10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

_X_ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

OR

__ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-35294

Starz

(Exact Name of Registrant as Specified in Its Charter)

Delaware(State or other jurisdiction ofincorporation or organization)	20-8988475(I.R.S. EmployerIdentification No.)
8900 Liberty Circle Englewood, Colorado (Address of principal executive offices)	80112(Zip Code)

Registrant’s telephone number, including area code: (720) 852-7700

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of exchange on which registered
Series A Common Stock, par value $.01 per share	The Nasdaq Stock Market LLC
Series B Common Stock, par value $.01 per share	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes __X_ No___

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes___ No __X_

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__X__ No___

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 __X__ No____

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. _X__

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.

Large accelerated filer __X__ Accelerated filer ____ Non-accelerated filer ___ Smaller reporting company ____

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ____ No _X__

The aggregate market value of the voting stock held by non-affiliates of Starz computed by reference to the last sales price of such stock, as of the closing of trading on June 30, 2015, was $2.6 billion.

The number of outstanding shares of Starz’s common stock as of January 31, 2016 was:

Series A	Series B
90,709,365	9,860,416

Documents Incorporated by Reference

The Registrant’s definitive proxy statement for its 2016 Annual Meeting of Stockholders is hereby incorporated by reference into Part III of this Annual Report on Form 10-K.

STARZ

2015 ANNUAL REPORT ON FORM 10-K

Table of Contents

	Part I	Page
Item 1.	Business	3
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	23
Item 2.	Properties	24
Item 3.	Legal Proceedings	24
Item 4.	Mine Safety Disclosures	24
	Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	25
Item 6.	Selected Financial Data	27
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 8.	Financial Statements and Supplementary Data	42
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	42
Item 9A.	Controls and Procedures	43
Item 9B.	Other Information	43
	Part III
Item 10.	Directors, Executive Officers and Corporate Governance	44
Item 11.	Executive Compensation	44
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	44
Item 13.	Certain Relationships and Related Transactions, and Director Independence	44
Item 14.	Principal Accountant Fees and Services	44
	Part IV
Item 15.	Exhibits and Financial Statement Schedules	45

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For convenience, the terms “Starz,” “we,” “us” or “our” are used in this Annual Report on Form 10-K to refer to Starz, and collectively to Starz and its majority-owned and controlled subsidiaries, unless the context otherwise requires. The term Starz, LLC refers to our wholly-owned subsidiary Starz, LLC.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K includes statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included in this Annual Report on Form 10-K other than statements of historical fact or current fact are forward-looking statements that address activities, events or developments that we or our management expect, believe or anticipate will or may occur in the future. These statements represent our reasonable judgment on the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors, many of which are beyond our control and could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “project,” “forecast,” “plan,” “may,” “will,” “should,” “could,” “expect,” or the negative thereof, or other words of similar meaning. In particular, these include, but are not limited to, statements of our current views and estimates of future economic circumstances, industry conditions in domestic and international markets, and our future performance and financial results. These forward-looking statements are subject to a number of factors and uncertainties that could cause our actual results to differ materially from the anticipated results and expectations expressed in such forward-looking statements.

Among the factors that may cause actual results and experiences to differ from the anticipated results and expectations expressed in such forward-looking statements are the following:

• changes in the nature of key strategic relationships with multichannel video programming distributors (“MVPDs”), online distribution partners (“Online Distributors” and together with MVPDs, “Distributors”) and content providers and our ability to enter into, maintain and renew affiliation agreements with Distributors and programming output and library agreements with content providers on terms acceptable to us;

• business combinations involving Distributors or content providers;

• Distributor demand for our products and services, including the impact of higher rates paid by our Distributors to other programmers, and our ability to adapt to changes in demand;

• consumer demand for our products and services, including changes in demand resulting from participation in and effectiveness of cooperative marketing campaigns with our Distributors, and our ability to adapt to changes in demand;

• competitor responses to our products and services;

• the continued investment in, the cost of and our ability to acquire or produce desirable original programming;

• the cost of and our ability to acquire desirable theatrical movie content;

• disruption in the production of theatrical films or television programs due to catastrophic events, such as natural disasters, fire or weather, or work stoppages or strikes by unions representing writers, directors or actors;

• changes in distribution and viewing of television programming, including the expanded deployment of DVRs, video-on-demand, online based content delivery, Blu-ray™ players, game consoles and mobile devices, and their impact on media content consumption;

• uncertainties inherent in the development and deployment of new business strategies;

• uncertainties associated with the development of products and services and market acceptance, including the development and provision of programming for new television and telecommunications technologies;

• our future financial performance, including availability, terms and deployment of capital;

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• the ability of our suppliers and vendors to deliver products, equipment, software and services;

• the outcome of any pending or threatened litigation;

• availability of qualified personnel and artistic talent;

• the regulatory and competitive environment of the industry in which we operate;

• changes in, or failure or inability to comply with, government regulations, including, without limitation, regulations of the Federal Communications Commission (“FCC”), and/or adverse outcomes from regulatory proceedings;

• changes in tax requirements, including tax rate changes, new tax laws and revised tax law interpretations;

• general economic and business conditions and industry trends;

• consumer spending levels;

• rapid technological changes;

• failure to protect digital information, including confidential and proprietary information about our distributors, viewers and employees, and copies of films, television programs and other content, subjecting us to potentially costly government enforcement actions, private litigation and reputational risks;

• market demand for our products and services internationally;

• fluctuation in foreign currency exchange rates; and

• threatened terrorist attacks or political unrest in domestic and international markets.

For a description of our risk factors, please see Part I, Item 1A of this Annual Report on Form 10-K.

In addition, there may be other factors that could cause our actual results to be materially different from the results referenced in the forward-looking statements. Many of these factors will be important in determining our actual future results. Consequently, no forward-looking statement can be guaranteed. Our actual future results may vary materially from those expressed or implied in any forward-looking statements.

All forward-looking statements contained in this Annual Report on Form 10-K are qualified in their entirety by this cautionary statement. We caution readers not to place undue reliance on any forward-looking statements, which speak only as of the date made. We undertake no obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.

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PART I.

Item 1. Business

COMPANY OVERVIEW

Starz is a leading integrated global media and entertainment company. We provide premium subscription video programming in the United States to cable operators, satellite television providers, telecommunications companies and online video providers. We also develop, produce and acquire entertainment content and distribute this content to consumers in the United States (“U.S.”) and throughout the world. Our business operations are conducted by our wholly-owned subsidiaries Starz, LLC, Starz Entertainment, LLC (“Starz Entertainment”), Starz Media Group, LLC (“Starz Media”) and certain other immaterial subsidiaries. In October 2015, Starz, LLC acquired the 25% interest in Starz Media which had previously been owned by The Weinstein Company LLC (“Weinstein”). In October 2015, Starz, LLC sold 100% of its wholly-owned subsidiary Film Roman, LLC (“Film Roman”), which made up 100% of our Starz Animation operating segment.

Following the sale of Film Roman, we manage our operations through our Starz Networks and Starz Distribution operating segments. Our integrated operating segments enable us to maintain control and maximize the profitability of our original programming content and its marketing and distribution in the home entertainment and television ancillary markets. Our expanding original programming line-up also provides downstream revenue opportunities for the Starz Distribution operating segment to the extent we retain rights to exploit such programming in these ancillary markets both in the U.S. and around the world.

Financial information related to our operating segments can be found in Note 13 to our consolidated financial statements found beginning on page F-2 of this report. A discussion regarding our operating segments follows.

STARZ NETWORKS

Programming Networks

Starz Networks is a leading provider of premium subscription video programming to U.S. MVPDs, including cable operators (such as Comcast and Time Warner Cable), satellite television providers (such as DIRECTV and DISH Network) and telecommunications companies (such as AT&T and Verizon). In December 2015, we began offering Starz content to Amazon, an Online Distributor. Starz Networks’ flagship premium networks are STARZ and ENCORE. As of December 31, 2015, these networks were available for subscription in approximately 113 million U.S. multichannel video and broadband-only households, and together STARZ and ENCORE served 55.8 million subscribers. Our third network, MOVIEPLEX, offers a variety of art house, independent films and classic movie library content. STARZ and ENCORE, along with MOVIEPLEX, air more than 1,000 movies monthly across 17 linear networks complemented by on-demand and online services.

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Premium networks, such as STARZ and ENCORE, offer recently released and library film content, along with original series and specials without advertisements. Premium networks are offered by our Distributors to their subscribers either on a fixed monthly price as part of a programming tier or package or on an a la carte basis. Subscribers to premium networks have the exclusive opportunity to watch “first run” or new movies when they are first aired on linear television or online following their initial release in movie theaters.

STARZ PLAY, ENCORE PLAY and MOVIEPLEXPLAY offer online viewing options for STARZ, ENCORE and MOVIEPLEX subscribers to enjoy the quality original series and commercial-free movies offered on the respective STARZ, ENCORE and MOVIEPLEX networks. The PLAY services are available on a wide array of platforms and devices.

The table below depicts Starz Networks’ 17 existing linear networks, the respective on-demand services, as well as our STARZ PLAY, ENCORE PLAY and MOVIEPLEXPLAY online services and highlights some of their key attributes.

Demographics

Our STARZ networks target a balanced composition of men and women in the 25-54 age group who have higher levels of education and income of $50,000+ annually. The ENCORE networks are sold in both premium programming packages together with our STARZ networks and in less expensive digital programming packages depending on the Distributor. ENCORE targets male adults in the 35-50 age group (more targeted for the theme channels) with income of $50,000+ annually. MOVIEPLEX is sold primarily in less expensive digital programming packages and together with our ENCORE networks depending on the Distributor. Together with its theme channels, INDIEPLEX and RETROPLEX, MOVIEPLEX targets a broad age range of men and women 35 and older with incomes of $50,000+ annually.

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Affiliation Agreements

Our networks are distributed pursuant to affiliation agreements with our Distributors. These agreements require us to deliver programming that meets certain standards and volumes of first-run films or original series or number of first-run output studios. We earn revenue under these agreements either:

• based solely on the total number of subscribers who receive our networks multiplied by rates specified in the agreements (i.e., consignment), or

• based on amounts or rates which are not tied solely to the total number of subscribers who receive our networks (i.e., non-consignment). Examples of non-consignment agreements include fixed payment arrangements whereby a Distributor pays a fixed monthly payment (with annual escalators) regardless of the total number of subscribers who receive our networks. Additionally, Distributor payments may be calculated using the number of households subscribing to the Distributor’s basic service multiplied by rates specified in the agreement.

We work with our Distributors to increase the number of subscribers to our networks. To accomplish this, we may help fund the Distributors’ efforts to market our networks or we may permit Distributors to offer limited promotional periods without payment of subscriber fees. We believe these efforts enhance our relationship with Distributors, improve the awareness of our networks and ultimately increase subscribers and revenue over the term of our affiliation agreements.

Distributors report the number of subscribers to our networks and pay us for services, generally on a monthly basis. The agreements are generally structured to be multi-year agreements with staggered expiration dates and generally provide for annual contractual rate increases of a fixed percentage or a fixed amount, or rate increases tied to annual increases in the Consumer Price Index.

Our existing affiliation agreements expire at various dates through 2020. Failure to renew important affiliation agreements, or the termination of those agreements, would have a material adverse effect on our business, and, even if affiliation agreements are renewed, there can be no assurance that renewal rates will equal or exceed the rates that are currently being charged. We have not historically failed to renew an agreement, although agreements have sometimes expired before the renewal was fully negotiated and finalized or continued on a month-to-month basis (in such cases, paid carriage of our networks continued unaffected during the periods in which the agreements were being negotiated).

As of December 31, 2015, we had 23.6 million STARZ subscribers and 32.2 million ENCORE subscribers. Our subscriber numbers do not include subscribers who receive programming free as part of a promotional offer.

For the year ended December 31, 2015, revenue earned under affiliation agreements with AT&T (including DIRECTV, which it acquired in July 2015) and Comcast each accounted for at least 10% of Starz’s revenue.

Programming

The programming on our networks includes programming that we license from studios and other rights holders and original programming that we control, either through outright ownership or through licensing arrangements. Programming costs represent our single largest expense.

Output and Content License Agreements

The majority of the content on our networks consists of films that have been released theatrically. We have an exclusive long-term output licensing agreement with Sony Pictures Entertainment Inc. (“Sony”) for all qualifying films released theatrically in the U.S. by studios owned by Sony through 2021. We also have an output license agreement with The Walt Disney Company (“Disney”) for all qualifying films released theatrically in the U.S. by studios owned by Disney through 2015. The rights we license from Sony and Disney on an exclusive basis during our license periods include linear television, on-demand and online, among others.

Under these agreements, our networks have valuable exclusive rights to air new movies on linear television networks, on-demand or online during two or three separate windows over a period of approximately eight to ten years from their initial theatrical release. Generally, except on a video-on-demand or pay-per-view basis, no other network, online

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streaming or other video service may air or stream these recent releases during our first two windows and no other premium subscription service may air or stream these releases between our first two windows. Examples of recent Hollywood blockbusters that are exclusively aired or will be aired by our networks in 2016 include Star Wars: The Force Awakens, Ant-Man, Avengers: Age of Ultron, Concussion, Inside Out, Paul Blart: Mall Cop 2 and Pixels.

Our output licensing agreement with Sony, which began in 2001, includes all titles released under the Columbia, Screen Gems, Sony Pictures Classics and TriStar labels. We do not license films produced by Sony Pictures Animation. We have licensed theatrical titles from Disney since 1994. We currently license films released by Disney under the Disney, Touchstone, Pixar and Marvel labels. We do not license films produced by DreamWorks that are released by Disney.

In December 2012, we made the decision not to extend our licensing agreement with Disney beyond its expiration on December 31, 2015. We will continue to receive films theatrically released by Disney’s studios through December 31, 2015 with initial license periods for such films extending into 2017.

We also license library content comprised of older, previously released theatrical films from many of Hollywood’s major studios. In addition to theatrical films, we license made for television movies, series and other content from studios, production companies or other rights holders. We license library content primarily on an exclusive basis, with virtually the same and, in some cases, more expansive exhibition rights than our output agreements. The rights agreements for our library content are of varying duration and generally permit our networks to exhibit these films, series and other programming during certain window periods.

A summary of our significant output and library programming agreements follows:

Summary of Significant Output Programming Agreements		Summary of Significant Library Programming Agreements
Studio	Term(1)	Studio	Term
Disney (aka Buena Vista)	12/2015	Warner Bros.	07/2017
Sony	12/2021	Twentieth Century Fox	02/2019
		MGM	03/2021
		Sony Pictures	10/2021
		Universal	12/2021
		Paramount	10/2022
		Miramax	02/2023
		Lionsgate	09/2025
		The Weinstein Company	01/2026

(1) Dates based on initial theatrical release.

Both the Sony and Disney output agreements require us to pay for films at rates calculated on a pricing grid that is based on each film’s domestic box office performance (subject to maximum amounts payable per film and a cap on the number of films that can be put to us each year). The amounts we pay for library content vary based on each specific agreement, but generally reflect an amount per film, series or other programming commensurate with the quality (e.g., utility and perceived popularity) of the content being licensed.

Original Programming

We contract with independent production companies, including BBC Worldwide Limited, Film Afrika, Media Rights Capital and Sony Pictures Television, among others, to produce the majority of the original programming that appears on our networks. These contractual arrangements provide us with either:

• Outright ownership of the programming, in which case we wholly-own the series and receive all distribution and other rights to the content,

• An exclusive U.S. pay television license and other distribution or ancillary rights covering specific territories for specified periods of time, or

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• An exclusive U.S. pay television license which provides for the programming to appear only on our networks and services for specified periods of time.

To the extent we receive distribution rights to our original programming in the home entertainment and television ancillary markets in the U.S. and around the world, we create downstream revenue opportunities for our Starz Distribution operating segment.

Our currently announced 2016 STARZ Original series programming line-up:

“Black Sails” Season 3 (10 episodes, 10 hours): The Michael Bay produced “Black Sails” chronicles the adventures of fabled buccaneer Captain Flint and his men. In the wake of Charles Town, the world lives in fear of Captain Flint. But when his campaign of terror crosses over into madness, it falls to John Silver to locate the man within the monster. Meanwhile, with Eleanor Guthrie gone, Jack Rackham and Captain Charles Vane struggle to secure Nassau for the ages. All will be tested when a new threat arrives. It knows them. It understands them. And in the blink of an eye, it will turn them against each other.

“Outlander” Season 2 (13 episodes, 13 hours): Based on the international best-selling novels by Diana Gabaldon, the series created by Ronald D. Moore (“Battlestar Galactica”) spans the genres of romance, science fiction, history and adventure as it follows Claire Randall, a married WWII combat nurse who mistakenly falls back in time to 1743. Season 2 of Outlander begins as Claire and Jamie arrive in France, hell-bent on infiltrating the Jacobite rebellion led by Prince Charles Stuart and stopping the battle of Culloden. With the help of his cousin Jared (Robert Cavanah), a local wine merchant, Jamie and Claire are thrown into the lavish world of French society, where intrigue and parties are abundant, but political gain proves far less fruitful. Altering the course of history presents challenges that begin to weigh on the very fabric of their relationship. However, armed with the knowledge of what lies ahead, Claire and Jamie must race to prevent a doomed Highland uprising and the extinction of Scottish life as they know it.

“Girlfriend Experience” Season 1 (13 episodes, 6.5 hours): This 13-part anthology series is inspired by the 2009 Magnolia Pictures film of the same name, with acclaimed director Steven Soderbergh serving as executive producer. Christine Reade is a second-year student at Chicago-Burnham Law School and a new intern at the prestigious firm of Kirkland & Allen. Working hard to establish herself at the firm, her focus quickly shifts when a classmate introduces her to the world of transactional relationships. Known as GFEs, they are women who provide “The Girlfriend Experience” - emotional and sexual relationships at a very high price. Juggling two very different lives, Christine quickly finds herself drawn into the GFE world, attracted to the rush of control and intimacy.

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“Power” Season 3 (10 episodes, 10 hours): Curtis “50 Cent” Jackson returns as both an executive producer and actor on “Power,” a visionary crime drama set in two different worlds, the glamorous New York club scene and that city’s brutal drug trade. Season 3 finds James St. Patrick as the owner of new nightclubs, out of the drug game and in a rekindled relationship with his first love, Angela - the Assistant United States Attorney sworn to bring him to justice.  But just as they begin to believe James’ past criminal persona of “Ghost” may finally be behind them, both are forced to face the consequences of running from a life from which no one gets away clean. Will James St. Patrick’s dream life end before it begins with old sins and the specter of “Ghost” coming back to haunt him?  Be careful what you wish for. 

“Survivor’s Remorse” Season 3 (10 episodes, 5 hours): Inspired by the experiences of NBA star LeBron James and executive produced by television legend Tom Werner (“The Cosby Show” and “Roseanne”), “Survivor’s Remorse” is a half-hour comedy series that explores the complexity, comedy and drama of an experience that everyone reads about, but few understand - what truly happens when you make it out. Cam Calloway, a hardworking, young basketball star who is thrust into the limelight after signing a huge contract with a pro team in Atlanta continues to confront the challenges of balancing the needs of family with the rewards and responsibilities generated by his newfound wealth and fame.

“Blunt Talk” Season 2 (10 episodes, 5 hours): “Blunt Talk” is a character-driven comedy executive produced by Seth MacFarlane and Jonathan Ames, starring Sir Patrick Stewart. The series revolves around Walter Blunt, a British import intent on conquering the world of American cable news.  The 2^nd season of “Blunt Talk” finds Walter and his team on top of the network ratings when Walter runs into an old flame, in town to investigate a conspiracy involving one of Los Angeles’ most crucial environmental threats. As he is pulled deeper into a web of intrigue, his entire newsroom follows behind, bringing along with them their numerous neuroses. As ever, Walter must juggle these romances and rivalries while he changes the world, one news story at a time.

“Ash vs Evil Dead” Season 2 (10 episodes, 5 hours): In the long-awaited follow-up to the international classic horror film The Evil Dead, “Ash vs Evil Dead”reunites the original team of Sam Raimi (the Spider-Man film trilogy), Rob Tapert (“Spartacus” and “Xena: Warrior Princess”) and Bruce Campbell, who reprises his role as Ash, the stock boy, aging lothario and chainsaw-handed monster hunter who has spent the last 30 years avoiding responsibility, maturity and the terrors of the Evil Dead.  This season roars back into action with Ash leaving his beloved Jacksonville and returning to his hometown of Elk Grove. There, he confronts Ruby. The former enemies have to form an uneasy alliance as Elk Grove soon becomes the nucleus of evil.

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Our 2015 STARZ Original series programming line-up:

“Black Sails” Season 2 (10 episodes, 10 hours): With the Walrus crew stranded and the precious Urca gold in Spanish hands, Flint and Silver must join forces in a desperate bid for survival. Eleanor Guthrie’s grip on Nassau is slipping when a new breed of pirate arrives in the form of Ned Low. As blood is spilled and tensions mount, Charles Vane must decide which he values more: Eleanor’s life, or his men’s respect. And unbeknownst to them all, a prize of immeasurable value has already been smuggled onto the island. Its discovery will impose the ultimate judgment: are they men, or are they monsters?

“Outlander” Season 1B (8 episodes, 8 hours): As the season continues, Claire and Jamie’s relationship is tested, and Claire must reconcile her modern mindset with this 18th century world. Ruthless redcoats, volatile clan politics and even a witch trial force Jamie and Claire to escape to a new home. Just when their life as a married couple begins to take shape, Jamie is once again drawn into Captain Randall’s darkness. Ultimately, Claire discovers there is a fate worse than death as she struggles to save Jamie’s heart, as well as his soul.

“Power” Season 2 (10 episodes, 10 hours): Ghost’s club, Truth, caters to the elite: the famous and infamous boldface names that run the city that never sleeps. As its success grows, so does Ghost’s plan to build an empire. However, Truth hides an ugly reality: it’s a front for Ghost’s criminal underworld; a lucrative drug network, serving only the wealthy and powerful.  As Ghost is seduced by the prospect of a legitimate life, everything precious to him becomes unknowingly threatened. Once you’re in, can you ever get out?

“Survivor’s Remorse” Season 2 (10 episodes, 5 hours): Cam Calloway, along with his cousin and confidant Reggie Vaughn, confront the challenges of carrying opportunistic family members and their strong ties to the impoverished

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community that they come from. Cam, Reggie and an unforgettable group of characters wrestle with the rewards and pitfalls of stardom, love and loyalty. 

“Blunt Talk” Season 1 (10 episodes, 5 hours): Through the platform of his nightly interview show, Blunt is on a mission to impart his wisdom and guidance on how Americans should live, think and behave.  Besieged by network bosses, a dysfunctional news staff, numerous ex-wives and children of all ages, Blunt’s only support is the alcoholic manservant he transplanted from the U.K. to join him in Los Angeles and his manager, played by Oscar^® nominee Jacki Weaver.  The series follows the fallout from Blunt’s well-intentioned, but mostly misguided decision-making, both on and off the air.

“Ash vs Evil Dead” Season 1 (10 episodes, 5 hours): When a Deadite plague threatens to destroy all of mankind, Ash is finally forced to face his demons - personal and literal.  Destiny, it turns out, has no plans to release the unlikely hero from its “Evil” grip.

“Da Vinci’s Demons” Season 3 (10 episodes, 10 hours): In a world where thought and faith are controlled, Leonardo Da Vinci fights to set knowledge free. The tortured genius defies authority and throws himself into the future, forever changing the fate of mankind. Leonardo da Vinci’s world comes crashing down when the city of Otranto is torn apart by an Ottoman invasion. On the battlefield, the Turks use da Vinci’s own weapons against him… the designs for which were stolen by someone he trusted. This betrayal will haunt Leo long after the battle is decided, as will the deaths of loved ones lost in the fighting. When Rome instigates a Crusade against the Turks, he seizes the opportunity to join, but his mission is complicated by a series of grisly murders that terrorize Italy and threaten the Crusade itself. The Emmy^® Award winning series’ third season is executive produced by David S. Goyer (the Dark Knight film trilogy and Man of Steel) and is written by John Shiban (“Breaking Bad” and “The X-Files”).

“Flesh and Bone” (8 episodes, 8 hours): Created/executive produced by Moira Walley-Beckett (“Breaking Bad”), this series is described as a dark and gritty drama that unflinchingly explores the dysfunction and glamour of the ballet world. After a long career as an acclaimed dancer, Paul Grayson founded the American Ballet Company, and he’s determined to make it rank among the world’s best artistic institutions. The key, he believes, is Claire Robbins, a transcendent ballerina, capable of reaching the sublime, but her inner torment and aspirations drive her in compelling, unforeseeable ways, especially when confronted with Paul’s ping-pong fits of ebullience and rage. ABC’s mercurial leader requires his dancers’ abject devotion… to an extremely unhealthy degree.

Transmission

We uplink our programming to five non-preemptible, protected transponders on three satellites positioned in geo-synchronous orbit. These satellites feed our signals to various swathes of the Americas. We lease these transponders under long-term lease agreements. These transponder leases have termination dates ranging from 2018 to 2021. We transmit to these satellites from our uplink center in Englewood, Colorado. We have made arrangements at a third party facility to uplink our linear channels to these satellites in the event we are unable to do so from our uplink center.

Competition

Our networks operate in highly competitive markets. We compete with other programming networks, including premium television network providers HBO/Cinemax, Showtime and EPIX, for viewing and subscribership by each Distributor’s customer base. Our networks compete not only with other programming networks and other content available from our Distributors, but also with over-the-air broadcast television, online services (e.g., Netflix, Amazon and Hulu), mobile services, radio, print media, motion picture theaters, DVDs and other sources of information and entertainment.

We also compete with other content providers to secure desired entertainment programming. The success of our business depends on the ability to license and produce content for the networks that is adequate in quantity and quality and will generate satisfactory subscriber levels. A portion of our original programming and a majority of the theatrical movie content are obtained through agreements with other parties that have produced or own the rights to such programming. Other programming networks that are affiliated with programming sources such as movie or television studios or own film libraries may have a competitive advantage over us in this area. With respect to the acquisition of programs and movies that are not produced by or specifically for our networks, our competitors include national broadcast television networks, local broadcast television stations, other premium television networks, other cable programming networks and online video distributors. Some of these competitors have exclusive contracts with motion picture studios or independent motion picture distributors or own film libraries.

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Regulatory Matters

In the U.S., the FCC regulates broadcasters, the providers of satellite communications services and facilities for the transmission of programming services, the cable television systems and other Distributors that distribute such services, and, to some extent, the availability of the programming services themselves through its regulation of program licensing. Cable television systems in the U.S. are also regulated by municipalities or other state and local government authorities. Although cable television systems are subject to federal rate regulation on the provision of basic service, such regulation is strictly limited to those local franchise authorities that have made an affirmative showing that there is no effective competition in the community. Very few franchise authorities have filed the necessary rate regulation certification. Nonetheless, other franchise conditions could place downward pressure on the fees cable television companies are willing or able to pay for programming services, and regulatory carriage requirements also could adversely affect the number of channels available to carry our networks.

Regulation of Carriage of Broadcast Stations

The Cable Television Consumer Protection and Competition Act of 1992 (“1992 Cable Act”) granted broadcasters a choice of must carry rights or retransmission consent rights. The rules adopted by the FCC generally provided for mandatory carriage by cable systems of all local full-power commercial television broadcast signals selecting must carry rights and, depending on a cable system’s channel capacity, non-commercial television broadcast signals. Such statutorily mandated carriage of broadcast stations coupled with the provisions of the Cable Communications Policy Act of 1984, which require cable television systems with 36 or more “activated” channels to reserve a percentage of such channels for commercial use by unaffiliated third parties and permit franchise authorities to require the cable operator to provide channel capacity, equipment and facilities for public, educational and government access channels, could adversely affect our networks by limiting the carriage of our services in cable systems with limited channel capacity.

Closed Captioning

The Telecommunications Act of 1996 also required the FCC to establish rules to ensure that video programming is fully accessible to the hearing impaired through closed captioning. The rules adopted by the FCC require substantial closed captioning, with only limited exemptions. In 2012, the FCC adopted regulations pursuant to the Twenty-First Century Communications and Video Accessibility Act of 2010 that require, among other things, video programming owners to send caption files for Internet protocol (“IP”) delivered video programming to video programming distributors and providers along with program files. A four year implementation period for the IP-delivered programming captioning requirements will be completed in 2016. In February 2014, the FCC adopted closed captioning quality standards regarding captioning accuracy, synchronicity, completeness and placement and captioning best practices for programmers. These new closed captioning requirements became effective in March 2015. As a result, our networks may incur additional costs for closed captioning.

Commercial Advertisement Loudness Mitigation (“CALM”) Act

Congress enacted the Commercial Advertisement Loudness Mitigation (“CALM”) Act in 2010. The CALM Act directs the FCC to incorporate into its rules and make mandatory a technical standard that is designed to prevent digital television commercial advertisements from being transmitted at louder volumes than the program material they accompany. The FCC’s CALM Act implementing regulations became effective on December 13, 2012. In 2014, the FCC revised its rules to incorporate the successor commercial loudness technical standard, and compliance with the successor technical standard is now mandatory. Although the FCC’s CALM Act regulations place the primary compliance responsibility on Distributors, the FCC’s “safe harbor” compliance approach, which requires programmers to issue “widely available” CALM Act compliance certifications to Distributors, effectively shifts much of that responsibility to programmers.

Copyright Regulation

We are required to obtain any necessary music performance rights from the rights holders. These rights generally are controlled by the music performance rights organizations of the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI) and the Society of European Stage Authors and Composers (SESAC), each with rights to the music of various artists.

Satellites and Uplink

In general, authorization from the FCC must be obtained for the construction and operation of a communications satellite. The FCC authorizes utilization of satellite orbital slots assigned to the U.S. by the World Radiocommunication

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Conference. Such slots are finite in number, thus limiting the number of carriers that can provide satellite transponders and the number of transponders available for transmission of programming services. At present, however, there are numerous competing satellite service providers that make transponders available for video services. The FCC also regulates the earth stations uplinking to and/or downlinking from such satellites.

Program Access

Because overlapping attributable interests continue to exist between us and entities owning cable systems, we remain subject to the FCC’s program access and antidiscrimination rules. The 1992 Cable Act and implementing regulations generally prohibit a cable operator that has an attributable interest in a satellite programmer from improperly influencing the terms and conditions of sale to unaffiliated Distributors. Further, the 1992 Cable Act requires that such affiliated programmers make their programming services available to cable operators and competing Distributors on terms and conditions that do not unfairly discriminate among Distributors. As part of the FCC’s 2008 order approving Old LMC’s (for an explanation of Old LMC, Liberty Media and the LMC Spin-Off,see “Corporate Information” and “Item 6. Selected Financial Data”) acquisition of a controlling interest in DIRECTV, the FCC imposed program access conditions on Old LMC and its affiliated entities, including us. Under this order, as amended by the FCC’s October 5, 2012 order allowing the general restrictions on exclusive contracts to expire, we are required to make our programming services available to all Distributors on nondiscriminatory terms and conditions. We are also currently subject to the program access rules due to interests held by Liberty Broadband Corporation in Charter Communications, Inc., as well as interests held by Liberty Global plc in a cable television system in Puerto Rico, which interests are attributable to us under FCC rules. The FCC’s program licensing rules establish a damages remedy in situations where the defendant knowingly violates the regulations and a timeline for the resolution of complaints, among other things.

In 2014, the FCC released a notice of proposed rulemaking seeking comment on a proposal to revise the definition of distributor in its rules to include services, such as Internet-based services, that make available for purchase by subscribers or customers, multiple linear streams of video programming, regardless of the technology used to distribute the programming. If the FCC were to adopt its proposed definition and determine that the program access rules apply to such distributors, we potentially would be required to negotiate with, and license our programming services to, such distributors and to comply with other related regulatory requirements.

Online Services

To the extent that our programming services are distributed through online based platforms, we must comply with various federal and state laws and regulations applicable to online communications and commerce. Congress and individual states may consider additional legislation addressing online privacy and other issues.

Proposed Changes in Regulation

The regulation of programming services, cable television systems, DBS providers, broadcast television licensees and online distributed services is subject to the political process and has been in constant flux historically. Further material changes in the law and regulatory requirements must be anticipated and there can be no assurance that our business will not be materially adversely affected by future legislation, new regulation or deregulation.

STARZ DISTRIBUTION

Our Starz Distribution operating segment includes the operations of our Anchor Bay Entertainment, Starz Digital and Starz Worldwide Distribution businesses.

Sales and Distribution

Anchor Bay Entertainment is the global home video sales arm of Starz and distributes DVDs (standard definition and Blu-ray) under the ANCHOR BAY brand, in the U.S., Canada and other international territories to the extent we have home entertainment rights to such content in international territories. Anchor Bay Entertainment acquires and licenses various titles from third parties and also develops and produces certain of its content. Certain of the titles acquired by Anchor Bay Entertainment air on Starz Networks’STARZ and ENCORE networks. Anchor Bay Entertainment also distributes Starz Networks’ original series and Weinstein’s titles. Each of these titles are sold to and distributed by regional and national retailers and other companies, including Amazon, Best Buy, Ingram Entertainment, Netflix, Redbox, Target and Wal-Mart. Consistent with the Hollywood studios, Anchor Bay Entertainment has a direct vendor relationship with the major North

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American retailers (e.g., Best Buy, Target, Wal-Mart, etc.). Generally, retailers have the right to return unsold products. Anchor Bay Entertainment records its revenue net of an allowance for future returns of unsold product.

Starz Digital is the global digital and on-demand licensing arm of Starz and distributes content on pay-per-view, video-on-demand, subscription video-on-demand (“SVOD”), ad-supported video-on-demand (“AVOD”), electronic sell-through and other digital formats for Starz’s owned content, including Starz Networks’ original series, Weinstein’s titles and content licensed from third parties in the U.S. and throughout the world to the extent it has rights to such content in international territories. Certain of the titles acquired by Starz Digital air on Starz Networks’ STARZ and ENCORE networks. Starz Digital receives fees for its content from a wide array of partners ranging from traditional MVPDs to online and mobile distributors.

Starz Worldwide Distribution is the global television licensing arm of Starz and distributes movies, television series, documentaries, children’s programming and other video content. Starz Worldwide Distribution exploits Starz’s owned content, including Starz Networks’ original series, and content for which it has licensed rights on free or pay television in the U.S. and throughout the world to the extent it has rights to such content in international territories. Starz Worldwide Distribution receives fees for its content primarily from various U.S. and international programming networks.

Content

Amortization of content acquisition costs, participations and royalties payable to its content licensors and residuals (which we collectively call production and acquisition costs) represent Starz Distribution’s largest expense.

Marketing

The majority of Starz Distribution’s marketing is performed by Anchor Bay Entertainment, which markets and advertises each title prior to and during release generally through the use of a combination of television and other media related advertising and discounts, rebates and cooperative advertising with retailers depending on the specific genre, demographic appeal and the overall sales expectations for the title.

Fox Agreement

Anchor Bay Entertainment has outsourced substantially all of its home video fulfillment services, including DVD manufacturing and distribution, to Twentieth Century Fox Home Entertainment LLC (“Fox”). Anchor Bay Entertainment does not outsource its sales or marketing functions and maintains its own marketing team and sales force. Anchor Bay Entertainment believes the agreement with Fox provides supply chain efficiencies due to the combined volume of titles provided by Anchor Bay Entertainment and Fox (Fox also has fulfillment agreements with Lionsgate and MGM), while not compromising Anchor Bay Entertainment’s control over its products and retail relationships.

Weinstein Agreement

Anchor Bay Entertainment has a license agreement with Weinstein for the distribution, by Anchor Bay Entertainment and Starz Digital, of certain of Weinstein’s theatrical titles through April 2020. Anchor Bay Entertainment earns a fee for the distribution of such theatrical titles.

Competition

Starz Distribution’s markets are highly competitive. Starz Distribution competes to sell content against all of the major Hollywood studios, including Disney, Paramount, Sony, Twentieth Century Fox, Universal and Warner Bros., as well as smaller studios such as Lionsgate. All of these studios distribute their theatrical, television and other titles acquired from third parties on DVD, various digital formats and through broadcast and cable programming networks. Starz Distribution also competes with independent distributors that are not affiliated with a Hollywood studio such as Alchemy, Cinedigm Corp., Entertainment One, Gaiam, Magnolia Pictures and RLJ Entertainment.

Starz Distribution competes with Hollywood studios and other distributors for “placement” at retailers and other distributors. Placement refers to the location in a store or on a website where content is placed for sale as well as the actual amount of physical shelf space allotted to a release. Starz Distribution also competes with Hollywood studios and other distributors to acquire content distribution rights. Starz Distribution’s ability to acquire quality content in sufficient quantities has a direct impact on its ability to acquire shelf space at retail locations and on websites. In addition, Starz Distribution’s sales are impacted by myriad choices consumers have to view entertainment content, including over-the-air broadcast

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television, cable television networks, online services, mobile services, radio, print media, motion picture theaters and other sources of information and entertainment.

STRATEGY AND CHALLENGES

Our mission is to be a leading global entertainment brand providing powerful and immersive experiences. To that end, our goal is to provide Distributors and subscribers with high-quality, differentiated premium video services available on multiple viewing platforms.

Strategy

We focus on the following strategic goals:

Deliver engaging, brand building, premium original programming. We believe this is the most effective path to building a differentiated STARZ brand, which resonates with our Distributors and our subscribers. Targeting underserved audiences (e.g., African American, female, Latino) will continue to be a core pillar of our original programming content strategy. We continue to use various mechanisms to prudently and economically increase the volume of our original programming to our goal of 80-90 episodes per year, including wholly-owned, co-produced and licensed original series. As a result, our subscribers will have a regular opportunity to see a new episode of a STARZ Original series or a new season of an existing STARZ Original series on our flagship STARZ network throughout the year.

Create compelling consumer offerings. We intend to ensure that our services are available in formats and platforms that meet the needs of our Distributors as well as our subscribers. We seek to monetize the digital rights we control for our exclusive original series and those under our programming licensing agreements with Hollywood studios by licensing the digital rights to our services to our traditional distributors, as well as online video providers.

Expand the business and STARZ brand in new international markets. We continue to distribute our growing line-up of exclusive original programming throughout the world in the home entertainment and television ancillary markets to the extent we control the rights to such content in international territories. During 2015, we launched STARZ PLAY Arabia, a STARZ-branded online SVOD service in the Middle East and North African regions. We will continue to look for other opportunities in international markets to enhance our brand and ultimately grow the business.

We believe our strategy, combined with a proven management team, positions Starz for continued success. We look forward to making our networks and services “must haves” for subscribers and a meaningful margin driver for our Distributors, thereby driving value for our stockholders.

Challenges

We face certain key challenges in our attempt to achieve our strategic goals, including:

• Our ability to renew and extend affiliation agreements with key Distributors on favorable terms;

• Potential loss of subscribers due to competition from other networks and video programming services, as well as economic conditions;

• Increased rates paid by our Distributors to carry broadcast networks and sports networks, making it more difficult for consumers to afford premium video services; and

• Our ability to continue to acquire or produce affordable programming content, including original programming content that appeals to our Distributors and subscribers.

See “Item 1A. Risk Factors” for a discussion of these and other factors that could impact our performance and operating results.

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EMPLOYEES

As of December 31, 2015, we had 772 full-time and part-time employees. We consider our employee relations to be good.

CORPORATE INFORMATION

Starz is a Delaware corporation, incorporated on May 7, 2007, with principal executive offices located at 8900 Liberty Circle, Englewood, Colorado 80112 and 9242 Beverly Boulevard, Suite 200, Beverly Hills, California 90210. Our main telephone number is (720) 852-7700 in Englewood, Colorado and (424) 204-4110 in Beverly Hills, California.

In January 2013, Starz (formerly known as Liberty Media Corporation (“Old LMC”)) completed the spin off (the “LMC Spin-Off”) of its wholly-owned subsidiary Liberty Media Corporation (formerly known as Liberty Spinco, Inc. (“Liberty Media”)). Following the LMC Spin-Off, Starz retained the businesses of its wholly-owned subsidiary, Starz, LLC, and all other businesses, assets and liabilities of Old LMC are included in Liberty Media. As a result, Liberty Media became a separate public company on January 11, 2013. For additional information regarding the LMC Spin-Off, see “Item 6. Selected Financial Data.” Unless the context otherwise requires, Old LMC is used when events or circumstances being described occurred prior to the LMC Spin-Off, and Starz is used when events or circumstances being described occurred following the LMC Spin-Off and in the context of the historical financial information.

