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8,072
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|
|
|
80
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6,809
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|
567
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|
|
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|
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|
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Comprehensive earnings (loss)
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$
|
868
|
|
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|
(1,463
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)
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(6,843
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)
|
|
|
(5,491
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)
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|
|
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|
|
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|
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|
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Basic earnings (loss) per share (note 7)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Continuing operations
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$
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(0.51
|
)
|
|
|
(0.23
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)
|
|
|
(0.97
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)
|
|
|
(0.68
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)
|
Discontinued operations
|
|
|
|
|
|
|
0.12
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|
|
|
|
|
|
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Net loss
|
|
$
|
(0.51
|
)
|
|
|
(0.11
|
)
|
|
|
(0.97
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)
|
|
|
(0.43
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Diluted earnings (loss) per share (note 7)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(0.51
|
)
|
|
|
(0.23
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)
|
|
|
(0.97
|
)
|
|
|
(0.68
|
)
|
Discontinued operations
|
|
|
|
|
|
|
0.12
|
|
|
|
|
|
|
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Net loss
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|
$
|
(0.51
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)
|
|
|
(0.11
|
)
|
|
|
(0.97
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)
|
|
|
(0.43
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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See accompanying notes to condensed consolidated financial
statements.
3
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
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|
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|
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|
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Six Months Ended
|
|
|
|
June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
|
Amounts in thousands
|
|
|
|
(Unaudited)
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(13,652
|
)
|
|
|
(6,058
|
)
|
Adjustments to reconcile net loss to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Earnings from discontinued operations, net of income tax
|
|
|
|
|
|
|
(3,457
|
)
|
Depreciation and amortization
|
|
|
29,466
|
|
|
|
30,682
|
|
Stock based compensation
|
|
|
1,262
|
|
|
|
|
|
Deferred income tax expense
|
|
|
2,500
|
|
|
|
98
|
|
Other non-cash activity, net
|
|
|
1,332
|
|
|
|
(221
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
11,346
|
|
|
|
(32,195
|
)
|
Prepaid expenses and other current assets
|
|
|
(8,484
|
)
|
|
|
(357
|
)
|
Payables and other liabilities
|
|
|
(6,061
|
)
|
|
|
19,283
|
|
Operating activities from discontinued operations, net
|
|
|
|
|
|
|
8,018
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
17,709
|
|
|
|
15,793
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(16,405
|
)
|
|
|
(14,048
|
)
|
Net (purchases) sales of marketable securities
|
|
|
(29,965
|
)
|
|
|
23,545
|
|
Cash paid for acquisitions (note 4)
|
|
|
(2,702
|
)
|
|
|
|
|
Cash proceeds from sale of operating assets
|
|
|
618
|
|
|
|
1,783
|
|
Equity investments
|
|
|
(971
|
)
|
|
|
|
|
Investing activities from discontinued operations, net
|
|
|
|
|
|
|
(3,648
|
)
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities
|
|
|
(49,425
|
)
|
|
|
7,632
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Net cash transfers from Discovery Holding Company
(DHC)
|
|
|
|
|
|
|
148
|
|
Payment of capital lease obligations
|
|
|
(888
|
)
|
|
|
(340
|
)
|
|
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(888
|
)
|
|
|
(192
|
)
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(32,604
|
)
|
|
|
23,233
|
|
Cash and cash equivalents at beginning of period
|
|
|
341,517
|
|
|
|
201,633
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
$
|
308,913
|
|
|
|
224,866
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial
statements.
4
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
|
|
(1)
|
Basis of
Presentation
|
On September 17, 2008, Discovery Holding Company
(DHC) completed the spin off of 100% of the capital
stock of Ascent Media Corporation (Ascent Media or
the Company) on a pro rata basis to the holders of
DHC Series A and Series B common stock (the
Ascent Media Spin Off). For periods prior to the
Ascent Media Spin Off, the accompanying condensed consolidated
financial statements of Ascent Media represent a combination of
the historical financial information of (1) Ascent Media
Group, LLC (AMG), then a wholly-owned subsidiary of
DHC, (2) Ascent Media CANS, LLC (AccentHealth),
a wholly-owned subsidiary of DHC until its sale on
September 4, 2008 and (3) cash and investment assets
of DHC. For periods following the Ascent Media Spin Off, the
accompanying condensed consolidated financial statements of
Ascent Media represent Ascent Media and its consolidated
subsidiaries. The Ascent Media Spin Off has been accounted for
at historical cost due to the pro rata nature of the
distribution.
The Company has two reportable segments: the Content Services
group and the Creative Services group. The Companys
reportable segments are strategic business units that offer
different products and services. They are managed separately
because each segment requires different technologies,
distribution channels and marketing strategies.
The accompanying interim condensed consolidated financial
statements are unaudited but, in the opinion of management,
reflect all adjustments (consisting of normal recurring
accruals) necessary for a fair presentation of the results for
such periods. The results of operations for any interim period
are not necessarily indicative of results for the full year.
These condensed consolidated financial statements should be read
in conjunction with the Ascent Media Annual Report on
Form 10-K
for the year ended December 31, 2008.
The preparation of financial statements in conformity with
U.S. generally accepted accounting principles
(GAAP) requires management to make estimates and
assumptions that affect the reported amounts of revenue and
expenses for each reporting period. The significant estimates
made in preparation of the Companys condensed consolidated
financial statements primarily relate to long-lived assets,
deferred tax assets, and the amount of the allowance for
doubtful accounts. Actual results could differ from the
estimates upon which the carrying values were based. Ascent
Media has performed an evaluation of subsequent events through
August 13, 2009, which is the date the financial statements
were issued.
|
|
(2)
|
Investments
in Marketable Securities
|
In the second quarter of 2009, Ascent Media purchased marketable
securities consisting of diversified corporate bond funds for
cash in the amount of $29,965,000. These investments have all
been classified as
available-for-sale
securities in accordance with Statement of Financial Accounting
Standard No. 115 Accounting for Certain Investments
in Debt and Equity Securities. For the three and six
months ended June 30, 2009, these investments had
unrealized gains of $1,317,000 (net of income taxes of $891,000)
which were recorded into accumulated other comprehensive income
on the consolidated balance sheet and in other comprehensive
income on the consolidated statements of operations and
comprehensive earnings (loss).
|
|
(3)
|
Discontinued
Operations
|
In 2008, Ascent Media completed the sales of its interests in
AccentHealth, Ascent Media Systems & Technology
Services, LLC in Palm Bay, Florida (Palm Bay) and
Visiontext Limited (Visiontext) which were treated
as discontinued operations in accordance with Statement of
Financial Accounting Standard No. 144 Accounting
for the Impairment and Disposal of Long-lived Assets.
5
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial
Statements (Continued)
The following table presents the results of operations of the
discontinued operations that are included in earnings from
discontinued operations, net of income tax:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30, 2008
|
|
|
June 30, 2008
|
|
|
|
Amounts in thousands
|
|
|
Revenue
|
|
$
|
10,887
|
|
|
$
|
21,695
|
|
Earnings before income taxes
|
|
$
|
3,416
|
|
|
$
|
6,379
|
|
|
|
(4)
|
Supplemental
Cash Flow Information (amounts in thousands)
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
June 30, 2009
|
|
|
Cash paid for acquisitions:
|
|
|
|
|
Fair value of assets acquired
|
|
$
|
6,683
|
|
Net liabilities assumed
|
|
|
(819
|
)
|
|
|
|
|
|
Net assets acquired
|
|
|
5,864
|
|
Estimated fair value of contingent consideration for acquisitions
|
|
|
(3,162
|
)
|
|
|
|
|
|
Cash paid for acquisitions
|
|
$
|
2,702
|
|
|
|
|
|
|
|
|
(5)
|
Restructuring
Charges
|
During the three and six months ended June 30, 2009, Ascent
Media recorded restructuring charges of $1,088,000 and
$1,486,000, respectively, related to severance and facility
costs in conjunction with ongoing restructuring and cost
mitigation measures undertaken across both of the reportable
segments. During the three and six months ended June 30,
2008, the Company recorded restructuring charges of $156,000 and
$1,263,000, respectively, related to severance and facility
costs in conjunction with the closing of its Creative Services
operations in Mexico.