(a) Financial Information About Geographic Areas

Information about our geographic areas can be found in Note 12 to our consolidated financial statements found beginning on page F-2 of this report.

(b) Available Information

All of our current and future filings with the SEC, including our Form 10-Ks, Form 10-Qs and Form 8-Ks, as well as amendments to such filings, are or will be available on our Internet website free of charge as soon as reasonably practicable after we file such material with the SEC. Our website address is www.starz.com. All of Old LMC’s filings with the SEC, including Form 10-Ks, Form 10-Qs and Form 8-Ks, as well as amendments to such filings, are available on our Internet website free of charge.

Our corporate governance guidelines, code of business conduct and ethics, audit committee charter, compensation committee charter and nominating and corporate governance committee charter are also available on our website. In addition, we will provide a copy of any of these documents, free of charge, to any stockholder who calls or submits a request in writing to Investor Relations, Starz, 8900 Liberty Circle, Englewood, Colorado 80112, telephone number (855) 807-2929.

The information contained on our website is not incorporated by reference herein.

Item 1A. Risk Factors

The risks described below and elsewhere in this Annual Report on Form 10-K are not the only ones facing our company. In the event any of the following risks actually occurs, our business, financial condition and results of operations could be materially adversely affected. The risks described below are those that we currently believe may materially affect us. Additional risks not presently known to us, or that we currently consider immaterial, may also materially adversely affect us.

This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere in this Annual Report on Form 10-K.

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RISKS RELATED TO OUR BUSINESS

Economic instability in the U.S. or in other parts of the world could adversely affect our business.

Our business is affected by prevailing economic conditions. Financial instability or a general decline in economic conditions in the U.S. could affect our business in an adverse manner. Lower household income and decreases in U.S. consumer discretionary spending, which is sensitive to general economic conditions, may affect cable television and other video service subscriptions, in particular with respect to digital programming packages on which our ENCORE and MOVIEPLEX networks are typically carried and premium video programming packages and premium a la carte on which our STARZ networks are typically carried. A reduction in spending could lead to a decrease in the number of subscribers to our networks, which could have a materially adverse impact on our business, financial condition and results of operations.

We depend on Distributors that carry our programming, and no assurance can be given that we will be able to maintain and renew our affiliation agreements on favorable terms or at all.

We currently distribute our programming through affiliation agreements with many Distributors, including AT&T, Cablevision, Charter, Comcast, Cox, DIRECTV, DISH Network, Time Warner Cable and Verizon. Our affiliation agreements with Distributors are scheduled to expire at various dates through 2020. The largest Distributors have significant leverage in their relationship with certain programmers, including Starz. As of September 30, 2015, the four largest MVPDs provided service to approximately 75% of U.S. multichannel households. Further consolidation among Distributors could increase this leverage.

In some cases, if a Distributor is acquired, the affiliation agreement of the acquiring Distributor will govern following the acquisition. In those circumstances, the acquisition of a Distributor that is party to affiliation agreements with us that are more favorable to us would adversely impact our business, financial condition and results of operations.

The renewal negotiation process for affiliation agreements is typically lengthy. In certain cases, renewals are not agreed upon prior to the expiration of a given agreement, while the programming continues to be carried by the relevant Distributor pursuant to the other terms and conditions in the affiliation agreement. We may be unable to obtain renewals with our current Distributors on acceptable terms, if at all. We may also be unable to successfully negotiate affiliation agreements with new or existing Distributors to carry our programming. The failure to successfully renew affiliation agreements on acceptable terms, or the failure to negotiate new affiliation agreements at all, in each case covering a material portion of multichannel television households, could result in a discontinuation of carriage, or could otherwise materially adversely affect our subscriber growth, revenue and earnings which would materially adversely affect our business, financial condition and results of operations.

We depend on a limited number of Distributors for a significant portion of our revenue.

Our networks depend upon agreements with a limited number of Distributors. For the year ended December 31, 2015, AT&T (including DIRECTV, which it acquired in July 2015) and Comcast each accounted for at least 10% of Starz’s revenue. The loss of any significant Distributor, or our inability to renew an affiliation agreement with any significant Distributor on acceptable terms, would have a materially adverse effect on our business, financial condition and results of operations.

Occasionally we have disputes with our Distributors over the terms of our carriage, such as how the Distributor markets our services (such as free offers), or other contract terms. If not resolved through business negotiation, such disputes could result in litigation or termination of an existing agreement. Termination of a significant existing agreement resulting in the loss of distribution of our programming to a material portion of our multichannel television households would materially adversely affect our subscriber growth, revenue and earnings and would have a materially adverse effect on our business, financial condition and results of operations.

Increasing rates paid by Distributors to other programmers may result in increased rates charged to their subscribers for their services, making it more costly for subscribers to purchase our STARZ and ENCORE services.

The amounts paid by Distributors to certain programming networks for the rights to carry broadcast networks and sports networks have increased substantially in recent years. As a result, Distributors have passed on some of these increases to their subscribers. The rates that subscribers pay for programming from Distributors continue to increase each year and these increases may impact our ability, as a premium subscription video provider, to increase or even maintain our subscriber levels and may adversely impact our revenue and earnings which would have a materially adverse effect on our business, financial condition and results of operations.

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We are subject to intense competition for marketing and carriage of our networks, which may have a negative effect on our profitability or on our ability to expand our business.

The subscription video programming industry is highly competitive. Our STARZ and ENCORE networks compete with other programming networks and other types of video programming services for marketing and distribution by Distributors. We face intense competition from other providers of programming networks for the right to be carried by a particular Distributor and for the right to be carried by such Distributor on a particular “tier” or in a particular “package” of service.

Certain programming networks affiliated with broadcast networks like ABC, CBS, Fox or NBC or other programming networks affiliated with sports and certain general entertainment networks with strong viewer ratings have a competitive advantage over our networks in obtaining distribution through the “bundling” of carriage agreements for such programming networks with a Distributor’s right to carry the affiliated broadcasting network. The inability of our programming networks to be carried by one or more Distributors, or the inability of our programming networks to be placed on a particular tier or programming package could have a materially adverse effect on our business, financial condition and results of operations.

We depend on our Distributors to market our networks and other services, the lack of which may result in reduced customer demand.

At times, certain of our Distributors do not allow us to participate in cooperative marketing campaigns to market our networks and services. Our inability to participate in the marketing of our networks and other services may put us at a competitive disadvantage. Also, our Distributors are often focused more on marketing their bundled service offerings (video, Internet and telephone) than premium video services. If our Distributors do not sign up new subscribers to our networks, we may lose subscribers which would have a materially adverse effect on our business, financial condition and results of operations.

We may not be able to adapt to new content distribution platforms and to changes in consumer behavior resulting from these new technologies.

We must successfully adapt to technological advances in our industry, including the emergence of alternative distribution platforms. Our ability to exploit new distribution platforms and viewing technologies will affect our ability to maintain or grow our business and may increase our capital expenditures. Additionally, we must adapt to changing consumer behavior driven by advances such as DVRs, video-on-demand, online based content delivery, Blu-ray players, game consoles and mobile devices. Such changes may impact the revenue we are able to generate from our traditional distribution methods by decreasing the viewership of our networks on systems of cable operators, satellite television providers and telecommunication companies, or by decreasing the number of households subscribing to services offered by those Distributors. If we fail to adapt our distribution methods and content to emerging technologies, our appeal to our targeted audiences might decline and there would be a materially adverse effect on our business, financial condition and results of operations.

Our business depends on the appeal of our programming to Distributors and subscribers, which is difficult to predict.

Our business depends in part upon viewer preferences and audience acceptance of the programming on our networks. These factors are difficult to predict and subject to influences that are beyond our control, such as the quality and appeal of competing programming, general economic conditions and the availability of other entertainment activities. We may not be able to anticipate and react effectively to shifts in tastes and interests in our markets. A change in viewer preferences could cause our programming to decline in popularity, which could jeopardize renewal of our affiliation agreements with Distributors. In addition, our competitors may have more flexible programming arrangements, as well as greater amounts of available content, distribution and capital resources and may be able to react more quickly than we can to shifts in tastes and interests.

To an increasing extent, the success of our business depends on exclusive original programming and our ability to accurately predict how audiences will respond to our original programming. Because original programming often involves a greater degree of financial commitment, as compared to acquired programming that we license from third parties, and because our network branding strategies depend significantly on a relatively small number of original series, a failure to anticipate viewer preferences for such series could be especially detrimental to our business.

In addition, theatrical feature films constitute a significant portion of the programming on our STARZ and ENCORE programming networks. In general, the popularity of feature-film content on linear television is declining, due in part to the

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broad availability of such content through an increasing number of distribution platforms prior to our linear window. Should the popularity of feature-film programming suffer significant further declines, we may lose subscribership or be forced to rely more heavily on original programming, which could increase our costs.

If our programming does not gain the level of audience acceptance we expect, or if we are unable to maintain the popularity of our programming, we may have a diminished negotiating position when dealing with Distributors, which could reduce our revenue and earnings. We cannot assure you that we will be able to maintain the success of any of our current programming, or generate sufficient demand and market acceptance for our new original programming. This would materially adversely impact our business, financial condition and results of operations.

Our networks’ success depends upon the availability of programming that is adequate in quantity and quality, and we may be unable to secure or maintain such programming.

Our networks’ success depends upon the availability of quality programming, particularly original programming and films, that is suitable for our target markets. While we produce some of our original programming, we obtain most of our programming (including some of our original series, films and other acquired programming) through agreements with third parties that have produced or control the rights to such programming. These agreements expire at varying times and may be terminated by the other party if we are not in compliance with their terms.

We compete with other programming networks to secure desired programming. Competition for programming has increased as the number of programming networks has increased. Other programming networks that are affiliated with programming sources such as movie or television studios or film libraries may have a competitive advantage over us in this area. In addition to other cable programming networks, we also compete for programming with national broadcast television networks, local broadcast television stations, video-on-demand services and online based content delivery services such as Amazon, Hulu, iTunes and Netflix. Some of these competitors have exclusive contracts with motion picture studios or independent motion picture distributors or own film libraries.

In December 2012, we made the decision not to extend our licensing agreement with Disney beyond its expiration on December 31, 2015. We will continue to receive qualifying films released theatrically in the U.S. by Disney’s Walt Disney Pictures, Walt Disney Animation Studios, Disney-Pixar, Touchstone Pictures, Marvel Entertainment and Hollywood Pictures labels through December 31, 2015, with initial license periods for such films extending into 2017. In February 2013, we extended our Sony output licensing agreement for initial theatrical releases in the U.S. through December 31, 2021.

We cannot assure you that we will ultimately be successful in negotiating renewals of our programming rights agreements or in negotiating adequate substitute agreements. In the event that these agreements expire or are terminated and are not replaced by programming content, including additional original programming, acceptable to our Distributors and subscribers, it would have a materially adverse impact on our business, financial condition and results of operations.

We have entered into output licensing agreements that require us to make substantial payments.

We have entered into agreements to acquire theatrical releases from Sony and Disney. The Sony agreement will expire on December 31, 2021. The agreement with Disney expired on December 31, 2015, but we will continue to receive films theatrically released by Disney’s studios through that date, with initial license periods for these films extending into 2017. Each agreement requires us to pay for films released by each studio at rates calculated on a pricing grid that is based on each film’s domestic box office performance (subject to maximum amounts payable per film and a cap on the number of films that can be put to us each year), and the amounts payable pursuant to those agreements will be substantial. We believe that the theatrical performance of the films we will receive under the agreements will perform at levels consistent with the performance of films we have received from Sony and Disney in the past. We also assume a certain number of annual releases of first run films by Sony’s studios consistent with the number we received in prior years. Should the films perform at higher levels across the slate of films we receive or the quantity of films increase, then our payment obligations under these agreements would increase and would have a materially adverse effect on our business, financial condition and results of operations.

Changes in foreign, state and local tax incentives may increase the cost of original programming content to such an extent that they are no longer feasible.

Original programming requires substantial financial commitment. In some cases the financial commitment can be offset by foreign, state or local tax incentives. However, there is a risk that the tax incentives will not remain available for the duration of a series. If tax incentives are no longer available or reduced substantially, it may result in increased costs for us to complete the production or make the production of additional seasons more expensive. If we are unable to produce original

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programming content on a cost effective basis our business, financial condition and results of operations would be materially adversely affected.

Any continued or permanent inability to transmit our programming via satellite would result in lost revenue and could result in lost subscribers.

Our success is dependent upon our continued ability to transmit our programming to Distributors from our satellite uplink facility, which transmissions are subject to FCC compliance in the U.S. We have entered into long-term satellite transponder leases that expire between 2018 and 2021 in the U.S. for carriage of our networks’ programming. These leases provide for the continued carriage of our programming on available replacement transponders and/or replacement satellites, as applicable, throughout the term of the leases, in the event of a failure of either the transponders and/or satellites currently carrying our programming. Although we believe we take reasonable and customary measures to ensure continued satellite transmission capability, termination or interruption of satellite transmissions may occur and would have a materially adverse effect on our business, financial condition and results of operations.

Despite our efforts to secure transponder capacity with long-term satellite transponder leases, there is a risk that when these leases expire, we may not be able to secure capacity on a transponder or may not be able to secure capacity on a transponder on the same or similar terms. This may result in an inability to transmit our content and could result in significant lost revenue and lost subscribers and would have a materially adverse effect on our business, financial condition and results of operations.

If our technology facilities fail or their operations are disrupted, our business could be damaged.

Our programming is transmitted from our uplink center in Englewood, Colorado. We use this center for a variety of purposes, including signal processing, satellite uplinking, program editing, on-air promotions, creation of programming segments (i.e., interstitials) to fill short gaps between featured programs, quality control and live and recorded playback. Our uplink center is equipped with backup generator power and other redundancies. However, like other facilities, this facility is subject to interruption from fire, lightning, adverse weather conditions and other natural causes. Equipment failure, employee misconduct or outside interference could also disrupt the facility’s services. We have made arrangements at a third party facility to uplink our linear channels and services to our satellites in the event we are unable to do so from this facility. Additionally, we have direct fiber connectivity to certain of our Distributors, which would allow continuous operation with respect to a significant segment of our subscriber base in the event of a satellite transmission interruption. Notwithstanding these precautions, any significant or prolonged interruption at our facility, and any failure by our third party facility to perform as intended, would have a materially adverse effect on our business, financial condition and results of operations.

Protection of electronically stored data is costly and if our data is compromised in spite of this protection, we may incur additional costs, lost opportunities and damage to our reputation.

We maintain information in digital form as necessary to conduct our business, including confidential and proprietary information, copies of films, television programs and other content and personal information regarding our employees. Data maintained in digital form is subject to the risk of intrusion, tampering and theft. We develop and maintain systems to prevent this from occurring, but the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated. Moreover, despite our efforts, the possibility of intrusion, tampering and theft cannot be eliminated entirely, and risks associated with each of these remain. In addition, we provide confidential information, digital content and personal information to third parties when it is necessary to pursue business objectives. While we obtain assurances that these third parties will protect this information and, where appropriate, monitor the protections employed by these third parties, there is a risk that data systems of these third parties may be compromised. If our data systems or data systems of these third parties are compromised, our ability to conduct our business may be impaired, we may lose profitable opportunities or the value of those opportunities may be diminished and we may lose revenue as a result of unlicensed use of our intellectual property. Furthermore, a penetration of our network security or other theft or misuse of confidential and proprietary information, digital content or personal employee information could subject us to business, regulatory, litigation and reputation risk, which could have a materially adverse effect on our business, financial condition and results of operations.

Piracy of films and television programs is an increasingly prevalent problem and could adversely affect our business over time.

Piracy is prevalent in many parts of the world and has been made easier in recent years by the availability of digital copies of content and technological advances allowing conversion of films and television programs into digital formats, which

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facilitates the creation, transmission and sharing of high quality unauthorized copies of films and television programs. Piracy has long-term implications for our business, as it may eventually force film studios to invest less in films, resulting in the release of fewer films and/or an increase in the use of other channels for releasing films. If piracy of films or television programs were to increase, it could have a materially adverse effect on our business, financial condition and results of operations.

We may fail to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties.

We regard our intellectual property rights, including service marks, trademarks, domain names, copyrights (including our programming and our websites), trade secrets and similar intellectual property, as critical to our success. Our business also relies heavily upon software codes, informational databases and other components that aid in the provision of our networks to our Distributors.

From time to time, we are subject to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of the trademarks, patents, copyrights and other intellectual property rights of third parties. In addition, litigation may be necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business, financial condition and results of operations. Our failure to protect our intellectual property rights, particularly our brand, in a meaningful manner or challenges to related contractual rights could result in erosion of our brand and limit our ability to control marketing of our networks, which could have a materially adverse effect on our business, financial condition and results of operations.

The loss of any of our key personnel and artistic talent could adversely affect our business.

We believe that our future success will depend to a significant extent upon the performance of our senior executives. We do not maintain “key man” insurance. In addition, we depend on the availability of a number of writers, directors, producers and others, who are employees of third-party production companies that create our original programming. The loss of any significant personnel or talent could have a materially adverse effect on our business, financial condition and results of operations.

Labor disputes may disrupt our operations and adversely affect the profitability of our business.

Our content providers’ talent, including writers, directors, actors and production personnel and those working on our original series, may be covered by collective bargaining agreements. In general, a labor dispute involving talent involved in content production at our content providers or working on our original series may disrupt our operations or result in work stoppages. Labor disputes or work stoppages may impair our ability to complete our original series or restrict our access to content, resulting in increased costs and decreased revenue, which would have a materially adverse effect on our business, financial condition and results of operations.

Our business is limited by regulatory constraints which may adversely impact our operations.

Although our business generally is not directly regulated by the FCC, under the Communications Act of 1934 and the 1992 Cable Act, there are certain FCC regulations that govern our business either directly or indirectly. See “Item 1. Business - Starz Networks - Regulatory Matters.” Furthermore, to the extent that regulations and laws, either presently in force or proposed, hinder or stimulate the growth of the cable television and satellite industries, our business will be affected.

Regulations governing our businesses are subject to the political process and have been in constant flux historically. Further material changes in the law and regulatory requirements must be anticipated. We cannot assure you that we will be able to anticipate material changes in laws or regulatory requirements or that future legislation, new regulation or deregulation will not have a materially adverse effect on our business, financial condition and results of operations.

Our license agreement with Weinstein requires us to pay a master advance.

We pay a master advance to Weinstein for a portfolio of films that we distribute for Weinstein in the home entertainment ancillary revenue markets. The master advance is non-refundable and is earned back or recouped from the profits earned from the distribution of the overall portfolio of films. The total master advance could exceed the portfolio’s

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total profits, which would require us to record such excess as a loss in our consolidated statement of operations. Such loss could be significant and have a materially adverse effect on our business, financial condition and results of operations.

Our Starz Distribution operating segment depends on the quantity and box office success of Weinstein titles, which are difficult to predict.

The financial performance of our Anchor Bay Entertainment and Starz Digital businesses significantly depends on the number of titles provided by Weinstein, as well as the U.S. box office success of Weinstein titles.  If we are not provided with a sufficient number of Weinstein titles, if Weinstein titles do not gain the appropriate level of U.S. box office success, or if they have limited commercial appeal in the home entertainment ancillary market, we may be unable to garner advantageous placement for our DVDs and other media, at retail and online, and revenue for our Starz Distribution operating segment could be significantly impacted which may have a materially adverse effect on our business, financial condition and results of operations.

Our Starz Distribution operating segment is subject to intense competition, which may have a materially adverse effect on our profitability or on our ability to expand our business.

The home entertainment industry is highly competitive. We compete to sell DVDs and other media (e.g., digital and television programs) with all of the major Hollywood studios, including Disney, Paramount, Sony, Twentieth Century Fox, Universal and Warner Bros. as well as smaller studios such as Lionsgate. All of these studios distribute their theatrical, television and titles acquired from third parties on DVD and other media and have marketing budgets that are well in excess of the amounts we are able to spend to market our content. We also compete with independent home entertainment distributors that are not affiliated with a Hollywood studio such as Alchemy, Cinedigm Corp., Entertainment One, Gaiam, Magnolia Pictures and RLJ Entertainment.

In addition to competing with these parties for ultimate consumer sales of DVDs and other media, we also compete with them for “placement” at retailers and other distributors. Placement refers to the location in a store or on a website where our content is placed for sale as well as the actual amount of physical shelf space allotted to a release. The better the location and the more space we are allotted the greater the chance our content will be seen by the consumer and ultimately purchased. The quality and quantity of titles as well as the quality of our marketing programs determines how much shelf space we are able to garner at any given time as retailers and other distributors look to maximize sales.

We compete with Hollywood studios and other distributors that may have certain competitive advantages over us to acquire the rights to sell or rent DVDs and other media. Our ability to license and produce quality content in sufficient quantities has a direct impact on our ability to acquire shelf space at retail locations and on websites. Some of our competitors, including the Hollywood studios, are large publicly held companies that have greater financial resources than we do. In addition, most of our content is obtained through agreements with other parties that have produced or own the rights to such content, while Hollywood studios produce most of the content they distribute.

Our DVD sales and other media sales are also impacted by myriad choices consumers have to view entertainment content, including over-the-air broadcast television, cable television networks, online services, mobile services, radio, print media, motion picture theaters and other sources of information and entertainment. The increasing availability of content from these varying media outlets may reduce our ability to sell DVDs and other media in the future, particularly during difficult economic conditions.

We are subject to risks related to our international operations.

We distribute programming and produce certain of our original series in a number of foreign jurisdictions. The inherent economic risks of doing business in international markets include, among other things, changes in the economic environment, exchange controls, tariffs and other trade barriers, foreign taxation, restrictions on content, differing degrees of protection for intellectual property, corruption and, in some markets, increased risk of political instability. Additionally, the local currencies in which our international operations conduct their business could change in value relative to the U.S. dollar, exposing our results to exchange rate fluctuations.

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RISKS RELATED TO OUR INDEBTEDNESS

We have a substantial amount of indebtedness, which could adversely affect our financial position and prevent us from fulfilling our debt obligations.

We have a substantial amount of indebtedness. As of December 31, 2015, we had total debt of $1,037.8 million, consisting of $676.9 million of 5% senior notes due September 15, 2019 (“Senior Notes”), $308.0 million of borrowings under the 2015 credit agreement (“2015 Credit Agreement”) which matures on April 20, 2020, $64.8 million of capital lease obligations less $11.9 million of debt issuance costs. We also have an additional $692.0 million available for borrowing under our 2015 Credit Agreement as of December 31, 2015. We may incur significant additional indebtedness in the future.

Our level of indebtedness could limit our flexibility in responding to current market conditions, and could have a materially adverse effect on our financial position, preventing us from meeting our obligations under our debt instruments or otherwise restricting our business activities.

The existence of and limitations on the availability of our debt could have important consequences. The existence of debt could, among other things:

• require a substantial portion of our net cash provided by operating activities to be dedicated to the payment of principal on our indebtedness;

• limit our ability to use net cash provided by operating activities or obtain additional financing for future working capital, capital expenditures or other general corporate purposes, which reduces the funds available to us for operations and any future business opportunities;

• expose us to the risk of increased interest rates because certain of our borrowings, including borrowings under our 2015 Credit Agreement, are at variable interest rates;

• cause our content providers and Distributors to attempt to use our significant debt levels in order to put pricing pressure on us during negotiations of affiliation and output licensing agreements; and

• increase our vulnerability to general economic and industry conditions.

Limitations imposed as a part of our debt, such as the availability of credit and the existence of restrictive covenants may, among other things:

• make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments on the Senior Notes and our other indebtedness;

• restrict us from making strategic acquisitions or cause us to make non-strategic divestitures;

• limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, other business opportunities or other general business purposes on satisfactory terms or at all;

• limit our flexibility to plan for, or react to, changes in our business and industry; and

• place us at a competitive disadvantage compared to our less leveraged competitors.

We may not be able to generate sufficient net cash provided by operating activities to service our debt obligations and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make payments on our indebtedness will depend on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may be unable to maintain a level of net cash provided by operating activities sufficient to permit us to pay the principal and interest on our indebtedness, including our Senior Notes and 2015 Credit Agreement.

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If our net cash provided by operating activities and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay investments in original programming and capital expenditures, or to dispose of material assets or operations, seek additional capital or restructure or refinance our indebtedness. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. Additionally, we may not be able to consummate asset dispositions or obtain the proceeds that we expect to realize from them, and any proceeds received may not be adequate to meet any debt service obligations then due. The terms of the indenture governing our Senior Notes, the 2015 Credit Agreement and future debt instruments may restrict us from adopting some of these alternatives. In addition, any failure to make payments of principal and interest on our outstanding indebtedness on a timely basis would likely result in a reduction of our credit rating, which could harm our ability to incur additional indebtedness.

Covenants in our debt agreements will restrict our business in many ways.

Our 2015 Credit Agreement and Senior Notes contain various covenants that limit our ability and/or our restricted subsidiaries’ ability to, among other things:

• incur additional indebtedness;

• create liens on property or assets;

• make certain loans or investments;

• sell or dispose of assets;

• pay certain dividends and other restricted payments;

• dissolve, consolidate or merge;

• enter into certain transactions with affiliates;

• enter into sale/leaseback transactions; and

• restrict subsidiary distributions.

Our 2015 Credit Agreement and Senior Notes contain restrictive covenants and our 2015 Credit Agreement requires us to maintain specified financial ratios. Our ability to meet those financial ratios can be affected by events beyond our control, and we may be unable to meet those tests. A breach of any of these covenants could result in a default under our 2015 Credit Agreement, which in turn could result in a default under the indenture governing our Senior Notes. Upon the occurrence of an event of default under our 2015 Credit Agreement, the lenders could elect to declare all amounts outstanding under our 2015 Credit Agreement to be immediately due and payable and terminate all commitments to extend further credit. If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness. We have pledged the membership interest of Starz, LLC and the equity interests of our material restricted subsidiaries as collateral under our 2015 Credit Agreement. If the lenders and counterparties under our 2015 Credit Agreement accelerate the repayment of obligations, we may not have sufficient assets to repay our 2015 Credit Agreement and our other indebtedness.

Borrowings under our 2015 Credit Agreement are at variable rates of interest and expose us to interest rate risk. If interest rates increase, we may not be able to successfully hedge the impact of these increased interest rates and our debt service obligations under the 2015 Credit Agreement would increase even though the amount borrowed remained the same, and our net income and cash on hand would decrease.

Item 1B. Unresolved Staff Comments

None.

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Item 2. Properties

We lease office space for executive offices and distribution and sales operations in Atlanta, Georgia; Beverly Hills, California; Burbank, California; Englewood, Colorado; New York, New York; Troy, Michigan and Toronto, Ontario.

Item 3. Legal Proceedings

On October 29, 2015, Keno Thomas, a former Starz Entertainment employee, filed a complaint in Los Angeles County Superior Court against Starz, Starz, LLC, Starz Entertainment (collectively, “Starz Parties”) and Liberty Media, and certain individual defendants. The plaintiff alleges that the Starz Parties and certain of the other defendants engaged in retaliation, wrongful termination of employment, failure to prevent retaliation and intentional infliction of emotional distress, all in connection with the plaintiff’s employment with Starz Entertainment. The plaintiff seeks compensatory, emotional distress and punitive damages, interest and an award of reasonable attorneys’ fees. On November 30, 2015, defendants removed this case to the United States District Court for the Central District of California. On December 7, 2015, the defendants moved to dismiss Mr. Albrecht and Liberty Media and to dismiss various causes of action against the Starz Parties and Mr. Thornton, and to strike portions of the complaint. These motions are scheduled for hearing on February 29, 2016. In February 2016, the parties stipulated to dismiss Starz and Starz, LLC without prejudice and to dismiss Liberty Media with prejudice.

On November 9, 2015, a purported class action was commenced in the U.S. District Court for the Central District of California by Pierre Bolduc, against Starz and certain individual defendants. The plaintiff purports to represent a class of persons who purchased shares of Starz common stock between August 1, 2014 and October 29, 2015. Citing allegations in the lawsuit filed by Keno Thomas, described above, the plaintiff alleges that the defendants violated applicable federal securities laws by making materially false and misleading statements and failing to disclose that: (a) our company lacked adequate internal controls; (b) our company’s contract with a certain Distributor was a result of illicit business practices; and (c) as a result, our company’s public statements were materially false and misleading and lacked a reasonable basis. The complaint alleges that the price of shares of our company’s common stock fell as a result of the Keno Thomas lawsuit. The plaintiff seeks damages, interest, reasonable attorneys’ fees and costs. On February 11, 2016, the District Court entered an Order appointing Lucille Theroux as Lead Plaintiff and Approving Glancy Prongay & Murray LLP, as Counsel, and thereafter the Court formally changed the case name to Theroux v. Starz, et al.

We believe we have substantial defenses to the claims asserted, we are defending these actions vigorously, and do not believe that the resolution of these remaining cases will have a material adverse effect on our business, financial condition or results of operations.

In the normal course of business, we are subject to other lawsuits and other claims, including claims of alleged infringement of the trademarks, patents, copyrights and other intellectual property rights of third parties. While it is not possible to predict the outcome of these other matters, it is the opinion of management, based upon consultation with legal counsel, that the ultimate disposition of known proceedings will not have a material adverse impact on our business, financial condition or results of operations.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Each series of our common stock (ticker symbols STRZA and STRZB) is traded on the Nasdaq Global Select Market (“Nasdaq”). The following table sets forth the range of high and low sales prices of shares of our common stock from January 1, 2014 through December 31, 2015.

	Series A (STRZA)		Series B (STRZB)
	High	Low	High	Low
Year Ended December 31, 2015
First quarter	$34.71	$27.31	$34.69	$27.68
Second quarter	$45.67	$34.06	$44.86	$34.69
Third quarter	$46.59	$34.24	$44.86	$36.26
Fourth quarter	$40.69	$31.63	$38.69	$32.42
Year Ended December 31, 2014
First quarter	$33.75	$26.38	$33.60	$26.32
Second quarter	$34.20	$27.99	$33.15	$27.60
Third quarter	$33.69	$27.36	$33.19	$27.54
Fourth quarter	$34.53	$27.53	$34.82	$27.63

Holders

As of January 31, 2016, there were approximately 1,363 and 79 holders of our Series A and Series B common stock, respectively. The foregoing number 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 stockholder.

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 2016 Annual Meeting of Stockholders that will be filed with the Securities and Exchange Commission on or before April 29, 2016.

Purchases of Equity Securities by the Issuer

On February 24, 2016, the Starz board of directors authorized an additional $400.0 million to repurchase our common stock. Including this authorization, the Starz board of directors has authorized a total of $1,200.0 million since January 2013 to repurchase our common stock. Fourth quarter repurchases and remaining availability under the repurchase program were as follows:

	Series A common stock
Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Plans or Programs
October 1 - 31, 2015	285,900	$38.28	285,900	$106.7 million
November 1 - 30, 2015	318,586	$34.72	318,586	$95.6 million
December 1 - 31, 2015	513,823	$33.89	513,823	$78.2 million
Total	1,118,309		1,118,309

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In addition to the shares listed in the table above, 26,637 shares of Series A common stock were surrendered in the fourth quarter of 2015 by our employees to pay withholding taxes in connection with the vesting of restricted shares.

Performance Graph

The following graph compares the cumulative total return on our Series A common stock and Series B common stock with the comparable cumulative return of the S&P 500 Media Index for our peer group and the S&P 400 Mid Cap Index for the period from January 14, 2013, the date our common stock began trading on Nasdaq (after the LMC Spin-Off), to December 31, 2015. The performance graph assumes that the value of the investment in our Series A and Series B common stock, the S&P 500 Media Index and the S&P 400 Mid Cap Index was $100 on January 14, 2013 and that all dividends were reinvested.

	1/14/2013		6/30/2013		12/31/2013		6/30/2014		12/31/2014		6/30/2015		12/31/2015
Starz Series A	$	100.00	$	156.18	$	206.64	$	210.53	$	209.89	$	316.04	$	236.75
Starz Series B	$	100.00	$	145.43	$	194.73	$	196.75	$	198.80	$	292.93	$	224.48
S&P 500 Media Index	$	100.00	$	117.80	$	143.45	$	150.20	$	159.46	$	167.26	$	150.34
S&P Mid Cap Index	$	100.00	$	109.73	$	126.91	$	135.45	$	137.29	$	142.00	$	132.20

This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

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Item 6. Selected Financial Data

In accordance with U.S. generally accepted accounting principles (“GAAP”), Liberty Media was determined to be the accounting successor to Old LMC for financial reporting purposes following the LMC Spin-Off due to the relative significance of Liberty Media to Starz (which is the legal spinnor) and the continued involvement of Old LMC’s senior management with Liberty Media following the LMC Spin-Off. Accordingly, the historical financial statements of Old LMC prior to the LMC Spin-Off will continue to be the historical financial statements of Liberty Media and Starz’s historical financial information is deemed to be the financial information of Starz, LLC. The financial statements of Starz reflect Starz, LLC on a historical cost basis.

Starz, LLC is the only directly owned subsidiary of Starz which in turn owns either directly or indirectly various operating subsidiaries. Starz is a holding company with no assets, liabilities or operations other than those of Starz, LLC. Accordingly, the financial position, results of operations, comprehensive income and cash flows of Starz and Starz, LLC are identical. As Starz’s common stock did not begin publicly trading until January 14, 2013 (following the LMC Spin-Off), Starz’s stockholders’ equity section as of December 31, 2012 and 2011 do not reflect common stock and additional paid in capital, but shows member’s interest, identical to that of Starz, LLC.

The statement of operations, balance sheet and other financial data included in the following selected historical consolidated financial data as of December 31, 2015 and 2014 and for each year in the three-year period ended December 31, 2015 have been derived from the audited annual consolidated financial statements of Starz included elsewhere in this Annual Report on Form 10-K. The balance sheet data as of December 31, 2013, 2012 and 2011 and the statement of operations and other financial data for the years ended December 31, 2012 and 2011 have been derived from the audited annual consolidated financial statements of Starz which are not included in this Annual Report on Form 10-K. The selected historical consolidated financial data presented below should be read in conjunction with the consolidated financial statements included elsewhere in this Annual Report on Form 10-K and with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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Statement of Operations Data (in millions, except per share amounts)

	Years Ended December 31,
	2015			2014			2013			2012			2011
Revenue:
Programming networks and other services	$	1,536.7		$	1,467.5		$	1,481.0		$	1,419.1		$	1,372.1
Home video net sales	163.4			196.4			296.5			211.6			241.9
Total revenue	1,700.1			1,663.9			1,777.5			1,630.7			1,614.0
Costs and expenses:
Programming (including amortization)	655.7			600.6			633.9			661.9			651.2
Production and acquisition (including amortization)	207.1			178.7			268.6			192.4			158.8
Home video cost of sales	43.6			60.0			71.1			63.9			62.4
Operating	49.3			54.3			54.9			53.5			53.7
Selling, general and administrative	315.7			299.2			306.4			234.2			245.4
Depreciation and amortization	19.0			19.4			17.4			19.4			17.9
Total costs and expenses	1,290.4			1,212.2			1,352.3			1,225.3			1,189.4
Operating income	409.7			451.7			425.2			405.4			424.6
Other income (expense):
Interest expense, including amounts due to affiliates, net of amounts capitalized	(46.0		)	(46.5		)	(45.0		)	(25.7		)	(5.0		)
Other income (expense), net	(15.7		)	4.6			9.0			3.0			(3.5		)
Income from continuing operations before income taxes	348.0			409.8			389.2			382.7			416.1
Income tax expense	(111.5		)	(140.8		)	(139.4		)	(130.4		)	(172.2		)
Income from continuing operations	$	236.5		$	269.0		$	249.8		$	252.3		$	243.9
Net income per common share:
Basic (1)	$	2.33		$	2.57		$	2.13		$	2.12		$	2.00
Diluted (1)	$	2.22		$	2.43		$	2.04		$	2.12		$	2.00

Balance Sheet Data (in millions)

	As of December 31,
	2015		2014 (2)		2013 (2)		2012 (2)		2011 (2)
Cash and cash equivalents	$	10.7	$	13.4	$	25.7	$	749.8	$	1,099.9
Program rights (3)	$	652.0	$	614.8	$	605.0	$	678.7	$	761.9
Investment in films and television programs	$	215.6	$	319.5	$	194.6	$	181.7	$	183.9
Total assets	$	1,564.2	$	1,562.4	$	1,437.2	$	2,162.7	$	2,583.1
Current portion of debt	$	5.6	$	5.3	$	4.9	$	4.1	$	4.1
Debt	$	1,032.2	$	1,164.3	$	1,041.7	$	522.3	$	531.0
Total debt	$	1,037.8	$	1,169.6	$	1,046.6	$	526.4	$	535.1
Stockholders’ equity / member’s interest	$	217.7	$	48.5	$	61.9	$	1,312.0	$	1,651.5

Other Financial Data (in millions, except ratios)

	Years Ended December 31,
	2015			2014			2013			2012			2011
Net cash provided by operating activities	$	250.6		$	206.5		$	312.8		$	292.1		$	348.0
Net cash used in investing activities	$	(23.5	)	$	(19.6	)	$	(14.8	)	$	(16.2	)	$	(7.7	)
Net cash provided by (used in) financing activities	$	(229.8	)	$	(199.2	)	$	(1,022.0	)	$	(626.1	)	$	443.9
Ratio of total debt to Adjusted OIBDA (4)	2.2x			2.3x			2.2x			1.2x			1.2x
Adjusted OIBDA (5)	$	461.6		$	501.7		$	476.9		$	444.8		$	449.6

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Selected Operating Data (in millions)

	As of December 31,
	2015	2014 (6)	2013	2012	2011
STARZsubscribers	23.6	23.1	22.2	21.2	19.6
ENCORE subscribers	32.2	33.8	34.9	34.8	33.2
	55.8	56.9	57.1	56.0	52.8

__________________

(1) For presentation purposes, the common stock assumed to be outstanding for the basic net income per common share calculation during the years ended December 31, 2012 and 2011 represented the number of shares as of the LMC Spin-Off, excluding unvested outstanding restricted shares as of each applicable date. The common stock assumed to be outstanding for the diluted net income per common share calculation during the years ended December 31, 2012 and 2011 represented the number of shares as of the LMC Spin-Off, the unvested outstanding restricted shares actually held by Starz employees plus any dilutive common shares actually held by Starz employees at each applicable date.

(2) Total assets, debt and total debt as of December 31, 2014, 2013, 2012 and 2011 have been reclassified for comparability with the 2015 presentation related to the adoption of recent accounting pronouncements.

(3) Total of current and long-term program rights.

(4) Ratio is calculated based on total debt divided by Adjusted OIBDA.

(5) The following table provides a reconciliation of Adjusted OIBDA to income from continuing operations before income taxes (in millions):

	Years Ended December 31,
	2015			2014			2013			2012			2011
Adjusted OIBDA	$	461.6		$	501.7		$	476.9		$	444.8		$	449.6
Stock compensation and long-term incentive plan	(32.9		)	(30.6		)	(34.3		)	(20.0		)	(7.1		)
Depreciation and amortization	(19.0		)	(19.4		)	(17.4		)	(19.4		)	(17.9		)
Interest expense, including amounts due to affiliate, net of amounts capitalized	(46.0		)	(46.5		)	(45.0		)	(25.7		)	(5.0		)
Other income (expense), net	(15.7		)	4.6			9.0			3.0			(3.5		)
Income from continuing operations before income taxes	$	348.0		$	409.8		$	389.2		$	382.7		$	416.1

For an explanation of Adjusted OIBDA - Adjusted Operating Income before Depreciation and Amortization (Adjusted OIBDA), a non-GAAP financial measure, see Note 13 to our consolidated financial statements found beginning on page F-2 of this report.

(6) The December 31, 2014 period end subscriptions have been adjusted for a reporting correction by one of our Distributors. Such adjustment had no impact on our revenue.