The following table provides the activity and balances of the
restructuring reserve (all amounts are in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2007
|
|
|
Additions
|
|
|
Deductions(a)
|
|
|
June 30, 2008
|
|
|
Severance
|
|
$
|
1,357
|
|
|
|
639
|
|
|
|
(1,710
|
)
|
|
|
286
|
|
Excess facility costs
|
|
|
1,622
|
|
|
|
624
|
|
|
|
(999
|
)
|
|
|
1,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,979
|
|
|
|
1,263
|
|
|
|
(2,709
|
)
|
|
|
1,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2008
|
|
|
Additions
|
|
|
Deductions(a)
|
|
|
June 30, 2009
|
|
|
Severance
|
|
$
|
2,526
|
|
|
|
1,472
|
|
|
|
(3,265
|
)
|
|
|
733
|
(b)
|
Excess facility costs
|
|
|
3,294
|
|
|
|
14
|
|
|
|
(939
|
)
|
|
|
2,369
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,820
|
|
|
|
1,486
|
|
|
|
(4,204
|
)
|
|
|
3,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Primarily represents cash payments. |
|
(b) |
|
Substantially all of this amount is expected to be paid in 2009. |
|
(c) |
|
Substantially all of this amount is expected to be paid by 2012. |
6
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial
Statements (Continued)
|
|
(6)
|
Stock-Based
and Long-Term Incentive Compensation
|
During the first quarter of 2009, certain key employees were
granted a total of 116,740 options to purchase Ascent Media
Series A common stock for a weighted average exercise price of
$25.30 per share. Such options vest quarterly over four years
from the date of grant, terminate 10 years from the date of
grant and had a weighted- average fair value at the date of
grant of $12.30, as determined using the Black-Scholes Model.
For the 2009 stock grants, the assumptions used in the
Black-Scholes Model to determine grant date fair value were a
volatility factor of 50%, a risk-free interest rate of 1.51%, an
expected life of 6.1 years and a dividend yield of zero.
|
|
(7)
|
Basic and
Diluted Earnings (Loss) Per Common Share
Series A and Series B
|
Basic and diluted earnings (loss) per common share
(EPS) is computed by dividing net earnings (loss) by
the number of Series A and Series B common shares
outstanding for the period. The total weighted average shares
outstanding for the Series A and Series B shares for
the three and six months ended June 30, 2009 was 14,076,073
and 14,073,341 shares, respectively. Since the Company
recorded a loss from continuing operations for the three and six
months ended June 30, 2009, diluted EPS is computed the
same as basic EPS. The number of shares outstanding used to
compute EPS for the three and six months ended June 30,
2008 is 14,061,618 shares, which is the number of shares
that were issued for the Ascent Media Spin Off.
During the first quarter of 2008, Liberty Media Corporation
(Liberty) reached an agreement with the IRS with
respect to certain tax items that related to periods prior to
DHCs spin off from Liberty in July 2005. The IRS agreement
resulted in a reduction of $5,370,000 and $30,808,000 to the
amount of federal and California net operating losses
(NOLs), respectively, that Liberty allocated to the
Company at the time of the 2005 spin off. The reduction in the
Companys federal NOLs resulted in tax expense of
$1,880,000 (35% of $5,370,000). The Company did not expect to
utilize the California NOLs, and had thus recorded a valuation
allowance with respect to such NOLs. Therefore, the reduction in
California NOLs was offset by a reduction in the corresponding
valuation allowance and resulted in no net tax expense.
|
|
(9)
|
Commitments,
Contingencies and Other Liabilities
|
The Company is involved in litigation and similar claims
incidental to the conduct of its business. In managements
opinion, none of the pending actions is likely to have a
material adverse impact on the Companys financial position
or results of operations.
|
|
(10)
|
Fair
Value Measurements
|
Statement of Financial Accounting Standard No. 157,
Fair Value Measurements defines fair value as the
amount that would be received for selling an asset or paid to
transfer a liability in an orderly transaction between market
participants and requires that assets and liabilities carried at
fair value are classified and disclosed in the following three
categories:
|
|
|
|
|
Level 1 Quoted prices for identical instruments
in active markets.
|
|
|
|
Level 2 Quoted prices for similar instruments
in active or inactive markets and valuations derived from models
where all significant inputs are observable in active markets.
|
|
|
|
Level 3 Valuations derived from valuation
techniques in which one or more significant inputs are
unobservable in any market.
|
7
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial
Statements (Continued)
The following summarizes the fair value level of assets and
liabilities that are measured on a recurring basis at
June 30, 2009 (amounts in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Total
|
|
|
Investments in marketable securities
|
|
$
|
32,173
|
|
|
|
|
|
|
|
|
|
|
|
32,173
|
|
Other liabilities
|
|
|
|
|
|
|
|
|
|
|
(7,388
|
)
|
|
|
(7,388
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
32,173
|
|
|
|
|
|
|
|
(7,388
|
)
|
|
|
24,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Level 3 liabilities relate to contingent consideration
and other participating residual interests related to business
acquisitions which were computed using discounted cash flow
models which use estimated discount rates. There was no material
adjustments to these Level 3 liabilities during the three months
ended June 30, 2009.
Ascent Medias financial instruments, including cash and
cash equivalents, accounts receivable and accounts payable are
carried at cost, which approximates their fair value because of
their short-term maturity.
|
|
(11)
|
Related
Party Transactions
|
Ascent Media provides services, such as satellite uplink,
systems integration, origination, and post-production, to
Discovery Communications, Inc. (DCI). Ascent Media,
previously a wholly-owned subsidiary of DHC, and DCIs
predecessor, previously an equity investment of DHC, were
related parties through the date of the Ascent Media Spin Off.
DHC and that predecessor are now both wholly-owned subsidiaries
of DCI. Revenue recorded by Ascent Media for these services for
the three and six months ended June 30, 2008 was
$10,044,000 and $19,355,000, respectively. Ascent Media
continues to provide services to DCI subsequent to the Ascent
Media Spin Off that are believed to be at arms-length rates.
|
|
(12)
|
Information
About Reportable Segments
|
Ascent Media evaluates the performance of its reportable
segments based on financial measures such as revenue and
adjusted operating income before depreciation and amortization
(adjusted OIBDA). Ascent Media defines adjusted
OIBDA as revenue less cost of services and selling, general and
administrative expenses (excluding stock and other equity-based
compensation and accretion expense on asset retirement
obligations) determined in each case for the relevant operating
segment only. Ascent Media believes this is an important
indicator of the operational strength and performance of its
businesses, including the businesses ability to fund
ongoing capital expenditures and service any debt. In addition,
this measure is used by management to evaluate operating results
and perform analytical comparisons and identify strategies to
improve performance. This measure of performance excludes
depreciation and amortization, stock and other equity-based
compensation, accretion expense on asset retirement obligations,
restructuring and impairment charges, gains/losses on sale of
operating assets and other income and expense that are included
in the measurement of earnings (loss) before income taxes
pursuant to GAAP. Accordingly, adjusted OIBDA should be
considered in addition to, but not as a substitute for, earnings
(loss) before income taxes, cash flow provided by operating
activities and other measures of financial performance prepared
in accordance with GAAP. Because segment adjusted OIBDA excludes
corporate and other SG&A (as defined below), and does not
include an allocation for corporate overhead, segment adjusted
OIBDA should not be used as a measure of Ascent Medias
liquidity or as an indication of the operating results that
could be expected if either operating segment were operated on a
stand-alone basis.