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

Management’s discussion and analysis, or MD&A, of the results of operations and financial condition is provided as a supplement to the audited annual consolidated financial statements and notes thereto included elsewhere herein to help provide an understanding of our financial condition, changes in financial condition and results of operations. The information included in this MD&A should be read in conjunction with the consolidated financial statements included in this Annual Report on Form 10-K as well as the financial data set forth under “Item 6. Selected Financial Data.” For an overview of Starz and discussion of our business, including our strategy and challenges, see “Item 1. Business.” As previously mentioned, in October 2015, Starz, LLC acquired the 25% interest in Starz Media which had previously been owned by Weinstein. In addition, in October 2015, Starz, LLC sold 100% of its wholly-owned subsidiary Film Roman, which made up 100% of our Starz Animation operating segment.    

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Revenue

The STARZ and ENCORE networks are the primary drivers of Starz Networks’ revenue. Our networks are distributed pursuant to affiliation agreements with Distributors. Programming revenue is recognized in the period during which programming is provided, either:

• based solely on the total number of subscribers who receive our networks multiplied by rates specified in the agreements (i.e., consignment), or

• based on amounts or rates which are not tied solely to the total number of subscribers who receive our networks (i.e., non-consignment). Examples of non-consignment agreements include fixed payment arrangements whereby a Distributor pays a fixed monthly payment (with annual escalators) regardless of the total number of subscribers who receive our networks. Additionally, Distributor payments may be calculated using the number of households subscribing to the Distributor’s basic service multiplied by rates specified in the agreement.

The agreements generally provide for annual contractual rate increases of a fixed percentage or a fixed amount, or rate increases tied to annual increases in the Consumer Price Index.

Starz Distribution earns revenue from its Anchor Bay Entertainment, Starz Digital and Starz Worldwide Distribution businesses through the sale of its content in the U.S. and throughout the world on DVDs, pay-per-view, video-on-demand, SVOD, AVOD, electronic sell-through, other digital formats and free and pay television. Revenue generated from the sale of DVDs is recognized, net of an allowance for estimated sales returns, on the later of the estimated receipt of the product by the customer or after any restrictions on sale lapse. At the time of the initial sale, we also record a provision, based on historical trends and practices, to reduce revenue for discounts and rebates provided to customers related to the sale of DVDs. Revenue from digital and television licensing is recognized when the film or program is complete in accordance with the terms of the arrangement and is available for exploitation by the licensee. The film or program is available for exploitation when it has been delivered or is available to the licensee and the license period has commenced. Starz Distribution’s content includes content we own and license, including Starz Networks’ original series, and for Anchor Bay Entertainment and Starz Digital, it also includes the Weinstein’s titles.

Starz Animation recognized revenue related to animation services provided to customers under contract generally based on the percentage that costs incurred-to-date bore to estimated total costs to complete utilizing the most recent information. Revenue recognized was proportional to the work performed-to-date under the contracts.

Costs and Expenses

Programming costs are Starz Networks’ largest expense. The cost of program rights for films and television programs (including original series) exhibited by Starz Networks is generally amortized on a title-by-title or episode-by-episode basis over the anticipated number of exhibitions. Starz Networks estimates the number of exhibitions based on the number of exhibitions allowed in the agreement and the expected usage of the content. Certain other program rights are amortized to expense on a straight-line basis over the respective lives of the agreements. Starz Networks generally has rights to two or three separate windows under its output agreements. For films with multiple windows, the license fee is allocated between the windows based upon the proportionate estimated fair value of each window with the majority of the cost allocated to the first window. Programming costs vary due to the number of airings and cost of our original series, the number of films licensed and the cost per film paid under our output and library programming agreements.

Production and acquisition costs are Starz Distribution’s largest expense and include amortization of our investment in films and television programs, participation and royalty costs and residuals. The portion of costs attributed to the pay television window for our original series is included in programming costs. All remaining production and acquisition costs for original series as well as our other films and television programs that we own or license (not including films licensed under our output and library programming agreements which are included in programming costs) are amortized to production and acquisition costs based on the proportion that current revenue bears to an estimate of the remaining unrecognized revenue (“Ultimate Revenue”) for each film or television program. The amount of production and acquisition costs that we will incur for original programming is impacted by both the number of and cost of the productions and the various distribution rights that we acquire or retain for these productions. Participation costs represent amounts paid or due to participants under agreements we have whereby Starz Distribution distributes content in which a participant (e.g., Weinstein, producers or writers of our original programming, etc.) has an ownership interest or shares in the profits from the distribution of the film or television program.

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Home video cost of sales represents the direct costs related to the production and distribution of DVDs in our Starz Distribution segment. Costs related to the production of DVDs include costs such as distribution fees, freight, manufacturing costs and mastering costs.

Operating expenses primarily included production costs related to animation services provided to customers under contract and represented Starz Animation’s largest expense. In addition, it includes our Starz Networks’ operating costs (e.g., salaries, transponder expenses and maintenance and repairs) and non-DVD distribution expenses related to Starz Distribution.

Selling, general and administrative expenses include our advertising and marketing costs and our general and administrative expenses. Our advertising and marketing costs primarily include consumer marketing, distributor marketing support and other marketing costs. Our general and administrative expenses include salaries, stock compensation and other overhead costs.

RESULTS OF OPERATIONS - YEARS ENDED DECEMBER 31, 2015 AND 2014

Our operating results were as follows (dollars in millions):

	Years Ended December 31,						$ Change			% Change
	2015			2014			‘15 vs ‘14			‘15 vs ‘14
Revenue:
Programming networks and other services	$	1,536.7		$	1,467.5		$	69.2		5	%
Home video net sales	163.4			196.4			(33.0		)	(17	)%
Total revenue	1,700.1			1,663.9			36.2			2	%
Costs and expenses:
Programming (including amortization)	655.7			600.6			55.1			9	%
Production and acquisition (including amortization)	207.1			178.7			28.4			16	%
Home video cost of sales	43.6			60.0			(16.4		)	(27	)%
Operating	49.3			54.3			(5.0		)	(9	)%
Selling, general and administrative	315.7			299.2			16.5			6	%
Depreciation and amortization	19.0			19.4			(0.4		)	(2	)%
Total costs and expenses	1,290.4			1,212.2			78.2			6	%
Operating income	409.7			451.7			(42.0		)	(9	)%
Other income (expense):
Interest expense, net of amounts capitalized	(46.0		)	(46.5		)	0.5			1	%
Other income (expense), net	(15.7		)	4.6			(20.3		)	(441	)%
Income before income taxes	348.0			409.8			(61.8		)	(15	)%
Income tax expense	(111.5		)	(140.8		)	29.3			21	%
Net income	$	236.5		$	269.0		$	(32.5	)	(12	)%

COMPARISON OF YEAR ENDED DECEMBER 31, 2015 TO YEAR ENDED DECEMBER 31, 2014

Revenue

Revenue by segment was as follows (dollars in millions):

	Years Ended December 31,						$ Change			% Change
	2015			2014			‘15 vs ‘14			‘15 vs ‘14
Revenue
Starz Networks	$	1,324.4		$	1,312.0		$	12.4		1	%
Starz Distribution	353.8			321.5			32.3			10	%
Starz Animation	24.6			31.7			(7.1		)	(22	)%
Inter-segment eliminations	(2.7		)	(1.3		)	(1.4		)	(108	)%
	$	1,700.1		$	1,663.9		$	36.2		2	%

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We generally account for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices.

Starz Networks’ revenue represented 78% and 79% of our total revenue for the years ended December 31, 2015 and 2014, respectively.

Subscriptions to our STARZ and ENCORE networks were as follows (subscriptions in millions):

	As of December 31,		# Change		% Change
Period End Subscriptions:	2015	2014 (1)	‘15 vs ‘14		‘15 vs ‘14
STARZ	23.6	23.1	0.5		2	%
ENCORE	32.2	33.8	(1.6	)	(5	)%
	55.8	56.9	(1.1	)	(2	)%

________________

(1)    The December 31, 2014 period end subscriptions have been adjusted for a reporting correction by one of our Distributors. Such adjustment had no impact on our revenue.

Revenue from Starz Networks increased$12.4 million or 1% for the year ended December 31, 2015 as compared to the corresponding prior year period. The increase in revenue was a result of a $7.9 million increase due to higher average subscriptions resulting from increased promotional activity with various Distributors and a $4.5 million increase due to higher effective rates primarily due to annual rate increases from various Distributors.

Revenue from Starz Distribution increased$32.3 million or 10% for the year ended December 31, 2015 as compared to the corresponding prior year period. This increase was primarily due to licensing of our original series “Spartacus” and “Magic City” to Netflix in the U.S. and select international territories, along with the release of “Black Sails” season one and “Power” season one in the home entertainment market (i.e., DVD and digital formats) and “Black Sails” season two and “Flesh and Bone” in various television markets throughout the world In addition, revenue from Starz Distribution was impacted by an increase in revenue from films distributed for Weinstein offset by a decrease in non-Weinstein titles.

Programming

Starz Networks’ programming costs increased$55.1 million or 9% for the year ended December 31, 2015 as compared to the corresponding prior year period. The increase in programming costs was primarily due to an $87.9 million increase in original series amortization expense, partially offset by a $36.3 million decrease in output and library film amortization expense. The increase in our original series amortization is due to the airing of 28 additional new episodes in 2015 (total of 76 new episodes) as compared to 2014 (total of 48 new episodes), including the 2015 premiere of the higher cost limited series “Flesh and Bone.”

We expect programming costs related to original programming to increase in the future. We are currently benefiting from a lower cost per film that we pay under our output agreements with Sony and Disney. This lower cost per film was the result of favorable negotiations during the most recent output agreement renewals. We expect to see continued savings in the 2016 through 2017 timeframe at which time the first window license period under our Disney output agreement ends. We plan to utilize these savings to fund a portion of the increase in our original programming to 80-90 episodes per year over the next few years.

Production and Acquisition

Starz Distribution’s production and acquisition costs increased$28.4 million or 16% for the year ended December 31, 2015 as compared to the corresponding prior year period. The increase was due to (i) higher Starz Distribution revenue related to our original series, which resulted in higher amortization of our investment in films and television programs and participation costs of $17.5 million and (ii) an increase in revenue from films distributed for Weinstein, which resulted in higher participation costs of $14.7 million.

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Home Video Cost of Sales

Starz Distribution’s home video cost of sales decreased$16.4 million or 27% for the year ended December 31, 2015 as compared to the corresponding prior year period. Home video cost of sales represented 27% and 31% of home video net sales for the years ended December 31, 2015 and 2014, respectively. This decrease in costs as a percentage of sales was due to an increase in the portion of our home video revenue from Weinstein titles. Under our agreement with Weinstein, DVD replication and packaging costs are paid for by Weinstein.

Selling, General and Administrative

Selling, general and administrative expenses were as follows (dollars in millions):

	Years Ended December 31,						$ Change			% Change
	2015			2014			‘15 vs ‘14			‘15 vs ‘14
Advertising and marketing:
Starz Networks	$	127.4		$	111.1		$	16.3		15	%
Starz Distribution	29.8			33.2			(3.4		)	(10	)%
Starz Animation	—			—			—			—	%
Inter-segment eliminations	—			—			—			—	%
Total advertising and marketing	157.2			144.3			12.9			9	%
General and administrative, excluding stock compensation
Starz Networks	95.0			87.7			7.3			8	%
Starz Distribution	33.1			38.7			(5.6		)	(14	)%
Starz Animation	0.4			0.6			(0.2		)	(33	)%
Inter-segment eliminations	—			—			—			—	%
General and administrative, excluding stock compensation	128.5			127.0			1.5			1	%
Stock compensation	30.0			27.9			2.1			8	%
Total general and administrative	158.5			154.9			3.6			2	%
	$	315.7		$	299.2		$	16.5		6	%
General and administrative expense as a percentage of consolidated revenue	9		%	9		%

Starz Networks’ advertising and marketing costs increased due to increased spend related to our original programming line-up and due to higher Distributor marketing support. Starz Distribution’s advertising and marketing costs decreased primarily as a result of reduced spend on various non-Weinstein titles. The increase in Starz Networks’ general and administrative expense was primarily due to an increase in payroll and related costs and professional services. The decrease in Starz Distribution’s general and administrative expenses was primarily due to a reduction in bad debt expense and lower payroll and related costs due to reduced headcount as a result of the sale of our home video operations in the United Kingdom in the fourth quarter of 2014 and Australia in the first quarter of 2015.

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Adjusted OIBDA

Adjusted OIBDA by segment was as follows (dollars in millions):

	Years Ended December 31,						$ Change			% Change
	2015			2014			‘15 vs ‘14			‘15 vs ‘14
Adjusted OIBDA (1)
Starz Networks	$	428.6		$	496.4		$	(67.8	)	(14	)%
Starz Distribution	36.1			7.5			28.6			381	%
Starz Animation	(1.5		)	(2.7		)	1.2			44	%
Inter-segment eliminations	(1.6		)	0.5			(2.1		)	(420	)%
	$	461.6		$	501.7		$	(40.1	)	(8	)%

___________________

(1)    See Note 13 to our consolidated financial statements found beginning on page F-2 of this report for a discussion of Adjusted OIBDA, which also includes a reconciliation of Adjusted OIBDA to the GAAP measure income before income taxes.

Adjusted OIBDA for Starz Networks decreased$67.8 million as compared to the corresponding prior year period. Such decrease was a result of the increase in programming costs, advertising and marketing costs and general and administrative expenses, which were offset by the increase in revenue. Adjusted OIBDA for Starz Distribution increased$28.6 million primarily due to higher revenue, a decrease in advertising and marketing costs, general and administrative expense and home video cost of sales, partially offset by an increase in production and acquisition costs.

Other Income (Expense), Net

We recorded other expense of $15.7 million for the year ended December 31, 2015 as compared to other income of $4.6 million for the year ended December 31, 2014. Other expense for the year ended December 31, 2015 was primarily comprised of our share of losses of $12.0 million from our investment in Playco Holdings Limited (“Playco”), as well as a loss on sale of assets, losses on foreign currency hedging transactions and foreign currency exchange losses offset by interest income. We account for our investment in Playco using the equity method. Other income for the year ended December 31, 2014 includes $10.7 million of cash we received from RSSF Studios, LLC, formerly known as Revolution Studios Holding Company, LLC (“Revolution”), an equity investee in which we hold a 15% ownership interest, as a result of the sale of all of its assets. We account for our investment in Revolution using the equity method and reduced our investment to zero in 2006. This income was partially offset by loss on sale of assets and foreign currency exchange losses.

Income Taxes

We had income before income taxes of $348.0 million and $409.8 million and income tax expense of $111.5 million and $140.8 million for the year ended December 31, 2015 and 2014, respectively. Our effective tax rate was 32% and 34% for the year ended December 31, 2015 and 2014, respectively.

In 2015 and 2014, our effective tax rate differed from the U.S. federal income tax rate of 35% primarily as a result of a deduction under Internal Revenue Code Section 199 (“Section 199”) and state and local taxes. Section 199 allows U.S. taxpayers a deduction for qualified domestic production activities.  We recorded a tax benefit of $9.5 million and $10.4 million for the years ended December 31, 2015 and 2014, respectively, under Section 199. The deduction for qualified production activity is based on our level of domestic productions and other criteria and must be evaluated each year. Changes in our domestic production activities could impact our qualification for a deduction under Section 199 in the future. The 2015 tax rate was also impacted by the de-recognition of an uncertain tax position, the change in the income tax status of Starz Media as a result of our acquisition of the 25% interest in Starz Media previously held by Weinstein and settlements with tax authorities.

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RESULTS OF OPERATIONS - YEARS ENDED DECEMBER 31, 2014 AND 2013

Operating results were as follows (dollars in millions):

	Years Ended December 31,						$ Change			% Change
	2014			2013			‘14 vs ‘13			‘14 vs ‘13
Revenue:
Programming networks and other services	$	1,467.5		$	1,481.0		$	(13.5	)	(1	)%
Home video net sales	196.4			296.5			(100.1		)	(34	)%
Total revenue	1,663.9			1,777.5			(113.6		)	(6	)%
Costs and expenses:
Programming (including amortization)	600.6			633.9			(33.3		)	(5	)%
Production and acquisition (including amortization)	178.7			268.6			(89.9		)	(33	)%
Home video cost of sales	60.0			71.1			(11.1		)	(16	)%
Operating	54.3			54.9			(0.6		)	(1	)%
Selling, general and administrative	299.2			306.4			(7.2		)	(2	)%
Depreciation and amortization	19.4			17.4			2.0			11	%
Total costs and expenses	1,212.2			1,352.3			(140.1		)	(10	)%
Operating income	451.7			425.2			26.5			6	%
Other income (expense):
Interest expense, net of amounts capitalized	(46.5		)	(45.0		)	(1.5		)	3	%
Other income, net	4.6			9.0			(4.4		)	(49	)%
Income before income taxes	409.8			389.2			20.6			5	%
Income tax expense	(140.8		)	(139.4		)	(1.4		)	1	%
Net income	$	269.0		$	249.8		$	19.2		8	%

COMPARISON OF YEAR ENDED DECEMBER 31, 2014 TO YEAR ENDED DECEMBER 31, 2013

Revenue

Revenue by segment was as follows (dollars in millions):

	Years Ended December 31,						$ Change			% Change
	2014			2013			‘14 vs ‘13			‘14 vs ‘13
Revenue
Starz Networks	$	1,312.0		$	1,297.7		$	14.3		1	%
Starz Distribution	321.5			449.5			(128.0		)	(28	)%
Starz Animation	31.7			32.5			(0.8		)	(2	)%
Inter-segment eliminations	(1.3		)	(2.2		)	0.9			41	%
	$	1,663.9		$	1,777.5		$	(113.6	)	(6	)%

We generally account for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices.

Starz Networks’ revenue represented 79% and 73% of our total revenue for the years ended December 31, 2014 and 2013, respectively.

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The table below sets forth, for the periods presented, subscriptions to our STARZ and ENCORE networks (subscriptions in millions):

	As of December 31,		# Change		% Change
Period End Subscriptions:	2014 (1)	2013	‘14 vs ‘13		‘14 vs ‘13
STARZ	23.1	22.2	0.9		4	%
ENCORE	33.8	34.9	(1.1	)	(3	)%
	56.9	57.1	(0.2	)	—	%

________________

(1)    The December 31, 2014 period end subscriptions have been adjusted for a reporting correction by one of our Distributors. Such adjustment had no impact on our revenue.

Revenue from Starz Networks increased $14.3 million or 1% for the year ended December 31, 2014 as compared to the corresponding prior year period. The overall increase was impacted by the one-time recognition during the second quarter of 2013 of $18.6 million of previously deferred revenue. Excluding this prior year one-time adjustment, revenue increased $32.9 million or 3% as a result of a $47.2 million increase due to higher effective rates, partially offset by a $14.3 million decrease due to lower average subscriptions. Consignment subscriptions were negatively impacted at certain Distributors by reduced promotional activity, video household losses, programming package changes and retail price increases.

Revenue from Starz Distribution decreased $128.0 million or 28% for the year ended December 31, 2014 as compared to the corresponding prior year period. This decrease was primarily due to revenue from the distribution of films for Weinstein. The Weinstein decrease was due to a stronger overall performance of films in 2013, which included the films Django Unchained and Silver Linings Playbook. No significant home video releases of our original series and lower revenue from AMC Networks’ “The Walking Dead” also impacted the decrease in Starz Distribution’s revenue.

Programming

Starz Networks’ programming costs decreased $33.3 million or 5% for the year ended December 31, 2014 as compared to the corresponding prior year period. The decrease in programming costs is primarily due to a $14.2 million decrease in original series amortization expense and an $11.2 million decrease in output and library film amortization expense.

Production and Acquisition

Starz Distribution’s production and acquisition costs decreased $89.9 million or 33% for the year ended December 31, 2014 as compared to the corresponding prior year period. The decrease was primarily due to lower Starz Distribution revenue, which resulted in lower participation costs.

Home Video Cost of Sales

Starz Distribution’s home video cost of sales decreased $11.1 million or 16% for the year ended December 31, 2014 as compared to the corresponding prior year period. Home video cost of sales represented 31% and 24% of home video net sales for the years ended December 31, 2014 and 2013, respectively. This increase in costs as a percentage of sales was due to lower revenue from Weinstein titles. Under our agreement with Weinstein, DVD replication and packaging costs are paid for by Weinstein.

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Selling, General and Administrative

Selling, general and administrative expenses were as follows (dollars in millions):

	Years Ended December 31,						$ Change			% Change
	2014			2013			‘14 vs ‘13			‘14 vs ‘13
Advertising and marketing:
Starz Networks	$	111.1		$	104.9		$	6.2		6	%
Starz Distribution	33.2			43.6			(10.4		)	(24	)%
Starz Animation	—			—			—			—	%
Inter-segment eliminations	—			—			—			—	%
Total advertising and marketing	144.3			148.5			(4.2		)	(3	)%
General and administrative, excluding stock compensation
Starz Networks	87.7			88.3			(0.6		)	(1	)%
Starz Distribution	38.7			36.5			2.2			6	%
Starz Animation	0.6			0.6			—			—	%
Inter-segment eliminations	—			—			—			—	%
General and administrative, excluding stock compensation	127.0			125.4			1.6			1	%
Stock compensation	27.9			32.5			(4.6		)	(14	)%
Total general and administrative	154.9			157.9			(3.0		)	(2	)%
	$	299.2		$	306.4		$	(7.2	)	(2	)%
General and administrative expense as a percentage of consolidated revenue	9		%	9		%

Starz Networks’ advertising and marketing costs increased due to increased spend related to our original programming line-up and was partially offset by a decrease in Distributor marketing support. Starz Distribution’s advertising and marketing costs decreased primarily as a result of lower spend on films distributed for Weinstein resulting from the stronger overall performance of Weinstein films in 2013 as compared to 2014. The decrease in Starz Networks’ general and administrative expense was primarily due to a decrease in legal costs. The increase in Starz Distribution’s general and administrative expense was primarily due to an increase in bad debt expense. Stock compensation decreased in 2014 as a result of the final vesting of certain stock options and restricted shares in late 2013.

Adjusted OIBDA

Adjusted OIBDA by segment was as follows (dollars in millions):

	Years Ended December 31,						$ Change			% Change
	2014			2013			‘14 vs ‘13			‘14 vs ‘13
Adjusted OIBDA (1)
Starz Networks	$	496.4		$	456.2		$	40.2		9	%
Starz Distribution	7.5			24.0			(16.5		)	(69	)%
Starz Animation	(2.7		)	(2.6		)	(0.1		)	(4	)%
Inter-segment eliminations	0.5			(0.7		)	1.2			171	%
	$	501.7		$	476.9		$	24.8		5	%

___________________

(1)    See Note 13 to our consolidated financial statements found beginning on page F-2 of this report for a discussion of Adjusted OIBDA, which also includes a reconciliation of Adjusted OIBDA to the GAAP measure income before income taxes.

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Adjusted OIBDA for Starz Networks increased $40.2 million as compared to the corresponding prior year period. Excluding the one-time recognition, during the second quarter of 2013, of $18.6 million of deferred revenue mentioned above, Adjusted OIBDA for Starz Networks increased $58.8 million or 13%. Such increase was a result of the increase in revenue and lower programming costs, which were partially offset by the increase in advertising and marketing costs. Adjusted OIBDA for Starz Distribution decreased $16.5 million primarily due to lower revenue and higher general and administrative expense, which were partially offset by a decrease in production and acquisition costs, advertising and marketing costs and home video cost of sales.

Other Income, Net

We recorded other income of $4.6 million for the year ended December 31, 2014 as compared to $9.0 million for the year ended December 31, 2013. Other income for the year ended December 31, 2014 includes $10.7 million of cash we received from Revolution, an equity investee in which we hold a 15% ownership interest, as a result of the sale of all of its assets. We account for our investment in Revolution using the equity method and reduced our investment to zero in 2006. This income was partially offset by loss on sale of assets and foreign currency exchange losses. Other income for the year ended December 31, 2013 was primarily due to $8.8 million related to the release of our guarantee of the Canadian Next Generation of Jobs Fund Grant as further described in Note 11 to the accompanying consolidated financial statements.

Income Taxes

We had income before income taxes of $409.8 million and $389.2 million and income tax expense of $140.8 million and $139.4 million for the year ended December 31, 2014 and 2013, respectively. Our effective tax rate was 34% and 36% for the year ended December 31, 2014 and 2013, respectively.

In 2014 and 2013, our effective tax rate differs from the U.S. federal income tax rate of 35% primarily as a result of a deduction under Section 199, state and local taxes and changes in our valuation allowance for deferred taxes. Section 199 allows U.S. taxpayers a deduction for qualified domestic production activities.  We recorded a tax benefit of $10.4 million and $12.6 million for the years ended December 31, 2014 and 2013, respectively, under Section 199.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2015, our cash and cash equivalents totaled $10.7 million. Our cash and cash equivalents are, from time to time, invested in U.S. Treasury securities, other government securities or government guaranteed funds, AAA rated money market funds and other highly rated commercial paper.

Operating Activities

We generated positive net cash provided by operating activities of $250.6 million, $206.5 million and $312.8 million for the years ended December 31, 2015, 2014 and 2013, respectively. Our primary uses of cash are payments under our programming output and library agreements and production and acquisition costs for our original programming, home video and other content (i.e., investment in films and television programs), which are included as a reduction of net cash provided by operating activities. Cash paid under our programming output and library agreements totaled $408.4 million, $389.1 million and $399.9 million for years ended December 31, 2015, 2014 and 2013, respectively, and increased primarily due to an increase in spend on our library content in 2015 and due to lower spend on first-run films in 2014 and 2013. Cash paid for original programming, home video and other content totaled $349.1 million, $389.5 million and $302.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. The decrease in 2015 as compared to 2014 was primarily due to the timing of payments under our distribution agreement with Weinstein, partially offset by an increase in spend on our original series due to the continued ramp up of our original series line-up. The increase in 2014 as compared to 2013 was primarily due to the increase in the number of original series in production. We plan to continue to increase our investments in original programming in future periods. A $28.7 million increase in our long term receivables from the licensing of certain of our original series to Netflix and Amazon negatively impacted our net cash provided by operating activities for the year ended December 31, 2015.

Changes in restricted cash, which is included in current and other assets, also impacted net cash provided by operating activities during the years ended December 31, 2014 and 2013. Restricted cash decreased$30.1 million for the year ended December 31, 2014 and increased$30.1 million during the year ended December 31, 2013. The changes in restricted cash represented timing of proceeds received from distribution of Weinstein titles and payment of Weinstein’s portion of such

38

proceeds. Under the terms of the December 2014 distribution agreement with Weinstein, we pay a master advance and do not expect to have further restricted cash balances. In addition, tax payments were $124.7 million during the year ended December 31, 2015 as compared to $107.9 million during the year ended December 31, 2014 and $184.4 million during the year ended December 31, 2013.

Investing Activities

During the years ended December 31, 2015 and 2014, we advanced and invested $6.3 million and $19.1 million, respectively, in Playco, an equity investee in which we acquired an approximate 40% ownership interest in 2014. We also received $10.7 million of cash from Revolution, an equity investee in which we hold a 15% ownership interest, as a result of the sale of all of its assets during the year ended December 31, 2014.

Financing Activities

We used $104.1 million of cash to buy back 2.8 million shares of common stock, including fees, under our share repurchase program during the year ended December 31, 2015 as compared to $328.3 million of cash to buy back 10.9 million shares of common stock, including fees, during the year ended December 31, 2014 and $289.9 million of cash to buy back 11.5 million shares of common stock, including fees, during the year ended December 31, 2013. We had $78.2 million available under our share repurchase program as of December 31, 2015. On February 24, 2016, the Starz board of directors authorized an additional $400.0 million to repurchase our common stock. Including this authorization, the Starz board of directors has authorized a total of $1,200.0 million since January 2013 to repurchase our common stock.

In connection with the LMC Spin-Off, we distributed $1.2 billion in cash on January 10, 2013, funded by a combination of cash on hand and $550.0 million of borrowings under our terminated 2011 $1.5 billion credit agreement (“2011 Credit Agreement”).

On February 8, 2013, we completed the issuance of an additional $175.0 million of senior notes, which were issued as additional notes under the indenture governing the Senior Notes. The net proceeds from this issuance were used to repay indebtedness under our 2011 Credit Agreement.

We are continually projecting our anticipated cash requirements for our operating, investing and financing needs as well as net cash provided by operating activities available to meet these needs. Our potential sources of liquidity are net cash provided by operating activities and borrowings under our 2015 Credit Agreement and we expect that we will be able to utilize these sources to fund our cash commitments for investing and financing activities, which include debt repayments, buybacks of common stock and capital expenditures during 2016. Based upon our current operating plans, we believe that our net cash provided by operating activities and borrowings under our 2015 Credit Agreement through its expiration on April 20, 2020 and borrowings under a replacement credit facility or other financing sources thereafter will be sufficient to fund our cash commitments for investing and financing activities, such as our capital expenditures and long term debt obligations from 2017 through 2020. However, there are no assurances that such replacement credit facility or other financing sources will be available, or available on terms acceptable to Starz. As of December 31, 2015, we had $692.0 million of borrowing capacity available under our 2015 Credit Agreement.

The 2015 Credit Agreement contains certain covenants, including a covenant that limits our maximum leverage ratio, as defined in the 2015 Credit Agreement, to not more than 4.25 to 1.00. In addition, investments in unrestricted subsidiaries, as defined in the 2015 Credit Agreement, shall not exceed $150.0 million during the term of the 2015 Credit Agreement. Starz Entertainment and Starz Finance Corp. are the only guarantors and restricted subsidiaries under the 2015 Credit Agreement.

OFF-BALANCE SHEET ARRANGEMENTS AND AGGREGATE CONTRACTUAL OBLIGATIONS

We are required to make future payments under various contracts, including output licensing agreements, affiliation agreements, debt agreements, lease agreements and various other agreements. Information concerning the amount and timing of required payments related to our contractual obligations at December 31, 2015 is summarized below (these contractual obligations are grouped in the same manner as they are classified in the consolidated statements of cash flows in order to provide a better understanding of the nature of the obligations and to provide a basis for comparison to historical information).

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	Payments due by period (in millions)
	Total		Less than 1 year		2 - 3 years		4 - 5 years		After 5 years
Operating activities:
Programming rights	$	819.3	$	323.8	$	223.5	$	160.8	$	111.2
Marketing support under affiliation agreements	50.1		37.4		11.6		1.1		—
Investment in films and television programs	348.6		237.7		110.9		—		—
Operating lease obligations	10.7		3.9		4.4		2.3		0.1
Purchase orders and other obligations	192.1		176.5		15.6		—		—
Interest related to total debt	218.1		47.2		93.3		43.3		34.3
Financing activities:
Repayments of total debt	1,049.7		5.6		11.9		992.2		40.0
Investing activities:
Purchases of property and equipment	0.7		0.7
	$	2,689.3	$	832.8	$	471.2	$	1,199.7	$	185.6

Obligations for Operating Activities

We are obligated to pay programming fees for all qualifying films that are released theatrically in the U.S. by Sony’s Columbia Pictures, Screen Gems, Sony Pictures Classics and TriStar labels through 2021. We do not license films produced by Sony Pictures Animation. We are also obligated to pay programming fees for qualifying theatrically released films from Disney through 2015 under the Disney, Touchstone, Pixar and Marvel labels. Theatrically released films produced by DreamWorks and released by Disney are not licensed to us under the agreement. The programming fees to be paid by us to Sony and Disney are based on the quantity and domestic theatrical exhibition receipts of qualifying films. We have also entered into agreements with a number of other motion picture producers and are obligated to pay fees for the rights to exhibit certain films that are released by these producers. In addition to the amounts stated above in the table, we are also obligated to pay fees for films that have not yet been released in theaters. We are unable to estimate the amounts to be paid under these agreements for films that have not yet been released in theaters, however, such amounts are expected to be significant.

Obligations for Financing Activities

The Senior Notes are due September 15, 2019 and the 2015 Credit Agreement is due April 20, 2020. We also have capital lease obligations associated with our Englewood, Colorado corporate office building and our transponder capacity. Under the terms of the building lease (which is accounted for as a capital lease), we will lease the facility for a term of 10 years, with an additional four successive five-year renewal periods at our option. Our transponder lease agreements expire during 2018 to 2021.

CRITICAL ACCOUNTING ESTIMATES

The following represents a discussion of our critical accounting estimates. For information regarding our significant accounting policies, see Note 2 to our consolidated financial statements for the year ended December 31, 2015.

Program Rights

Programming costs are our most significant individual operating cost. Program rights for films and television programs (including original series) exhibited by Starz Networks are generally amortized on a title-by-title or episode-by-episode basis over the anticipated number of exhibitions. We estimate the number of exhibitions based on the number of exhibitions allowed in the agreement and the expected usage of the content. We generally have rights to two or three separate windows under our pay-television output agreements. For films with multiple windows, the license fee is allocated between the windows based upon the proportionate estimated value of each window. We have allocated a substantial portion of the programming costs to the first window as first-run content is believed to have greater appeal to subscribers when it is newer and therefore deemed to have greater value to us in acquiring and retaining subscribers. Certain other program rights are amortized to expense on a straight-line basis over the respective lives of the agreements.

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Additionally, we allocate programming costs associated with our original series between the pay television window and the ancillary revenue markets (e.g., home video, digital platforms, international television, etc.) based on the estimated relative fair values of these markets. Costs allocated to the pay television window are amortized to expense over the anticipated number of exhibitions for each original series while costs associated with the ancillary revenue markets are amortized to expense based on the proportion that current revenue from the original series bears to its Ultimate Revenue. Estimates of fair value for the pay television and ancillary markets involve uncertainty as well as estimates of Ultimate Revenue.

Changes in management’s estimate of the anticipated exhibitions of films and original series on our networks and the estimate of Ultimate Revenue could result in the earlier recognition of our programming costs than anticipated. Conversely, scheduled exhibitions may not capture the appropriate usage of the program rights in current periods which would lead to the write-off of additional program rights in future periods and may have a significant impact on our future results of operations and our financial position.

Carrying Value of Investments in Films and Television Programs

Investment in films and television programs is stated at unamortized cost unless reduced to estimated fair value, as discussed below, on an individual film or program basis. Investment in films and television programs is amortized to production and acquisition costs using the individual-film-forecast method, whereby the costs are charged to expense and royalty, participation and residual costs are accrued based on the proportion that current revenue from the films or television programs bears to Ultimate Revenue. Estimates of Ultimate Revenue involve uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in management’s future revenue estimates. We periodically review revenue estimates and revise our assumptions as necessary, which impacts the timing of amortization expense. Significant revisions to our revenue estimates could also be an indicator that a title is impaired.

Investment in films and television programs is reviewed for impairment on a title-by-title basis when an event or change in circumstances indicates that a film or television program may be impaired. The estimated fair value for each title is determined using the discounted estimated future cash flow of each title. If the estimated fair value of a film or television program is less than its unamortized cost, the excess of unamortized cost over the estimated fair value is charged to expense. Considerable management judgment is necessary to estimate the fair value of investment in films and television programs. Changes in these estimates could significantly impact the impairment analysis in the future.

Impairment of Goodwill

We test goodwill annually for impairment at December 31 or more frequently if indicators of potential impairment exist. Our goodwill balance resides entirely at our Starz Networks’ operating segment which is also a reporting unit. We first utilize a qualitative assessment for determining whether the first step of the goodwill impairment analysis is necessary. In evaluating goodwill on a qualitative basis, we consider whether there are any negative macroeconomic conditions, negative changes in our industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges, events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, the legal environment and how these factors might impact our performance in future periods. This qualitative assessment involves a significant amount of judgment on the part of management.

If the qualitative assessment indicates that step one of the goodwill test is necessary, the fair value of Starz Networks’ goodwill is compared to its carrying value. Fair value is estimated by considering sale prices for similar assets or by discounting estimated future cash flows from such assets using an appropriate discount rate. If the carrying amount of Starz Networks’ net assets exceeds its fair value, the second step of the goodwill impairment test is performed to measure the amount of goodwill impairment loss, if any. The second step of the goodwill impairment test would compare the implied fair value of Starz Networks’ goodwill with the carrying amount of that goodwill. If the carrying amount of Starz Networks’ goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess. The implied fair value of goodwill is determined in the same manner as the amount of goodwill that would be recognized in a business combination.

At December 31, 2015 and 2014, our qualitative assessment indicated that step one of the goodwill impairment analysis was not necessary. At December 31, 2013, our qualitative assessment indicated that step one of the goodwill impairment analysis was necessary due to the LMC Spin-Off and the known future change in our net assets due to the $1.2

41

billion cash distribution we made to Old LMC on January 10, 2013. We utilized a valuation analysis which included a guideline public companies analysis and a discounted cash flow analysis, prepared by a third party, to perform step one, which indicated Starz Networks did not have an impairment at December 31, 2013.

The fair value of Starz Networks’ net assets substantially exceeds its carrying value. Goodwill impairment tests require a high degree of judgment with respect to estimates of future cash flows and discount rates as well as other assumptions. Accordingly, any value ultimately derived for Starz Networks’ net assets may differ from our estimate of fair value.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk in the normal course of business due to our ongoing financial and operating activities. Market risk refers to the risk of loss arising from adverse changes in stock prices and interest rates. The risk of loss can be assessed from the perspective of adverse changes in fair values, cash flows and future earnings.

We are exposed to changes in interest rates as a result of borrowings used to maintain our liquidity and fund our operations. The nature and amount of our long-term and short-term debt are expected to vary as a result of future requirements, market conditions and other factors. We manage our exposure to interest rates by maintaining what we believe is an appropriate mix of fixed and variable rate debt and by entering into interest rate swap and collar arrangements when we deem appropriate.

As of December 31, 2015, our debt was comprised of the following amounts (in millions):

Variable rate debt		Fixed rate debt
Principal amount	Weighted avg. interest rate	Principal amount	Weighted avg. interest rate
$308.0	2.17%	$741.7	5.12%

A hypothetical 50 basis point change in interest rates prevailing at December 31, 2015 would either increase or decrease our annual interest expense on our variable rate debt by approximately $1.5 million. As noted above, our outstanding debt at December 31, 2015 was primarily fixed rate debt. We have borrowing capacity at December 31, 2015 of $692.0 million under our 2015 Credit Agreement at variable rates.

At December 31, 2015, the fair value of the Senior Notes was $687.5 million. We believe the fair value of our borrowings under our 2015 Credit Agreement approximate their carrying value as of December 31, 2015 due to their variable rate nature and our stable credit spread.

We are exposed to foreign exchange rate risk on certain of our original series that are produced in foreign countries. We mitigate this foreign exchange rate risk by entering into forward contracts and other types of derivative instruments as deemed appropriate. As of December 31, 2015, the fair market value of our outstanding derivative instruments related to foreign currencies was insignificant. We are also exposed to foreign exchange rate risk on our foreign operations, however, this risk is not deemed significant to our overall business.

Item 8. Financial Statements and Supplementary Data

The Report of Independent Registered Public Accounting Firm and our consolidated financial statements and notes thereto appear in a separate section of this report (beginning on page F-2 following Part IV).

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

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Item 9A. Controls and Procedures

Disclosure Controls and Procedures

In accordance with Exchange Act Rules 13a-15 and 15d-15, we carried out an evaluation, under the supervision and with the participation of management, including our chief executive officer and our principal financial and accounting officer (the “Executives”), of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Executives concluded that our disclosure controls and procedures were effective as of December 31, 2015 to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Internal Control over Financial Reporting

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements and related disclosures in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions of our company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the consolidated financial statements and related disclosures in accordance with GAAP; (3) provide reasonable assurance that receipts and expenditures of our company are being made only in accordance with authorizations of management and directors of our company; and (4) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the consolidated financial statements and related disclosures.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

We assessed the design and effectiveness of internal control over financial reporting as of December 31, 2015. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013), a principles-based guidance for designing and implementing effective internal controls.

Based upon our assessment using the criteria contained in COSO, management has concluded that, as of December 31, 2015, our internal control over financial reporting is effectively designed and operating effectively.

Our independent registered public accounting firm audited the consolidated financial statements and related disclosures in the Annual Report on Form 10-K and have issued an audit report on the effectiveness of our internal control over financial reporting. This report appears on page F-2 of this Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the three months ended December 31, 2015 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

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Part III.

The following required information is incorporated by reference to our definitive proxy statement for our 2016 Annual Meeting of Stockholders presently scheduled to be held in the second quarter of 2016:

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accountant Fees and Services

We expect to file our definitive proxy statement for our 2016 Annual Meeting of Stockholders with the Securities and Exchange Commission on or before April 29, 2016.

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Part IV.

Item 15. Exhibits and Financial Statement Schedules

The following documents are filed as part of this report:

(1) Financial Statements

The financial statements listed in the accompanying Index to Financial Statements are filed as part of this report beginning on page F-1.

(2) Financial Statement Schedules

All schedules have been omitted because they are not applicable, not material or the required information is set forth in the financial statements or notes thereto.

(3) Exhibits

Listed below are the exhibits which are filed as part of this report (according to the number assigned to them in Item 601 of Regulation S-K).

Exhibit No.	Description of Exhibit
3-Articles of Incorporation and Bylaws:
3.1	Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Registrant's Registration Statement on Form 8-A filed on June 12, 2013 (File No. 001-35294) (the “8-A”))
3.2	Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 2, 2013 (File No. 001-35294))
4-Instruments Defining the Rights of Securities Holders, including Indentures:
4.1	Form of Specimen Certificate for shares of Series A common stock, par value $0.01 per share, of the Registrant (incorporated by reference to Exhibit 4.1 to the 8-A)
4.2	Form of Specimen Certificate for shares of Series B common stock, par value $0.01 per share, of the Registrant (incorporated by reference to Exhibit 4.2 to the 8-A)
4.3	Indenture dated as of September 13, 2012 among Starz, LLC and Starz Finance Corp. as issuers, the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Starz, LLC’s Registration Statement on Form S-4 filed on October 23, 2012 (File No. 333-184551) (the “Starz, LLC S-4”))
10-Material Contracts:
10.1	Starz 2011 Incentive Plan (Amended and Restated as of October 15, 2013) (the “2011 Incentive Plan”) (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2013 filed on November 6, 2013 (File No. 001-35294) (the “2013 10-Q”))
10.2	Form of Non-Qualified Stock Option Agreement under the Registrant’s 2011 Incentive Plan (incorporated by reference to Exhibit 10.2 to the December 31, 2012 Annual Report on Form 10-K filed on February 27, 2013 (File No. 001-35294) (the Starz 10-K”))
10.3	Form of Restricted Stock Award Agreement under the Registrant’s 2007 Incentive Plan (incorporated by reference to Exhibit 10.3 to the Starz 10-K)
10.4	Form of Non-Qualified Stock Option Agreement under the Registrant’s 2011 Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2014 filed on May 1, 2014 (File No. 001-35294) (the “2014 10-Q”))
10.5	Form of Restricted Stock Award Agreement under the Registrant’s 2011 Incentive Plan (incorporated by reference to Exhibit 10.2 to the 2014 10-Q)
10.6	Form of Performance-Based Restricted Stock Units Award Agreement under the Registrant’s 2011 Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2015 filed on April 30, 2015 (File No. 001-35294))
10.7	Starz 2011 Nonemployee Director Incentive Plan (Amended and Restated as of October 15, 2013) (incorporated by reference to Exhibit 10.3 to the 2013 10-Q)

45

10.8	The Registrant’s Transitional Stock Adjustment Plan (incorporated by reference to Exhibit 10.3 to Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-4 filed on September 23, 2011 (File No. 333-171201 (the “S-4”))
10.9	Non-Qualified Stock Option Agreement pursuant to the Starz Transitional Stock Adjustment Plan between the Registrant and Gregory B. Maffei (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 filed on August 8, 2012 (File No. 001-35294))
10.10	Form of Election Form with respect to December 2012 Option Exchange Proposal for participants (incorporated by reference to Exhibit 10.7 to the Starz 10-K)
10.11	Tax Sharing Agreement, dated as of September 23, 2011, by and among Liberty Interactive Corporation, Liberty Interactive LLC and the Registrant (incorporated by reference to Exhibit 10.4 to Post-Effective Amendment No. 1 to the S-4)
10.12	Tax Sharing Agreement, dated as of January 11, 2013, by and between the Registrant and Liberty Media Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Starz filed on January 17, 2013 (File No. 001-35294) (the “Starz 8-K”))
10.13	Services Agreement, dated as of January 11, 2013, by and between the Registrant and Liberty Media Corporation (incorporated by reference to Exhibit 10.2 to the Starz 8-K)
10.14	Facilities Sharing Agreement, dated as of January 11, 2013, by and between the Registrant and Liberty Property Holdings, Inc. (incorporated by reference to Exhibit 10.3 to the Starz 8-K)
10.15	Form of Indemnification Agreement by and between the Registrant and its executive officers/directors (incorporated by reference to Exhibit 10.7 to Amendment No. 2 to the S-4)
10.16	Lease Agreement, dated as of January 11, 2013, by and among Starz, LLC, Liberty Property Holdings, Inc. and, for the limited purposes specified therein, Starz Entertainment, LLC (incorporated by reference to Exhibit 10.5 to the Starz 8-K)
10.17	Credit Agreement, dated as of November 16, 2011 among Starz, LLC, as the borrower, the lenders from time to time party thereto, the Bank of Nova Scotia, as administrative agent, Suntrust Bank, as syndication agent, and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Starz, LLC S-4)
10.18	Credit Agreement, dated as of April 20, 2015 among Starz, LLC, as the borrower, the Bank of Nova Scotia, as administrative agent, and the other parties named therein (incorporated by reference to Exhibit 4.1 to Starz, LLC’s Current Report on Form 8-K (File No. 333-184551), filed with the Securities and Exchange Commission on April 24, 2015)
10.19	Employment Agreement, effective as of January 1, 2013, by and between Starz and Christopher Albrecht (incorporated by reference to Exhibit 10.1 to the 2013 10-Q)
10.20	Form of Starz Severance Agreement, effective September 1, 2013, for certain named executive officers (incorporated by reference to Exhibit 10.4 to the 2013 10-Q)
10.21	Form of Notice to certain named executive officers regarding amendments to equity awards (incorporated by reference to Exhibit 10.5 to the 2013 10-Q)
10.22	Employment Agreement, dated as of July 20, 2015, between Starz Entertainment, LLC and Jeffrey Hirsch (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed on October 29, 2015 (File No. 001-35294))
21.1	Subsidiaries of the Registrant*
23.1	Consent of KPMG LLP*
31.1	Rule 13a-14(a)/15(d)-14(a) Certification*
31.2	Rule 13a-14(a)/15(d)-14(a) Certification*
32.1	Section 1350 Certifications**
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Calculation Linkbase Document*
101.LAB	XBRL Taxonomy Label Linkbase Document*
101.PRE	XBRL Taxonomy Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Definition Document*

______________________

*    Filed herewith.

**    Furnished herewith.

46

Signatures

Pursuant to the requirements of Section 13 or 15(d) 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.

	Starz
	By:	/s/ Christopher P. Albrecht
Date: February 25, 2016		Name:	Christopher P. Albrecht
		Title:	Chief Executive Officer
	By:	/s/ Scott D. Macdonald
Date: February 25, 2016		Name:	Scott D. Macdonald
		Title:	Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer and Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

Signature	Title	Date
/s/ Gregory B Maffei
Gregory B. Maffei	Chairman of the Board and Director	February 25, 2016
/s/ Christopher P. Albrecht
Christopher P. Albrecht	Director and Chief Executive Officer	February 25, 2016
/s/ Scott D. Macdonald
Scott D. Macdonald	Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer and Principal Accounting Officer)	February 25, 2016
/s/ Irving L. Azoff
Irving L. Azoff	Director	February 25, 2016
/s/ Andrew T. Heller
Andrew T. Heller	Director	February 25, 2016
/s/ Susan M. Lyne
Susan M. Lyne	Director	February 25, 2016
/s/ Jeffrey F. Sagansky
Jeffrey F. Sagansky	Director	February 25, 2016
/s/ Daniel E. Sanchez
Daniel E. Sanchez	Director	February 25, 2016
/s/ Charles Y. Tanabe
Charles Y. Tanabe	Director	February 25, 2016
/s/ Robert S. Wiesenthal
Robert S. Wiesenthal	Director	February 25, 2016

47

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page Number
AUDITED FINANCIAL STATEMENTS:
Independent Registered Public Accounting Firm Report	F‑2
Independent Registered Public Accounting Firm Report	F‑3
Consolidated Balance Sheets as of December 31, 2015 and 2014	F‑4
Consolidated Statements of Operations for the Years Ended December 31, 2015, 2014 and 2013	F‑5
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2015, 2014 and 2013	F‑6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013	F‑7
Consolidated Statements of Equity for the Years Ended December 31, 2015, 2014 and 2013	F‑8
Notes to Consolidated Financial Statements	F‑9

F-1

Independent Registered Public Accounting Firm Report

The Board of Directors and Stockholders

Starz:

We have audited Starz’s internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Starz’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on Starz’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Starz maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Starz and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, cash flows, and equity for each of the years in the three-year period ended December 31, 2015, and our report dated February 25, 2016 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG LLP

Denver, Colorado

February 25, 2016

F-2

Independent Registered Public Accounting Firm Report

The Board of Directors and Stockholders

Starz:

We have audited the accompanying consolidated balance sheets of Starz and subsidiaries (the Company) as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, cash flows, and equity for each of the years in the three-year period ended December 31, 2015. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Starz and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2015, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 25, 2016 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

/s/ KPMG LLP

Denver, Colorado

February 25, 2016

F-3

Starz and Subsidiaries

Consolidated Balance Sheets

December 31, 2015 and 2014

(in millions, except share and per share amounts)

	2015			2014
Assets
Current assets:
Cash and cash equivalents	$	10.7		$	13.4
Trade accounts receivable, net of allowances of $35.2 and $41.9 (Note 12)	252.9			249.1
Program rights	316.1			303.5
Other current assets (Note 12)	90.1			70.1
Total current assets	669.8			636.1
Program rights	335.9			311.3
Investment in films and television programs, net (Note 3)	215.6			319.5
Property and equipment, net (Note 4)	89.2			89.8
Deferred income taxes, net (Note 10)	21.2			—
Goodwill (Note 12)	131.8			131.8
Other assets, net (Note 12)	100.7			73.9
Total assets	$	1,564.2		$	1,562.4
Liabilities and Equity
Current liabilities:
Current portion of debt (Note 5)	$	5.6		$	5.3
Trade accounts payable	8.0			10.1
Accrued liabilities (Notes 6, 7 and 11)	267.7			327.4
Deferred revenue	10.3			7.4
Total current liabilities	291.6			350.2
Debt (Note 5)	1,032.2			1,164.3
Deferred income taxes, net (Note 10)	—			0.2
Other liabilities (Note 11)	22.7			7.9
Total liabilities	1,346.5			1,522.6
Stockholders’ equity (Note 8):
Preferred stock, $.01 par value. Authorized 50,000,000 shares; no shares issued	—			—
Series A common stock, $.01 par value. Authorized 2,000,000,000 shares; issued and outstanding 91,468,763 and 91,874,138 shares at December 31, 2015 and December 31, 2014, respectively	0.9			0.9
Series B common stock, $.01 par value. Authorized 75,000,000 shares; issued and outstanding 9,861,294 and 9,872,524 shares at December 31, 2015 and December 31, 2014, respectively	0.1			0.1
Additional paid-in capital	—			24.0
Accumulated other comprehensive loss, net of taxes	(1.5		)	(2.3		)
Retained earnings	218.2			25.8
Total stockholders’ equity	217.7			48.5
Noncontrolling interests in subsidiaries	—			(8.7		)
Total equity	217.7			39.8
Commitments and contingencies (Note 11)
Total liabilities and equity	$	1,564.2		$	1,562.4

See accompanying notes to consolidated financial statements.

F-4

Starz and Subsidiaries

Consolidated Statements of Operations

Years Ended December 31, 2015, 2014 and 2013

(in millions, except per share amounts)

	2015			2014			2013
Revenue:
Programming networks and other services	$	1,536.7		$	1,467.5		$	1,481.0
Home video net sales	163.4			196.4			296.5
Total revenue	1,700.1			1,663.9			1,777.5
Costs and expenses:
Programming (including amortization) (Notes 9 and 11)	655.7			600.6			633.9
Production and acquisition (including amortization) (Notes 3 and 7)	207.1			178.7			268.6
Home video cost of sales	43.6			60.0			71.1
Operating (Notes 9 and 11)	49.3			54.3			54.9
Selling, general and administrative (Notes 9, 11 and 12)	315.7			299.2			306.4
Depreciation and amortization	19.0			19.4			17.4
Total costs and expenses	1,290.4			1,212.2			1,352.3
Operating income	409.7			451.7			425.2
Other income (expense):
Interest expense, net of amounts capitalized (Note 5)	(46.0		)	(46.5		)	(45.0		)
Other income (expense), net	(15.7		)	4.6			9.0
Income before income taxes	348.0			409.8			389.2
Income tax expense (Note 10)	(111.5		)	(140.8		)	(139.4		)
Net income	236.5			269.0			249.8
Net loss (income) attributable to noncontrolling interests	(0.4		)	2.3			(2.5		)
Net income attributable to stockholders	$	236.1		$	271.3		$	247.3
Basic net income per common share (Note 12)	$	2.33		$	2.57		$	2.13
Diluted net income per common share (Note 12)	$	2.22		$	2.43		$	2.04
Weighted average number of common shares outstanding (Note 12):
Basic	101.2			105.5			115.9
Diluted	106.3			111.5			121.1

See accompanying notes to consolidated financial statements.

F-5

Starz and Subsidiaries

Consolidated Statements of Comprehensive Income

Years Ended December 31, 2015, 2014 and 2013

(in millions)

	2015			2014		2013
Net income	$	236.5		$	269.0	$	249.8
Other comprehensive income, net of taxes:
Foreign currency translation adjustments	1.0			2.7		0.1
Comprehensive income	237.5			271.7		249.9
Comprehensive loss (income) attributable to noncontrolling interests	(0.6		)	1.6		(2.4		)
Comprehensive income attributable to stockholders	$	236.9		$	273.3	$	247.5

See accompanying notes to consolidated financial statements.

F-6

Starz and Subsidiaries

Consolidated Statements of Cash Flows

Years Ended December 31, 2015, 2014 and 2013

(in millions)

	2015			2014			2013
Operating activities:
Net income	$	236.5		$	269.0		$	249.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	19.0			19.4			17.4
Amortization of program rights	607.2			555.7			581.1
Program rights payments	(408.4		)	(389.1		)	(399.9		)
Amortization of investment in films and television programs	155.1			130.0			212.4
Investment in films and television programs	(349.1		)	(389.5		)	(302.5		)
Stock compensation	32.9			30.6			34.3
Deferred income taxes	(12.6		)	19.3			8.4
Other non-operating and non-cash items	14.2			10.4			5.7
Changes in assets and liabilities:
Current and other assets	(56.7		)	(29.0		)	(61.1		)
Payables and other liabilities	12.5			(20.3		)	6.7
Due to affiliates	—			—			(39.5		)
Net cash provided by operating activities	250.6			206.5			312.8
Investing activities:
Purchases of property and equipment	(17.2		)	(11.2		)	(14.8		)
Investment in and advances to equity investee	(6.3		)	(19.1		)	—
Cash received from equity investee	—			10.7			—
Net cash used in investing activities	(23.5		)	(19.6		)	(14.8		)
Financing activities:
Borrowings of debt	840.0			515.5			1,197.0
Payments of debt	(969.2		)	(394.9		)	(721.6		)
Debt issuance costs	(5.0		)	—			(2.4		)
Repurchases of common stock	(104.1		)	(328.3		)	(289.9		)
Exercise of stock options	16.0			9.6			—
Minimum withholding of taxes related to stock compensation	(20.4		)	(14.5		)	(9.8		)
Excess tax benefit from stock compensation	19.9			13.4			4.7
Acquisition of noncontrolling interest	(7.0		)	—			—
Distributions to Old LMC	—			—			(1,200.0		)
Net cash used in financing activities	(229.8		)	(199.2		)	(1,022.0		)
Effect of exchange rate changes on cash and cash equivalents	—			—			(0.1		)
Net decrease in cash and cash equivalents	(2.7		)	(12.3		)	(724.1		)
Cash and cash equivalents:
Beginning of year	13.4			25.7			749.8
End of year	$	10.7		$	13.4		$	25.7

See accompanying notes to consolidated financial statements.

F-7

Starz and Subsidiaries

Consolidated Statements of Equity

Years Ended December 31, 2015, 2014 and 2013

(in millions)

	Stockholders’ Equity
	Preferred Stock		Series A			Series B		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Retained Earnings (Deficit)			Member’s Interest			Noncontrolling Interests			Total Equity
Balance at December 31, 2012	$	—	$	—		$	—	$	—		$	—		$	—		$	1,312.0		(9.8		)	1,302.2
The LMC Spin-Off (Note 1)	—		1.1			0.1		1,808.1			(4.5		)	(492.8		)	(1,312.0		)	—			—
Distribution to Old LMC (Note 1)	—		—			—		(1,245.7		)	—			—			—			—			(1,245.7		)
Tax attributes related to the LMC Spin-Off (Note 1)	—		—			—		11.5			—			—			—			—			11.5
Net income	—		—			—		—			—			247.3			—			2.5			249.8
Other comprehensive income (loss)	—		—			—		—			0.2			—			—			(0.1		)	0.1
Stock compensation	—		—			—		31.6			—			—			—			0.2			31.8
Minimum withholding of taxes related to stock compensation	—		—			—		(9.8		)	—			—			—			—			(9.8		)
Excess tax benefit from stock compensation	—		—			—		4.7			—			—			—			—			4.7
Repurchases of common stock	—		(0.1		)	—		(289.8		)	—			—			—			—			(289.9		)
Balance at December 31, 2013	—		1.0			0.1		310.6			(4.3		)	(245.5		)	—			(7.2		)	54.7
Net income (loss)	—		—			—		—			—			271.3			—			(2.3		)	269.0
Other comprehensive income	—		—			—		—			2.0			—			—			0.7			2.7
Stock compensation	—		—			—		33.1			—			—			—			0.1			33.2
Stock issued upon exercise of stock options	—		—			—		9.6			—			—			—			—			9.6
Minimum withholding of taxes related to stock compensation	—		—			—		(14.5		)	—			—			—			—			(14.5		)
Excess tax benefit from stock compensation	—		—			—		13.4			—			—			—			—			13.4
Repurchases of common stock	—		(0.1		)	—		(328.2		)	—			—			—			—			(328.3		)
Balance at December 31, 2014	—		0.9			0.1		24.0			(2.3		)	25.8			—			(8.7		)	39.8
Net income	—		—			—		—			—			236.1			—			0.4			236.5
Other comprehensive income	—		—			—		—			0.8			—			—			0.2			1.0
Stock compensation	—		—			—		36.2			—			—			—			(0.2		)	36.0
Stock issued upon exercise of stock options	—		—			—		16.0			—			—			—			—			16.0
Minimum withholding of taxes related to stock compensation	—		—			—		(20.4		)	—			—			—			—			(20.4		)
Excess tax benefit from stock compensation	—		—			—		19.9			—			—			—			—			19.9
Acquisition of noncontrolling interest	—		—			—		(15.3		)	—			—			—			8.3			(7.0		)
Repurchases of common stock	—		—			—		(60.4		)	—			(43.7		)	—			—			(104.1		)
Balance at December 31, 2015	$	—	$	0.9		$	0.1	$	—		$	(1.5	)	$	218.2		$	—		$	—		$	217.7

See accompanying notes to consolidated financial statements.

F-8

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Note 1 - Basis of Presentation and Description of Business

Starz, through its wholly-owned subsidiary Starz, LLC, provides premium subscription video programming to United States (“U.S.”) multichannel video programming distributors (“MVPDs”), including cable operators, satellite television providers and telecommunications companies, and online video providers (collectively, “Distributors”). Starz also develops, produces and acquires entertainment content and distributes this content to consumers in the U.S. and throughout the world.

Business

Starz’s business operations are conducted by its wholly-owned subsidiaries Starz, LLC, Starz Entertainment, LLC (“Starz Entertainment”), Starz Media Group, LLC (“Starz Media”) and certain other immaterial subsidiaries. In October 2015, Starz, LLC acquired the 25% interest in Starz Media which had previously been owned by The Weinstein Company LLC (“Weinstein”). In October 2015, Starz, LLC sold 100% of its wholly-owned subsidiary Film Roman, LLC (“Film Roman”), which made up 100% of the Starz Animation operating segment. Following the sale of Film Roman, Starz manages its operations through its Starz Networks and Starz Distribution operating segments.

Starz Networks

Starz Networks’ flagship premium networks are STARZ and ENCORE. STARZ exhibits first-run hit movies and original series. ENCORE airs first-run movies, classic contemporary movies and original series. Starz Networks’ third network, MOVIEPLEX, offers a variety of art house, independent films and classic movie library content. STARZ and ENCORE, along with MOVIEPLEX, air across 17 linear networks complemented by on-demand and online services. Starz Networks’ premium networks are offered by Distributors to their subscribers either on a fixed monthly price as part of a programming tier or package or on an a la carte basis.

Starz Distribution

Starz Distribution includes the Anchor Bay Entertainment, Starz Digital and Starz Worldwide Distribution businesses.

Anchor Bay Entertainment

Anchor Bay Entertainment is the global home video sales arm of Starz and distributes DVDs (standard definition and Blu-ray™) under the ANCHOR BAY brand, in the U.S., Canada and other international territories to the extent it has home entertainment rights to such content in international territories. Anchor Bay Entertainment acquires and licenses various titles from third parties and also develops and produces certain of its content. Certain of the titles acquired by Anchor Bay Entertainment air on Starz Networks’ STARZ and ENCORE networks. Anchor Bay Entertainment also distributes Starz Networks’ original series and Weinstein’s titles. Each of these titles are sold to and distributed by regional and national retailers and other companies, including Amazon, Best Buy, Ingram Entertainment, Netflix, Redbox, Target and Wal-Mart.

Starz Digital

Starz Digital is the global digital and on-demand licensing arm of Starz and distributes content on pay-per-view, video-on-demand, subscription video-on-demand (“SVOD”), ad-supported video-on-demand (“AVOD”), electronic sell-through and other digital formats for Starz’s owned content, including Starz Networks’ original series, Weinstein’s titles and content licensed from third-parties in the U.S. and throughout the world to the extent it has rights to such content in international territories. Certain of the titles acquired by Starz Digital air on Starz Networks’ STARZ and ENCORE networks. Starz Digital receives fees for its content from a wide array of partners ranging from traditional MVPDs to online and mobile distributors.

F-9

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Starz Worldwide Distribution

Starz Worldwide Distribution is the global television licensing arm of Starz and distributes movies, television series, documentaries, children’s programming and other video content. Starz Worldwide Distribution exploits Starz’s owned content, including Starz Networks’ original series, and content for which it has licensed rights on free or pay television in the U.S. and throughout the world to the extent it has rights to such content in international territories. Starz Worldwide Distribution receives fees for its content primarily from various U.S. and international programming networks.

LMC Spin-Off

In January 2013, Starz (formerly known as Liberty Media Corporation (“Old LMC”)) completed the spin off (the “LMC Spin-Off”) of its wholly-owned subsidiary Liberty Media Corporation (formerly known as Liberty Spinco, Inc. (“Liberty Media”)). Following the LMC Spin-Off, Starz retained the businesses of its wholly-owned subsidiary, Starz, LLC, and all other businesses, assets and liabilities of Old LMC were included in Liberty Media. As a result, Liberty Media became a separate public company on January 11, 2013.

    In accordance with U. S. generally accepted accounting principles (“GAAP”), Liberty Media was determined to be the accounting successor to Old LMC for financial reporting purposes following the LMC Spin-Off. Accordingly, Starz’s historical financial information is deemed to be the financial information of Starz, LLC. As Starz’s common stock did not begin publicly trading until January 14, 2013 (following the LMC Spin-Off), Starz’s statement of equity as of December 31, 2012 does not reflect common stock and additional paid in capital, but shows member’s interest, identical to that of Starz, LLC.

On January 10, 2013, in connection with the LMC Spin-Off, Starz, LLC distributed $1.2 billion in cash to Old LMC which was funded by a combination of cash on hand and borrowings under Starz, LLC’s 2011 Credit Agreement (as defined in Note 5). Additionally, in connection with the LMC Spin-Off, Starz, LLC distributed its Englewood, Colorado corporate office building and related building improvements at its net book value of $45.7 million to Old LMC and then leased back the use of such facilities from a subsidiary of Old LMC. Following the LMC Spin-Off, Liberty Media and Starz operate independently, and neither have any stock ownership, beneficial or otherwise, in the other. In addition, in connection with the LMC Spin-Off, state net operating losses, foreign tax credit carryforwards and other tax attributes of $11.5 million were allocated to Starz.

Note 2 - Significant Accounting Policies

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Starz and its majority-owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Starz considers amortization of program rights, the development of ultimate revenue estimates (as defined below under “Investment in Films and Television Programs”) associated with released films, the assessment of investment in films and television programs for impairment, the fair value of goodwill and any related impairment, valuation allowances associated with deferred income taxes and allowances for sales returns to be its most significant estimates. Actual results may differ from those estimates.

Prior Period Reclassifications

Certain prior period amounts have been reclassified for comparability with the 2015 presentation.

F-10

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less when purchased. Cash and cash equivalents are invested at high credit quality financial institutions. Deposits generally exceed the Federal Deposit Insurance Corporation insurance limit.

Allowance for Trade Receivables

The allowance for trade receivables represents estimated losses which may result from the inability of customers to make required payments on trade accounts receivable and for sales returns. Allowances for sales returns are based on past experience and current trends that are expected to continue.

Program Rights

The cost of program rights for films and television programs (including the license fee associated with the pay television window for original series which is reclassified to program rights from investment in films and television programs when the original series is aired) exhibited on Starz Networks’ premium networks are generally amortized on a title-by-title or episode-by-episode basis over the anticipated number of exhibitions. Starz Networks estimates the number of exhibitions based on the number of exhibitions allowed in the agreement (if specified) and the expected usage of the content. Certain other program rights are amortized to expense on a straight-line basis over the respective lives of the agreements. Starz Networks generally has rights to two or three separate windows under its output agreements. For films with multiple windows, the license fee is allocated between the windows based upon the proportionate estimated fair value of each window with the majority of the cost allocated to the first window. Considerable management judgment is necessary to estimate the fair value of each window.

Investment in Films and Television Programs

Investment in films and television programs includes the cost of completed films and television programs (including original series) which have been produced by Starz or for which Starz has acquired distribution rights, as well as the cost of films and television programs in production, pre-production and development. Capitalized costs include production costs, including labor, goods and services, interest and allocable overhead, acquisition of distribution rights (including cash advances paid to Weinstein for theatrical releases under the license agreement entered into with Weinstein – see Note 7), acquisition of story rights and the development of stories less amounts allocated to program rights for original series, which have aired on Starz Networks’ premium networks.

Starz allocates the cost of its original series between the pay television window, which is considered the license fee, and the ancillary revenue markets (e.g. home video, digital platforms, international television, etc.) based on the estimated relative fair values of these markets. The amount associated with the pay television window is reclassified to program rights when the program is aired and the portion attributable to the ancillary markets remains in investment in films and television programs.

Investment in films and television programs is amortized using the individual-film-forecast method, whereby the costs are charged to expense and royalty, participation and residual costs are accrued based on the proportion that current revenue from the films or television programs bears to an estimate of the remaining unrecognized revenue (“Ultimate Revenue”). Ultimate Revenue estimates do not exceed ten years following the date of initial release or from the date of delivery of the first episode for episodic television series. Estimates of Ultimate Revenue involve uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in management’s future revenue estimates.

Investment in films and television programs in development or pre-production is periodically reviewed to determine whether they will ultimately be used in the production of a film or television program. Costs of films and television programs in development or pre-production are charged to expense when a project is abandoned, or generally if the film or television program has not been set for production within three years from the time of the first capitalized transaction.

Investment in films and television programs is reviewed for impairment on a title-by-title basis when an event or change in circumstances indicates that a film or television program may be impaired. The estimated fair value for each title is determined using the discounted estimated future cash flow of each title. If the estimated fair value of a film or television

F-11

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

program is less than its unamortized cost, the excess of unamortized cost over the estimated fair value is charged to expense. Considerable management judgment is necessary to estimate the fair value of investment in films and television programs.

Equity Investments

For investments in affiliates in which Starz has the ability to exercise significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize Starz’s share of net income or loss and other comprehensive income or loss of the affiliate. Losses are limited to the extent of Starz’s investment in, advances to and commitments on behalf of the investee. Starz’s equity investment is reflected in other assets, net in the accompanying consolidated balance sheets and the share of net income or loss of its equity investment is reflected in other income, net in the accompanying consolidated statements of operations.

Property and Equipment

Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 3 to 15 years for distribution equipment, 3 to 7 years for furniture, fixtures and office equipment and 30 years for building.

Property and equipment is reviewed for impairment when an event or change in circumstances indicates that the asset may be impaired. If the carrying value of the asset is determined to not be recoverable and is greater than its fair value, then an impairment charge is recognized. The charge consists of the amount by which the carrying value of the asset exceeds its fair value. Fair value is estimated by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. Considerable management judgment is necessary to determine recoverability and to estimate the fair value of property and equipment.

Goodwill

Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified assets acquired. Goodwill is reviewed for impairment annually, at December 31, or more frequently if indicators of potential impairment exist. Starz utilizes a qualitative assessment for determining whether step one of the goodwill impairment analysis is necessary. In evaluating goodwill on a qualitative basis, Starz considers whether there were any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges, the legal environment and how these factors might impact the company specific performance in future periods.

If the qualitative assessment indicates that step one is necessary, the fair value of each reporting unit in which goodwill resides is compared to its carrying value. Fair value is estimated by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. For reporting units whose carrying value exceeds the fair value, a second test is required to measure the impairment loss. In the second test, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit with any residual value being allocated to goodwill. The difference between such allocated amount and the carrying value of the goodwill is recorded as an impairment charge. Considerable management judgment is necessary to estimate the fair value of each reporting unit.

Revenue Recognition

Programming revenue is recognized in the period during which programming is provided, pursuant to affiliation agreements. If an affiliation agreement has expired, revenue is recognized based on the terms of the expired agreement or the actual payment from the Distributor, whichever is less. Any funds received in excess of fixed and determinable programming revenue are recorded as a liability in deferred revenue until the discrepancy is resolved. Payments to Distributors for marketing support costs for which Starz does not receive a direct benefit are recorded as a reduction of revenue. Certain sales incentives, including discounts and rebates, provided to Distributors are accounted for as a reduction of revenue and are not significant.

Revenue generated from the sale of DVDs is recognized, net of an allowance for estimated sales returns, on the later of the estimated receipt of the product by the customer or after any restrictions on sale lapse. At the time of the initial sale, Starz also records a provision, based on historical trends and practices, to reduce revenue for discounts and rebates provided to customers related to the sale of DVDs.

F-12

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Revenue from digital and television licensing is recognized when the film or program is complete in accordance with the terms of the arrangement and is available for exploitation by the licensee. The film or program is available for exploitation when it has been delivered or is available to the licensee and the license period has commenced. In the event that a licensee pays Starz a nonrefundable minimum guarantee at or prior to the beginning of the license period, Starz records this amount as deferred revenue until all of the criteria for revenue recognition are met.

Starz recognized revenue and related production costs related to animation services provided to customers under contract generally based on the percentage that costs incurred-to-date bore to estimated total costs to complete utilizing the most recent information. Revenue recognized was proportional to the work performed-to-date under the contracts.

Advertising and Marketing

Advertising and marketing costs are expensed as incurred. Certain of Starz’s affiliation agreements require Starz to provide marketing support to the Distributor based upon certain criteria as stipulated in the agreements. Marketing support includes cooperative advertising and marketing efforts between Starz and its Distributors such as cross channel, direct mail and point of sale incentives. Marketing support is recorded as an expense and not a reduction of revenue when Starz has received a direct benefit and the fair value of such benefit is determinable.

Stock-Based Compensation

Starz measures the cost of employee services received in exchange for an award of equity instruments (such as stock options, restricted shares and restricted stock units) based on the grant-date fair value of the award and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the award). Starz measures the cost of employee services received in exchange for an award of liability instruments (i.e., awards that have the option to be settled in cash) based on the current fair value of the award and re-measures the fair value of the award at each reporting date.

Income Taxes

Starz has applied the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value amounts and income tax basis of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards. The deferred tax assets and liabilities are calculated using enacted tax rates in effect for each taxing jurisdiction in which Starz operates for the year in which those temporary differences are expected to be recovered or settled. Net deferred tax assets are then reduced by a valuation allowance if Starz believes it more likely than not that such net deferred tax assets will not be realized.

Derivative Instruments and Hedging Activities

All derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income (loss) and are recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. If the derivative is not designated as a hedge, changes in the fair value of the derivative are recognized in earnings.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, restricted cash, trade accounts receivable, trade accounts payable and accrued liabilities approximates fair value, due to their short maturity. See Note 5 for information concerning the fair value of Starz’s debt instruments.

Foreign Currency Translation

The functional currency of Starz is the U.S. dollar. The functional currency of Starz’s foreign operations is the applicable local currency for each foreign subsidiary. Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date and the related statements of operations are translated at the average exchange

F-13

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is included as a component of accumulated other comprehensive loss in equity and other comprehensive income in the consolidated statements of comprehensive income.

Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in gains and losses which are reflected in the accompanying consolidated statements of operations as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (Topic 606). ASU 2014-09 replaces the majority of all U.S. GAAP guidance that currently exists on revenue recognition with a single model to be applied to all contracts with customers. The core principle of ASU 2014-09 is that “an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” For a public entity, ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted, but not before annual periods beginning after December 15, 2016. An entity must apply ASU 2014-09 using either the full retrospective approach, by restating all years presented, or the cumulative effect at the date of adoption approach. Starz is currently assessing the impact that these changes will have on its consolidated financial statements, and therefore, is unable to quantify such impact or determine the method of adoption.

In April 2015, the FASB issued ASU 2015-03 Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. For a public entity, ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted for financial statements that have not been previously issued. In August 2015, the FASB issued ASU 2015-15 Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements to provide additional clarification on the presentation of debt issuance costs. Starz adopted the new guidance effective December 31, 2015 and has reclassified its debt issuance costs from other assets, net to debt in the accompanying consolidated balance sheets (see Note 5).

In November 2015, the FASB issued ASU 2015-17 Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. ASU 2015-17 eliminates the current requirement for entities to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. For a public entity, ASU 2015-17 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted and it may be applied prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. Starz adopted the new guidance retrospectively effective December 31, 2015 and has reflected its deferred tax assets and liabilities as noncurrent in the accompanying consolidated balance sheets.

F-14

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Note 3 – Investment in Films and Television Programs, Net

Investment in films and television programs, net consisted of the following (in millions):

	December 31,
	2015		2014
Released film costs - theatrical, less amortization	$	1.1	$	1.2
Film costs – television and home entertainment:
Released, less amortization	57.3		70.5
Completed, but not released	3.4		116.2
In production	141.5		125.5
Development and pre-production	12.3		6.1
	$	215.6	$	319.5

Approximately 64% and 82% of the unamortized film costs (theatrical, television and home entertainment) for released films of $58.4 million at December 31, 2015 are expected to be amortized within three and four years, respectively. Approximately $33.5 million of the costs of Released and Completed, but not released films of $61.8 million at December 31, 2015 are expected to be amortized during the next twelve months.

Note 4 - Property and Equipment, Net

Property and equipment, net consisted of the following (in millions):

	December 31,
	2015			2014
Distribution equipment (a)	$	114.4		$	114.5
Furniture, fixtures and office equipment	64.5			53.9
Building (b)	44.8			44.8
	223.7			213.2
Less accumulated depreciation	(134.5		)	(123.4		)
	$	89.2		$	89.8

(a) The cost of satellite transponders accounted for as capital leases was $57.5 million as of December 31, 2015 and 2014. Accumulated depreciation for these transponders was $41.6 million and $37.8 million at December 31, 2015 and 2014, respectively.

(b) Represents the cost of Starz’s corporate headquarters facility in Englewood, Colorado which is accounted for as a capital lease and which is leased from a subsidiary of Starz’s related party, Liberty Media. Accumulated depreciation for the building totaled $4.4 million and $2.9 million at December 31, 2015 and 2014, respectively.

F-15

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Note 5 - Debt

Debt consisted of the following (in millions):

	December 31,
	2015			2014
2015 Credit Agreement (a)	$	308.0		$	—
2011 Credit Agreement (b)	—			432.0
Senior Notes, including premium of $1.9 and $2.5 (c)	676.9			677.5
Capital leases (d)	64.8			70.0
Debt issuance costs, net	(11.9		)	(9.9		)
Total debt	1,037.8			1,169.6
Less: current portion	(5.6		)	(5.3		)
	$	1,032.2		$	1,164.3

(a) On April 20, 2015, Starz, LLC entered into a credit agreement (“2015 Credit Agreement”) that provides for $1,000.0 million in revolving loans with a $50.0 million sub-limit for stand-by letters of credit. Net proceeds from the 2015 Credit Agreement were used to repay and terminate the 2011 Credit Agreement (as defined below). Borrowings may be prepaid at any time and from time to time without penalty other than customary breakage costs. Any amounts prepaid may be reborrowed. The 2015 Credit Agreement is scheduled to mature on April 20, 2020. As of December 31, 2015, $692.0 million of borrowing capacity was available under the 2015 Credit Agreement.

Interest on each loan under the 2015 Credit Agreement is payable at either an alternate base rate or LIBOR at Starz, LLC’s election. Borrowings that are alternate base rate loans bear interest at a per annum rate equal to the alternate base rate plus a margin that varies between 0.5% and 1.25% depending on the consolidated leverage ratio of Starz, LLC, as defined in the 2015 Credit Agreement. The alternate base rate is the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus ½ of 1% or (c) LIBOR for a one-month interest period plus 1%. Borrowings that are LIBOR loans bear interest at a per annum rate equal to the applicable LIBOR plus a margin that varies between 1.5% and 2.25% depending on the consolidated leverage ratio of Starz, LLC. The 2015 Credit Agreement requires Starz, LLC to pay a commitment fee on any unused portion. The commitment fee varies between 0.25% and 0.40%, depending on the consolidated leverage ratio of Starz, LLC.

As of December 31, 2015, the following borrowings and related LIBOR or alternate base rate interest rates were outstanding (dollars in millions):

LIBOR or alternate base rate period:	Interest Rate	Loan Amount
December 2015 - January 2016	2.03700%	$	95.0
December 2015 - January 2016	2.09450%	200.0
December 2015 and forward	4.25000%	13.0
		$	308.0

The 2015 Credit Agreement contains certain covenants that include restrictions on, among others, incurring additional debt, paying dividends or making certain distributions, investments and other restricted payments, liens, guarantees and investments. In addition, Starz, LLC must comply with certain financial covenants including a consolidated leverage ratio, as defined in the 2015 Credit Agreement. As of December 31, 2015, Starz, LLC was in compliance with all covenants under the 2015 Credit Agreement.

(b) On November 16, 2011, Starz, LLC entered into a credit agreement (“2011 Credit Agreement”) that provided $1,000 million in revolving loans, a $50 million sub-limit for standby letters of credit and a $500.0 million term loan. On April 20, 2015, Starz LLC repaid and terminated the 2011 Credit Agreement using borrowings under the 2015 Credit Agreement.

F-16

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Interest on each loan under the 2011 Credit Agreement was payable at either an alternate base rate or LIBOR at Starz, LLC’s election. Borrowings that were alternate base rate loans bore interest at a per annum rate equal to the alternate base rate plus a margin that varied between 0.5% and 1.5% depending on the consolidated leverage ratio of Starz, LLC, as defined in the 2011 Credit Agreement. The alternate base rate was the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus ½ of 1% or (c) LIBOR for a one-month interest period plus 1%. Borrowings that were LIBOR loans bore interest at a per annum rate equal to the applicable LIBOR plus a margin that varied between 1.5% and 2.5% depending on the consolidated leverage ratio of Starz, LLC. The 2011 Credit Agreement required Starz, LLC to pay a commitment fee on any unused portion of the revolving loans under the 2011 Credit Agreement. The commitment fee varied between 0.25% and 0.50%, depending on the consolidated leverage ratio of Starz, LLC.