8
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial
Statements (Continued)
Summarized financial information concerning the Companys
reportable segments is presented in the following tables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reportable Segments
|
|
|
|
|
|
|
|
|
|
Content
|
|
|
Creative
|
|
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
Services
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
Group
|
|
|
Group
|
|
|
Total
|
|
|
Other(1)
|
|
|
Total
|
|
|
|
Amounts in thousands
|
|
|
Three months ended June 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
78,245
|
|
|
|
40,432
|
|
|
|
118,677
|
|
|
|
|
|
|
|
118,677
|
|
Adjusted OIBDA
|
|
$
|
10,159
|
|
|
|
2,473
|
|
|
|
12,632
|
|
|
|
(6,590
|
)
|
|
|
6,042
|
|
Capital expenditures
|
|
$
|
4,265
|
|
|
|
3,269
|
|
|
|
7,534
|
|
|
|
1,764
|
|
|
|
9,298
|
|
Six months ended June 30, 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
156,849
|
|
|
|
81,095
|
|
|
|
237,944
|
|
|
|
|
|
|
|
237,944
|
|
Adjusted OIBDA
|
|
$
|
17,833
|
|
|
|
7,103
|
|
|
|
24,936
|
|
|
|
(12,711
|
)
|
|
|
12,225
|
|
Capital expenditures
|
|
$
|
9,138
|
|
|
|
4,993
|
|
|
|
14,131
|
|
|
|
2,274
|
|
|
|
16,405
|
|
Three months ended June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
120,251
|
|
|
|
43,170
|
|
|
|
163,421
|
|
|
|
|
|
|
|
163,421
|
|
Adjusted OIBDA
|
|
$
|
13,711
|
|
|
|
6,281
|
|
|
|
19,992
|
|
|
|
(6,500
|
)
|
|
|
13,492
|
|
Capital expenditures
|
|
$
|
4,603
|
|
|
|
1,694
|
|
|
|
6,297
|
|
|
|
1,220
|
|
|
|
7,517
|
|
Six months ended June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
$
|
243,598
|
|
|
|
82,858
|
|
|
|
326,456
|
|
|
|
|
|
|
|
326,456
|
|
Adjusted OIBDA
|
|
$
|
27,061
|
|
|
|
10,507
|
|
|
|
37,568
|
|
|
|
(12,767
|
)
|
|
|
24,801
|
|
Capital expenditures
|
|
$
|
8,639
|
|
|
|
3,118
|
|
|
|
11,757
|
|
|
|
2,291
|
|
|
|
14,048
|
|
|
|
|
(1) |
|
Amounts shown in Other provide a reconciliation of total
reportable segments to the Companys consolidated total.
Included in Other is corporate SG&A expenses and capital
expenditures incurred at a corporate level. |
The following table provides a reconciliation of consolidated
segment adjusted OIBDA to loss from continuing operations before
income taxes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
|
Amounts in thousands
|
|
|
Total segment adjusted OIBDA
|
|
$
|
12,632
|
|
|
|
19,992
|
|
|
|
24,936
|
|
|
|
37,568
|
|
Corporate selling, general and administrative expenses
|
|
|
(6,590
|
)
|
|
|
(6,500
|
)
|
|
|
(12,711
|
)
|
|
|
(12,767
|
)
|
Stock-based and long-term incentive compensation
|
|
|
(585
|
)
|
|
|
8
|
|
|
|
(1,262
|
)
|
|
|
284
|
|
Accretion expense on asset retirement obligations
|
|
|
(53
|
)
|
|
|
(64
|
)
|
|
|
(99
|
)
|
|
|
(129
|
)
|
Restructuring and other charges
|
|
|
(1,088
|
)
|
|
|
(156
|
)
|
|
|
(1,486
|
)
|
|
|
(1,263
|
)
|
Depreciation and amortization
|
|
|
(14,984
|
)
|
|
|
(15,415
|
)
|
|
|
(29,466
|
)
|
|
|
(30,682
|
)
|
Loss on sale of operating assets, net
|
|
|
(56
|
)
|
|
|
(257
|
)
|
|
|
(210
|
)
|
|
|
(179
|
)
|
Other income, net
|
|
|
155
|
|
|
|
643
|
|
|
|
439
|
|
|
|
2,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income taxes
|
|
$
|
(10,569
|
)
|
|
|
(1,749
|
)
|
|
|
(19,859
|
)
|
|
|
(4,976
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
Notes to
Condensed Consolidated Financial
Statements (Continued)
Information as to the Companys operations in different
geographic areas is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
|
Amounts in thousands
|
|
|
Amounts in thousands
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
92,483
|
|
|
|
117,613
|
|
|
|
186,874
|
|
|
|
241,515
|
|
United Kingdom
|
|
|
20,542
|
|
|
|
39,625
|
|
|
|
39,758
|
|
|
|
72,667
|
|
Singapore
|
|
|
5,652
|
|
|
|
6,183
|
|
|
|
11,312
|
|
|
|
12,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
118,677
|
|
|
|
163,421
|
|
|
|
237,944
|
|
|
|
326,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2009
|
|
|
2008
|
|
|
|
Amounts in thousands
|
|
|
Property and equipment, net
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
160,091
|
|
|
|
165,008
|
|
United Kingdom
|
|
|
40,796
|
|
|
|
41,227
|
|
Singapore
|
|
|
14,844
|
|
|
|
17,693
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
215,731
|
|
|
|
223,928
|
|
|
|
|
|
|
|
|
|
|
10
|
|
Item 2.
|
Managements
Discussion and Analysis of Financial Condition and Results of
Operations.
|
Certain statements in this Quarterly Report on
Form 10-Q
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including
statements regarding our business, marketing and operating
strategies, integration of acquired businesses, new service
offerings, financial prospects, and anticipated sources and uses
of capital. Where, in any forward-looking statement, we express
an expectation or belief as to future results or events, such
expectation or belief is expressed in good faith and believed to
have a reasonable basis, but there can be no assurance that the
expectation or belief will result or be achieved or
accomplished. The following include some but not all of the
factors that could cause actual results or events to differ
materially from those anticipated:
|
|
|
|
|
lack of operating history as a stand-alone company;
|
|
|
|
general economic and business conditions and industry trends
including the timing of, and spending on, motion picture,
television and television advertising;
|
|
|
|
integration of acquired businesses;
|
|
|
|
the regulatory and competitive environment of the industries in
which we and our customers operate;
|
|
|
|
retention of our largest customer accounts;
|
|
|
|
availability of third-party satellite and terrestrial
connectivity services relied on by us to provide our services;
|
|
|
|
the possibility of an industry-wide strike or other job action
affecting a major entertainment industry union, or the duration
of any existing strike or job action;
|
|
|
|
rapid technological changes;
|
|
|
|
present and future financial conditions, including availability
and terms of capital;
|
|
|
|
the outcome of any pending or threatened litigation;
|
|
|
|
availability of qualified personnel;
|
|
|
|
changes in, or failure or inability to comply with, government
regulations, including, without limitation, regulations of the
Federal Communications Commission, and adverse outcomes from
regulatory proceedings;
|
|
|
|
competitor and overall market response to our products and
services, including acceptance of the pricing of such products
and services; and
|
|
|
|
risk of loss from earthquakes and other catastrophic events.
|
For additional risk factors, please see our Annual Report on
Form 10-K
for the year ended December 31, 2008. These risks,
uncertainties and other factors and the forward-looking
statements contained herein speak only as of the date of this
Quarterly Report, and we expressly disclaim any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement, to reflect any change in our
expectations with regard thereto, or any other change in events,
conditions or circumstances on which any such statement is based.