(c) On September 13, 2012, Starz, LLC and Starz Finance Corp. co-issued $500.0 million aggregate principal amount of senior notes, due September 15, 2019 (“2012 Notes”). On February 8, 2013, Starz, LLC and Starz Finance Corp. completed the issuance of an additional $175.0 million aggregate principal amount of 5.0% senior notes due 2019 (“2013 Notes” and together with the 2012 Notes, “Senior Notes”), which were issued as additional notes under the indenture governing the 2012 Notes. The net proceeds from the issuance of the 2012 Notes and cash on hand were used to repay and terminate the $500.0 million term loan under the 2011 Credit Agreement. The net proceeds from the issuance of the 2013 Notes were used to repay indebtedness under the 2011 Credit Agreement. The 2013 Notes were issued at a price of 102.0% plus accrued interest from September 13, 2012.

The Senior Notes bear interest at a rate of 5.0% payable semi-annually on September 15 and March 15 of each year. Starz Finance Corp. is a wholly-owned subsidiary of Starz, LLC and was formed for the sole purpose of co-issuing the 2012 Notes. Starz Finance Corp. does not have and will not have any operations, assets or subsidiaries of its own. The Senior Notes are guaranteed by Starz Entertainment.

The Senior Notes rank equally in right of payment to all existing and future senior obligations and existing and future subordinated obligations. The Senior Notes are effectively subordinated to any existing and future secured obligations and to all the liabilities of the subsidiaries that do not guarantee the Senior Notes.

The Senior Notes contain certain covenants that include restrictions on, among others, incurring additional debt, paying dividends, entering into liens and guarantees, or making certain distributions, investments and other restricted payments. As of December 31, 2015, Starz, LLC was in compliance with all covenants under the Senior Notes.

(d) On January 11, 2013, Starz, LLC, and, for the limited purposes described therein, Starz Entertainment entered into a commercial lease with a subsidiary of Starz’s related party, Liberty Media, for its headquarters building. The term of the lease is ten-years, with an additional four successive five-year renewal periods at the option of Starz, LLC. Starz, LLC recorded a $44.8 million capital lease in connection with this lease agreement with an imputed annual interest rate of 6.4%.

Starz Entertainment has entered into capital lease agreements for its transponder capacity. The transponder agreements expire during 2018 to 2021 and have imputed annual interest rates ranging from 5.5% to 7.0%.

F-17

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Debt maturities for the next five years and thereafter at December 31, 2015 were as follows (in millions):

2016	$	10.1
2017	10.1
2018	9.7
2019	682.4
2020	313.8
Thereafter	74.4
Total minimum payments	1,100.5
Less: amounts representing interest	(50.8		)
Present value of debt payments	1,049.7
Less: debt issuance costs	(11.9		)
Less: current portion	(5.6		)
Long-term portion of debt obligations	$	1,032.2

At December 31, 2015, the fair value of the Senior Notes was $687.5 million and was based upon quoted prices in active markets. Starz believes the fair value of borrowings under the 2015 Credit Agreement approximate their carrying value as of December 31, 2015 due to their variable rate nature and Starz’s stable credit spread.

Interest costs of $6.0 million, $4.7 million and $3.6 million have been capitalized as investment in films and television programs during the years ended December 31, 2015, 2014 and 2013, respectively.

Note 6 – Accrued Liabilities

Accrued liabilities consisted of the following (in millions):

	December 31,
	2015		2014
Royalties, residuals and participations	$	82.4	$	134.2
Program rights payable	67.8		$	89.0
Advertising and marketing	48.1		41.1
Payroll and related costs	29.2		27.5
Other	40.2		35.6
	$	267.7	$	327.4

Approximately85%of accrued royalties, residuals and participations of $82.4 million at December 31, 2015 are expected to be paid during the next twelve months.

Note 7 – Related Party Transactions

In December 2010, Anchor Bay Entertainment entered into a five-year license agreement with Weinstein for the distribution of certain Weinstein theatrical releases on DVD and digital formats. Effective in December 2014, Anchor Bay Entertainment extended, through April 2020, its license agreement with Weinstein. As mentioned in Note 1, Starz, LLC acquired Weinstein’s 25% interest in Starz Media during October 2015. Accordingly, Weinstein is no longer considered a related party.

Anchor Bay Entertainment earns a fee for the distribution of such theatrical titles. Starz recognized participation expense of $100.8 million, $91.5 million and $163.2 million, which is included in production and acquisition costs in the accompanying consolidated statements of operations, for Weinstein’s share of the net proceeds under the license agreement, for the years ended December 31, 2015, 2014 and 2013, respectively. Cash paid to Weinstein for investment in films and television programs totaled $85.1 million, $145.5 million and $143.9 million for the years ended December 31, 2015, 2014

F-18

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

and 2013, respectively. Starz’s payable to Weinstein, which is included in accrued liabilities in the accompanying consolidated balance sheets, totaled $59.6 million at December 31, 2014.

Note 8 - Stockholders’ Equity

Preferred Stock

Preferred stock is issuable, from time to time, with such designations, preferences and relative participating, optional or other rights, qualifications, limitations or restrictions thereof, as shall be stated and expressed in a resolution or resolutions providing for the issue of such preferred stock adopted by Starz’s board of directors. As of December 31, 2015, no shares of preferred stock were issued.

Common Stock

Series A common stock has one vote per share and Series B common stock has ten votes per share. Each share of Series B common stock is exchangeable at the option of the holder for one share of Series A common stock. Series A and Series B common stock participate on an equal basis with respect to dividends and distributions.

As of December 31, 2015, there were 13.2 million shares of Series A common stock reserved for issuance under the exercise privileges of outstanding stock options. In addition to the Series A and Series B common stock, there are 2.0 billion shares of Series C common stock authorized for issuance.

Purchases of Common Stock

Shares of Series A common stock are subject to repurchase pursuantto a share repurchase program. Repurchased shares are retired and returned to the status of authorized and available for issuance. On February 24, 2016, the Starz board of directors authorized an additional $400.0 million to repurchase Starz common stock. Including this authorization, the Starz board of directors has authorized a total of $1,200.0 million since January 2013 to repurchase Starz common stock. Starz repurchased 2.8 million, 10.9 million and 11.5 million shares of Series A common stock for aggregate consideration, including fees, of$104.1 million,$328.3 millionand$289.9 millionfor the years endedDecember 31, 2015,2014 and 2013, respectively.Starz had $78.2 million available under its share repurchase program as of December 31, 2015.

Note 9 – Stock Compensation

Pursuant to the Starz 2011 Incentive Plan, the compensation committee of the board of directors may grant eligible employees stock options, stock appreciation rights, restricted shares and restricted stock units made in respect of a maximum of 29.2 million shares of Starz common stock. Stock options generally vest over 4 years and have a term of 7-10 years. Restricted shares generally vest over 1-4 years. Restricted stock units generally vest over 3 years. Starz issues new shares upon exercise of equity awards. Pursuant to the Starz 2011 Nonemployee Director Incentive Plan, the board of directors may grant eligible nonemployee directors stock options, stock appreciation rights, restricted shares and restricted stock units made in respect of a maximum of 1.4 million shares of Starz common stock.

Stock compensation expense, by expense category, consisted of the following (in millions):

	Years ended December 31,
	2015		2014		2013
Programming	$	2.6	$	2.4	$	1.6
Operating	0.3		0.3		0.2
Selling, general and administrative	30.0		27.9		32.5
	$	32.9	$	30.6	$	34.3

As of December 31, 2015, total unrecognized compensation cost related to unvested stock options, restricted shares and restricted stock units was approximately $57.8 million. Such amount will be recognized in Starz’s consolidated statements of operations over a weighted average period of 2.52 years.

F-19

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Awards granted in 2015, 2014 and 2013 were as follows:

	Options Granted	Weighted Average Grant-Date Fair Value
2015 Awards:
Stock options	731,263	$	11.12
Restricted shares	443,710	$	33.57
Restricted stock units	107,070	$	34.85
2014 Awards:
Stock options	1,424,612	$	10.94
Restricted shares	148,106	$	32.94
2013 Awards:
Stock options	7,443,494	$	7.84
Restricted shares	574,548	$	22.85

Starz calculated the grant-date fair value for stock options using the Black-Scholes Model. The expected term was estimated using a simplified method as Starz does not have a sufficient amount of historical exercise or forfeiture data due to the LMC Spin-Off in January 2013. The simplified method assumes that the employee would exercise stock options evenly over the vesting period and through the contract term. The 2015 expected volatility was calculated using Starz’s historical and implied volatility and comparable peer company historical and implied volatility, while the 2014 and 2013 expected volatility was calculated using comparable peer company historical and implied volatility because Starz lacked historical volatility equal to the expected term due to the LMC Spin-Off in January 2013. Starz used a zero dividend rate as Starz has not historically declared dividends and used risk-free rates which were derived from U.S. Treasury Bonds with a term similar to that of the subject options. The assumptions used were as follows:

	2015	2014	2013
Expected term	4.75	4.75	4.60 to 6.90
Expected volatility	36.0% to 36.2%	35.9% to 36.0%	35.9% to 41.4%
Risk-free rate of return	1.4% to 1.7%	1.5%	0.7% to 1.4%

The number and weighted average exercise price (“WAEP”) of stock options to purchase Starz common stock were as follows:

	Options		WAEP
Outstanding at December 31, 2014	16,431,666		$	17.42
Granted	731,263		$	33.33
Exercised	(3,420,547	)	$	13.97
Forfeited	(554,840	)	$	22.99
Expired/cancelled	—		$	—
Outstanding at December 31, 2015	13,187,542		$	18.97
Exercisable at December 31, 2015	8,293,383		$	15.85

At December 31, 2015, the weighted average remaining contractual term of outstanding options was 5.1 years and exercisable options was 4.5 years. At December 31, 2015, the aggregate intrinsic value of outstanding options was $191.7 million and the aggregate intrinsic value of exercisable options was $146.4 million. The aggregate intrinsic value of options

F-20

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

exercised was $80.0 million, $55.8 million and $16.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.

The number and weighted average grant date fair value of restricted share grants were as follows:

	Restricted Shares		Weighted Average Grant-Date Fair Value
Outstanding at December 31, 2014	708,658		$	21.01
Granted	443,710		$	33.57
Vested	(361,814	)	$	22.72
Forfeited	(20,607	)	$	33.85
Outstanding at December 31, 2015	769,947		$	29.22

The grant date fair value was based on the market value of the shares on the date of grant. The aggregate fair value of all restricted shares that vested during the years ended December 31, 2015, 2014 and 2013 was $8.2 million, $12.4 million and $8.8 million, respectively.

In 2015, Starz granted certain employees restricted stock units that will vest based upon the actual, cumulative Adjusted OIBDA (as defined in Note 13) achieved by Starz during a three year performance period beginning on January 1, 2015 and ending on December 31, 2017 (“Performance Period”), compared to a target cumulative Adjusted OIBDA during the Performance Period specified by the Starz compensation committee. Potential vesting of the restricted stock units ranges from a threshold of 50% of the target award if Starz’s actual three-year cumulative Adjusted OIBDA equals 90% of the targeted amount, to a maximum of 200% of the target award if Starz’s actual three-year cumulative Adjusted OIBDA equals or exceeds 120% of the targeted amount. Results between threshold, target and maximum will be interpolated on a straight line basis. Each restricted stock unit provides the right to receive, in those specified circumstances, one share of Starz Series A common stock. Based upon the target for the Performance Period, the number of restricted stock units representing the threshold, target and maximum were 53,535 units, 107,070 units and 214,140 units, respectively (which are not reflected in the table above).

At December 31, 2015, 2.0 million of outstanding stock options and 0.1 million restricted shares were held by Liberty Media employees as a result of the LMC Spin-Off.

Note 10 - Income Taxes

Starz is a holding company with no assets, liabilities or operations other than those of Starz, LLC. Starz, LLC is a single-member limited liability company (“LLC”), which is treated as a disregarded entity for U.S. federal income tax purposes.

As mentioned in Note 1, in October 2015, Starz, LLC acquired Weinstein’s 25% interest in Starz Media. As a result, Starz Media became a single-member LLC of Starz, LLC and 100% of its activity will be included in Starz’s federal and state income tax returns for periods subsequent to the acquisition.

F-21

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Income tax expense consisted of the following (in millions):

	Years ended December 31,
	2015			2014		2013
Current:
Federal	$	111.3		$	110.6	$	119.2
State and local	10.4			7.6		9.3
Foreign	2.4			3.3		2.5
	124.1			121.5		131.0
Deferred:
Federal	(14.8		)	14.9		0.5
State and local	2.2			4.4		7.9
	(12.6		)	19.3		8.4
	$	111.5		$	140.8	$	139.4

Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following (in millions):

	Years ended December 31,
	2015			2014			2013
Computed expected tax expense	$	121.8		$	143.4		$	136.2
State and local income taxes, net of federal income taxes	7.4			8.0			11.5
Deduction for qualified production activity	(9.5		)	(10.4		)	(12.6		)
Uncertain tax positions	(8.4		)	—			—
Settlements with tax authorities	6.6			—			—
Change in subsidiary tax status	(4.7		)	—			0.8
Change in valuation allowance affecting tax expense	(0.8		)	1.2			3.0
Foreign taxes, net of foreign tax credit	(0.2		)	(0.7		)	0.9
Other, net	(0.7		)	(0.7		)	(0.4		)
	$	111.5		$	140.8		$	139.4

Internal Revenue Code Section 199 (“Section 199”) allows U.S. taxpayers a deduction for qualified domestic production activities.  Generally, the deduction is equal to 9% of the net income from such activities (subject to certain limitations).  Starz recorded tax benefits of $9.5 million, $10.4 million and $12.6 million for the years ended December 31, 2015, 2014 and 2013, respectively, under Section 199.

During 2015, Starz remitted $6.6 million to the Internal Revenue Service with respect to a settlement of its Section 199 deduction for the year ended December 31, 2013. In addition, Starz recognized an income tax benefit of $8.4 million due to the expiration of the statute of limitations related to an uncertain tax position.

As a result of the acquisition of Weinstein’s 25% interest in Starz Media in October 2015, Starz Media converted from a partnership to a single-member LLC of Starz, LLC for income tax purposes. As a consequence, the deferred tax asset recorded for the difference between the book basis and tax basis of Starz, LLC’s investment in Starz Media was retired and a deferred tax asset for Starz Media’s net deductible temporary differences was recorded, which was primarily related to allowance for doubtful accounts and intangible assets. The income tax benefit of the conversion was $4.7 million.

F-22

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2015 and 2014 were as follows (in millions):

	December 31,
	2015			2014
Deferred tax assets:
Accrued stock compensation	$	22.5		$	16.8
Intangible assets	14.5			—
Allowance for doubtful accounts	13.2			—
Tax loss and credit carryforwards	4.6			7.1
Investments	0.7			32.3
Other future deductible amounts	5.6			1.1
	61.1			57.3
Valuation allowance	(1.8		)	(2.6		)
	59.3			54.7
Deferred tax liabilities:
Property and equipment	(13.9		)	(15.0		)
Investment in films and television programs	(24.2		)	(32.6		)
Program rights	—			(7.3		)
	(38.1		)	(54.9		)
Deferred income taxes, net	$	21.2		$	(0.2	)

The changes in uncertain tax positions were as follows:

	December 31,
	2015			2014
Balance at beginning of year	$	—		$	—
Additions	13.6			—
Settlements and lapses	(13.6		)	—
Balance at end of year	$	—		$	—

As of December 31, 2015, Starz had no accrued interest and penalties recorded related to uncertain tax positions.

Note 11 - Commitments and Contingencies

Programming Rights

Starz has an exclusive multi-year output licensing agreement for qualifying films that are released theatrically in the U.S. by Sony Pictures Entertainment Inc. (“Sony”) through 2021. The agreement provides Starz with exclusive pay TV rights to exhibit qualifying theatrically released films under the Sony, Columbia Pictures, Screen Gems, Sony Pictures Classics and TriStar labels. Theatrically released films produced by Sony Pictures Animation are not licensed to Starz under the Sony agreement. In addition, Starz has an exclusive licensing agreement for qualifying films that are released theatrically in the U.S. by Walt Disney Company (“Disney”) through 2015. The agreement provides Starz with exclusive pay TV rights to exhibit qualifying theatrically released films under the Disney, Touchstone, Pixar and Marvel labels. Theatrically released films produced by DreamWorks and released by Disney are not licensed to Starz under the Disney agreement. The programming fees to be paid to Sony and Disney are based on the quantity and domestic theatrical exhibition receipts of qualifying films. Starz has also entered into agreements with a number of other motion picture producers and is obligated to pay fees for the rights to exhibit certain films licensed from these producers.

F-23

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

The unpaid balance for film rights related to films that were available for exhibition at December 31, 2015 is reflected in accrued liabilities and in other liabilities in the accompanying consolidated balance sheets. As of December 31, 2015, such liabilities aggregated approximately $88.9 million and are payable as follows: $67.8 million in 2016, $10.5 million in 2017, $4.1 million in 2018, $6.0 million in 2019, $0.4 million in 2020 and $0.1 million thereafter.

The estimated amounts payable under programming license agreements related to films that are not available for exhibition until some future date, including the rights to exhibit films that have been released theatrically under the Sony and Disney agreements, which have not been accrued as of December 31, 2015, are as follows: $256.0 million in 2016; $109.4 million in 2017; $99.6 million in 2018; $87.9 million in 2019, $66.5 million in 2020 and $111.2 million thereafter.

Starz is also obligated to pay fees for films that have not yet been released in theaters by Sony. Starz is unable to estimate the amounts to be paid to Sony for films that have not yet been released, however, such amounts are expected to be significant.

Amortization of program rights was $607.2 million, $555.7 million and $581.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts are included in programming costs in the accompanying consolidated statements of operations.

Operating Leases

Starz leases office facilities, back-up transponder capacity and certain other equipment under operating lease arrangements. Rental expense under such arrangements amounted to $6.4 million, $7.2 million and $7.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. Such amounts are included in operating expenses and selling, general and administrative expenses in the accompanying consolidated statements of operations.

The future minimum payments under noncancelable operating leases at December 31, 2015 were as follows (in millions):

2016	$	3.9
2017	2.3
2018	2.2
2019	1.6
2020	0.7
Thereafter	0.1
	$	10.8

Foreign Currency Hedge Contracts

Starz has entered into foreign currency hedge contracts to manage its foreign currency risk in connection with certain original series produced in South Africa and New Zealand. Starz has committed to pay US$11.2 million for ZAR142.4 million and US$16.6 million for NZD25.2 million during 2016.

Guarantee

Starz Entertainment entered into a guarantee on behalf of a previously owned subsidiary of Starz Media for any amounts owed to the Ontario government under the Canadian Next Generation of Jobs Fund Grant if the subsidiary did not meet its obligations. The Ontario government released Starz Entertainment from the guarantee in December 2013 due to completion of the project in September 2013. As a result of this release, Starz recognized income of $8.8 million in other income, net during the year ended December 31, 2013, for amounts accrued in prior years under the guarantee.

F-24

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Legal Proceedings

On October 29, 2015, Keno Thomas, a former Starz Entertainment employee, filed a complaint in Los Angeles County Superior Court against Starz, Starz, LLC, Starz Entertainment (collectively, “Starz Parties”) and Liberty Media, and certain individual defendants. The plaintiff alleges that the Starz Parties and certain of the other defendants engaged in retaliation, wrongful termination of employment, failure to prevent retaliation and intentional infliction of emotional distress, all in connection with the plaintiff’s employment with Starz Entertainment. The plaintiff seeks compensatory, emotional distress and punitive damages, interest and an award of reasonable attorneys’ fees. On November 30, 2015, defendants removed this case to the United States District Court for the Central District of California. On December 7, 2015, the defendants moved to dismiss Mr. Albrecht and Liberty Media and to dismiss various causes of action against the Starz Parties and Mr. Thornton, and to strike portions of the complaint. These motions are scheduled for hearing on February 29, 2016. In February 2016, the parties stipulated to dismiss Starz and Starz, LLC without prejudice and to dismiss Liberty Media with prejudice.

On November 9, 2015, a purported class action was commenced in the U.S. District Court for the Central District of California by Pierre Bolduc, against Starz and certain individual defendants. The plaintiff purports to represent a class of persons who purchased shares of Starz common stock between August 1, 2014 and October 29, 2015. Citing allegations in the lawsuit filed by Keno Thomas, described above, the plaintiff alleges that the defendants violated applicable federal securities laws by making materially false and misleading statements and failing to disclose that: (a) Starz lacked adequate internal controls; (b) Starz’s contract with a certain Distributor was a result of illicit business practices; and (c) as a result, Starz’s public statements were materially false and misleading and lacked a reasonable basis. The complaint alleges that the price of shares of Starz’s common stock fell as a result of the Keno Thomas lawsuit. The plaintiff seeks damages, interest, reasonable attorneys’ fees and costs. On February 11, 2016, the District Court entered an Order appointing Lucille Theroux as Lead Plaintiff and Approving Glancy Prongay & Murray LLP, as Counsel, and thereafter the Court formally changed the case name to Theroux v. Starz, et al.

Starz believes it has substantial defenses to the claims asserted, is defending these actions vigorously, and does not believe that the resolution of these remaining cases will have a material adverse effect on its business, financial condition or results of operations.

In the normal course of business, Starz is subject to other lawsuits and other claims, including claims of alleged infringement of the trademarks, patents, copyrights and other intellectual property rights of third parties. While it is not possible to predict the outcome of these other matters, it is the opinion of management, based upon consultation with legal counsel, that the ultimate disposition of known proceedings will not have a material adverse impact on Starz’s business, financial condition or results of operations.

Note 12 – Other Information

Supplemental Disclosure of Cash Flow Information

Supplemental disclosure of cash flow information was as follows (in millions):

	Years ended December 31,
	2015		2014		2013
Cash paid for interest, net of amounts capitalized	$	43.7	$	44.0	$	43.4
Cash paid for income taxes	$	124.7	$	107.9	$	184.4
Distribution of corporate office building to Old LMC	$	—	$	—	$	45.7
Capital lease with subsidiary of Liberty Media	$	—	$	—	$	44.8
Tax attributes related to LMC Spin-Off	$	—	$	—	$	11.5

F-25

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Allowance for Trade Receivables

Changes in the allowance for trade receivables were as follows (in millions):

Description	Balance at beginning of period		Charged to costs and expenses(1)			Charged to other accounts(1)		Deductions(2)			Balance at end of period
Year ended December 31, 2015:
Reserves:
Allowance for doubtful accounts	$	1.1	$	(0.4	)	$	—	$	(0.1	)	$	0.6
Allowance for sales returns	40.8		—			99.4		(105.6		)	34.6
	$	41.9	$	(0.4	)	$	99.4	$	(105.7	)	$	35.2
Year ended December 31, 2014:
Reserves:
Allowance for doubtful accounts	$	1.1	$	3.4		$	—	$	(3.4	)	$	1.1
Allowance for sales returns	31.7		—			126.5		(117.4		)	40.8
	$	32.8	$	3.4		$	126.5	$	(120.8	)	$	41.9
Year ended December 31, 2013:
Reserves:
Allowance for doubtful accounts	$	0.3	$	0.8		$	—	$	—		$	1.1
Allowance for sales returns	34.7		—			141.4		(144.4		)	31.7
	$	35.0	$	0.8		$	141.4	$	(144.4	)	$	32.8

(1) Charges for doubtful accounts are included in selling, general and administrative expense and charges for sales returns are recorded against revenue. During the year ended December 31, 2015, an account receivable previously written off was collected and resulted in a credit balance for amounts charged to costs and expenses.

(2) Actual home video returns, uncollectible accounts written off and foreign currency exchange rate changes.

Other Current Assets

Other current assets consisted of the following (in millions):

	December 31,
	2015		2014
Income tax receivable	$	44.1	$	29.8
Other	46.0		40.3
	$	90.1	$	70.1

Condensed Financial Information of Registrant

The restricted net assets of Starz exceeds 25% of its consolidated net assets due to restrictions under the 2015 Credit Agreement and Senior Notes. As mentioned in Note 10, Starz is a holding company with no assets or liabilities of its own or operations other than those of Starz, LLC. Accordingly, the financial position, results of operations, comprehensive income and cash flows of Starz and Starz, LLC are identical. As such, condensed financial information for the Starz parent legal entity is not presented as it is not meaningful.

F-26

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Net Income Attributable to Common Stockholders

Basic net income per common share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented.

The reconciliation between basic and diluted weighted average shares outstanding was as follows (in millions):

	Years Ended December 31,
	2015	2014	2013
Basic weighted average shares outstanding	101.2	105.5	115.9
Effect of dilution:
Stock options	4.9	5.3	3.8
Restricted shares	0.2	0.7	1.4
Diluted weighted average shares outstanding	106.3	111.5	121.1

For the years ended December 31, 2015, 2014 and 2013, approximately 0.4 million, 1.4 million and no shares, respectively, have been excluded from the diluted weighted average shares outstanding since the shares would have been anti-dilutive.

Investment in Equity Affiliate

During the year ended December 31, 2014, Starz invested $19.1 million for an approximate 40% interest in Playco Holdings Limited (“Playco”) and during the year ended December 31, 2015, made advances to Playco totaling $6.3 million. Playco began offering a STARZ-branded online SVOD service in the Middle East and North Africa during 2015. Starz accounts for its investment in Playco using the equity method of accounting. Such investment is included in other assets, net in the accompanying consolidated balance sheets.

Goodwill

There were no changes in the carrying amount of goodwill, all of which relates to Starz Networks, during the years ended December 31, 2015 and 2014. As of December 31, 2015, the accumulated impairment loss was $1,718.9 million, of which $1,396.7 million relates to Starz Networks and $322.2 million to Starz Distribution.

Advertising and Marketing

Starz’s total advertising costs were $116.1 million, $110.4 million and $113.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. Total marketing costs were $41.1 million, $33.9 million and $35.0 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Major Customers and Suppliers

Two Starz Networks’ Distributors each accounted for more than 10% of Starz’s total revenue and together accounted for 41%, 36% and 34% of Starz’s total revenue for the years ended December 31, 2015, 2014 and 2013, respectively. There were no other Distributors or other customers that accounted for more than 10% of revenue in any year. Starz’s premium networks and services are provided to these Distributors pursuant to affiliation agreements with varying terms.

As discussed in Note 11, Starz has entered into agreements to license theatrically released films from studios owned by Sony (through 2021) and Disney (through 2015). Films are available to Starz for exhibition generally 8-13 months after their theatrical release.

Anchor Bay Entertainment outsources substantially all of its home video distribution services, including DVD manufacturing and distribution to Twentieth Century Fox Home Entertainment LLC. The agreement expires on June 30, 2020.

F-27

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Foreign Operations

Revenue generated outside of the U.S. represented 5%, 4% and 5% of consolidated revenue for each of the years ended December 31, 2015, 2014 and 2013, respectively.  Net long-lived assets outside the U.S. were less than 1% of consolidated net long-lived assets as of December 31, 2015 and 2014.

Note 13 – Information about Operating Segments

Starz evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as Adjusted OIBDA. Adjusted OIBDA is defined as revenue less programming costs, production and acquisition costs, home video cost of sales, operating expenses and selling, general and administrative expenses, but excluding all stock compensation expense. Starz’s chief operating decision maker uses this measure of performance in conjunction with other measures to evaluate its operating segments’ performance and make decisions about allocating resources among its operating segments. Starz believes that Adjusted OIBDA is an important indicator of the operational strength and performance of its operating segments, including each operating segment’s ability to assist Starz in servicing its debt and to fund investments in films and television programs. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between operating segments and identify strategies to improve performance.

This measure of performance excludes stock compensation and depreciation and amortization that are included in the measurement of operating income pursuant to GAAP. The primary material limitations associated with the use of Adjusted OIBDA as compared to GAAP results are (i) it may not be comparable to similarly titled measures used by other companies in Starz’s industry, and (ii) it excludes financial information that some may consider important in evaluating Starz’s performance. Starz compensates for these limitations by providing a reconciliation of Adjusted OIBDA to GAAP results to enable investors to perform their own analysis of Starz’s operating results. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, income before income taxes, net income, net cash provided by operating activities and other measures of financial performance prepared in accordance with GAAP.

The reconciliation of Adjusted OIBDA to income before income taxes was as follows (in millions):

	Years Ended December 31,
	2015			2014			2013
Consolidated Adjusted OIBDA	$	461.6		$	501.7		$	476.9
Stock compensation	(32.9		)	(30.6		)	(34.3		)
Depreciation and amortization	(19.0		)	(19.4		)	(17.4		)
Interest expense, net of amounts capitalized	(46.0		)	(46.5		)	(45.0		)
Other income (expense), net	(15.7		)	4.6			9.0
Income before income taxes	$	348.0		$	409.8		$	389.2

Starz’s reportable segments are strategic business units that offer different services. They are managed separately because each segment requires different technologies, content delivery methods and marketing strategies. Starz identifies its reportable segments as those operating segments that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA or total assets. Starz Networks and Starz Distribution have been identified as reportable segments, however, as Starz had three operating segments, Starz Animation was also reported. As mentioned in Note 1, Starz, LLC sold 100% of its wholly-owned subsidiary Film Roman, which made up 100% of the Starz Animation operating segment, in October 2015. Starz generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.

F-28

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Performance Measures (in millions):

	Years Ended December 31,
	2015			2014			2013
Revenue:
Starz Networks	$	1,324.4		$	1,312.0		$	1,297.7
Starz Distribution	353.8			321.5			449.5
Starz Animation	24.6			31.7			32.5
Inter-segment eliminations	(2.7		)	(1.3		)	(2.2		)
	$	1,700.1		$	1,663.9		$	1,777.5
Adjusted OIBDA:
Starz Networks	$	428.6		$	496.4		$	456.2
Starz Distribution	36.1			7.5			24.0
Starz Animation	(1.5		)	(2.7		)	(2.6		)
Inter-segment eliminations	(1.6		)	0.5			(0.7		)
	$	461.6		$	501.7		$	476.9

Other Information (in millions):

	Years Ended December 31,
	2015			2014			2013
Cash paid for investment in films and television programs:
Starz Networks	$	246.8		$	227.9		$	125.2
Starz Distribution	102.3			161.6			177.3
Starz Animation	—			—			—
Inter-segment eliminations	—			—			—
	$	349.1		$	389.5		$	302.5
	December 31,
	2015			2014
Total assets:
Starz Networks	$	1,365.9		$	1,347.2
Starz Distribution	166.8			173.5
Starz Animation	—			2.4
Other unallocated assets (primarily cash, deferred taxes and other assets, including income tax receivables and the commercial lease for Starz’s corporate headquarters facility)	109.7			92.0
Inter-segment eliminations	(78.2		)	(52.7		)
	$	1,564.2		$	1,562.4

F-29

Starz and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2015, 2014 and 2013

Note 14 – Quarterly Financial Information (Unaudited)

The unaudited quarterly financial information for the years ended December 31, 2015 and 2014 was as follows (in millions):

	1st		2nd		3rd		4th
	Quarter		Quarter		Quarter		Quarter
2015
Revenue	$	450.7	$	417.7	$	404.1	$	427.6
Operating income	$	142.5	$	110.5	$	101.8	$	54.9
Net income	$	86.1	$	63.0	$	59.5	$	27.9
Net income attributable to stockholders	$	84.6	$	63.4	$	60.2	$	27.9
Basic net income per common share	$	0.84	$	0.63	$	0.59	$	0.27
Diluted net income per common share	$	0.80	$	0.59	$	0.57	$	0.26
2014:
Revenue	$	420.0	$	410.1	$	408.2	$	425.6
Operating income	$	113.5	$	104.8	$	97.3	$	136.1
Net income	$	66.8	$	69.0	$	55.8	$	77.4
Net income attributable to member	$	64.9	$	70.1	$	56.3	$	80.0
Basic net income per common share	$	0.60	$	0.66	$	0.54	$	0.78
Diluted net income per common share	$	0.56	$	0.62	$	0.51	$	0.74

F-30

Exhibit List

Exhibits. Listed below are the exhibits which are filed as a part of this Report (according to the number assigned to them in Item 601 of Regulation S-K):

Exhibit No.		Description of Exhibit
3-Articles of Incorporation and Bylaws:
3.1	Restated Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Registrant’s Registration Statement on Form 8-A filed on June 12, 2013 (File No. 001-35294) (the “8-A”))
3.2	Amended and Restated Bylaws of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed on May 2, 2013 (File No. 001-35294))
4-Instruments Defining the Rights of Securities Holders, including Indentures:
4.1	Form of Specimen Certificate for shares of Series A common stock, par value $0.01 per share, of the Registrant (incorporated by reference to Exhibit 4.1 to the 8-A)
4.2	Form of Specimen Certificate for shares of Series B common stock, par value $0.01 per share, of the Registrant (incorporated by reference to Exhibit 4.2 to the 8-A)
4.3	Indenture dated as of September 13, 2012 among Starz, LLC and Starz Finance Corp. as issuers, the guarantors named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to Starz, LLC’s Registration Statement on Form S-4 filed on October 23, 2012 (File No. 333-184551) (the “Starz, LLC S-4”))
10-Material Contracts:
10.1	Starz 2011 Incentive Plan (Amended and Restated as of October 15, 2013) (the “2011 Incentive Plan”) (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the period ended September 30, 2013 filed on November 6, 2013 (File No. 001-35294) (the “2013 10-Q”))
10.2	Form of Non-Qualified Stock Option Agreement under the Registrant’s 2011 Incentive Plan (incorporated by reference to Exhibit 10.2 to the December 31, 2012 Annual Report on Form 10-K filed on February 27, 2013 (File No. 001-35294) (the Starz 10-K”))
10.3	Form of Restricted Stock Award Agreement under the Registrant’s 2007 Incentive Plan (incorporated by reference to Exhibit 10.3 to the Starz 10-K)
10.4	Form of Non-Qualified Stock Option Agreement under the Registrant’s 2011 Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2014 filed on May 1, 2014 (File No. 001-35294) (the “2014 10-Q”))
10.5	Form of Restricted Stock Award Agreement under the Registrant’s 2011 Incentive Plan (incorporated by reference to Exhibit 10.2 to the 2014 10-Q)
10.6	Form of Performance-Based Restricted Stock Units Award Agreement under the Registrant’s 2011 Incentive Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the period ended March 31, 2015 filed on April 30, 2015 (File No. 001-35294))
10.7	Starz 2011 Nonemployee Director Incentive Plan (Amended and Restated as of October 15, 2013) (incorporated by reference to Exhibit 10.3 to the 2013 10-Q)
10.8	The Registrant’s Transitional Stock Adjustment Plan (incorporated by reference to Exhibit 10.3 to Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-4 filed on September 23, 2011 (File No. 333-171201 (the “S-4”))
10.9	Non-Qualified Stock Option Agreement pursuant to the Starz Transitional Stock Adjustment Plan between the Registrant and Gregory B. Maffei (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 filed on August 8, 2012 (File No. 001-35294))
10.10	Form of Election Form with respect to December 2012 Option Exchange Proposal for participants (incorporated by reference to Exhibit 10.7 to the Starz 10-K)
10.11	Tax Sharing Agreement, dated as of September 23, 2011, by and among Liberty Interactive Corporation, Liberty Interactive LLC and the Registrant (incorporated by reference to Exhibit 10.4 to Post-Effective Amendment No. 1 to the S-4)
10.12	Tax Sharing Agreement, dated as of January 11, 2013, by and between the Registrant and Liberty Media Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Starz filed on January 17, 2013 (File No. 001-35294) (the “Starz 8-K”))
10.13	Services Agreement, dated as of January 11, 2013, by and between the Registrant and Liberty Media Corporation (incorporated by reference to Exhibit 10.2 to the Starz 8-K)

E-1

10.14	Facilities Sharing Agreement, dated as of January 11, 2013, by and between the Registrant and Liberty Property Holdings, Inc. (incorporated by reference to Exhibit 10.3 to the Starz 8-K)
10.15	Form of Indemnification Agreement by and between the Registrant and its executive officers/directors (incorporated by reference to Exhibit 10.7 to Amendment No. 2 to the S-4)
10.16	Lease Agreement, dated as of January 11, 2013, by and among Starz, LLC, Liberty Property Holdings, Inc. and, for the limited purposes specified therein, Starz Entertainment, LLC (incorporated by reference to Exhibit 10.5 to the Starz 8-K)
10.17	Credit Agreement, dated as of November 16, 2011 among Starz, LLC, as the borrower, the lenders from time to time party thereto, the Bank of Nova Scotia, as administrative agent, Suntrust Bank, as syndication agent, and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Starz, LLC S-4)
10.18	Credit Agreement, dated as of April 20, 2015 among Starz, LLC, as the borrower, the Bank of Nova Scotia, as administrative agent, and the other parties named therein (incorporated by reference to Exhibit 4.1 to Starz, LLC’s Current Report on Form 8-K (File No. 333-184551), filed with the Securities and Exchange Commission on April 24, 2015)
10.19	Employment Agreement, effective as of January 1, 2013, by and between Starz and Christopher Albrecht (incorporated by reference to Exhibit 10.1 to the 2013 10-Q)
10.20	Form of Starz Severance Agreement, effective September 1, 2013, for certain named executive officers (incorporated by reference to Exhibit 10.4 to the 2013 10-Q)
10.21	Form of Notice to certain named executive officers regarding amendments to equity awards (incorporated by reference to Exhibit 10.5 to the 2013 10-Q)
10.22	Employment Agreement, dated as of July 20, 2015, between Starz Entertainment, LLC and Jeffrey Hirsch (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 filed on October 29, 2015 (File No. 001-35294))
21.1	Subsidiaries of the Registrant*
23.1	Consent of KPMG LLP*
31.1	Rule 13a-14(a)/15(d)-14(a) Certification*
31.2	Rule 13a-14(a)/15(d)-14(a) Certification*
32.1	Section 1350 Certifications**
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Calculation Linkbase Document*
101.LAB	XBRL Taxonomy Label Linkbase Document*
101.PRE	XBRL Taxonomy Presentation Linkbase Document*
101.DEF	XBRL Taxonomy Definition Document*

_____________________

* Filed herewith.

** Furnished herewith.

E-2

EX-21.1

	Exhibit 21.1
Starz
Subsidiary List
as of December 31, 2015
NAME	Domicile
Starz	DE
Starz, LLC	DE
Aries Pictures LLC	CO
Chalk Line Productions, LLC	DE
Namor Productions, LLC	DE
SEG Investments, LLC	DE
Starz Canada Holdco, LLC	DE
Starz Entertainment, LLC	CO
Starz Finance Corp.	DE
Starz Independent, LLC	DE
Starz Ballet Productions, LLC	DE
Starz Evil Dead New Zealand Limited	NZ
Starz Evil Productions, LLC	DE
Starz Pirates Productions, LLC	DE
Starz Power Productions, LLC	DE
Starz Remorse Productions LLC	DE
Starz Media Group, LLC	DE
Starz Media, LLC	DE
Anchor Bay Entertainment, LLC	DE
Anchor Bay Entertainment Canada Co.	Nova Scotia
Overture Films, LLC	DE

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Starz:

We consent to the incorporation by reference in the following registration statements of Starz of our reports dated February 25, 2016, with respect to the consolidated balance sheets of Starz and subsidiaries as of December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, cash flows, and equity for each of the years in the three-year period ended December 31, 2015, and the effectiveness of internal control over financial reporting as of December 31, 2015, which reports appear in the December 31, 2015 annual report on Form 10-K of Starz.