In addition to the risk factors in our Annual Report on
Form 10-K
for the year ended December 31, 2008, the following factors
relating to our businesses, and the industries in which we
operate, may have a material adverse effect on our businesses,
prospects, financial condition, results of operations
and/or cash
flows, if adversely determined.
The recent worldwide credit crisis and resulting economic
downturn may reduce the level of investment by independent
motion picture producers, as well as spending by other producers
of filmed entertainment and television commercials, which would
have a material adverse effect on our revenue and
profitability. The recent worldwide financial
crisis significantly reduced the availability of liquidity and
credit to fund business and investment activity and resulted in
a broad recession. Such economic conditions make it more
difficult for motion picture producers and television
programmers to maintain prior levels of production activity. The
advertising
11
industry is also highly dependent on economic conditions, and
the continued recession may result in a significant decline in
both the number of new television commercials created and
amounts budgeted for production of new commercials. Independent
producers, who generally require access to external capital to
fund production of motion pictures and television pilots, have
been particularly hard hit by the reduced availability of
capital. Demand for AMGs services is driven in large part
by the volume of motion picture and television content being
created and distributed. A substantial decrease in such
production activities would have a material adverse effect on
AMGs business and financial results.
Runaway production and higher state taxes in California could
adversely affect AMGs business. Over the
past two decades, the U.S. entertainment industry, including the
business of producing major motion pictures and primetime
television programming, has experienced an increasing trend of
runaway production, or the migration of production
activities for economic reasons from the United
States and in particular from the traditional
industry centers of Southern California and New York
to facilities and locations in foreign countries and other
states. This trend is the result of both high operating and tax
costs in the traditional entertainment industry hubs and the
availability of economic subsidies and other film production
incentives provided by such other jurisdictions. Although AMG
has facilities in various locations in the United States, the
United Kingdom and Singapore and serves customers throughout the
world via a global fiber-based network that is integrated with
AMGs work flows, as well as services delivered over the
Internet, a significant acceleration of the runaway production
trend could adversely affect AMGs business if film studios
and production companies send post-production and other work to
competitors in other geographic markets, whether to take
advantage of subsidies and incentives offered in those
jurisdictions or to use facilities geographically closer to the
place of production. The runaway production trend may also
result in an increase in competition for post-production and
other entertainment and media services, as the growth of the
entertainment industry in areas outside Southern California and
New York may encourage the development of new service providers
in such location. In addition, the adverse effects of the
runaway production trend may be significantly exacerbated by
recent changes to the California State tax regime, including a
one percentage point increase in state sales and use tax rates
and, effective January 1, 2011, changes to the manner of
calculating California income for state corporate income tax
purposes. Although the sales tax increase is scheduled to expire
July 1, 2011, the combined effect of these changes may
discourage content producers, owners and distributors from using
California-based facilities for post-production and other media
services, which could have a material adverse effect on
AMGs business and financial results.
We may not be able to earn a rate of return on cash
investments that exceeds the rate of
inflation. We currently have a significant
balance of cash and cash equivalents in excess of that required
for working capital purposes. While we may use a portion of our
excess capital to fund potential strategic acquisitions or
investment opportunities, there can be no assurance that we will
consummate any such transaction in the near-term. Currently, our
cash balances are invested in highly liquid, highly-rated
short-term investments. However, such short-term investments
generally bear a low effective interest rate, and investments
producing higher rates of return are likely to be more risky and
may bear a substantial risk of loss of principal. Accordingly,
there can be no assurance that the rate of return on our cash
investments will exceed the rate of inflation. Additionally,
although inflation has been relatively stable in the United
States over the recent past, there is a risk that inflation will
increase in the future, whether as a result of increased
economic stimulus spending by the United States and other
nations or other factors. Any sustained period of significantly
higher inflation rates would have the affect of reducing the
relative purchasing power of our cash and cash equivalents,
which could have an adverse effect on our financial position or
results of operations, and on our ability to execute our
business strategy.
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 condensed consolidated financial statements and the
notes thereto included elsewhere herein and in our Annual Report
on
Form 10-K
for the year ended December 31, 2008.
Overview
We are a holding company and own 100% of our principal operating
subsidiary, Ascent Media Group, LLC (AMG), as well
as cash and cash equivalents. In September 2008, we sold our
other wholly-owned operating subsidiary, Ascent Media CANS, LLC
(AccentHealth).
12
Ascent
Media Group
AMG provides creative services and content management and
delivery services to the media and entertainment industries in
the United States, the United Kingdom and Singapore. AMGs
clients include major motion picture studios, independent
producers, broadcast networks, programming networks, advertising
agencies and other companies that produce, own
and/or
distribute entertainment, news, sports, corporate, educational,
industrial and advertising content. AMGs operations are
organized into the following two groups: the Content Services
group and the Creative Services group.
In June 2009, the members of the Screen Actors Guild
(SAG) voted in favor of ratifying a new contract for
theatrical motion picture and television performances that was
reached between SAG and the Alliance of Motion Picture and
Television Producers (AMPTP). The new agreement
expires on June 30, 2011. The previous contract had expired
on June 30, 2008 and SAG had continued to work under the
terms of the expired contract until the new contract was
ratified. In May 2009, the members of SAG and the American
Federation of Television and Radio Artists (AFTRA)
voted in favor of ratifying new contracts between SAG, AFTRA and
the advertising industry for television, radio and internet/new
media commercials. The new contracts expire on March 31,
2012. The previous contract had expired on March 31, 2009.
Any future labor dispute could have an adverse effect on the
television
and/or
motion picture production industries, including AMGs
business, and in the case of a severe or prolonged work
stoppage, the adverse effect on AMGs business, operations,
results of operations
and/or
financial condition could be material.
In recent years, AMG has been challenged by increasing
competition and resulting downward rate pressure for certain of
its services. Such factors have caused margin compression and
lower operating income. AMG is continuing to focus on leveraging
its broad array of traditional media and file-based services to
be a full service provider to new and existing customers within
the feature film, television production and advertising
industries. Its strategy focuses on providing a unified
portfolio of
business-to-business
services intended to enable media companies to realize
increasing benefits from digital distribution. With facilities
in the United States, the United Kingdom and Singapore, AMG
hopes to increase its services to multinational companies on a
worldwide basis. The challenges that it faces include the
continued successful development of
end-to-end
file-based solutions, increased competition in both its Creative
Services and Content Services groups, the need to differentiate
its products and services to help maintain or increase operating
margins and financing capital expenditures for equipment and
other items to meet customers requirements for integrated
and file-based workflows.