	Registration
Description	Statement No.	Description
S-8	333-201809	Starz 401(k) Savings Plan
S-8	333-185990	Starz Transitional Stock Adjustment Plan
S-8	333-185988	Starz 2011 Nonemployee Director Incentive Plan
S-8	333-185986	Starz 2011 Incentive Plan
S-8	333-184900	Starz 2011 Incentive Plan
S-8	333-179112	Starz 2011 Incentive Plan
S-8	333-178421	Starz Transitional Stock Adjustment Plan
S-8	333-177844	Starz 2011 Incentive Plan
S-8	333-177843	Starz 2011 Nonemployee Director Incentive Plan
S-8	333-176988	Starz Transitional Stock Adjustment Plan

/s/ KPMG LLP

Denver, Colorado

February 25, 2016

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Christopher P. Albrecht, certify that:

1. I have reviewed this annual report on Form 10-K of Starz;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements and other financial information included in this annual report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this annual report based on such evaluation; and

d) disclosed in this annual report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 25, 2016

/s/ Christopher P. Albrecht

Christopher P. Albrecht

Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Scott D. Macdonald, certify that:

1. I have reviewed this annual report on Form 10-K of Starz;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements and other financial information included in this annual report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this annual report based on such evaluation; and

d) disclosed in this annual report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 25, 2016

/s/ Scott D. Macdonald

Scott D. Macdonald

Chief Financial Officer, Executive Vice President and Treasurer

EX-32.1

Exhibit 32.1

Certification

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Starz, a Delaware corporation (the “Company”), does hereby certify, to such officer's knowledge, that:

The Annual Report on Form 10-K for the period ended December 31, 2015 (the “Form 10-K”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ Christopher P. Albrecht
Date: February 25, 2016		Name:	Christopher P. Albrecht
		Title:	Chief Executive Officer (Principal Executive Officer)
	By:	/s/ Scott D. Macdonald
Date: February 25, 2016		Name:	Scott D. Macdonald
		Title:	Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer and Principal Accounting Officer)

The foregoing certification is being furnished solely pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) and is not being filed as part of the Form 10-K or as a separate disclosure document.

XML

Document and Entity Information Document - USD ($) $ in Billions	12 Months Ended
	Dec. 31, 2015	Jan. 31, 2016	Jun. 30, 2015
Document and Entity Information [Line Items]
Entity Registrant Name	Starz
Entity Central Index Key	0001507934
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 2.6
Common Class A
Document and Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		90,709,365
Common Class B [Member]
Document and Entity Information [Line Items]
Entity Common Stock, Shares Outstanding		9,860,416

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 10.7	$ 13.4
Trade accounts receivable, net of allowances of $35.2 and $41.9 (Note 12)	252.9	249.1
Program rights	316.1	303.5
Other current assets (Note 12)	90.1	70.1
Total current assets	669.8	636.1
Noncurrent assets:
Program rights	335.9	311.3
Investment in films and television programs, net (Note 3)	215.6	319.5
Property and equipment, net (Note 4)	89.2	89.8
Deferred income taxes, net (Note 10)	21.2	0.0
Goodwill (Note 12)	131.8	131.8
Other assets, net (Note 12)	100.7	73.9
Total assets	1,564.2	1,562.4
Current liabilities:
Current portion of debt (Note 5)	5.6	5.3
Trade accounts payable	8.0	10.1
Accrued liabilities (Notes 6, 7 and 11)	267.7	327.4
Deferred revenue	10.3	7.4
Total current liabilities	291.6	350.2
Noncurrent liabilities:
Debt (Note 5)	1,032.2	1,164.3
Deferred income taxes, net (Note 10)	0.0	0.2
Other liabilities (Note 11)	22.7	7.9
Total liabilities	$ 1,346.5	$ 1,522.6
Commitments and contingencies (Note 11)
Total liabilities and equity	$ 1,564.2	$ 1,562.4
Stockholders' Equity [Abstract]
Preferred stock, $.01 par value. Authorized 50,000,000 shares; no shares issued	0.0	0.0
Additional paid-in capital	0.0	24.0
Accumulated other comprehensive loss, net of taxes	(1.5)	(2.3)
Retained earnings	218.2	25.8
Noncontrolling interests in subsidiaries	0.0	(8.7)
Total equity	217.7	39.8
Total stockholders’ equity	217.7	48.5
Common Class A
Stockholders' Equity [Abstract]
Common Stock, Value, Issued	0.9	0.9
Common Class B [Member]
Stockholders' Equity [Abstract]
Common Stock, Value, Issued	$ 0.1	$ 0.1

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Allowances for trade accounts receivable	$ 35.2	$ 41.9
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	50,000,000	50,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common Class B [Member]
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	75,000,000	75,000,000
Common Stock, Shares, Issued	9,861,294	9,872,524
Common Stock, Shares, Outstanding	9,861,294	9,872,524
Common Class A
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01
Common Stock, Shares Authorized	2,000,000,000	2,000,000,000
Common Stock, Shares, Issued	91,468,763	91,874,138
Common Stock, Shares, Outstanding	91,468,763	91,874,138

XML

Consolidated Statements of Operations - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenue:
Programming networks and other services	$ 1,536.7	$ 1,467.5	$ 1,481.0
Home video net sales	163.4	196.4	296.5
Total revenue	1,700.1	1,663.9	1,777.5
Costs and expenses:
Programming (including amortization) (Notes 9 and 11)	655.7	600.6	633.9
Production and acquisition (including amortization) (Notes 3 and 7)	207.1	178.7	268.6
Home video cost of sales	43.6	60.0	71.1
Operating (Notes 9 and 11)	49.3	54.3	54.9
Selling, general and administrative (Notes 9, 11 and 12)	315.7	299.2	306.4
Depreciation and amortization	19.0	19.4	17.4
Total costs and expenses	1,290.4	1,212.2	1,352.3
Operating income	409.7	451.7	425.2
Other income (expense):
Interest expense, net of amounts capitalized (Note 5)	(46.0)	(46.5)	(45.0)
Other income (expense), net	(15.7)	4.6	9.0
Income before income taxes	348.0	409.8	389.2
Income tax expense (Note 10)	(111.5)	(140.8)	(139.4)
Net income	236.5	269.0	249.8
Net loss (income) attributable to noncontrolling interests	(0.4)	2.3	(2.5)
Net income attributable to stockholders	$ 236.1	$ 271.3	$ 247.3
Basic net income per common share	$ 2.33	$ 2.57	$ 2.13
Diluted net income per common share	$ 2.22	$ 2.43	$ 2.04
Basic weighted average shares outstanding	101.2	105.5	115.9
Diluted weighted average shares outstanding	106.3	111.5	121.1

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Statement of Comprehensive Income [Abstract]
Net income	$ 236.5	$ 269.0	$ 249.8
Other comprehensive income, net of taxes:
Foreign currency translation adjustments	1.0	2.7	0.1
Comprehensive income	237.5	271.7	249.9
Comprehensive loss (income) attributable to noncontrolling interests	(0.6)	1.6	(2.4)
Comprehensive income attributable to stockholders	$ 236.9	$ 273.3	$ 247.5

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Operating activities:
Net income	$ 236.5	$ 269.0	$ 249.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	19.0	19.4	17.4
Amortization of program rights	607.2	555.7	581.1
Program rights payments	(408.4)	(389.1)	(399.9)
Amortization of investment in films and television programs	155.1	130.0	212.4
Investment in films and television programs	(349.1)	(389.5)	(302.5)
Stock compensation	32.9	30.6	34.3
Deferred income taxes	(12.6)	19.3	8.4
Other non-operating and non-cash items	14.2	10.4	5.7
Changes in assets and liabilities:
Current and other assets	(56.7)	(29.0)	(61.1)
Due to affiliates	0.0	0.0	(39.5)
Payables and other liabilities	12.5	(20.3)	6.7
Net cash provided by operating activities	250.6	206.5	312.8
Investing activities:
Purchases of property and equipment	(17.2)	(11.2)	(14.8)
Investment in and advances to equity investee	(6.3)	(19.1)	0.0
Cash received from equity investee	0.0	10.7	0.0
Net cash used in investing activities	(23.5)	(19.6)	(14.8)
Financing activities:
Borrowings of debt	840.0	515.5	1,197.0
Payments of debt	(969.2)	(394.9)	(721.6)
Debt issuance costs	(5.0)	0.0	(2.4)
Repurchases of common stock	(104.1)	(328.3)	(289.9)
Exercise of stock options	16.0	9.6	0.0
Minimum withholding of taxes related to stock compensation	(20.4)	(14.5)	(9.8)
Excess tax benefit from stock compensation	19.9	13.4	4.7
Acquisition of noncontrolling interest	(7.0)	0.0	0.0
Distributions to Old LMC	0.0	0.0	(1,200.0)
Net cash used in financing activities	(229.8)	(199.2)	(1,022.0)
Effect of exchange rate changes on cash and cash equivalents	0.0	0.0	(0.1)
Net decrease in cash and cash equivalents	(2.7)	(12.3)	(724.1)
Beginning of year	13.4	25.7	749.8
End of year	$ 10.7	$ 13.4	$ 25.7

XML

Consolidated Statements of Equity - USD ($) $ in Millions	Total	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member]	Member's Interest	Noncontrolling Interests	Common Class A Common Stock [Member]	Common Class B [Member] Common Stock [Member]
Balance at Dec. 31, 2012	$ 1,302.2	$ 0.0	$ 0.0	$ 0.0	$ 1,312.0	$ (9.8)	$ 0.0	$ 0.0
Increase (Decrease) in Member's Interest and Noncontrolling Interests [Roll Forward]
The LMC Spin-Off (Note 1)	0.0	1,808.1	(4.5)	(492.8)	(1,312.0)		1.1	0.1
Adjustments to additional paid in capital, Distributions to Old LMC	(1,245.7)	(1,245.7)
Adjustment to additional paid in capital, Change in Tax Attributes Due to Spin-Off	11.5	11.5
Net income	249.8			247.3		2.5
Other comprehensive income (loss)	0.1		0.2			(0.1)
Adjustments to Additional Paid in Capital, Share-based Compensation, Restricted Stock Unit or Restricted Stock Award, Requisite Service Period Recognition	31.8	31.6				0.2
Minimum withholding of taxes related to stock compensation	(9.8)	(9.8)
Excess tax benefit from stock compensation	4.7	4.7
Repurchases of common stock	(289.9)	(289.8)					(0.1)
Balance at Dec. 31, 2013	54.7	310.6	(4.3)	(245.5)	0.0	(7.2)	1.0	0.1
Increase (Decrease) in Member's Interest and Noncontrolling Interests [Roll Forward]
Net income	269.0			271.3		(2.3)
Other comprehensive income (loss)	2.7		2.0			0.7
Adjustments to Additional Paid in Capital, Share-based Compensation, Restricted Stock Unit or Restricted Stock Award, Requisite Service Period Recognition	33.2	33.1				0.1
Stock issued upon exercise of stock options	9.6	9.6
Minimum withholding of taxes related to stock compensation	(14.5)	(14.5)
Excess tax benefit from stock compensation	13.4	13.4
Repurchases of common stock	(328.3)	(328.2)					(0.1)
Balance at Dec. 31, 2014	39.8	24.0	(2.3)	25.8	0.0	(8.7)	0.9	0.1
Increase (Decrease) in Member's Interest and Noncontrolling Interests [Roll Forward]
Net income	236.5			236.1		0.4
Other comprehensive income (loss)	1.0		0.8			0.2
Adjustments to Additional Paid in Capital, Share-based Compensation, Restricted Stock Unit or Restricted Stock Award, Requisite Service Period Recognition	36.0	36.2				(0.2)
Stock issued upon exercise of stock options	16.0	16.0
Minimum withholding of taxes related to stock compensation	(20.4)	(20.4)
Excess tax benefit from stock compensation	19.9	19.9
Acquisition of noncontrolling interest	(7.0)	(15.3)				8.3
Repurchases of common stock	(104.1)	(60.4)		(43.7)
Balance at Dec. 31, 2015	$ 217.7	$ 0.0	$ (1.5)	$ 218.2	$ 0.0	$ 0.0	$ 0.9	$ 0.1

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Basis of Presentation and Description of Business

12 Months Ended

Dec. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Description of Business

Basis of Presentation and Description of Business

Starz, through its wholly-owned subsidiary Starz, LLC, provides premium subscription video programming to United States (“U.S.”) multichannel video programming distributors (“MVPDs”), including cable operators, satellite television providers and telecommunications companies, and online video providers (collectively, “Distributors”). Starz also develops, produces and acquires entertainment content and distributes this content to consumers in the U.S. and throughout the world.

Business

Starz’s business operations are conducted by its wholly-owned subsidiaries Starz, LLC, Starz Entertainment, LLC (“Starz Entertainment”), Starz Media Group, LLC (“Starz Media”) and certain other immaterial subsidiaries. In October 2015, Starz, LLC acquired the 25% interest in Starz Media which had previously been owned by The Weinstein Company LLC (“Weinstein”). In October 2015, Starz, LLC sold 100% of its wholly-owned subsidiary Film Roman, LLC (“Film Roman”), which made up 100% of the Starz Animation operating segment. Following the sale of Film Roman, Starz manages its operations through its Starz Networks and Starz Distribution operating segments.

Starz Networks

Starz Networks’ flagship premium networks are STARZ and ENCORE. STARZ exhibits first-run hit movies and original series. ENCORE airs first-run movies, classic contemporary movies and original series. Starz Networks’ third network, MOVIEPLEX, offers a variety of art house, independent films and classic movie library content. STARZ and ENCORE, along with MOVIEPLEX, air across 17 linear networks complemented by on-demand and online services. Starz Networks’ premium networks are offered by Distributors to their subscribers either on a fixed monthly price as part of a programming tier or package or on an a la carte basis.

Starz Distribution

Starz Distribution includes the Anchor Bay Entertainment, Starz Digital and Starz Worldwide Distribution businesses.

Anchor Bay Entertainment

Anchor Bay Entertainment is the global home video sales arm of Starz and distributes DVDs (standard definition and Blu-ray™) under the ANCHOR BAY brand, in the U.S., Canada and other international territories to the extent it has home entertainment rights to such content in international territories. Anchor Bay Entertainment acquires and licenses various titles from third parties and also develops and produces certain of its content. Certain of the titles acquired by Anchor Bay Entertainment air on Starz Networks’ STARZ and ENCORE networks. Anchor Bay Entertainment also distributes Starz Networks’ original series and Weinstein’s titles. Each of these titles are sold to and distributed by regional and national retailers and other companies, including Amazon, Best Buy, Ingram Entertainment, Netflix, Redbox, Target and Wal-Mart.

Starz Digital

Starz Digital is the global digital and on-demand licensing arm of Starz and distributes content on pay-per-view, video-on-demand, subscription video-on-demand (“SVOD”), ad-supported video-on-demand (“AVOD”), electronic sell-through and other digital formats for Starz’s owned content, including Starz Networks’ original series, Weinstein’s titles and content licensed from third-parties in the U.S. and throughout the world to the extent it has rights to such content in international territories. Certain of the titles acquired by Starz Digital air on Starz Networks’ STARZ and ENCORE networks. Starz Digital receives fees for its content from a wide array of partners ranging from traditional MVPDs to online and mobile distributors.

Starz Worldwide Distribution

Starz Worldwide Distribution is the global television licensing arm of Starz and distributes movies, television series, documentaries, children’s programming and other video content. Starz Worldwide Distribution exploits Starz’s owned content, including Starz Networks’ original series, and content for which it has licensed rights on free or pay television in the U.S. and throughout the world to the extent it has rights to such content in international territories. Starz Worldwide Distribution receives fees for its content primarily from various U.S. and international programming networks.

LMC Spin-Off

In January 2013, Starz (formerly known as Liberty Media Corporation (“Old LMC”)) completed the spin off (the “LMC Spin-Off”) of its wholly-owned subsidiary Liberty Media Corporation (formerly known as Liberty Spinco, Inc. (“Liberty Media”)). Following the LMC Spin-Off, Starz retained the businesses of its wholly-owned subsidiary, Starz, LLC, and all other businesses, assets and liabilities of Old LMC were included in Liberty Media. As a result, Liberty Media became a separate public company on January 11, 2013.

    In accordance with U. S. generally accepted accounting principles (“GAAP”), Liberty Media was determined to be the accounting successor to Old LMC for financial reporting purposes following the LMC Spin-Off. Accordingly, Starz’s historical financial information is deemed to be the financial information of Starz, LLC. As Starz’s common stock did not begin publicly trading until January 14, 2013 (following the LMC Spin-Off), Starz’s statement of equity as of December 31, 2012 does not reflect common stock and additional paid in capital, but shows member’s interest, identical to that of Starz, LLC.

On January 10, 2013, in connection with the LMC Spin-Off, Starz, LLC distributed $1.2 billion in cash to Old LMC which was funded by a combination of cash on hand and borrowings under Starz, LLC’s 2011 Credit Agreement (as defined in Note 5). Additionally, in connection with the LMC Spin-Off, Starz, LLC distributed its Englewood, Colorado corporate office building and related building improvements at its net book value of $45.7 million to Old LMC and then leased back the use of such facilities from a subsidiary of Old LMC. Following the LMC Spin-Off, Liberty Media and Starz operate independently, and neither have any stock ownership, beneficial or otherwise, in the other. In addition, in connection with the LMC Spin-Off, state net operating losses, foreign tax credit carryforwards and other tax attributes of $11.5 million were allocated to Starz.

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Significant Accounting Policies

- Significant Accounting Policies

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Starz and its majority-owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Starz considers amortization of program rights, the development of ultimate revenue estimates (as defined below under “Investment in Films and Television Programs”) associated with released films, the assessment of investment in films and television programs for impairment, the fair value of goodwill and any related impairment, valuation allowances associated with deferred income taxes and allowances for sales returns to be its most significant estimates. Actual results may differ from those estimates.

Prior Period Reclassifications

Certain prior period amounts have been reclassified for comparability with the 2015 presentation.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less when purchased. Cash and cash equivalents are invested at high credit quality financial institutions. Deposits generally exceed the Federal Deposit Insurance Corporation insurance limit.

Allowance for Trade Receivables

The allowance for trade receivables represents estimated losses which may result from the inability of customers to make required payments on trade accounts receivable and for sales returns. Allowances for sales returns are based on past experience and current trends that are expected to continue.

Program Rights

The cost of program rights for films and television programs (including the license fee associated with the pay television window for original series which is reclassified to program rights from investment in films and television programs when the original series is aired) exhibited on Starz Networks’ premium networks are generally amortized on a title-by-title or episode-by-episode basis over the anticipated number of exhibitions. Starz Networks estimates the number of exhibitions based on the number of exhibitions allowed in the agreement (if specified) and the expected usage of the content. Certain other program rights are amortized to expense on a straight-line basis over the respective lives of the agreements. Starz Networks generally has rights to two or three separate windows under its output agreements. For films with multiple windows, the license fee is allocated between the windows based upon the proportionate estimated fair value of each window with the majority of the cost allocated to the first window. Considerable management judgment is necessary to estimate the fair value of each window.

Investment in Films and Television Programs

Investment in films and television programs includes the cost of completed films and television programs (including original series) which have been produced by Starz or for which Starz has acquired distribution rights, as well as the cost of films and television programs in production, pre-production and development. Capitalized costs include production costs, including labor, goods and services, interest and allocable overhead, acquisition of distribution rights (including cash advances paid to Weinstein for theatrical releases under the license agreement entered into with Weinstein – see Note 7), acquisition of story rights and the development of stories less amounts allocated to program rights for original series, which have aired on Starz Networks’ premium networks.

Starz allocates the cost of its original series between the pay television window, which is considered the license fee, and the ancillary revenue markets (e.g. home video, digital platforms, international television, etc.) based on the estimated relative fair values of these markets. The amount associated with the pay television window is reclassified to program rights when the program is aired and the portion attributable to the ancillary markets remains in investment in films and television programs.

Investment in films and television programs is amortized using the individual-film-forecast method, whereby the costs are charged to expense and royalty, participation and residual costs are accrued based on the proportion that current revenue from the films or television programs bears to an estimate of the remaining unrecognized revenue (“Ultimate Revenue”). Ultimate Revenue estimates do not exceed ten years following the date of initial release or from the date of delivery of the first episode for episodic television series. Estimates of Ultimate Revenue involve uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in management’s future revenue estimates.

Investment in films and television programs in development or pre-production is periodically reviewed to determine whether they will ultimately be used in the production of a film or television program. Costs of films and television programs in development or pre-production are charged to expense when a project is abandoned, or generally if the film or television program has not been set for production within three years from the time of the first capitalized transaction.

Investment in films and television programs is reviewed for impairment on a title-by-title basis when an event or change in circumstances indicates that a film or television program may be impaired. The estimated fair value for each title is determined using the discounted estimated future cash flow of each title. If the estimated fair value of a film or television program is less than its unamortized cost, the excess of unamortized cost over the estimated fair value is charged to expense. Considerable management judgment is necessary to estimate the fair value of investment in films and television programs.

Equity Investments

For investments in affiliates in which Starz has the ability to exercise significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize Starz’s share of net income or loss and other comprehensive income or loss of the affiliate. Losses are limited to the extent of Starz’s investment in, advances to and commitments on behalf of the investee. Starz’s equity investment is reflected in other assets, net in the accompanying consolidated balance sheets and the share of net income or loss of its equity investment is reflected in other income, net in the accompanying consolidated statements of operations.

Property and Equipment

Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 3 to 15 years for distribution equipment, 3 to 7 years for furniture, fixtures and office equipment and 30 years for building.

Property and equipment is reviewed for impairment when an event or change in circumstances indicates that the asset may be impaired. If the carrying value of the asset is determined to not be recoverable and is greater than its fair value, then an impairment charge is recognized. The charge consists of the amount by which the carrying value of the asset exceeds its fair value. Fair value is estimated by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. Considerable management judgment is necessary to determine recoverability and to estimate the fair value of property and equipment.

Goodwill

Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified assets acquired. Goodwill is reviewed for impairment annually, at December 31, or more frequently if indicators of potential impairment exist. Starz utilizes a qualitative assessment for determining whether step one of the goodwill impairment analysis is necessary. In evaluating goodwill on a qualitative basis, Starz considers whether there were any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges, the legal environment and how these factors might impact the company specific performance in future periods.

If the qualitative assessment indicates that step one is necessary, the fair value of each reporting unit in which goodwill resides is compared to its carrying value. Fair value is estimated by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. For reporting units whose carrying value exceeds the fair value, a second test is required to measure the impairment loss. In the second test, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit with any residual value being allocated to goodwill. The difference between such allocated amount and the carrying value of the goodwill is recorded as an impairment charge. Considerable management judgment is necessary to estimate the fair value of each reporting unit.

Revenue Recognition

Programming revenue is recognized in the period during which programming is provided, pursuant to affiliation agreements. If an affiliation agreement has expired, revenue is recognized based on the terms of the expired agreement or the actual payment from the Distributor, whichever is less. Any funds received in excess of fixed and determinable programming revenue are recorded as a liability in deferred revenue until the discrepancy is resolved. Payments to Distributors for marketing support costs for which Starz does not receive a direct benefit are recorded as a reduction of revenue. Certain sales incentives, including discounts and rebates, provided to Distributors are accounted for as a reduction of revenue and are not significant.

Revenue generated from the sale of DVDs is recognized, net of an allowance for estimated sales returns, on the later of the estimated receipt of the product by the customer or after any restrictions on sale lapse. At the time of the initial sale, Starz also records a provision, based on historical trends and practices, to reduce revenue for discounts and rebates provided to customers related to the sale of DVDs.

Revenue from digital and television licensing is recognized when the film or program is complete in accordance with the terms of the arrangement and is available for exploitation by the licensee. The film or program is available for exploitation when it has been delivered or is available to the licensee and the license period has commenced. In the event that a licensee pays Starz a nonrefundable minimum guarantee at or prior to the beginning of the license period, Starz records this amount as deferred revenue until all of the criteria for revenue recognition are met.

Starz recognized revenue and related production costs related to animation services provided to customers under contract generally based on the percentage that costs incurred-to-date bore to estimated total costs to complete utilizing the most recent information. Revenue recognized was proportional to the work performed-to-date under the contracts.

Advertising and Marketing

Advertising and marketing costs are expensed as incurred. Certain of Starz’s affiliation agreements require Starz to provide marketing support to the Distributor based upon certain criteria as stipulated in the agreements. Marketing support includes cooperative advertising and marketing efforts between Starz and its Distributors such as cross channel, direct mail and point of sale incentives. Marketing support is recorded as an expense and not a reduction of revenue when Starz has received a direct benefit and the fair value of such benefit is determinable.

Stock-Based Compensation

Starz measures the cost of employee services received in exchange for an award of equity instruments (such as stock options, restricted shares and restricted stock units) based on the grant-date fair value of the award and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the award). Starz measures the cost of employee services received in exchange for an award of liability instruments (i.e., awards that have the option to be settled in cash) based on the current fair value of the award and re-measures the fair value of the award at each reporting date.

Income Taxes

Starz has applied the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value amounts and income tax basis of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards. The deferred tax assets and liabilities are calculated using enacted tax rates in effect for each taxing jurisdiction in which Starz operates for the year in which those temporary differences are expected to be recovered or settled. Net deferred tax assets are then reduced by a valuation allowance if Starz believes it more likely than not that such net deferred tax assets will not be realized.

Derivative Instruments and Hedging Activities

All derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income (loss) and are recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. If the derivative is not designated as a hedge, changes in the fair value of the derivative are recognized in earnings.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, restricted cash, trade accounts receivable, trade accounts payable and accrued liabilities approximates fair value, due to their short maturity. See Note 5 for information concerning the fair value of Starz’s debt instruments.

Foreign Currency Translation

The functional currency of Starz is the U.S. dollar. The functional currency of Starz’s foreign operations is the applicable local currency for each foreign subsidiary. Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date and the related statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is included as a component of accumulated other comprehensive loss in equity and other comprehensive income in the consolidated statements of comprehensive income.

Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in gains and losses which are reflected in the accompanying consolidated statements of operations as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (Topic 606). ASU 2014-09 replaces the majority of all U.S. GAAP guidance that currently exists on revenue recognition with a single model to be applied to all contracts with customers. The core principle of ASU 2014-09 is that “an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” For a public entity, ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted, but not before annual periods beginning after December 15, 2016. An entity must apply ASU 2014-09 using either the full retrospective approach, by restating all years presented, or the cumulative effect at the date of adoption approach. Starz is currently assessing the impact that these changes will have on its consolidated financial statements, and therefore, is unable to quantify such impact or determine the method of adoption.

In April 2015, the FASB issued ASU 2015-03 Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. For a public entity, ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted for financial statements that have not been previously issued. In August 2015, the FASB issued ASU 2015-15 Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements to provide additional clarification on the presentation of debt issuance costs. Starz adopted the new guidance effective December 31, 2015 and has reclassified its debt issuance costs from other assets, net to debt in the accompanying consolidated balance sheets (see Note 5).

In November 2015, the FASB issued ASU 2015-17 Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. ASU 2015-17 eliminates the current requirement for entities to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. For a public entity, ASU 2015-17 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted and it may be applied prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. Starz adopted the new guidance retrospectively effective December 31, 2015 and has reflected its deferred tax assets and liabilities as noncurrent in the accompanying consolidated balance sheets.

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Investment in Films and Television Programs, Net

12 Months Ended

Dec. 31, 2015

Investment In Films And Television Programs, Net [Abstract]

Investment in Films and Television Programs, Net

Investment in Films and Television Programs, Net

Investment in films and television programs, net consisted of the following (in millions):

	December 31,
	2015		2014
Released film costs - theatrical, less amortization	$	1.1	$	1.2
Film costs – television and home entertainment:
Released, less amortization	57.3		70.5
Completed, but not released	3.4		116.2
In production	141.5		125.5
Development and pre-production	12.3		6.1
	$	215.6	$	319.5

Approximately 64% and 82% of the unamortized film costs (theatrical, television and home entertainment) for released films of $58.4 million at December 31, 2015 are expected to be amortized within three and four years, respectively. Approximately $33.5 million of the costs of Released and Completed, but not released films of $61.8 million at December 31, 2015 are expected to be amortized during the next twelve months.

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Property and Equipment, Net

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, Net

Property and equipment, net consisted of the following (in millions):

	December 31,
	2015			2014
Distribution equipment (a)	$	114.4		$	114.5
Furniture, fixtures and office equipment	64.5			53.9
Building (b)	44.8			44.8
	223.7			213.2
Less accumulated depreciation	(134.5		)	(123.4		)
	$	89.2		$	89.8

(a) The cost of satellite transponders accounted for as capital leases was $57.5 million as of December 31, 2015 and 2014. Accumulated depreciation for these transponders was $41.6 million and $37.8 million at December 31, 2015 and 2014, respectively.

(b) Represents the cost of Starz’s corporate headquarters facility in Englewood, Colorado which is accounted for as a capital lease and which is leased from a subsidiary of Starz’s related party, Liberty Media. Accumulated depreciation for the building totaled $4.4 million and $2.9 million at December 31, 2015 and 2014, respectively.

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Debt

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Debt

Debt

Debt consisted of the following (in millions):

	December 31,
	2015			2014
2015 Credit Agreement (a)	$	308.0		$	—
2011 Credit Agreement (b)	—			432.0
Senior Notes, including premium of $1.9 and $2.5 (c)	676.9			677.5
Capital leases (d)	64.8			70.0
Debt issuance costs, net	(11.9		)	(9.9		)
Total debt	1,037.8			1,169.6
Less: current portion	(5.6		)	(5.3		)
	$	1,032.2		$	1,164.3

(a) On April 20, 2015, Starz, LLC entered into a credit agreement (“2015 Credit Agreement”) that provides for $1,000.0 million in revolving loans with a $50.0 million sub-limit for stand-by letters of credit. Net proceeds from the 2015 Credit Agreement were used to repay and terminate the 2011 Credit Agreement (as defined below). Borrowings may be prepaid at any time and from time to time without penalty other than customary breakage costs. Any amounts prepaid may be reborrowed. The 2015 Credit Agreement is scheduled to mature on April 20, 2020. As of December 31, 2015, $692.0 million of borrowing capacity was available under the 2015 Credit Agreement.

Interest on each loan under the 2015 Credit Agreement is payable at either an alternate base rate or LIBOR at Starz, LLC’s election. Borrowings that are alternate base rate loans bear interest at a per annum rate equal to the alternate base rate plus a margin that varies between 0.5% and 1.25% depending on the consolidated leverage ratio of Starz, LLC, as defined in the 2015 Credit Agreement. The alternate base rate is the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus ½ of 1% or (c) LIBOR for a one-month interest period plus 1%. Borrowings that are LIBOR loans bear interest at a per annum rate equal to the applicable LIBOR plus a margin that varies between 1.5% and 2.25% depending on the consolidated leverage ratio of Starz, LLC. The 2015 Credit Agreement requires Starz, LLC to pay a commitment fee on any unused portion. The commitment fee varies between 0.25% and 0.40%, depending on the consolidated leverage ratio of Starz, LLC.

As of December 31, 2015, the following borrowings and related LIBOR or alternate base rate interest rates were outstanding (dollars in millions):

LIBOR or alternate base rate period:	Interest Rate	Loan Amount
December 2015 - January 2016	2.03700%	$	95.0
December 2015 - January 2016	2.09450%	200.0
December 2015 and forward	4.25000%	13.0
		$	308.0

The 2015 Credit Agreement contains certain covenants that include restrictions on, among others, incurring additional debt, paying dividends or making certain distributions, investments and other restricted payments, liens, guarantees and investments. In addition, Starz, LLC must comply with certain financial covenants including a consolidated leverage ratio, as defined in the 2015 Credit Agreement. As of December 31, 2015, Starz, LLC was in compliance with all covenants under the 2015 Credit Agreement.

(b) On November 16, 2011, Starz, LLC entered into a credit agreement (“2011 Credit Agreement”) that provided $1,000 million in revolving loans, a $50 million sub-limit for standby letters of credit and a $500.0 million term loan. On April 20, 2015, Starz LLC repaid and terminated the 2011 Credit Agreement using borrowings under the 2015 Credit Agreement.

Interest on each loan under the 2011 Credit Agreement was payable at either an alternate base rate or LIBOR at Starz, LLC’s election. Borrowings that were alternate base rate loans bore interest at a per annum rate equal to the alternate base rate plus a margin that varied between 0.5% and 1.5% depending on the consolidated leverage ratio of Starz, LLC, as defined in the 2011 Credit Agreement. The alternate base rate was the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus ½ of 1% or (c) LIBOR for a one-month interest period plus 1%. Borrowings that were LIBOR loans bore interest at a per annum rate equal to the applicable LIBOR plus a margin that varied between 1.5% and 2.5% depending on the consolidated leverage ratio of Starz, LLC. The 2011 Credit Agreement required Starz, LLC to pay a commitment fee on any unused portion of the revolving loans under the 2011 Credit Agreement. The commitment fee varied between 0.25% and 0.50%, depending on the consolidated leverage ratio of Starz, LLC.

(c) On September 13, 2012, Starz, LLC and Starz Finance Corp. co-issued $500.0 million aggregate principal amount of senior notes, due September 15, 2019 (“2012 Notes”). On February 8, 2013, Starz, LLC and Starz Finance Corp. completed the issuance of an additional $175.0 million aggregate principal amount of 5.0% senior notes due 2019 (“2013 Notes” and together with the 2012 Notes, “Senior Notes”), which were issued as additional notes under the indenture governing the 2012 Notes. The net proceeds from the issuance of the 2012 Notes and cash on hand were used to repay and terminate the $500.0 million term loan under the 2011 Credit Agreement. The net proceeds from the issuance of the 2013 Notes were used to repay indebtedness under the 2011 Credit Agreement. The 2013 Notes were issued at a price of 102.0% plus accrued interest from September 13, 2012.

The Senior Notes bear interest at a rate of 5.0% payable semi-annually on September 15 and March 15 of each year. Starz Finance Corp. is a wholly-owned subsidiary of Starz, LLC and was formed for the sole purpose of co-issuing the 2012 Notes. Starz Finance Corp. does not have and will not have any operations, assets or subsidiaries of its own. The Senior Notes are guaranteed by Starz Entertainment.

The Senior Notes rank equally in right of payment to all existing and future senior obligations and existing and future subordinated obligations. The Senior Notes are effectively subordinated to any existing and future secured obligations and to all the liabilities of the subsidiaries that do not guarantee the Senior Notes.

The Senior Notes contain certain covenants that include restrictions on, among others, incurring additional debt, paying dividends, entering into liens and guarantees, or making certain distributions, investments and other restricted payments. As of December 31, 2015, Starz, LLC was in compliance with all covenants under the Senior Notes.

(d) On January 11, 2013, Starz, LLC, and, for the limited purposes described therein, Starz Entertainment entered into a commercial lease with a subsidiary of Starz’s related party, Liberty Media, for its headquarters building. The term of the lease is ten-years, with an additional four successive five-year renewal periods at the option of Starz, LLC. Starz, LLC recorded a $44.8 million capital lease in connection with this lease agreement with an imputed annual interest rate of 6.4%.

Starz Entertainment has entered into capital lease agreements for its transponder capacity. The transponder agreements expire during 2018 to 2021 and have imputed annual interest rates ranging from 5.5% to 7.0%.

Debt maturities for the next five years and thereafter at December 31, 2015 were as follows (in millions):

2016	$	10.1
2017	10.1
2018	9.7
2019	682.4
2020	313.8
Thereafter	74.4
Total minimum payments	1,100.5
Less: amounts representing interest	(50.8		)
Present value of debt payments	1,049.7
Less: debt issuance costs	(11.9		)
Less: current portion	(5.6		)
Long-term portion of debt obligations	$	1,032.2

At December 31, 2015, the fair value of the Senior Notes was $687.5 million and was based upon quoted prices in active markets. Starz believes the fair value of borrowings under the 2015 Credit Agreement approximate their carrying value as of December 31, 2015 due to their variable rate nature and Starz’s stable credit spread.

Interest costs of $6.0 million, $4.7 million and $3.6 million have been capitalized as investment in films and television programs during the years ended December 31, 2015, 2014 and 2013, respectively.

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Accrued Liabilities

12 Months Ended

Dec. 31, 2015

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consisted of the following (in millions):

	December 31,
	2015		2014
Royalties, residuals and participations	$	82.4	$	134.2
Program rights payable	67.8		$	89.0
Advertising and marketing	48.1		41.1
Payroll and related costs	29.2		27.5
Other	40.2		35.6
	$	267.7	$	327.4

Approximately85%of accrued royalties, residuals and participations of $82.4 million at December 31, 2015 are expected to be paid during the next twelve months.

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Related Party Transactions

12 Months Ended

Dec. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions

– Related Party Transactions

In December 2010, Anchor Bay Entertainment entered into a five-year license agreement with Weinstein for the distribution of certain Weinstein theatrical releases on DVD and digital formats. Effective in December 2014, Anchor Bay Entertainment extended, through April 2020, its license agreement with Weinstein. As mentioned in Note 1, Starz, LLC acquired Weinstein’s 25% interest in Starz Media during October 2015. Accordingly, Weinstein is no longer considered a related party.

Anchor Bay Entertainment earns a fee for the distribution of such theatrical titles. Starz recognized participation expense of $100.8 million, $91.5 million and $163.2 million, which is included in production and acquisition costs in the accompanying consolidated statements of operations, for Weinstein’s share of the net proceeds under the license agreement, for the years ended December 31, 2015, 2014 and 2013, respectively. Cash paid to Weinstein for investment in films and television programs totaled $85.1 million, $145.5 million and $143.9 million for the years ended December 31, 2015, 2014 and 2013, respectively. Starz’s payable to Weinstein, which is included in accrued liabilities in the accompanying consolidated balance sheets, totaled $59.6 million at December 31, 2014.

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Stockholders' Equity (Notes)

12 Months Ended

Dec. 31, 2015

Stockholders' Equity Attributable to Parent [Abstract]

Stockholders' Equity

Note 8 - Stockholders’ Equity

Preferred Stock

Preferred stock is issuable, from time to time, with such designations, preferences and relative participating, optional or other rights, qualifications, limitations or restrictions thereof, as shall be stated and expressed in a resolution or resolutions providing for the issue of such preferred stock adopted by Starz’s board of directors. As of December 31, 2015, no shares of preferred stock were issued.

Common Stock

Series A common stock has one vote per share and Series B common stock has ten votes per share. Each share of Series B common stock is exchangeable at the option of the holder for one share of Series A common stock. Series A and Series B common stock participate on an equal basis with respect to dividends and distributions.

As of December 31, 2015, there were 13.2 million shares of Series A common stock reserved for issuance under the exercise privileges of outstanding stock options. In addition to the Series A and Series B common stock, there are 2.0 billion shares of Series C common stock authorized for issuance.

Purchases of Common Stock

Shares of Series A common stock are subject to repurchase pursuantto a share repurchase program. Repurchased shares are retired and returned to the status of authorized and available for issuance. On February 24, 2016, the Starz board of directors authorized an additional $400.0 million to repurchase Starz common stock. Including this authorization, the Starz board of directors has authorized a total of $1,200.0 million since January 2013 to repurchase Starz common stock. Starz repurchased 2.8 million, 10.9 million and 11.5 million shares of Series A common stock for aggregate consideration, including fees, of$104.1 million,$328.3 millionand$289.9 millionfor the years endedDecember 31, 2015,2014 and 2013, respectively.Starz had $78.2 million available under its share repurchase program as of December 31, 2015.

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Stock Compensation

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Compensation and Long Term Incentive Plan

Stock Compensation

Pursuant to the Starz 2011 Incentive Plan, the compensation committee of the board of directors may grant eligible employees stock options, stock appreciation rights, restricted shares and restricted stock units made in respect of a maximum of 29.2 million shares of Starz common stock. Stock options generally vest over 4 years and have a term of 7-10 years. Restricted shares generally vest over 1-4 years. Restricted stock units generally vest over 3 years. Starz issues new shares upon exercise of equity awards. Pursuant to the Starz 2011 Nonemployee Director Incentive Plan, the board of directors may grant eligible nonemployee directors stock options, stock appreciation rights, restricted shares and restricted stock units made in respect of a maximum of 1.4 million shares of Starz common stock.

Stock compensation expense, by expense category, consisted of the following (in millions):

	Years ended December 31,
	2015		2014		2013
Programming	$	2.6	$	2.4	$	1.6
Operating	0.3		0.3		0.2
Selling, general and administrative	30.0		27.9		32.5
	$	32.9	$	30.6	$	34.3

As of December 31, 2015, total unrecognized compensation cost related to unvested stock options, restricted shares and restricted stock units was approximately $57.8 million. Such amount will be recognized in Starz’s consolidated statements of operations over a weighted average period of 2.52 years.

Awards granted in 2015, 2014 and 2013 were as follows:

	Options Granted	Weighted Average Grant-Date Fair Value
2015 Awards:
Stock options	731,263	$	11.12
Restricted shares	443,710	$	33.57
Restricted stock units	107,070	$	34.85
2014 Awards:
Stock options	1,424,612	$	10.94
Restricted shares	148,106	$	32.94
2013 Awards:
Stock options	7,443,494	$	7.84
Restricted shares	574,548	$	22.85

Starz calculated the grant-date fair value for stock options using the Black-Scholes Model. The expected term was estimated using a simplified method as Starz does not have a sufficient amount of historical exercise or forfeiture data due to the LMC Spin-Off in January 2013. The simplified method assumes that the employee would exercise stock options evenly over the vesting period and through the contract term. The 2015 expected volatility was calculated using Starz’s historical and implied volatility and comparable peer company historical and implied volatility, while the 2014 and 2013 expected volatility was calculated using comparable peer company historical and implied volatility because Starz lacked historical volatility equal to the expected term due to the LMC Spin-Off in January 2013. Starz used a zero dividend rate as Starz has not historically declared dividends and used risk-free rates which were derived from U.S. Treasury Bonds with a term similar to that of the subject options. The assumptions used were as follows:

	2015	2014	2013
Expected term	4.75	4.75	4.60 to 6.90
Expected volatility	36.0% to 36.2%	35.9% to 36.0%	35.9% to 41.4%
Risk-free rate of return	1.4% to 1.7%	1.5%	0.7% to 1.4%

The number and weighted average exercise price (“WAEP”) of stock options to purchase Starz common stock were as follows:

	Options		WAEP
Outstanding at December 31, 2014	16,431,666		$	17.42
Granted	731,263		$	33.33
Exercised	(3,420,547	)	$	13.97
Forfeited	(554,840	)	$	22.99
Expired/cancelled	—		$	—
Outstanding at December 31, 2015	13,187,542		$	18.97
Exercisable at December 31, 2015	8,293,383		$	15.85

At December 31, 2015, the weighted average remaining contractual term of outstanding options was 5.1 years and exercisable options was 4.5 years. At December 31, 2015, the aggregate intrinsic value of outstanding options was $191.7 million and the aggregate intrinsic value of exercisable options was $146.4 million. The aggregate intrinsic value of options exercised was $80.0 million, $55.8 million and $16.1 million for the years ended December 31, 2015, 2014 and 2013, respectively.

The number and weighted average grant date fair value of restricted share grants were as follows:

	Restricted Shares		Weighted Average Grant-Date Fair Value
Outstanding at December 31, 2014	708,658		$	21.01
Granted	443,710		$	33.57
Vested	(361,814	)	$	22.72
Forfeited	(20,607	)	$	33.85
Outstanding at December 31, 2015	769,947		$	29.22

The grant date fair value was based on the market value of the shares on the date of grant. The aggregate fair value of all restricted shares that vested during the years ended December 31, 2015, 2014 and 2013 was $8.2 million, $12.4 million and $8.8 million, respectively.

In 2015, Starz granted certain employees restricted stock units that will vest based upon the actual, cumulative Adjusted OIBDA (as defined in Note 13) achieved by Starz during a three year performance period beginning on January 1, 2015 and ending on December 31, 2017 (“Performance Period”), compared to a target cumulative Adjusted OIBDA during the Performance Period specified by the Starz compensation committee. Potential vesting of the restricted stock units ranges from a threshold of 50% of the target award if Starz’s actual three-year cumulative Adjusted OIBDA equals 90% of the targeted amount, to a maximum of 200% of the target award if Starz’s actual three-year cumulative Adjusted OIBDA equals or exceeds 120% of the targeted amount. Results between threshold, target and maximum will be interpolated on a straight line basis. Each restricted stock unit provides the right to receive, in those specified circumstances, one share of Starz Series A common stock. Based upon the target for the Performance Period, the number of restricted stock units representing the threshold, target and maximum were 53,535 units, 107,070 units and 214,140 units, respectively (which are not reflected in the table above).

At December 31, 2015, 2.0 million of outstanding stock options and 0.1 million restricted shares were held by Liberty Media employees as a result of the LMC Spin-Off.

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Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Starz is a holding company with no assets, liabilities or operations other than those of Starz, LLC. Starz, LLC is a single-member limited liability company (“LLC”), which is treated as a disregarded entity for U.S. federal income tax purposes.

As mentioned in Note 1, in October 2015, Starz, LLC acquired Weinstein’s 25% interest in Starz Media. As a result, Starz Media became a single-member LLC of Starz, LLC and 100% of its activity will be included in Starz’s federal and state income tax returns for periods subsequent to the acquisition.

Income tax expense consisted of the following (in millions):

	Years ended December 31,
	2015			2014		2013
Current:
Federal	$	111.3		$	110.6	$	119.2
State and local	10.4			7.6		9.3
Foreign	2.4			3.3		2.5
	124.1			121.5		131.0
Deferred:
Federal	(14.8		)	14.9		0.5
State and local	2.2			4.4		7.9
	(12.6		)	19.3		8.4
	$	111.5		$	140.8	$	139.4

Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following (in millions):

	Years ended December 31,
	2015			2014			2013
Computed expected tax expense	$	121.8		$	143.4		$	136.2
State and local income taxes, net of federal income taxes	7.4			8.0			11.5
Deduction for qualified production activity	(9.5		)	(10.4		)	(12.6		)
Uncertain tax positions	(8.4		)	—			—
Settlements with tax authorities	6.6			—			—
Change in subsidiary tax status	(4.7		)	—			0.8
Change in valuation allowance affecting tax expense	(0.8		)	1.2			3.0
Foreign taxes, net of foreign tax credit	(0.2		)	(0.7		)	0.9
Other, net	(0.7		)	(0.7		)	(0.4		)
	$	111.5		$	140.8		$	139.4

Internal Revenue Code Section 199 (“Section 199”) allows U.S. taxpayers a deduction for qualified domestic production activities.  Generally, the deduction is equal to 9% of the net income from such activities (subject to certain limitations).  Starz recorded tax benefits of $9.5 million, $10.4 million and $12.6 million for the years ended December 31, 2015, 2014 and 2013, respectively, under Section 199.

During 2015, Starz remitted $6.6 million to the Internal Revenue Service with respect to a settlement of its Section 199 deduction for the year ended December 31, 2013. In addition, Starz recognized an income tax benefit of $8.4 million due to the expiration of the statute of limitations related to an uncertain tax position.

As a result of the acquisition of Weinstein’s 25% interest in Starz Media in October 2015, Starz Media converted from a partnership to a single-member LLC of Starz, LLC for income tax purposes. As a consequence, the deferred tax asset recorded for the difference between the book basis and tax basis of Starz, LLC’s investment in Starz Media was retired and a deferred tax asset for Starz Media’s net deductible temporary differences was recorded, which was primarily related to allowance for doubtful accounts and intangible assets. The income tax benefit of the conversion was $4.7 million.

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2015 and 2014 were as follows (in millions):

	December 31,
	2015			2014
Deferred tax assets:
Accrued stock compensation	$	22.5		$	16.8
Intangible assets	14.5			—
Allowance for doubtful accounts	13.2			—
Tax loss and credit carryforwards	4.6			7.1
Investments	0.7			32.3
Other future deductible amounts	5.6			1.1
	61.1			57.3
Valuation allowance	(1.8		)	(2.6		)
	59.3			54.7
Deferred tax liabilities:
Property and equipment	(13.9		)	(15.0		)
Investment in films and television programs	(24.2		)	(32.6		)
Program rights	—			(7.3		)
	(38.1		)	(54.9		)
Deferred income taxes, net	$	21.2		$	(0.2	)

The changes in uncertain tax positions were as follows:

	December 31,
	2015			2014
Balance at beginning of year	$	—		$	—
Additions	13.6			—
Settlements and lapses	(13.6		)	—
Balance at end of year	$	—		$	—

As of December 31, 2015, Starz had no accrued interest and penalties recorded related to uncertain tax positions.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Programming Rights

Starz has an exclusive multi-year output licensing agreement for qualifying films that are released theatrically in the U.S. by Sony Pictures Entertainment Inc. (“Sony”) through 2021. The agreement provides Starz with exclusive pay TV rights to exhibit qualifying theatrically released films under the Sony, Columbia Pictures, Screen Gems, Sony Pictures Classics and TriStar labels. Theatrically released films produced by Sony Pictures Animation are not licensed to Starz under the Sony agreement. In addition, Starz has an exclusive licensing agreement for qualifying films that are released theatrically in the U.S. by Walt Disney Company (“Disney”) through 2015. The agreement provides Starz with exclusive pay TV rights to exhibit qualifying theatrically released films under the Disney, Touchstone, Pixar and Marvel labels. Theatrically released films produced by DreamWorks and released by Disney are not licensed to Starz under the Disney agreement. The programming fees to be paid to Sony and Disney are based on the quantity and domestic theatrical exhibition receipts of qualifying films. Starz has also entered into agreements with a number of other motion picture producers and is obligated to pay fees for the rights to exhibit certain films licensed from these producers.

The unpaid balance for film rights related to films that were available for exhibition at December 31, 2015 is reflected in accrued liabilities and in other liabilities in the accompanying consolidated balance sheets. As of December 31, 2015, such liabilities aggregated approximately $88.9 million and are payable as follows: $67.8 million in 2016, $10.5 million in 2017, $4.1 million in 2018, $6.0 million in 2019, $0.4 million in 2020 and $0.1 million thereafter.

The estimated amounts payable under programming license agreements related to films that are not available for exhibition until some future date, including the rights to exhibit films that have been released theatrically under the Sony and Disney agreements, which have not been accrued as of December 31, 2015, are as follows: $256.0 million in 2016; $109.4 million in 2017; $99.6 million in 2018; $87.9 million in 2019, $66.5 million in 2020 and $111.2 million thereafter.

Starz is also obligated to pay fees for films that have not yet been released in theaters by Sony. Starz is unable to estimate the amounts to be paid to Sony for films that have not yet been released, however, such amounts are expected to be significant.

Amortization of program rights was $607.2 million, $555.7 million and $581.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. These amounts are included in programming costs in the accompanying consolidated statements of operations.

Operating Leases

Starz leases office facilities, back-up transponder capacity and certain other equipment under operating lease arrangements. Rental expense under such arrangements amounted to $6.4 million, $7.2 million and $7.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. Such amounts are included in operating expenses and selling, general and administrative expenses in the accompanying consolidated statements of operations.

The future minimum payments under noncancelable operating leases at December 31, 2015 were as follows (in millions):

2016	$	3.9
2017	2.3
2018	2.2
2019	1.6
2020	0.7
Thereafter	0.1
	$	10.8

Foreign Currency Hedge Contracts

Starz has entered into foreign currency hedge contracts to manage its foreign currency risk in connection with certain original series produced in South Africa and New Zealand. Starz has committed to pay US$11.2 million for ZAR142.4 million and US$16.6 million for NZD25.2 million during 2016.

Guarantee

Starz Entertainment entered into a guarantee on behalf of a previously owned subsidiary of Starz Media for any amounts owed to the Ontario government under the Canadian Next Generation of Jobs Fund Grant if the subsidiary did not meet its obligations. The Ontario government released Starz Entertainment from the guarantee in December 2013 due to completion of the project in September 2013. As a result of this release, Starz recognized income of $8.8 million in other income, net during the year ended December 31, 2013, for amounts accrued in prior years under the guarantee.

Legal Proceedings

On October 29, 2015, Keno Thomas, a former Starz Entertainment employee, filed a complaint in Los Angeles County Superior Court against Starz, Starz, LLC, Starz Entertainment (collectively, “Starz Parties”) and Liberty Media, and certain individual defendants. The plaintiff alleges that the Starz Parties and certain of the other defendants engaged in retaliation, wrongful termination of employment, failure to prevent retaliation and intentional infliction of emotional distress, all in connection with the plaintiff’s employment with Starz Entertainment. The plaintiff seeks compensatory, emotional distress and punitive damages, interest and an award of reasonable attorneys’ fees. On November 30, 2015, defendants removed this case to the United States District Court for the Central District of California. On December 7, 2015, the defendants moved to dismiss Mr. Albrecht and Liberty Media and to dismiss various causes of action against the Starz Parties and Mr. Thornton, and to strike portions of the complaint. These motions are scheduled for hearing on February 29, 2016. In February 2016, the parties stipulated to dismiss Starz and Starz, LLC without prejudice and to dismiss Liberty Media with prejudice.

On November 9, 2015, a purported class action was commenced in the U.S. District Court for the Central District of California by Pierre Bolduc, against Starz and certain individual defendants. The plaintiff purports to represent a class of persons who purchased shares of Starz common stock between August 1, 2014 and October 29, 2015. Citing allegations in the lawsuit filed by Keno Thomas, described above, the plaintiff alleges that the defendants violated applicable federal securities laws by making materially false and misleading statements and failing to disclose that: (a) Starz lacked adequate internal controls; (b) Starz’s contract with a certain Distributor was a result of illicit business practices; and (c) as a result, Starz’s public statements were materially false and misleading and lacked a reasonable basis. The complaint alleges that the price of shares of Starz’s common stock fell as a result of the Keno Thomas lawsuit. The plaintiff seeks damages, interest, reasonable attorneys’ fees and costs. On February 11, 2016, the District Court entered an Order appointing Lucille Theroux as Lead Plaintiff and Approving Glancy Prongay & Murray LLP, as Counsel, and thereafter the Court formally changed the case name to Theroux v. Starz, et al.

Starz believes it has substantial defenses to the claims asserted, is defending these actions vigorously, and does not believe that the resolution of these remaining cases will have a material adverse effect on its business, financial condition or results of operations.

In the normal course of business, Starz is subject to other lawsuits and other claims, including claims of alleged infringement of the trademarks, patents, copyrights and other intellectual property rights of third parties. While it is not possible to predict the outcome of these other matters, it is the opinion of management, based upon consultation with legal counsel, that the ultimate disposition of known proceedings will not have a material adverse impact on Starz’s business, financial condition or results of operations.

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Other Information

12 Months Ended

Dec. 31, 2015

Other Information [Abstract]

Other Information

Other Information

Supplemental Disclosure of Cash Flow Information

Supplemental disclosure of cash flow information was as follows (in millions):

	Years ended December 31,
	2015		2014		2013
Cash paid for interest, net of amounts capitalized	$	43.7	$	44.0	$	43.4
Cash paid for income taxes	$	124.7	$	107.9	$	184.4
Distribution of corporate office building to Old LMC	$	—	$	—	$	45.7
Capital lease with subsidiary of Liberty Media	$	—	$	—	$	44.8
Tax attributes related to LMC Spin-Off	$	—	$	—	$	11.5

Allowance for Trade Receivables

Changes in the allowance for trade receivables were as follows (in millions):

Description	Balance at beginning of period		Charged to costs and expenses(1)			Charged to other accounts(1)		Deductions(2)			Balance at end of period
Year ended December 31, 2015:
Reserves:
Allowance for doubtful accounts	$	1.1	$	(0.4	)	$	—	$	(0.1	)	$	0.6
Allowance for sales returns	40.8		—			99.4		(105.6		)	34.6
	$	41.9	$	(0.4	)	$	99.4	$	(105.7	)	$	35.2
Year ended December 31, 2014:
Reserves:
Allowance for doubtful accounts	$	1.1	$	3.4		$	—	$	(3.4	)	$	1.1
Allowance for sales returns	31.7		—			126.5		(117.4		)	40.8
	$	32.8	$	3.4		$	126.5	$	(120.8	)	$	41.9
Year ended December 31, 2013:
Reserves:
Allowance for doubtful accounts	$	0.3	$	0.8		$	—	$	—		$	1.1
Allowance for sales returns	34.7		—			141.4		(144.4		)	31.7
	$	35.0	$	0.8		$	141.4	$	(144.4	)	$	32.8

(1) Charges for doubtful accounts are included in selling, general and administrative expense and charges for sales returns are recorded against revenue. During the year ended December 31, 2015, an account receivable previously written off was collected and resulted in a credit balance for amounts charged to costs and expenses.

(2) Actual home video returns, uncollectible accounts written off and foreign currency exchange rate changes.

Other Current Assets

Other current assets consisted of the following (in millions):

	December 31,
	2015		2014
Income tax receivable	$	44.1	$	29.8
Other	46.0		40.3
	$	90.1	$	70.1

Condensed Financial Information of Registrant

The restricted net assets of Starz exceeds 25% of its consolidated net assets due to restrictions under the 2015 Credit Agreement and Senior Notes. As mentioned in Note 10, Starz is a holding company with no assets or liabilities of its own or operations other than those of Starz, LLC. Accordingly, the financial position, results of operations, comprehensive income and cash flows of Starz and Starz, LLC are identical. As such, condensed financial information for the Starz parent legal entity is not presented as it is not meaningful.

Net Income Attributable to Common Stockholders

Basic net income per common share (“EPS”) is computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares as if they had been converted at the beginning of the periods presented.

The reconciliation between basic and diluted weighted average shares outstanding was as follows (in millions):

	Years Ended December 31,
	2015	2014	2013
Basic weighted average shares outstanding	101.2	105.5	115.9
Effect of dilution:
Stock options	4.9	5.3	3.8
Restricted shares	0.2	0.7	1.4
Diluted weighted average shares outstanding	106.3	111.5	121.1

For the years ended December 31, 2015, 2014 and 2013, approximately 0.4 million, 1.4 million and no shares, respectively, have been excluded from the diluted weighted average shares outstanding since the shares would have been anti-dilutive.

Investment in Equity Affiliate

During the year ended December 31, 2014, Starz invested $19.1 million for an approximate 40% interest in Playco Holdings Limited (“Playco”) and during the year ended December 31, 2015, made advances to Playco totaling $6.3 million. Playco began offering a STARZ-branded online SVOD service in the Middle East and North Africa during 2015. Starz accounts for its investment in Playco using the equity method of accounting. Such investment is included in other assets, net in the accompanying consolidated balance sheets.

Goodwill

There were no changes in the carrying amount of goodwill, all of which relates to Starz Networks, during the years ended December 31, 2015 and 2014. As of December 31, 2015, the accumulated impairment loss was $1,718.9 million, of which $1,396.7 million relates to Starz Networks and $322.2 million to Starz Distribution.

Advertising and Marketing

Starz’s total advertising costs were $116.1 million, $110.4 million and $113.5 million for the years ended December 31, 2015, 2014 and 2013, respectively. Total marketing costs were $41.1 million, $33.9 million and $35.0 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Major Customers and Suppliers

Two Starz Networks’ Distributors each accounted for more than 10% of Starz’s total revenue and together accounted for 41%, 36% and 34% of Starz’s total revenue for the years ended December 31, 2015, 2014 and 2013, respectively. There were no other Distributors or other customers that accounted for more than 10% of revenue in any year. Starz’s premium networks and services are provided to these Distributors pursuant to affiliation agreements with varying terms.

As discussed in Note 11, Starz has entered into agreements to license theatrically released films from studios owned by Sony (through 2021) and Disney (through 2015). Films are available to Starz for exhibition generally 8-13 months after their theatrical release.

Anchor Bay Entertainment outsources substantially all of its home video distribution services, including DVD manufacturing and distribution to Twentieth Century Fox Home Entertainment LLC. The agreement expires on June 30, 2020.

Foreign Operations

Revenue generated outside of the U.S. represented 5%, 4% and 5% of consolidated revenue for each of the years ended December 31, 2015, 2014 and 2013, respectively.  Net long-lived assets outside the U.S. were less than 1% of consolidated net long-lived assets as of December 31, 2015 and 2014.

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Information about Operating Segments

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Information about Operating Segments

Information about Operating Segments

Starz evaluates performance and makes decisions about allocating resources to its operating segments based on financial measures such as Adjusted OIBDA. Adjusted OIBDA is defined as revenue less programming costs, production and acquisition costs, home video cost of sales, operating expenses and selling, general and administrative expenses, but excluding all stock compensation expense. Starz’s chief operating decision maker uses this measure of performance in conjunction with other measures to evaluate its operating segments’ performance and make decisions about allocating resources among its operating segments. Starz believes that Adjusted OIBDA is an important indicator of the operational strength and performance of its operating segments, including each operating segment’s ability to assist Starz in servicing its debt and to fund investments in films and television programs. In addition, this measure allows management to view operating results and perform analytical comparisons and benchmarking between operating segments and identify strategies to improve performance.

This measure of performance excludes stock compensation and depreciation and amortization that are included in the measurement of operating income pursuant to GAAP. The primary material limitations associated with the use of Adjusted OIBDA as compared to GAAP results are (i) it may not be comparable to similarly titled measures used by other companies in Starz’s industry, and (ii) it excludes financial information that some may consider important in evaluating Starz’s performance. Starz compensates for these limitations by providing a reconciliation of Adjusted OIBDA to GAAP results to enable investors to perform their own analysis of Starz’s operating results. Accordingly, Adjusted OIBDA should be considered in addition to, but not as a substitute for, operating income, income before income taxes, net income, net cash provided by operating activities and other measures of financial performance prepared in accordance with GAAP.

The reconciliation of Adjusted OIBDA to income before income taxes was as follows (in millions):

	Years Ended December 31,
	2015			2014			2013
Consolidated Adjusted OIBDA	$	461.6		$	501.7		$	476.9
Stock compensation	(32.9		)	(30.6		)	(34.3		)
Depreciation and amortization	(19.0		)	(19.4		)	(17.4		)
Interest expense, net of amounts capitalized	(46.0		)	(46.5		)	(45.0		)
Other income (expense), net	(15.7		)	4.6			9.0
Income before income taxes	$	348.0		$	409.8		$	389.2

Starz’s reportable segments are strategic business units that offer different services. They are managed separately because each segment requires different technologies, content delivery methods and marketing strategies. Starz identifies its reportable segments as those operating segments that represent 10% or more of its consolidated annual revenue, annual Adjusted OIBDA or total assets. Starz Networks and Starz Distribution have been identified as reportable segments, however, as Starz had three operating segments, Starz Animation was also reported. As mentioned in Note 1, Starz, LLC sold 100% of its wholly-owned subsidiary Film Roman, which made up 100% of the Starz Animation operating segment, in October 2015. Starz generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties, that is, at current prices.

Performance Measures (in millions):

	Years Ended December 31,
	2015			2014			2013
Revenue:
Starz Networks	$	1,324.4		$	1,312.0		$	1,297.7
Starz Distribution	353.8			321.5			449.5
Starz Animation	24.6			31.7			32.5
Inter-segment eliminations	(2.7		)	(1.3		)	(2.2		)
	$	1,700.1		$	1,663.9		$	1,777.5
Adjusted OIBDA:
Starz Networks	$	428.6		$	496.4		$	456.2
Starz Distribution	36.1			7.5			24.0
Starz Animation	(1.5		)	(2.7		)	(2.6		)
Inter-segment eliminations	(1.6		)	0.5			(0.7		)
	$	461.6		$	501.7		$	476.9

Other Information (in millions):

	Years Ended December 31,
	2015			2014			2013
Cash paid for investment in films and television programs:
Starz Networks	$	246.8		$	227.9		$	125.2
Starz Distribution	102.3			161.6			177.3
Starz Animation	—			—			—
Inter-segment eliminations	—			—			—
	$	349.1		$	389.5		$	302.5
	December 31,
	2015			2014
Total assets:
Starz Networks	$	1,365.9		$	1,347.2
Starz Distribution	166.8			173.5
Starz Animation	—			2.4
Other unallocated assets (primarily cash, deferred taxes and other assets, including income tax receivables and the commercial lease for Starz’s corporate headquarters facility)	109.7			92.0
Inter-segment eliminations	(78.2		)	(52.7		)
	$	1,564.2		$	1,562.4

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Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Information (Unaudited)

Quarterly Financial Information (Unaudited)

The unaudited quarterly financial information for the years ended December 31, 2015 and 2014 was as follows (in millions):

	1st		2nd		3rd		4th
	Quarter		Quarter		Quarter		Quarter
2015
Revenue	$	450.7	$	417.7	$	404.1	$	427.6
Operating income	$	142.5	$	110.5	$	101.8	$	54.9
Net income	$	86.1	$	63.0	$	59.5	$	27.9
Net income attributable to stockholders	$	84.6	$	63.4	$	60.2	$	27.9
Basic net income per common share	$	0.84	$	0.63	$	0.59	$	0.27
Diluted net income per common share	$	0.80	$	0.59	$	0.57	$	0.26
2014:
Revenue	$	420.0	$	410.1	$	408.2	$	425.6
Operating income	$	113.5	$	104.8	$	97.3	$	136.1
Net income	$	66.8	$	69.0	$	55.8	$	77.4
Net income attributable to member	$	64.9	$	70.1	$	56.3	$	80.0
Basic net income per common share	$	0.60	$	0.66	$	0.54	$	0.78
Diluted net income per common share	$	0.56	$	0.62	$	0.51	$	0.74

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Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Basis of Consolidation

Basis of Consolidation

The accompanying consolidated financial statements include the accounts of Starz and its majority-owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Starz considers amortization of program rights, the development of ultimate revenue estimates (as defined below under “Investment in Films and Television Programs”) associated with released films, the assessment of investment in films and television programs for impairment, the fair value of goodwill and any related impairment, valuation allowances associated with deferred income taxes and allowances for sales returns to be its most significant estimates. Actual results may differ from those estimates.

Prior Period Reclassifications

Prior Period Reclassifications

Certain prior period amounts have been reclassified for comparability with the 2015 presentation.

Cash and Cash Equivalents and Restricted Cash

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less when purchased. Cash and cash equivalents are invested at high credit quality financial institutions. Deposits generally exceed the Federal Deposit Insurance Corporation insurance limit.

Allowance for Trade Receivables

Allowance for Trade Receivables

The allowance for trade receivables represents estimated losses which may result from the inability of customers to make required payments on trade accounts receivable and for sales returns. Allowances for sales returns are based on past experience and current trends that are expected to continue.

Program Rights

Program Rights

The cost of program rights for films and television programs (including the license fee associated with the pay television window for original series which is reclassified to program rights from investment in films and television programs when the original series is aired) exhibited on Starz Networks’ premium networks are generally amortized on a title-by-title or episode-by-episode basis over the anticipated number of exhibitions. Starz Networks estimates the number of exhibitions based on the number of exhibitions allowed in the agreement (if specified) and the expected usage of the content. Certain other program rights are amortized to expense on a straight-line basis over the respective lives of the agreements. Starz Networks generally has rights to two or three separate windows under its output agreements. For films with multiple windows, the license fee is allocated between the windows based upon the proportionate estimated fair value of each window with the majority of the cost allocated to the first window. Considerable management judgment is necessary to estimate the fair value of each window.

Investment in Films and Television Programs

Investment in Films and Television Programs

Investment in films and television programs includes the cost of completed films and television programs (including original series) which have been produced by Starz or for which Starz has acquired distribution rights, as well as the cost of films and television programs in production, pre-production and development. Capitalized costs include production costs, including labor, goods and services, interest and allocable overhead, acquisition of distribution rights (including cash advances paid to Weinstein for theatrical releases under the license agreement entered into with Weinstein – see Note 7), acquisition of story rights and the development of stories less amounts allocated to program rights for original series, which have aired on Starz Networks’ premium networks.

Starz allocates the cost of its original series between the pay television window, which is considered the license fee, and the ancillary revenue markets (e.g. home video, digital platforms, international television, etc.) based on the estimated relative fair values of these markets. The amount associated with the pay television window is reclassified to program rights when the program is aired and the portion attributable to the ancillary markets remains in investment in films and television programs.

Investment in films and television programs is amortized using the individual-film-forecast method, whereby the costs are charged to expense and royalty, participation and residual costs are accrued based on the proportion that current revenue from the films or television programs bears to an estimate of the remaining unrecognized revenue (“Ultimate Revenue”). Ultimate Revenue estimates do not exceed ten years following the date of initial release or from the date of delivery of the first episode for episodic television series. Estimates of Ultimate Revenue involve uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in management’s future revenue estimates.

Investment in films and television programs in development or pre-production is periodically reviewed to determine whether they will ultimately be used in the production of a film or television program. Costs of films and television programs in development or pre-production are charged to expense when a project is abandoned, or generally if the film or television program has not been set for production within three years from the time of the first capitalized transaction.

Investment in films and television programs is reviewed for impairment on a title-by-title basis when an event or change in circumstances indicates that a film or television program may be impaired. The estimated fair value for each title is determined using the discounted estimated future cash flow of each title. If the estimated fair value of a film or television program is less than its unamortized cost, the excess of unamortized cost over the estimated fair value is charged to expense. Considerable management judgment is necessary to estimate the fair value of investment in films and television programs.

Equity Investments

Equity Investments

For investments in affiliates in which Starz has the ability to exercise significant influence, the equity method of accounting is used. Under this method, the investment, originally recorded at cost, is adjusted to recognize Starz’s share of net income or loss and other comprehensive income or loss of the affiliate. Losses are limited to the extent of Starz’s investment in, advances to and commitments on behalf of the investee. Starz’s equity investment is reflected in other assets, net in the accompanying consolidated balance sheets and the share of net income or loss of its equity investment is reflected in other income, net in the accompanying consolidated statements of operations.

Property and Equipment

Property and Equipment

Property and equipment is stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which range from 3 to 15 years for distribution equipment, 3 to 7 years for furniture, fixtures and office equipment and 30 years for building.

Property and equipment is reviewed for impairment when an event or change in circumstances indicates that the asset may be impaired. If the carrying value of the asset is determined to not be recoverable and is greater than its fair value, then an impairment charge is recognized. The charge consists of the amount by which the carrying value of the asset exceeds its fair value. Fair value is estimated by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. Considerable management judgment is necessary to determine recoverability and to estimate the fair value of property and equipment.

Goodwill

Goodwill

Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of the net identified assets acquired. Goodwill is reviewed for impairment annually, at December 31, or more frequently if indicators of potential impairment exist. Starz utilizes a qualitative assessment for determining whether step one of the goodwill impairment analysis is necessary. In evaluating goodwill on a qualitative basis, Starz considers whether there were any negative macroeconomic conditions, industry specific conditions, market changes, increased competition, increased costs in doing business, management challenges, the legal environment and how these factors might impact the company specific performance in future periods.

If the qualitative assessment indicates that step one is necessary, the fair value of each reporting unit in which goodwill resides is compared to its carrying value. Fair value is estimated by considering sale prices for similar assets or by discounting estimated future cash flows from such asset using an appropriate discount rate. For reporting units whose carrying value exceeds the fair value, a second test is required to measure the impairment loss. In the second test, the fair value of the reporting unit is allocated to all of the assets and liabilities of the reporting unit with any residual value being allocated to goodwill. The difference between such allocated amount and the carrying value of the goodwill is recorded as an impairment charge. Considerable management judgment is necessary to estimate the fair value of each reporting unit.

Revenue Recognition

Revenue Recognition

Programming revenue is recognized in the period during which programming is provided, pursuant to affiliation agreements. If an affiliation agreement has expired, revenue is recognized based on the terms of the expired agreement or the actual payment from the Distributor, whichever is less. Any funds received in excess of fixed and determinable programming revenue are recorded as a liability in deferred revenue until the discrepancy is resolved. Payments to Distributors for marketing support costs for which Starz does not receive a direct benefit are recorded as a reduction of revenue. Certain sales incentives, including discounts and rebates, provided to Distributors are accounted for as a reduction of revenue and are not significant.

Revenue generated from the sale of DVDs is recognized, net of an allowance for estimated sales returns, on the later of the estimated receipt of the product by the customer or after any restrictions on sale lapse. At the time of the initial sale, Starz also records a provision, based on historical trends and practices, to reduce revenue for discounts and rebates provided to customers related to the sale of DVDs.

Revenue from digital and television licensing is recognized when the film or program is complete in accordance with the terms of the arrangement and is available for exploitation by the licensee. The film or program is available for exploitation when it has been delivered or is available to the licensee and the license period has commenced. In the event that a licensee pays Starz a nonrefundable minimum guarantee at or prior to the beginning of the license period, Starz records this amount as deferred revenue until all of the criteria for revenue recognition are met.

Starz recognized revenue and related production costs related to animation services provided to customers under contract generally based on the percentage that costs incurred-to-date bore to estimated total costs to complete utilizing the most recent information. Revenue recognized was proportional to the work performed-to-date under the contracts.

Advertising and Marketing

Advertising and Marketing

Advertising and marketing costs are expensed as incurred. Certain of Starz’s affiliation agreements require Starz to provide marketing support to the Distributor based upon certain criteria as stipulated in the agreements. Marketing support includes cooperative advertising and marketing efforts between Starz and its Distributors such as cross channel, direct mail and point of sale incentives. Marketing support is recorded as an expense and not a reduction of revenue when Starz has received a direct benefit and the fair value of such benefit is determinable.

Stock-Based Compensation

Stock-Based Compensation

Starz measures the cost of employee services received in exchange for an award of equity instruments (such as stock options, restricted shares and restricted stock units) based on the grant-date fair value of the award and recognizes that cost over the period during which the employee is required to provide service (usually the vesting period of the award). Starz measures the cost of employee services received in exchange for an award of liability instruments (i.e., awards that have the option to be settled in cash) based on the current fair value of the award and re-measures the fair value of the award at each reporting date.

Income Taxes

Income Taxes

Starz has applied the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying value amounts and income tax basis of assets and liabilities and the expected benefits of utilizing net operating loss and tax credit carryforwards. The deferred tax assets and liabilities are calculated using enacted tax rates in effect for each taxing jurisdiction in which Starz operates for the year in which those temporary differences are expected to be recovered or settled. Net deferred tax assets are then reduced by a valuation allowance if Starz believes it more likely than not that such net deferred tax assets will not be realized.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

All derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income (loss) and are recognized in the statement of operations when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. If the derivative is not designated as a hedge, changes in the fair value of the derivative are recognized in earnings.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, restricted cash, trade accounts receivable, trade accounts payable and accrued liabilities approximates fair value, due to their short maturity. See Note 5 for information concerning the fair value of Starz’s debt instruments.

Foreign Currency Translation

Foreign Currency Translation

The functional currency of Starz is the U.S. dollar. The functional currency of Starz’s foreign operations is the applicable local currency for each foreign subsidiary. Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date and the related statements of operations are translated at the average exchange rates in effect during the applicable period. The resulting unrealized cumulative translation adjustment, net of applicable income taxes, is included as a component of accumulated other comprehensive loss in equity and other comprehensive income in the consolidated statements of comprehensive income.

Transactions denominated in currencies other than the functional currency are recorded based on exchange rates at the time such transactions arise. Subsequent changes in exchange rates result in gains and losses which are reflected in the accompanying consolidated statements of operations as unrealized (based on the applicable period-end exchange rate) or realized upon settlement of the transactions.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (Topic 606). ASU 2014-09 replaces the majority of all U.S. GAAP guidance that currently exists on revenue recognition with a single model to be applied to all contracts with customers. The core principle of ASU 2014-09 is that “an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” For a public entity, ASU 2014-09 is now effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is permitted, but not before annual periods beginning after December 15, 2016. An entity must apply ASU 2014-09 using either the full retrospective approach, by restating all years presented, or the cumulative effect at the date of adoption approach. Starz is currently assessing the impact that these changes will have on its consolidated financial statements, and therefore, is unable to quantify such impact or determine the method of adoption.

In April 2015, the FASB issued ASU 2015-03 Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in ASU 2015-03. For a public entity, ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. Early adoption is permitted for financial statements that have not been previously issued. In August 2015, the FASB issued ASU 2015-15 Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements to provide additional clarification on the presentation of debt issuance costs. Starz adopted the new guidance effective December 31, 2015 and has reclassified its debt issuance costs from other assets, net to debt in the accompanying consolidated balance sheets (see Note 5).

In November 2015, the FASB issued ASU 2015-17 Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. ASU 2015-17 eliminates the current requirement for entities to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Instead, organizations will be required to classify all deferred tax assets and liabilities as noncurrent. For a public entity, ASU 2015-17 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted and it may be applied prospectively to all deferred tax assets and liabilities or retrospectively to all periods presented. Starz adopted the new guidance retrospectively effective December 31, 2015 and has reflected its deferred tax assets and liabilities as noncurrent in the accompanying consolidated balance sheets.

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Investment in Films and Television Programs, Net (Tables)

12 Months Ended

Dec. 31, 2015

Investment In Films And Television Programs, Net [Abstract]

Net Investment In Films And Television Programs

Investment in films and television programs, net consisted of the following (in millions):

	December 31,
	2015		2014
Released film costs - theatrical, less amortization	$	1.1	$	1.2
Film costs – television and home entertainment:
Released, less amortization	57.3		70.5
Completed, but not released	3.4		116.2
In production	141.5		125.5
Development and pre-production	12.3		6.1
	$	215.6	$	319.5

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Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property and equipment, net consisted of the following (in millions):

	December 31,
	2015			2014
Distribution equipment (a)	$	114.4		$	114.5
Furniture, fixtures and office equipment	64.5			53.9
Building (b)	44.8			44.8
	223.7			213.2
Less accumulated depreciation	(134.5		)	(123.4		)
	$	89.2		$	89.8

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Debt (Tables)

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Schedule of Debt

Debt consisted of the following (in millions):

	December 31,
	2015			2014
2015 Credit Agreement (a)	$	308.0		$	—
2011 Credit Agreement (b)	—			432.0
Senior Notes, including premium of $1.9 and $2.5 (c)	676.9			677.5
Capital leases (d)	64.8			70.0
Debt issuance costs, net	(11.9		)	(9.9		)
Total debt	1,037.8			1,169.6
Less: current portion	(5.6		)	(5.3		)
	$	1,032.2		$	1,164.3

(a) On April 20, 2015, Starz, LLC entered into a credit agreement (“2015 Credit Agreement”) that provides for $1,000.0 million in revolving loans with a $50.0 million sub-limit for stand-by letters of credit. Net proceeds from the 2015 Credit Agreement were used to repay and terminate the 2011 Credit Agreement (as defined below). Borrowings may be prepaid at any time and from time to time without penalty other than customary breakage costs. Any amounts prepaid may be reborrowed. The 2015 Credit Agreement is scheduled to mature on April 20, 2020. As of December 31, 2015, $692.0 million of borrowing capacity was available under the 2015 Credit Agreement.

Interest on each loan under the 2015 Credit Agreement is payable at either an alternate base rate or LIBOR at Starz, LLC’s election. Borrowings that are alternate base rate loans bear interest at a per annum rate equal to the alternate base rate plus a margin that varies between 0.5% and 1.25% depending on the consolidated leverage ratio of Starz, LLC, as defined in the 2015 Credit Agreement. The alternate base rate is the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus ½ of 1% or (c) LIBOR for a one-month interest period plus 1%. Borrowings that are LIBOR loans bear interest at a per annum rate equal to the applicable LIBOR plus a margin that varies between 1.5% and 2.25% depending on the consolidated leverage ratio of Starz, LLC. The 2015 Credit Agreement requires Starz, LLC to pay a commitment fee on any unused portion. The commitment fee varies between 0.25% and 0.40%, depending on the consolidated leverage ratio of Starz, LLC.

As of December 31, 2015, the following borrowings and related LIBOR or alternate base rate interest rates were outstanding (dollars in millions):

LIBOR or alternate base rate period:	Interest Rate	Loan Amount
December 2015 - January 2016	2.03700%	$	95.0
December 2015 - January 2016	2.09450%	200.0
December 2015 and forward	4.25000%	13.0
		$	308.0

The 2015 Credit Agreement contains certain covenants that include restrictions on, among others, incurring additional debt, paying dividends or making certain distributions, investments and other restricted payments, liens, guarantees and investments. In addition, Starz, LLC must comply with certain financial covenants including a consolidated leverage ratio, as defined in the 2015 Credit Agreement. As of December 31, 2015, Starz, LLC was in compliance with all covenants under the 2015 Credit Agreement.

(b) On November 16, 2011, Starz, LLC entered into a credit agreement (“2011 Credit Agreement”) that provided $1,000 million in revolving loans, a $50 million sub-limit for standby letters of credit and a $500.0 million term loan. On April 20, 2015, Starz LLC repaid and terminated the 2011 Credit Agreement using borrowings under the 2015 Credit Agreement.

Interest on each loan under the 2011 Credit Agreement was payable at either an alternate base rate or LIBOR at Starz, LLC’s election. Borrowings that were alternate base rate loans bore interest at a per annum rate equal to the alternate base rate plus a margin that varied between 0.5% and 1.5% depending on the consolidated leverage ratio of Starz, LLC, as defined in the 2011 Credit Agreement. The alternate base rate was the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus ½ of 1% or (c) LIBOR for a one-month interest period plus 1%. Borrowings that were LIBOR loans bore interest at a per annum rate equal to the applicable LIBOR plus a margin that varied between 1.5% and 2.5% depending on the consolidated leverage ratio of Starz, LLC. The 2011 Credit Agreement required Starz, LLC to pay a commitment fee on any unused portion of the revolving loans under the 2011 Credit Agreement. The commitment fee varied between 0.25% and 0.50%, depending on the consolidated leverage ratio of Starz, LLC.