Adjusted
OIBDA
We evaluate the performance of our operating segments based on
financial measures such as revenue and adjusted operating income
before depreciation and amortization (adjusted
OIBDA). We define segment adjusted OIBDA as revenue less
cost of services and selling, general and administrative expense
(excluding stock-based and long-term incentive compensation and
accretion expense on asset retirement obligations) determined in
each case for the relevant operating segment only. We believe
this non-GAAP financial measure is an important indicator of the
operational strength and performance of our businesses,
including each businesss ability to fund its ongoing
capital expenditures and service any debt. In addition, this
measure is used by management to evaluate operating results and
perform analytical comparisons and identify strategies to
improve performance. This measure of performance excludes
depreciation and amortization, stock-based and long-term
incentive compensation, accretion expense on asset retirement
obligations, restructuring and impairment charges, gains/losses
on sale of operating assets and other income and expense that
are included in the measurement of earnings (loss) before income
taxes pursuant to GAAP. Accordingly, adjusted OIBDA should be
considered in addition to, but not as a substitute for, earnings
(loss) before income taxes, cash flow provided by operating
activities and other measures of financial performance prepared
in accordance with GAAP. Because segment adjusted OIBDA excludes
corporate and other SG&A (as defined below), and does not
include an allocation for corporate overhead, segment adjusted
OIBDA should not be used as a measure of our liquidity or as an
indication of the operating results that could be expected if
either operating segment were operated on a stand-alone basis.
13
Results
of Operations
Our operations are organized into the following reportable
segments: the Content Services group and the Creative Services
group.
The Content Services groups revenue consists of fees
relating to facilities and services necessary to optimize,
archive, manage, reformat and repurpose completed media assets
for global distribution via freight, satellite, fiber and the
Internet. In addition, the Content Services group includes the
facilities, technical infrastructure, and operating staff
necessary to assemble programming content for cable and
broadcast networks and to distribute media signals via satellite
and terrestrial networks. The Content Services group includes
AMGs digital media distribution center, which provides
file-based services in areas such as digital imaging, digital
vault, distribution services and interactive media to new and
existing distribution platforms. Additionally, the Content
Services group provides owners of film libraries a broad range
of restoration, preservation, archiving, professional mastering
and duplication services. The scope of these services vary in
duration from one day to several months depending on the nature
of the service, and fees typically range from less than $1,000
to $100,000 per project. For the six months ended June 30,
2009, approximately 40% of the Content Services groups
revenue relates to broadcast services, satellite operations and
fiber services that are earned monthly under long-term contracts
ranging generally from one to seven years. Additionally,
approximately 20% of revenue relates to systems integration and
engineering services that are provided on a project basis over
terms generally ranging from three to twelve months.
AMGs Creative Services group generates revenue primarily
from fees for various technical and creative services necessary
to complete principal photography into final products.
Generally, these services pertain to the completion of feature
films, television programs, television commercials and new
digital media. These services are referred to generally in the
entertainment industry as post-production services.
These projects normally span from a few days to three months or
more in length, and fees for these projects typically range from
$10,000 to $1,000,000 per project.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
|
Dollar amounts in thousands
|
|
|
Dollar amounts in thousands
|
|
|
Consolidated Results of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
$
|
118,677
|
|
|
|
163,421
|
|
|
|
237,944
|
|
|
|
326,456
|
|
Loss from continuing operations before income taxes
|
|
$
|
(10,569
|
)
|
|
|
(1,749
|
)
|
|
|
(19,859
|
)
|
|
|
(4,976
|
)
|
Net loss
|
|
$
|
(7,204
|
)
|
|
|
(1,543
|
)
|
|
|
(13,652
|
)
|
|
|
(6,058
|
)
|
Segment Result of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content Services group
|
|
$
|
78,245
|
|
|
|
120,251
|
|
|
|
156,849
|
|
|
|
243,598
|
|
Creative Services group
|
|
$
|
40,432
|
|
|
|
43,170
|
|
|
|
81,095
|
|
|
|
82,858
|
|
Adjusted OIBDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content Services group
|
|
$
|
10,159
|
|
|
|
13,711
|
|
|
|
17,833
|
|
|
|
27,061
|
|
Creative Services group
|
|
|
2,473
|
|
|
|
6,281
|
|
|
|
7,103
|
|
|
|
10,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment adjusted OIBDA(a)
|
|
$
|
12,632
|
|
|
|
19,992
|
|
|
|
24,936
|
|
|
|
37,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted OIBDA as a percentage of Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content Services group
|
|
|
13.0
|
%
|
|
|
11.4
|
%
|
|
|
11.4
|
%
|
|
|
11.1
|
%
|
Creative Services group
|
|
|
6.1
|
%
|
|
|
14.6
|
%
|
|
|
8.8
|
%
|
|
|
12.7
|
%
|
|
|
|
(a) |
|
See reconciliation to loss from continuing operations before
income taxes below. |
Revenue. Our consolidated revenue decreased
$44,744,000 or 27.4% and $88,512,000 or 27.1% for the three
months and six months ended June 30, 2009, respectively, as
compared to the corresponding prior year periods. The Content
Services group revenue decreased $42,006,000 or 34.9% and
$86,749,000 or 35.6% for the three months
14
and six months ended June 30, 2009, respectively, compared
to the prior year periods. The Creative Services group revenue
decreased by $2,738,000 or 6.3% and $1,763,000 or 2.1% for such
periods.
The decrease in the Content Services group revenue for the three
month period was mainly due to (i) a decrease of
$34,026,000 in system integration services revenue due to a
significant number of large projects in the United States
and the United Kingdom in the prior year and a decline in system
integration projects in 2009 as customers reduced their spending
in response to a weaker economic climate, (ii) a decrease
of $3,438,000 due to a decline in traditional media services in
the United States and United Kingdom including duplication,
audio and lab services and (iii) unfavorable changes in
foreign currency exchange rates of $5,390,000. These decreases
were partially offset by an increase of $2,860,000 due to higher
digital services revenues due to an increase in volumes from
existing customers. The decrease in the Content Services group
revenue for the six month period was mainly due to (i) a
decrease of $68,037,000 in system integration services revenue
due to a significant number of large projects in the United
States and the United Kingdom in the prior year and a decline in
system integration projects in 2009 as customers reduced their
spending in response to a weaker economic climate, (ii) a
decrease of $5,614,000 due to a decline in traditional media
services in the United States and United Kingdom including lab,
tape and audio services, (iii) a decrease of $1,122,000 for
content distribution and transport services due to expired
contracts and a decline of occasional projects in the United
States and (iv) unfavorable changes in foreign currency
exchange rates of $12,042,000. These decreases were partially
offset by an increase of $3,897,000 due to higher digital
services revenues due to an increase in volumes from existing
customers.
The decrease in Creative Services group revenue for the three
month period was due to (i) a decrease of $4,545,000 in
commercial revenues driven by a weaker worldwide production
market in 2009 compared to the prior year, (ii) a decrease
of $2,896,000 from television and ancillary post production
services as production slowed in the quarter compared to the
prior year which had seen increased production due to the ending
of the Writers Guild strike in March 2008, (iii) a decrease
of $883,000 resulting from the shutdown of certain operations in
Mexico and the United States and (iv) unfavorable changes
in foreign currency exchange rates of $642,000. These decreases
were partially offset by (i) an increase of $3,598,000 in
editorial services in the United States, which included the
Beast operations which were acquired in May 2009 and
(ii) an increase of $3,228,000 in feature film revenue
driven by increased titles for digital intermediate services.
The decrease in Creative Services group revenue for the six
month period was due to (i) a decrease of $9,331,000 in
commercial revenues driven by a weaker worldwide production
market for the first six months of 2009 compared to the prior
year period, (ii) a decrease of $1,680,000 resulting from
the shutdown of certain operations in Mexico and the United
States and (iii) unfavorable changes in foreign currency
exchange rates of $1,620,000. These decreases were partially
offset by (i) an increase of $6,693,000 in feature film
revenue driven by increased titles for digital intermediate
services, (ii) an increase of $3,074,000 in editorial
services in the United States, which included the Beast
operations acquired in May 2009 and (iii) an increase of
approximately $2,162,000 from television post production
services, due primarily to the effect of the 2008 Writers Guild
strike on the prior years results.
For the three months and six months ended June 30, 2009,
$7,551,000 and $19,695,000, respectively, of the Content
Services group revenue was generated by one customer, Motorola,
Inc., under system integration services contracts. For the three
months and six months ended June 30, 2008, these Motorola
contracts generated $21,808,000 and $52,602,000, respectively,
of Content Services revenues. Our system integration contracts
have a limited duration. Following any termination or expiration
of our contracts with Motorola we could only continue to sustain
our current level of system integration revenue if we enter into
other contracts of this same magnitude, for which there can be
no assurance.
Cost of Services. Cost of services decreased
$35,931,000 or 29.6% and $74,147,000 or 30.4% for the three and
six months ended June 30, 2009, respectively, as compared
to the corresponding prior year periods. The decrease for the
three and six month periods was primarily due to Content
Services resulting from lower S&TS volumes of system
integration services, driving significant decreases in
production material costs and, to a lesser extent, labor costs.
Further, we restructured the company at the end of 2008 which
resulted in an additional reduction in labor and facility costs
for the three and six months ended June 30, 2009, compared
to the corresponding prior periods. In addition, cost of
services decreased as a result of favorable changes in foreign
currency exchange rates of $4,098,000 and $9,338,000 for the
three and six months ended June 30, 2009, respectively.
15
As a percent of revenue, cost of services was 71.9% and 74.2%
for the three month periods ended June 30, 2009 and 2008,
respectively. As a percent of revenue, cost of services was
71.4% and 74.8% for the six month periods ended June 30,
2009 and 2008, respectively. The decrease in cost of services as
a percent of revenue is mainly a result of revenue mix as system
integration projects, which incur higher production material
costs, were significantly lower in 2009. The percentage decrease
was also the result of the restructuring and cost mitigation
measures that were enacted across both segments.
Selling, General and Administrative. Our
selling, general and administrative expenses
(SG&A) are comprised of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
|
Amounts in thousands
|
|
|
Amounts in thousands
|
|
|
SG&A(a)
|
|
$
|
27,323
|
|
|
|
28,686
|
|
|
|
55,821
|
|
|
|
57,610
|
|
Stock-based and long-term incentive compensation
|
|
|
585
|
|
|
|
(8
|
)
|
|
|
1,262
|
|
|
|
(284
|
)
|
Accretion expense on asset retirement obligations (AROs)
|
|
|
53
|
|
|
|
64
|
|
|
|
99
|
|
|
|
129
|
|
Loss on sale of operating assets, net
|
|
|
56
|
|
|
|
257
|
|
|
|
210
|
|
|
|
179
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total SG&A
|
|
$
|
28,017
|
|
|
|
28,999
|
|
|
|
57,392
|
|
|
|
57,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
SG&A includes corporate SG&A of $6,590,000 and
$6,500,000 for the three months ended June 30, 2009 and
2008, respectively, and $12,711,000 and $12,767,000 for the six
months ended June 30, 2009 and 2008, respectively, which
are not included in total segment adjusted OIBDA. |
Our SG&A, excluding stock-based and long-term incentive
compensation, accretion expense on AROs and loss on sale of
operating assets, net, decreased $1,363,000 or 4.8% and
$1,789,000 or 3.1% for the three and six months ended
June 30, 2009, respectively, compared to the corresponding
prior year periods. The decrease for the three and six months
periods was mainly driven by lower labor, travel, entertainment
and supplies costs which declined due to the implementation of
restructuring and cost mitigation measures. These decreases were
partially offset by higher professional fees and other public
company costs, higher bad debt expense and higher facility costs
related to duplicative rent as a result of a Creative Services
business unit relocating to a new facility. In addition,
SG&A was impacted by favorable changes in foreign currency
exchange rates of $1,451,000 and $3,281,000 for the three and
six months ended June 30, 2009, respectively. As a percent
of revenue, our SG&A, excluding stock-based and long-term
incentive compensation, accretion expense on AROs and loss on
sale of operating assets, net, was 23.0% and 17.6% for the three
months ended June 30, 2009 and 2008, respectively, and
23.5% and 17.6% for the six months ended June 30, 2009 and
2008, respectively.
Stock-based and Long-term Incentive
Compensation. Stock-based and long-term incentive
compensation is included in SG&A in our consolidated
statements of operations. The 2009 expense for the three and six
months ended June 30, 2009, was related to restricted stock
and stock option awards granted to certain executives subsequent
to the Ascent Media Spin Off. The 2008 gain for the three and
six months ended June 30, 2008, relates to adjustments to
the amount recorded for the 2006 Long-Term Incentive Plan awards
granted to certain executives in 2006.
Loss on Sale of Operating Assets, net. Loss on
sale of operating assets, net, is included in SG&A in our
consolidated statements of operations. The 2009 amounts relates
to the write-off of certain property and equipment. The 2008
amounts relate to the loss on the sale of an equity investment
partially offset by a gain on sale of United Kingdom assets.
Restructuring Charges. During the three and
six months ended June 30, 2009, we recorded restructuring
charges of $1,088,000 and $1,486,000, respectively, related to
severance costs in conjunction with ongoing restructuring and
cost mitigation measures undertaken across all of our
businesses. During the three and six months ended June 30,
2008, we recorded restructuring charges of $156,000 and
$1,263,000 related to severance and facility costs in
conjunction with the closing of our Creative Services operations
in Mexico.
16
The following table provides the activity and balances of the
restructuring reserve (all amounts are in thousands).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2007
|
|
|
Additions
|
|
|
Deductions(a)
|
|
|
June 30, 2008
|
|
|
Severance
|
|
$
|
1,357
|
|
|
|
639
|
|
|
|
(1,710
|
)
|
|
|
286
|
|
Excess facility costs
|
|
|
1,622
|
|
|
|
624
|
|
|
|
(999
|
)
|
|
|
1,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
2,979
|
|
|
|
1,263
|
|
|
|
(2,709
|
)
|
|
|
1,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2008
|
|
|
Additions
|
|
|
Deductions(a)
|
|
|
June 30, 2009
|
|
|
Severance
|
|
$
|
2,526
|
|
|
|
1,472
|
|
|
|
(3,265
|
)
|
|
|
733
|
(b)
|
Excess facility costs
|
|
|
3,294
|
|
|
|
14
|
|
|
|
(939
|
)
|
|
|
2,369
|
(c)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5,820
|
|
|
|
1,486
|
|
|
|
(4,204
|
)
|
|
|
3,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
|
Primarily represents cash payments. |
|
(b) |
|
Substantially all of this amount is expected to be paid in 2009. |
|
(c) |
|
Substantially all of this amount is expected to be paid by 2012. |
Depreciation and Amortization. Depreciation
and amortization expense decreased $431,000 or 2.8% and
$1,216,000 or 4.0% for the three and six months ended
June 30, 2009, respectively, compared to the corresponding
prior year periods, due to the favorable impact of changes in
foreign currency exchange rates of $1,093,000 and $2,364,000 for
the three and six months ended June 30, 2009, respectively.
Excluding such exchange rate effects, depreciation and
amortization expense increased for both three and six month
periods. This is due to the depreciation expense on property and
plant from acquisitions that occurred at the end of 2008 and in
2009.
Income Taxes from Continuing Operations. For
the three months ended June 30, 2009, we had a pre-tax loss
from continuing operations of $10,569,000 and an income tax
benefit from continuing operations of $3,365,000, for an
effective tax benefit rate of 31.8%. For the six months ended
June 30, 2009, we had a pre-tax loss from continuing
operations of $19,859,000 and an income tax benefit from
continuing operations of $6,207,000, for an effective tax
benefit rate of 31.3%. For the three months ended June 30,
2008, we had a pre-tax loss from continuing operations of
$1,749,000, but incurred $1,467,000 of income tax expense from
continuing operations. For the six months ended June 30,
2008, we had a pre-tax loss from continuing operations of
$4,976,000, but incurred $4,539,000 of income tax expense from
continuing operations. The income tax expense for the three and
six month periods of 2008 was mainly due to federal income tax
expense and an agreement reached with the IRS which resulted in
a reduction of certain net operating losses which had been
previously utilized. During the first quarter of 2008, Liberty
Media reached an agreement with the IRS with respect to certain
tax items that related to periods prior to DHCs spin off
from Liberty Media in July 2005. The IRS agreement resulted in a
reduction of $5,370,000 and $30,808,000 to the amount of federal
and California net operating losses (NOLs),
respectively, that Liberty Media allocated to us at the time of
the 2005 spin off. The reduction in our federal NOLs resulted in
tax expense of $1,880,000 (35% of $5,370,000). We had no
expectation that we would be able to utilize the California
NOLs, and had thus recorded a valuation allowance with respect
to such NOLs. Therefore, the reduction in California NOLs was
offset by a reduction in the corresponding valuation allowance
and resulted in no net tax expense.
Earnings from Discontinued Operations, Net of Income
Taxes We recorded earnings from discontinued
operations, net of income taxes of $1,673,000 and $3,457,000 for
the three and six months ended June 30, 2008, respectively.
These amounts included the earnings of AccentHealth, Palm Bay
and Visiontext, which were all sold in the third quarter of 2008.
17
Adjusted OIBDA. The following table provides a
reconciliation of consolidated segment adjusted OIBDA to loss
from continuing operations before income taxes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2009
|
|
|
2008
|
|
|
2009
|
|
|
2008
|
|
|
|
Amounts in thousands
|
|
|
Total segment adjusted OIBDA
|
|
$
|
12,632
|
|
|
|
19,992
|
|
|
|
24,936
|
|
|
|
37,568
|
|
Corporate selling, general and administrative expenses
|
|
|
(6,590
|
)
|
|
|
(6,500
|
)
|
|
|
(12,711
|
)
|
|
|
(12,767
|
)
|
Stock-based and long-term incentive compensation
|
|
|
(585
|
)
|
|
|
8
|
|
|
|
(1,262
|
)
|
|
|
284
|
|
Accretion expense on asset retirement obligations
|
|
|
(53
|
)
|
|
|
(64
|
)
|
|
|
(99
|
)
|
|
|
(129
|
)
|
Restructuring and other charges
|
|
|
(1,088
|
)
|
|
|
(156
|
)
|
|
|
(1,486
|
)
|
|
|
(1,263
|
)
|
Depreciation and amortization
|
|
|
(14,984
|
)
|
|
|
(15,415
|
)
|
|
|
(29,466
|
)
|
|
|
(30,682
|
)
|
Loss on sale of operating assets, net
|
|
|
(56
|
)
|
|
|
(257
|
)
|
|
|
(210
|
)
|
|
|
(179
|
)
|
Other income, net
|
|
|
155
|
|
|
|
643
|
|
|
|
439
|
|
|
|
2,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income taxes
|
|
$
|
(10,569
|
)
|
|
|
(1,749
|
)
|
|
|
(19,859
|
)
|
|
|
(4,976
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Content Services group adjusted OIBDA as a percentage of revenue
was 13.0% and 11.4% for the three months ended June 30,
2009 and 2008, respectively, and 11.4% and 11.1% for the six
months ended June 30, 2009 and 2008, respectively. Creative
Services group adjusted OIBDA as a percentage of revenue was
6.1% and 14.6% for the three months ended June 30, 2009 and
2008, respectively, and 8.8% and 12.7% for the six months ended
June 30, 2009 and 2008, respectively. The decrease in the
adjusted OIBDA margin for the Creative Services group for the
three and six months ended June 30, 2009, was due to higher
labor as a percentage of revenue in television and ancillary
post production as a result of revenue compression and a change
in the mix of key services, higher equipment rental costs as
shows moved from film to tape, duplicative rent as a result of a
business unit relocating to a new facility and an increase in
bad debt expense compared to the prior year.
The primary cost components for the Content Services group are
labor and materials, with these costs comprising over 65% of the
segment revenue. The other cost components for the Content
Services group are facility costs, production equipment and
general and administrative expense. Content Services group
adjusted OIBDA decreased $3,552,000 or 25.9% for the three
months ended June 30, 2009, compared to the prior year
period. This decrease was due to (i) a decrease of
$4,387,000 from lower system integration revenues,
(ii) $603,000 from lower revenues from media services in
the United Kingdom and United States including duplication, edit
and lab, (iii) $367,000 of costs for development of new
business initiatives and research and development and
(iv) unfavorable changes in foreign currency exchange rates
of $871,000. This decrease was partially offset by an increase
of (i) $1,631,000 from higher worldwide content
distribution revenues and (ii) $1,289,000 due to higher
digital services revenue. Content Services group adjusted OIBDA
decreased $9,228,000 or 34.1% for the six months ended
June 30, 2009, compared to the prior year period. This
decrease was due to (i) a decrease of $9,249,000 from lower
system integration revenues, (ii) $711,000 from lower
revenues from media services in the United States and
United Kingdom including duplication, lab and syndication,
(iii) $810,000 of costs for development of new business
initiatives and research and development and
(iv) unfavorable changes in foreign currency exchanges
rates of $1,808,000. This decrease was partially offset by
(i) an increase of $2,159,000 due to higher digital
services revenue and (ii) $2,197,000 from higher content
origination and transport service revenues in the United Kingdom.
The services provided by the Creative Services group are labor
intensive and they require high labor and facility costs, with
these costs representing over 76% of the segment revenue. The
Creative Services groups other primary cost components are
production equipment, materials cost and general and
administrative expenses. Creative Services group adjusted OIBDA
decreased $3,808,000 or 60.6% for the three months ended
June 30, 2009, compared to the prior period. This decrease
was due to (i) a decrease of $3,085,000 due to lower
worldwide commercial revenues as a result of a weaker commercial
production market in 2009 and (ii) $3,055,000 from lower
television and ancillary post production revenues. This decrease
was partially offset by an increase of $2,145,000 as a result of
higher feature film revenue driven by increased titles for
digital intermediate services. Creative Services group adjusted
OIBDA decreased $3,404,000 or 32.4% for the six months ended
June 30, 2009, compared to the prior period. This decrease
was due to (i) $6,795,000 due to lower worldwide commercial
revenues as a result of a weaker commercial production market in
2009 and (ii) $742,000 in television and ancillary post
production services as weak production in 2009 more than offset
the impact of the Writers Guild strike in 2008 This decrease was
18
partially offset by an increase of $4,468,000 as a result of
higher feature film revenue driven by increased titles for
digital intermediate services. As a result of the above, the
Creative Services group adjusted OIBDA margin was lower in both
the three and six month periods ended June 30, 2009,
compared to the prior periods.
Liquidity
and Capital Resources
At June 30, 2009, we have $308,913,000 of cash and cash
equivalents on a consolidated basis. In addition, we have
investments in marketable securities of $32,173,000, which are
readily convertible to cash. We may use a portion of these
assets to fund potential strategic acquisitions or investment
opportunities. The cash is invested in highly liquid,
highly-rated short-term investments and a substantial portion of
the balance is held in financial institutions that are
participating in the United States government guarantee program.
Additionally, our other source of funds is AMGs cash flows
from operating activities. During the six months ended
June 30, 2009 and 2008, our cash from operating activities
was $17,709,000 and $15,793,000, respectively. The primary
driver of our cash flow from operating activities is adjusted
OIBDA. Fluctuations in our adjusted OIBDA are discussed in
Results of Operations above. In addition, our cash
flow from operating activities is impacted by changes in working
capital which are generally due to the timing of purchases and
payments for equipment and the timing of billings and
collections for revenue.
During the six months ended June 30, 2009 and 2008, we used
cash of $16,405,000 and $14,048,000, respectively, to fund our
capital expenditures. These expenditures relate to the purchase
of new equipment, the upgrade of facilities and the buildout of
our existing facilities to meet specific customer contracts,
which are capitalized as additions and remain our property, not
that of the customer. During the second quarter of 2009, we
purchased marketable securities consisting of diversified
corporate bond funds for cash of $29,965,000 in order to improve
our investment rate of return. During the six months ended
June 30, 2008, we sold marketable securities for cash of
$23,545,000.
For the next twelve months, we expect to have sufficient
available cash and cash equivalents and net cash from AMGs
operating activities to meet our working capital needs and
capital expenditure requirements. We may seek external equity or
debt financing in the event of any new investment opportunities,
additional capital expenditures or our operations requiring
additional funds, but there can be no assurance that we will be
able to obtain equity or debt financing on terms that would be
acceptable to us.
Our ability to seek additional sources of funding depends on our
future financial position and results of operations, which are
subject to general conditions in or affecting our industry and
our customers and to general economic, political, financial,
competitive, legislative and regulatory factors beyond our
control.
|
|
Item 3.
|
Quantitative
and Qualitative Disclosure about Market Risk
|
Foreign
Currency Risk
We continually monitor our economic exposure to changes in
foreign exchange rates and may enter into foreign exchange
agreements where and when appropriate. Substantially all of our
foreign transactions are denominated in foreign currencies,
including the liabilities of our foreign subsidiaries. Although
our foreign transactions are not generally subject to
significant foreign exchange transaction gains or losses, the
financial statements of our foreign subsidiaries are translated
into United States dollars as part of our consolidated financial
reporting. As a result, fluctuations in exchange rates affect
our financial position, results of operations and cash flows.
|
|
Item 4T.
|
Controls
and Procedures
|
In accordance with Exchange Act
Rules 13a-15
and 15d-15,
the Company carried out an evaluation, under the supervision and
with the participation of management, including its chairman,
president and principal accounting officer (the
Executives), of the effectiveness of its disclosure
controls and procedures as of the end of the period covered by
this report. Based on that evaluation, the Executives concluded
that the Companys disclosure controls and procedures were
effective as of June 30, 2009 to provide reasonable
assurance that information required to be disclosed in its
reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported within the time periods
specified in the Securities and Exchange Commissions rules
and forms.
There has been no change in the Companys internal controls
over financial reporting that occurred during the three months
ended June 30, 2009 that has materially affected, or is
reasonably likely to materially affect, its internal controls
over financial reporting.
19
ASCENT
MEDIA CORPORATION AND SUBSIDIARIES
PART II
OTHER INFORMATION
|
|
Item 4.
|
Submission
of Matters to a Vote of Security Holders
|
On June 12, 2009, we held our annual meeting of
stockholders. At the annual meeting, three matters were
considered and acted upon: (i) the election of Michael J.
Pohl to serve as the Class I member of our board of
directors until our 2012 annual meeting of stockholders or until
his successor is elected, (ii) the approval of the material
terms of the performance objectives under the Ascent Media
Corporation 2008 Incentive Plan and (iii) the ratification
of the selection of KPMG LLP as our independent auditors for the
year ending December 31, 2009. All three proposals were
voted on and approved by our stockholders. Broker non-votes had
no effect on any of the proposals. The following is a summary of
the votes for each proposal:
Proposal 1: Election of Michael J. Pohl as Director
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
Withheld
|
|
|
Series A
|
|
|
6,516,509
|
|
|
|
5,626,059
|
|
Series B
|
|
|
6,512,580
|
|
|
|
28,920
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
13,029,089
|
|
|
|
5,654,979
|
|
|
|
|
|
|
|
|
|
|
The foregoing nominee also served on the Companys board of
directors prior to the annual meeting. The term of the following
directors continued following the annual meeting: Philip J.
Holthouse, Brian C. Mulligan, William R. Fitzgerald and Jose A.
Royo. Broker non-votes had no effect on voting for the election
of directors, and abstentions and unreturned proxies have been
treated as votes withheld.
Proposal 2: Approval of the Material Terms of the 2008
Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
Against
|
|
|
Abstentions
|
|
|
Broker Non-Votes
|
|
|
Series A
|
|
|
8,903,659
|
|
|
|
1,321,506
|
|
|
|
8,536
|
|
|
|
1,908,868
|
|
Series B
|
|
|
6,266,910
|
|
|
|
29,410
|
|
|
|
11,930
|
|
|
|
233,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
15,170,569
|
|
|
|
1,350,916
|
|
|
|
20,466
|
|
|
|
2,142,118
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proposal 3: Ratification of KPMG LLP as Independent
Auditors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
|
|
Against
|
|
|
Abstentions
|
|
|
Broker Non-Votes
|
|
|
Series A
|
|
|
12,056,620
|
|
|
|
76,105
|
|
|
|
9,843
|
|
|
|
0
|
|
Series B
|
|
|
6,537,020
|
|
|
|
0
|
|
|
|
4,480
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
18,593,640
|
|
|
|
76,105
|
|
|
|
14,323
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Listed below are the exhibits which are included as a part of
this Report (according to the number assigned to them in
Item 601 of
Regulation S-K):
|
|
|
|
|
|
10
|
.1
|
|
Employment Agreement, dated as of April 13, 2009, between
Ascent Media Corporation and Mr. John A. Orr*
|
|
31
|
.1
|
|
Rule 13a-14(a)/15d-14(a)
Certification*
|
|
31
|
.2
|
|
Rule 13a-14(a)/15d-14(a)
Certification*
|
|
31
|
.3
|
|
Rule 13a-14(a)/15d-14(a)
Certification*
|
|
32
|
|
|
Section 1350 Certification**
|
|
|
|
* |
|
Filed herewith. |
|
** |
|
Furnished herewith. |
20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
ASCENT MEDIA CORPORATION
|
|
|
|
By:
|
/s/ William
R. Fitzgerald
|
William R. Fitzgerald
Chairman and Chief Executive Officer
Date: August 13, 2009
Jose A. Royo
President and Chief Operating Officer
Date: August 13, 2009
|
|
|
|
By:
|
/s/ George
C. Platisa
|
George C. Platisa
Executive Vice President and
Chief Financial Officer
Date: August 13, 2009
21
EXHIBIT INDEX
Listed below are the exhibits which are included as a part of
this Report (according to the number assigned to them in
Item 601 of
Regulation S-K):
|
|
|
|
|
|
10
|
.1
|
|
Employment Agreement, dated as of April 13, 2009, between
Ascent Media Corporation and Mr. John A. Orr*
|
|
31
|
.1
|
|
Rule 13a-14(a)/15d-14(a)
Certification*
|
|
31
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.2
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Rule 13a-14(a)/15d-14(a)
Certification*
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31
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.3
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Rule 13a-14(a)/15d-14(a)
Certification*
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32
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|
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Section 1350 Certification**
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* |
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Filed herewith. |
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** |
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Furnished herewith. |