(c) On September 13, 2012, Starz, LLC and Starz Finance Corp. co-issued $500.0 million aggregate principal amount of senior notes, due September 15, 2019 (“2012 Notes”). On February 8, 2013, Starz, LLC and Starz Finance Corp. completed the issuance of an additional $175.0 million aggregate principal amount of 5.0% senior notes due 2019 (“2013 Notes” and together with the 2012 Notes, “Senior Notes”), which were issued as additional notes under the indenture governing the 2012 Notes. The net proceeds from the issuance of the 2012 Notes and cash on hand were used to repay and terminate the $500.0 million term loan under the 2011 Credit Agreement. The net proceeds from the issuance of the 2013 Notes were used to repay indebtedness under the 2011 Credit Agreement. The 2013 Notes were issued at a price of 102.0% plus accrued interest from September 13, 2012.

The Senior Notes bear interest at a rate of 5.0% payable semi-annually on September 15 and March 15 of each year. Starz Finance Corp. is a wholly-owned subsidiary of Starz, LLC and was formed for the sole purpose of co-issuing the 2012 Notes. Starz Finance Corp. does not have and will not have any operations, assets or subsidiaries of its own. The Senior Notes are guaranteed by Starz Entertainment.

The Senior Notes rank equally in right of payment to all existing and future senior obligations and existing and future subordinated obligations. The Senior Notes are effectively subordinated to any existing and future secured obligations and to all the liabilities of the subsidiaries that do not guarantee the Senior Notes.

The Senior Notes contain certain covenants that include restrictions on, among others, incurring additional debt, paying dividends, entering into liens and guarantees, or making certain distributions, investments and other restricted payments. As of December 31, 2015, Starz, LLC was in compliance with all covenants under the Senior Notes.

(d) On January 11, 2013, Starz, LLC, and, for the limited purposes described therein, Starz Entertainment entered into a commercial lease with a subsidiary of Starz’s related party, Liberty Media, for its headquarters building. The term of the lease is ten-years, with an additional four successive five-year renewal periods at the option of Starz, LLC. Starz, LLC recorded a $44.8 million capital lease in connection with this lease agreement with an imputed annual interest rate of 6.4%.

Starz Entertainment has entered into capital lease agreements for its transponder capacity. The transponder agreements expire during 2018 to 2021 and have imputed annual interest rates ranging from 5.5% to 7.0%.

Schedule of Maturities of Long-term Debt

Debt maturities for the next five years and thereafter at December 31, 2015 were as follows (in millions):

2016	$	10.1
2017	10.1
2018	9.7
2019	682.4
2020	313.8
Thereafter	74.4
Total minimum payments	1,100.5
Less: amounts representing interest	(50.8		)
Present value of debt payments	1,049.7
Less: debt issuance costs	(11.9		)
Less: current portion	(5.6		)
Long-term portion of debt obligations	$	1,032.2

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Accrued Liabilities (Tables)

12 Months Ended

Dec. 31, 2015

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following (in millions):

	December 31,
	2015		2014
Royalties, residuals and participations	$	82.4	$	134.2
Program rights payable	67.8		$	89.0
Advertising and marketing	48.1		41.1
Payroll and related costs	29.2		27.5
Other	40.2		35.6
	$	267.7	$	327.4

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Stock Compensation (Tables)

12 Months Ended

Dec. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

Stock compensation expense, by expense category, consisted of the following (in millions):

	Years ended December 31,
	2015		2014		2013
Programming	$	2.6	$	2.4	$	1.6
Operating	0.3		0.3		0.2
Selling, general and administrative	30.0		27.9		32.5
	$	32.9	$	30.6	$	34.3

Schedule of Share-based Compensation, Historical Award Activity

Awards granted in 2015, 2014 and 2013 were as follows:

	Options Granted	Weighted Average Grant-Date Fair Value
2015 Awards:
Stock options	731,263	$	11.12
Restricted shares	443,710	$	33.57
Restricted stock units	107,070	$	34.85
2014 Awards:
Stock options	1,424,612	$	10.94
Restricted shares	148,106	$	32.94
2013 Awards:
Stock options	7,443,494	$	7.84
Restricted shares	574,548	$	22.85

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The assumptions used were as follows:

	2015	2014	2013
Expected term	4.75	4.75	4.60 to 6.90
Expected volatility	36.0% to 36.2%	35.9% to 36.0%	35.9% to 41.4%
Risk-free rate of return	1.4% to 1.7%	1.5%	0.7% to 1.4%

Schedule of Share-based Compensation, Stock Options, Activity

The number and weighted average exercise price (“WAEP”) of stock options to purchase Starz common stock were as follows:

	Options		WAEP
Outstanding at December 31, 2014	16,431,666		$	17.42
Granted	731,263		$	33.33
Exercised	(3,420,547	)	$	13.97
Forfeited	(554,840	)	$	22.99
Expired/cancelled	—		$	—
Outstanding at December 31, 2015	13,187,542		$	18.97
Exercisable at December 31, 2015	8,293,383		$	15.85

Schedule of Share-based Compensation, Restricted Stock Units Award Activity

The number and weighted average grant date fair value of restricted share grants were as follows:

	Restricted Shares		Weighted Average Grant-Date Fair Value
Outstanding at December 31, 2014	708,658		$	21.01
Granted	443,710		$	33.57
Vested	(361,814	)	$	22.72
Forfeited	(20,607	)	$	33.85
Outstanding at December 31, 2015	769,947		$	29.22

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense consisted of the following (in millions):

	Years ended December 31,
	2015			2014		2013
Current:
Federal	$	111.3		$	110.6	$	119.2
State and local	10.4			7.6		9.3
Foreign	2.4			3.3		2.5
	124.1			121.5		131.0
Deferred:
Federal	(14.8		)	14.9		0.5
State and local	2.2			4.4		7.9
	(12.6		)	19.3		8.4
	$	111.5		$	140.8	$	139.4

Schedule of Effective Income Tax Rate Reconciliation

Income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 35% as a result of the following (in millions):

	Years ended December 31,
	2015			2014			2013
Computed expected tax expense	$	121.8		$	143.4		$	136.2
State and local income taxes, net of federal income taxes	7.4			8.0			11.5
Deduction for qualified production activity	(9.5		)	(10.4		)	(12.6		)
Uncertain tax positions	(8.4		)	—			—
Settlements with tax authorities	6.6			—			—
Change in subsidiary tax status	(4.7		)	—			0.8
Change in valuation allowance affecting tax expense	(0.8		)	1.2			3.0
Foreign taxes, net of foreign tax credit	(0.2		)	(0.7		)	0.9
Other, net	(0.7		)	(0.7		)	(0.4		)
	$	111.5		$	140.8		$	139.4

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2015 and 2014 were as follows (in millions):

	December 31,
	2015			2014
Deferred tax assets:
Accrued stock compensation	$	22.5		$	16.8
Intangible assets	14.5			—
Allowance for doubtful accounts	13.2			—
Tax loss and credit carryforwards	4.6			7.1
Investments	0.7			32.3
Other future deductible amounts	5.6			1.1
	61.1			57.3
Valuation allowance	(1.8		)	(2.6		)
	59.3			54.7
Deferred tax liabilities:
Property and equipment	(13.9		)	(15.0		)
Investment in films and television programs	(24.2		)	(32.6		)
Program rights	—			(7.3		)
	(38.1		)	(54.9		)
Deferred income taxes, net	$	21.2		$	(0.2	)

Summary of Income Tax Contingencies [Table Text Block]

The changes in uncertain tax positions were as follows:

	December 31,
	2015			2014
Balance at beginning of year	$	—		$	—
Additions	13.6			—
Settlements and lapses	(13.6		)	—
Balance at end of year	$	—		$	—

As of December 31, 2015, Starz had no accrued interest and penalties recorded related to uncertain tax positions.

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

The future minimum payments under noncancelable operating leases at December 31, 2015 were as follows (in millions):

2016	$	3.9
2017	2.3
2018	2.2
2019	1.6
2020	0.7
Thereafter	0.1
	$	10.8

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Other Information (Tables)

12 Months Ended

Dec. 31, 2015

Other Information [Abstract]

Schedule of Cash Flow, Supplemental Disclosures

Supplemental Disclosure of Cash Flow Information

Supplemental disclosure of cash flow information was as follows (in millions):

	Years ended December 31,
	2015		2014		2013
Cash paid for interest, net of amounts capitalized	$	43.7	$	44.0	$	43.4
Cash paid for income taxes	$	124.7	$	107.9	$	184.4
Distribution of corporate office building to Old LMC	$	—	$	—	$	45.7
Capital lease with subsidiary of Liberty Media	$	—	$	—	$	44.8
Tax attributes related to LMC Spin-Off	$	—	$	—	$	11.5

Schedule of Allowance for Trade Receivables

Changes in the allowance for trade receivables were as follows (in millions):

Description	Balance at beginning of period		Charged to costs and expenses(1)			Charged to other accounts(1)		Deductions(2)			Balance at end of period
Year ended December 31, 2015:
Reserves:
Allowance for doubtful accounts	$	1.1	$	(0.4	)	$	—	$	(0.1	)	$	0.6
Allowance for sales returns	40.8		—			99.4		(105.6		)	34.6
	$	41.9	$	(0.4	)	$	99.4	$	(105.7	)	$	35.2
Year ended December 31, 2014:
Reserves:
Allowance for doubtful accounts	$	1.1	$	3.4		$	—	$	(3.4	)	$	1.1
Allowance for sales returns	31.7		—			126.5		(117.4		)	40.8
	$	32.8	$	3.4		$	126.5	$	(120.8	)	$	41.9
Year ended December 31, 2013:
Reserves:
Allowance for doubtful accounts	$	0.3	$	0.8		$	—	$	—		$	1.1
Allowance for sales returns	34.7		—			141.4		(144.4		)	31.7
	$	35.0	$	0.8		$	141.4	$	(144.4	)	$	32.8

(1) Charges for doubtful accounts are included in selling, general and administrative expense and charges for sales returns are recorded against revenue. During the year ended December 31, 2015, an account receivable previously written off was collected and resulted in a credit balance for amounts charged to costs and expenses.

(2) Actual home video returns, uncollectible accounts written off and foreign currency exchange rate changes.

Schedule of Other Assets

Other current assets consisted of the following (in millions):

	December 31,
	2015		2014
Income tax receivable	$	44.1	$	29.8
Other	46.0		40.3
	$	90.1	$	70.1

Schedule of Weighted Average Number of Shares [Table Text Block]

The reconciliation between basic and diluted weighted average shares outstanding was as follows (in millions):

	Years Ended December 31,
	2015	2014	2013
Basic weighted average shares outstanding	101.2	105.5	115.9
Effect of dilution:
Stock options	4.9	5.3	3.8
Restricted shares	0.2	0.7	1.4
Diluted weighted average shares outstanding	106.3	111.5	121.1

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Information about Operating Segments (Tables)

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Reconciliation of Other Significant Reconciling Items from Segments to Consolidated [Table Text Block]

The reconciliation of Adjusted OIBDA to income before income taxes was as follows (in millions):

	Years Ended December 31,
	2015			2014			2013
Consolidated Adjusted OIBDA	$	461.6		$	501.7		$	476.9
Stock compensation	(32.9		)	(30.6		)	(34.3		)
Depreciation and amortization	(19.0		)	(19.4		)	(17.4		)
Interest expense, net of amounts capitalized	(46.0		)	(46.5		)	(45.0		)
Other income (expense), net	(15.7		)	4.6			9.0
Income before income taxes	$	348.0		$	409.8		$	389.2

Schedule of Segment Reporting Information, by Segment

Performance Measures (in millions):

	Years Ended December 31,
	2015			2014			2013
Revenue:
Starz Networks	$	1,324.4		$	1,312.0		$	1,297.7
Starz Distribution	353.8			321.5			449.5
Starz Animation	24.6			31.7			32.5
Inter-segment eliminations	(2.7		)	(1.3		)	(2.2		)
	$	1,700.1		$	1,663.9		$	1,777.5
Adjusted OIBDA:
Starz Networks	$	428.6		$	496.4		$	456.2
Starz Distribution	36.1			7.5			24.0
Starz Animation	(1.5		)	(2.7		)	(2.6		)
Inter-segment eliminations	(1.6		)	0.5			(0.7		)
	$	461.6		$	501.7		$	476.9

Other Information (in millions):

	Years Ended December 31,
	2015			2014			2013
Cash paid for investment in films and television programs:
Starz Networks	$	246.8		$	227.9		$	125.2
Starz Distribution	102.3			161.6			177.3
Starz Animation	—			—			—
Inter-segment eliminations	—			—			—
	$	349.1		$	389.5		$	302.5
	December 31,
	2015			2014
Total assets:
Starz Networks	$	1,365.9		$	1,347.2
Starz Distribution	166.8			173.5
Starz Animation	—			2.4
Other unallocated assets (primarily cash, deferred taxes and other assets, including income tax receivables and the commercial lease for Starz’s corporate headquarters facility)	109.7			92.0
Inter-segment eliminations	(78.2		)	(52.7		)
	$	1,564.2		$	1,562.4

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Quarterly Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2015

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

The unaudited quarterly financial information for the years ended December 31, 2015 and 2014 was as follows (in millions):

	1st		2nd		3rd		4th
	Quarter		Quarter		Quarter		Quarter
2015
Revenue	$	450.7	$	417.7	$	404.1	$	427.6
Operating income	$	142.5	$	110.5	$	101.8	$	54.9
Net income	$	86.1	$	63.0	$	59.5	$	27.9
Net income attributable to stockholders	$	84.6	$	63.4	$	60.2	$	27.9
Basic net income per common share	$	0.84	$	0.63	$	0.59	$	0.27
Diluted net income per common share	$	0.80	$	0.59	$	0.57	$	0.26
2014:
Revenue	$	420.0	$	410.1	$	408.2	$	425.6
Operating income	$	113.5	$	104.8	$	97.3	$	136.1
Net income	$	66.8	$	69.0	$	55.8	$	77.4
Net income attributable to member	$	64.9	$	70.1	$	56.3	$	80.0
Basic net income per common share	$	0.60	$	0.66	$	0.54	$	0.78
Diluted net income per common share	$	0.56	$	0.62	$	0.51	$	0.74

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Basis of Presentation and Description of Business (Details) - linear_network	1 Months Ended	10 Months Ended
	Oct. 31, 2015	Oct. 31, 2015	Dec. 31, 2015
Business Combination, Separately Recognized Transactions [Line Items]
Number of linear networks containing programming			17
Weinstein
Business Combination, Separately Recognized Transactions [Line Items]
Ownership percentage interest acquired from noncontrolling owner	25.00%	25.00%
Film Roman
Business Combination, Separately Recognized Transactions [Line Items]
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest	100.00%
Starz Animation
Business Combination, Separately Recognized Transactions [Line Items]
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest		100.00%

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Basis of Presentation and Description of Business LMC Spin-off (Details) - USD ($) $ in Millions		12 Months Ended
	Jan. 10, 2013	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
LMC Spin-Off [Line Items]
Distributions to Old LMC	$ 1,200.0	$ 0.0	$ 0.0	$ 1,200.0
Tax attributes related to Spin-Off (Non-Cash)	11.5	0.0	0.0	11.5
Building and Building Improvements [Member]
LMC Spin-Off [Line Items]
Distributions to Old LMC	$ 45.7	$ 0.0	$ 0.0	$ 45.7

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Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2015
Distribution Equipment | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	3 years
Distribution Equipment | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	15 years
Furniture and Fixtures | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	3 years
Furniture and Fixtures | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	7 years
Building
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives	30 years

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Investment in Films and Television Programs, Net (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Investment In Films And Television Programs, Net [Abstract]
Released film costs - theatrical, less amortization	$ 1.1	$ 1.2
Film costs – television and home entertainment:
Released, less amortization	57.3	70.5
Completed, but not released	3.4	116.2
In production	141.5	125.5
Development and pre-production	12.3	6.1
Investment in films and television programs, net	$ 215.6	$ 319.5
Percentage of unamortized film costs expected to be amortized within three years	64.00%
Percentage of Unamortized Film Costs within four years	82.00%
Unamortized film costs for released films	$ 58.4
Amortization period of unamortized film costs for released films	3 years
Expected period to amortize 80% of film costs	4 years
Film costs released and completed, but not released expected to be amortized in next twelve months	$ 33.5
Unamortized film costs for released and completed but not released films	$ 61.8

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Property and Equipment, Net (Details) - USD ($) $ in Millions		Dec. 31, 2015	Dec. 31, 2014
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross		$ 223.7	$ 213.2
Less accumulated depreciation		(134.5)	(123.4)
Property, Plant and Equipment, Net		89.2	89.8
Distribution Equipment held under capital lease
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross		57.5	57.5
Less accumulated depreciation		(41.6)	(37.8)
Distribution Equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	[1]	114.4	114.5
Furniture, fixtures and office equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross		64.5	53.9
Capital Lease Obligations [Member] | Liberty Media | Building
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	[2]	44.8	44.8
Less accumulated depreciation		$ (4.4)	$ (2.9)

[1] The cost of satellite transponders accounted for as capital leases was $57.5 million as of December 31, 2015 and 2014. Accumulated depreciation for these transponders was $41.6 million and $37.8 million at December 31, 2015 and 2014, respectively.

[2] Represents the cost of Starz’s corporate headquarters facility in Englewood, Colorado which is accounted for as a capital lease and which is leased from a subsidiary of Starz’s related party, Liberty Media. Accumulated depreciation for the building totaled $4.4 million and $2.9 million at December 31, 2015 and 2014, respectively.

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Debt (Details) - USD ($)			4 Months Ended	12 Months Ended
		Jan. 11, 2013	Apr. 20, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Feb. 08, 2013	Sep. 13, 2012	Nov. 16, 2011
Debt Instrument [Line Items]
Unamortized Debt Issuance Expense				$ (11,900,000)	$ (9,900,000)
Long-term Debt and Capital Lease Obligations, Including Current Maturities				1,037,800,000	1,169,600,000
Less: current portion				(5,600,000)	(5,300,000)
Non current portion of Debt				1,032,200,000	1,164,300,000
Line of Credit Facility, Remaining Borrowing Capacity				692,000,000
Interest Costs Capitalized				$ 6,000,000	4,700,000	$ 3,600,000
Starz Entertainment | Minimum
Debt Instrument [Line Items]
Capital Lease Agreement, Imputed Annual Interest Rate				5.50%
Starz Entertainment | Maximum
Debt Instrument [Line Items]
Capital Lease Agreement, Imputed Annual Interest Rate				7.00%
Senior Notes
Debt Instrument [Line Items]
Debt Instrument, Unamortized Discount (Premium), Net				$ 1,900,000	2,500,000
Debt, including current portion	[1]			676,900,000	677,500,000
Fair value of long-term debt				687,500,000
Senior Notes | Starz, LLC and Starz Finance Corp
Debt Instrument [Line Items]
Debt Instrument, Face Amount							$ 175,000,000	$ 500,000,000
Debt Instrument, Interest Rate, Stated Percentage							5.00%	5.00%
Debt Instrument, Premium							102.00%
Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Debt, including current portion	[2]			64,800,000	70,000,000
Revolving Credit Facility, Senior Secured, Term Loans [Member] | Line of Credit | Starz, LLC
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity									$ 500,000,000
2015 Credit Agreement [Member] | Line of Credit | Starz, LLC
Debt Instrument [Line Items]
Debt, including current portion	[3]			$ 308,000,000	0
Revolving Credit Facility | Line of Credit | Starz, LLC
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 1,000,000,000						$ 1,000,000,000
Revolving Credit Facility | Line of Credit | Starz, LLC | Minimum
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage			0.25%	0.25%
Revolving Credit Facility | Line of Credit | Starz, LLC | Maximum
Debt Instrument [Line Items]
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage			0.50%	0.40%
Revolving Credit Facility | Line of Credit | Alternate Base Rate, Prime, Federal Funds, or LIBOR [Member] | Starz, LLC | Minimum
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate, Alternate Base Rate Loans			0.50%						0.50%
Revolving Credit Facility | Line of Credit | Alternate Base Rate, Prime, Federal Funds, or LIBOR [Member] | Starz, LLC | Maximum
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate, Alternate Base Rate Loans			1.25%						1.50%
Revolving Credit Facility | Line of Credit | Federal Funds Effective Rate | Starz, LLC
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate, Alternate Base Rate Loans			0.50%						0.50%
Revolving Credit Facility | Line of Credit | London Interbank Offered Rate (LIBOR) [Member] | Starz, LLC
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate, Alternate Base Rate Loans			1.00%						1.00%
Debt Instrument, Interest Period Used to Determine Basis Spread on Variable Rate				1 month
Revolving Credit Facility | Line of Credit | London Interbank Offered Rate (LIBOR) [Member] | Starz, LLC | Minimum
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate, Alternate Base Rate Loans			1.50%						1.50%
Revolving Credit Facility | Line of Credit | London Interbank Offered Rate (LIBOR) [Member] | Starz, LLC | Maximum
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate, Alternate Base Rate Loans			2.25%						2.50%
Standby Letters of Credit | Line of Credit | Starz, LLC
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 50,000,000						$ 50,000,000
2011 Credit Agreement [Member] | Line of Credit | Starz, LLC
Debt Instrument [Line Items]
Debt, including current portion	[4]			$ 0	$ 432,000,000
2011 Credit Agreement [Member] | Line of Credit | London Interbank Offered Rate (LIBOR) [Member] | Starz, LLC
Debt Instrument [Line Items]
Debt Instrument, Interest Period Used to Determine Basis Spread on Variable Rate				1 month
December 2015 - January 2016 | Revolving Credit Facility | Line of Credit | Alternate Base Rate [Member] | Starz, LLC
Debt Instrument [Line Items]
Debt, including current portion				$ 95,000,000
Debt Instrument, Interest Rate at Period End				2.037%
December 2015 - January 2016 | Revolving Credit Facility | Line of Credit | Alternate Base Rate [Member] | Starz, LLC
Debt Instrument [Line Items]
Debt, including current portion				$ 200,000,000
Debt Instrument, Interest Rate at Period End				2.0945%
December 2015 and forward | Revolving Credit Facility | Line of Credit | Alternate Base Rate [Member] | Starz, LLC
Debt Instrument [Line Items]
Debt, including current portion				$ 13,000,000
Debt Instrument, Interest Rate at Period End				4.25%
Capital Lease Obligations [Member] | Liberty Media
Debt Instrument [Line Items]
Capital Leases, Period of Lease Agreement		10 years
Capital Leases, Successive Renewal Periods Available for Lease Agreement		5 years
Capital Lease Obligations [Member] | Liberty Media | Capital Lease Obligations [Member]
Debt Instrument [Line Items]
Debt, including current portion		$ 44,800,000
Capital Lease Agreement, Imputed Annual Interest Rate				6.40%

[1] On September 13, 2012, Starz, LLC and Starz Finance Corp. co-issued $500.0 million aggregate principal amount of senior notes, due September 15, 2019 (“2012 Notes”). On February 8, 2013, Starz, LLC and Starz Finance Corp. completed the issuance of an additional $175.0 million aggregate principal amount of 5.0% senior notes due 2019 (“2013 Notes” and together with the 2012 Notes, “Senior Notes”), which were issued as additional notes under the indenture governing the 2012 Notes. The net proceeds from the issuance of the 2012 Notes and cash on hand were used to repay and terminate the $500.0 million term loan under the 2011 Credit Agreement. The net proceeds from the issuance of the 2013 Notes were used to repay indebtedness under the 2011 Credit Agreement. The 2013 Notes were issued at a price of 102.0% plus accrued interest from September 13, 2012.The Senior Notes bear interest at a rate of 5.0% payable semi-annually on September 15 and March 15 of each year. Starz Finance Corp. is a wholly-owned subsidiary of Starz, LLC and was formed for the sole purpose of co-issuing the 2012 Notes. Starz Finance Corp. does not have and will not have any operations, assets or subsidiaries of its own. The Senior Notes are guaranteed by Starz Entertainment. The Senior Notes rank equally in right of payment to all existing and future senior obligations and existing and future subordinated obligations. The Senior Notes are effectively subordinated to any existing and future secured obligations and to all the liabilities of the subsidiaries that do not guarantee the Senior Notes.The Senior Notes contain certain covenants that include restrictions on, among others, incurring additional debt, paying dividends, entering into liens and guarantees, or making certain distributions, investments and other restricted payments. As of December 31, 2015, Starz, LLC was in compliance with all covenants under the Senior Notes.

[2] On January 11, 2013, Starz, LLC, and, for the limited purposes described therein, Starz Entertainment entered into a commercial lease with a subsidiary of Starz’s related party, Liberty Media, for its headquarters building. The term of the lease is ten-years, with an additional four successive five-year renewal periods at the option of Starz, LLC. Starz, LLC recorded a $44.8 million capital lease in connection with this lease agreement with an imputed annual interest rate of 6.4%.Starz Entertainment has entered into capital lease agreements for its transponder capacity. The transponder agreements expire during 2018 to 2021 and have imputed annual interest rates ranging from 5.5% to 7.0%.

[3] On April 20, 2015, Starz, LLC entered into a credit agreement (“2015 Credit Agreement”) that provides for $1,000.0 million in revolving loans with a $50.0 million sub-limit for stand-by letters of credit. Net proceeds from the 2015 Credit Agreement were used to repay and terminate the 2011 Credit Agreement (as defined below). Borrowings may be prepaid at any time and from time to time without penalty other than customary breakage costs. Any amounts prepaid may be reborrowed. The 2015 Credit Agreement is scheduled to mature on April 20, 2020. As of December 31, 2015, $692.0 million of borrowing capacity was available under the 2015 Credit Agreement.Interest on each loan under the 2015 Credit Agreement is payable at either an alternate base rate or LIBOR at Starz, LLC’s election. Borrowings that are alternate base rate loans bear interest at a per annum rate equal to the alternate base rate plus a margin that varies between 0.5% and 1.25% depending on the consolidated leverage ratio of Starz, LLC, as defined in the 2015 Credit Agreement. The alternate base rate is the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus ½ of 1% or (c) LIBOR for a one-month interest period plus 1%. Borrowings that are LIBOR loans bear interest at a per annum rate equal to the applicable LIBOR plus a margin that varies between 1.5% and 2.25% depending on the consolidated leverage ratio of Starz, LLC. The 2015 Credit Agreement requires Starz, LLC to pay a commitment fee on any unused portion. The commitment fee varies between 0.25% and 0.40%, depending on the consolidated leverage ratio of Starz, LLC. As of December 31, 2015, the following borrowings and related LIBOR or alternate base rate interest rates were outstanding (dollars in millions):LIBOR or alternate base rate period:Interest Rate Loan AmountDecember 2015 - January 20162.03700% $95.0December 2015 - January 20162.09450% 200.0December 2015 and forward4.25000% 13.0 $308.0The 2015 Credit Agreement contains certain covenants that include restrictions on, among others, incurring additional debt, paying dividends or making certain distributions, investments and other restricted payments, liens, guarantees and investments. In addition, Starz, LLC must comply with certain financial covenants including a consolidated leverage ratio, as defined in the 2015 Credit Agreement. As of December 31, 2015, Starz, LLC was in compliance with all covenants under the 2015 Credit Agreement.

[4] On November 16, 2011, Starz, LLC entered into a credit agreement (“2011 Credit Agreement”) that provided $1,000 million in revolving loans, a $50 million sub-limit for standby letters of credit and a $500.0 million term loan. On April 20, 2015, Starz LLC repaid and terminated the 2011 Credit Agreement using borrowings under the 2015 Credit Agreement. Interest on each loan under the 2011 Credit Agreement was payable at either an alternate base rate or LIBOR at Starz, LLC’s election. Borrowings that were alternate base rate loans bore interest at a per annum rate equal to the alternate base rate plus a margin that varied between 0.5% and 1.5% depending on the consolidated leverage ratio of Starz, LLC, as defined in the 2011 Credit Agreement. The alternate base rate was the highest of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus ½ of 1% or (c) LIBOR for a one-month interest period plus 1%. Borrowings that were LIBOR loans bore interest at a per annum rate equal to the applicable LIBOR plus a margin that varied between 1.5% and 2.5% depending on the consolidated leverage ratio of Starz, LLC. The 2011 Credit Agreement required Starz, LLC to pay a commitment fee on any unused portion of the revolving loans under the 2011 Credit Agreement. The commitment fee varied between 0.25% and 0.50%, depending on the consolidated leverage ratio of Starz, LLC.

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Debt - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Long-term Debt and Capital Leases, Fiscal Year Maturity [Roll Forward]
2016	$ 10.1
2017	10.1
2018	9.7
2019	682.4
2020	313.8
Thereafter	74.4
Total minimum payments	1,100.5
Total minimum payments	(50.8)
Debt	1,049.7
Unamortized Debt Issuance Expense	(11.9)	$ (9.9)
Less: debt issuance costs	(5.6)	(5.3)
Non current portion of Debt	$ 1,032.2	$ 1,164.3

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Accrued Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Royalties, residuals and participations	$ 82.4	$ 134.2
Program rights payable	67.8	89.0
Advertising and marketing	48.1	41.1
Payroll and related costs	29.2	27.5
Other	40.2	35.6
Total accrued liabilities	$ 267.7	$ 327.4
Percent of accrued royalties, participations and residuals expected to be paid during next twelve months	85.00%

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Related Party Transactions (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Oct. 31, 2015
Related Party Transaction [Line Items]
Cash paid for investment in films and television programs:		$ 349.1	$ 389.5	$ 302.5
Weinstein
Related Party Transaction [Line Items]
Related party transaction, period	5 years
Recognition of participation expense		100.8	91.5	163.2
Cash paid for investment in films and television programs:		$ 85.1	145.5	$ 143.9
Participations payable to Weinstein			$ 59.6
Weinstein
Related Party Transaction [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners					25.00%

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Stockholders' Equity (Details) - USD ($)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Feb. 24, 2016
Class of Stock [Line Items]
Common Stock, Capital Shares Reserved for Future Issuance	13,200,000
Stock Repurchased and Retired During Period, Shares	2,800,000	10,900,000	11,500,000
Repurchases of common stock	$ 104,100,000	$ 328,300,000	$ 289,900,000
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 78,200,000
Common Class A
Class of Stock [Line Items]
Common Stock, Shares Authorized	2,000,000,000	2,000,000,000
Common Class C
Class of Stock [Line Items]
Common Stock, Shares Authorized	2,000,000,000.0
Starz (Parent) [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Increase in amount authorized to repurchase stock				$ 400,000,000
Starz, LLC | Starz (Parent) [Member] | Subsequent Event [Member]
Class of Stock [Line Items]
Stock Repurchase Program, Authorized Amount				$ 1,200,000,000

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Stock Compensation - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend rate (as a percent)	0.00%	0.00%	0.00%
Weighted Average Remaining Contractual Term of outstanding options (in years)	5 years 1 month 6 days
Weighted average remaining contractual term of exercisable options (in years)	4 years 6 months
Aggregate intrinsic value of outstanding options	$ 191.7
Intrinsic value of exercisable options	146.4
Intrinsic value of options exercised	80.0	$ 55.8	$ 16.1
Restricted Stock Aggregate Intrinsic Value	$ 8.2	$ 12.4	$ 8.8
Outstanding stock options	13,187,542	16,431,666
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	4 years
Employee Stock Option | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award term (in years)	7 years
Employee Stock Option | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award term (in years)	10 years
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	443,710
Outstanding restricted stock	769,947	708,658
Restricted Stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	1 year
Restricted Stock | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	4 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	3 years
Granted	107,070
Restricted Stock Units (RSUs) | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award Vesting Rights, Percentage	50.00%
Vesting Rights, Adjusted OIBDA, Percentage	90.00%
Granted	53,535
Restricted Stock Units (RSUs) | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award Vesting Rights, Percentage	200.00%
Vesting Rights, Adjusted OIBDA, Percentage	120.00%
Granted	214,140
Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized	29,200,000
Non-Employee and Director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized	1,400,000
Incentive Plan, Stock Options and Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 57.8
Period for Recognition, Compensation Cost Not yet Recognized	2 years 6 months 7 days
Liberty Media | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding stock options	2,000,000
Liberty Media | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding restricted stock	100,000

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Stock Compensation Stock Compensation - Stock Compensation Expense (Details) - Incentive Plan, Stock Options and Restricted Stock - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock compensation expense	$ 32.9	$ 30.6	$ 34.3
Programming
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock compensation expense	2.6	2.4	1.6
Operating
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock compensation expense	0.3	0.3	0.2
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock compensation expense	$ 30.0	$ 27.9	$ 32.5

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Stock Compensation - The Historical Awards Granted (Details) - $ / shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted - Restricted Stock	443,710
Weighted Average Grant Date Fair Value - Restricted Stock	$ 33.57
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted - Restricted Stock	107,070
Awards 2015 [Member] | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted - Stock Options	731,263
Weighted Average Grant-Date Fair Value - Stock Options	$ 11.12
Awards 2015 [Member] | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted - Restricted Stock	443,710
Weighted Average Grant Date Fair Value - Restricted Stock	$ 33.57
Awards 2015 [Member] | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted - Restricted Stock	107,070
Weighted Average Grant Date Fair Value - Restricted Stock	$ 34.85
2014 Awards: | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted - Stock Options		1,424,612
Weighted Average Grant-Date Fair Value - Stock Options		$ 10.94
2014 Awards: | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted - Restricted Stock		148,106
Weighted Average Grant Date Fair Value - Restricted Stock		$ 32.94
2013 Awards: | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted - Stock Options			7,443,494
Weighted Average Grant-Date Fair Value - Stock Options			$ 7.84
2013 Awards: | Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options Granted - Restricted Stock			574,548
Weighted Average Grant Date Fair Value - Restricted Stock			$ 22.85

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Stock Compensation - Valuation Assumptions (Details)	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend rate (as a percent)	0.00%	0.00%	0.00%
Expected term (in years)	4 years 9 months	4 years 9 months
Expected volatility, minimum (as a percent)	36.00%	35.90%	35.90%
Expected volatility, maximum (as a percent)	36.20%	36.00%	41.40%
Risk-free rate of return. minimum (as a percent)	1.40%		0.70%
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate		1.50%
Risk-free rate of return, maximum (as a percent)	1.70%		1.40%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)			4 years 7 months 7 days
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)			6 years 10 months 25 days

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Stock Compensation - Number and Weighted-average Exercise Price (WAEP) of Stock Options to Purchase Starz Common Stock (Details)	12 Months Ended
	Dec. 31, 2015 $ / shares shares
Options (in shares)
Balance at beginning of period | shares	16,431,666
Granted | shares	731,263
Exercised | shares	(3,420,547)
Forfeited | shares	(554,840)
Expired/cancelled | shares	0
Balance at end of period | shares	13,187,542
Exercisable at end of period | shares	8,293,383
WAEP (in dollars per share)
Balance at beginning of period | $ / shares	$ 17.42
Granted | $ / shares	33.33
Exercised | $ / shares	13.97
Forfeited | $ / shares	22.99
Expired/cancelled | $ / shares	0.00
Balance at end of period | $ / shares	18.97
Exercisable at end of period | $ / shares	$ 15.85

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Stock Compensation - Number and Weighted-average Grant Date Fair Value of Restricted Stock Grants (Details) - Restricted Stock	12 Months Ended
	Dec. 31, 2015 $ / shares shares
Options (in shares)
Outstanding at beginning of period | shares	708,658
Granted | shares	443,710
Vested | shares	(361,814)
Forfeited | shares	(20,607)
Outstanding at end of period | shares	769,947
Weighted Average Grant-Date Fair Value (in dollars per share)
Balance at beginning of period | $ / shares	$ 21.01
Granted | $ / shares	33.57
Vested | $ / shares	22.72
Forfeited | $ / shares	33.85
Balance at end of period | $ / shares	$ 29.22

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Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Millions	2 Months Ended	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Oct. 31, 2015
Current:
Federal		$ 111.3	$ 110.6	$ 119.2
State and local		10.4	7.6	9.3
Foreign		2.4	3.3	2.5
Current income tax expense		124.1	121.5	131.0
Deferred:
Federal		(14.8)	14.9	0.5
State and local		2.2	4.4	7.9
Deferred income tax expense		(12.6)	19.3	8.4
Income tax expense		$ 111.5	$ 140.8	$ 139.4
Weinstein
Investments, Owned, Federal Income Tax Note [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners					25.00%
Starz Media [Member]
Investments, Owned, Federal Income Tax Note [Line Items]
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest	100.00%

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Income Taxes - Reconciliation of Income Tax Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Oct. 31, 2015
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract]
Federal income tax rate (as a percent)	35.00%	35.00%	35.00%
Computed expected tax expense	$ 121.8	$ 143.4	$ 136.2
State and local income taxes, net of federal income taxes	7.4	8.0	11.5
Deduction for qualified production activity	(9.5)	(10.4)	(12.6)
Uncertain tax positions	(8.4)	0.0	0.0
Settlements with tax authorities	6.6	0.0	0.0
Change in subsidiary tax status	(4.7)	0.0	0.8
Change in valuation allowance affecting tax expense	(0.8)	1.2	3.0
Foreign taxes, net of foreign tax credit	(0.2)	(0.7)	0.9
Other, net	(0.7)	(0.7)	(0.4)
Income tax expense	$ 111.5	$ 140.8	$ 139.4
Weinstein
Investments, Owned, Federal Income Tax Note [Line Items]
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners				25.00%

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Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Accrued stock compensation	$ 22.5	$ 16.8
Deferred Tax Assets, Goodwill and Intangible Assets	14.5	0.0
Allowance for doubtful accounts	13.2	0.0
Tax loss and credit carryforwards	4.6	7.1
Investments	0.7	32.3
Other future deductible amounts	5.6	1.1
Deferred tax assets	61.1	57.3
Valuation allowance	(1.8)	(2.6)
Deferred tax assets, net	59.3	54.7
Property and equipment	(13.9)	(15.0)
Investment in films and television programs	(24.2)	(32.6)
Program rights	0.0	(7.3)
Deferred tax liabilities	(38.1)	(54.9)
Deferred income taxes, net	$ 21.2
Deferred income taxes, net		$ (0.2)

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Income Taxes Uncertain tax positions (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized Tax Benefits	$ 0.0	$ 0.0
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions	13.6	0.0
Settlements and lapses	(13.6)	0.0
Unrecognized Tax Benefits	$ 0.0	$ 0.0

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Commitments and Contingencies - Programming Rights (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Unpaid balance for film rights related to films available at year end	$ 88.9
Contractual Obligation, Fiscal Year Maturity [Abstract]
Film rights payable in 2016	67.8
Film rights payable in 2017	10.5
Film rights payable in 2018	4.1
Film rights payable in 2019	6.0
Film rights payable in 2020	0.4
Film rights payable after 5 years	0.1
Programming license agreements payable in 2016	256.0
Programming license agreements payable in 2017	109.4
Programming license agreements payable in 2018	99.6
Programming license agreements payable in 2019	87.9
Programming license agreements payable in 2020	66.5
Programming license agreements payable after 5 years	111.2
Amortization of program rights	$ 607.2	$ 555.7	$ 581.1

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Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Operating Leases, Rent Expense, Net [Abstract]
Rental expense under operating lease arrangements	$ 6.4	$ 7.2	$ 7.1
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2016	3.9
2017	2.3
2018	2.2
2019	1.6
2020	0.7
Thereafter	0.1
Total future minimum payments under noncancelable operating leases, net of subleases	$ 10.8

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Commitments and Contingencies - Foreign Currency Hedge Contracts (Details) - Dec. 31, 2015 ZAR in Millions, NZD in Millions, $ in Millions	NZD	USD ($)	ZAR
Derivative [Line Items]
Derivative, Notional Amount		$ 11.2
South Africa, Rand
Derivative [Line Items]
Derivative, Notional Amount | ZAR			ZAR 142.4
United States of America, Dollars
Derivative [Line Items]
Derivative, Notional Amount		$ 16.6
New Zealand, Dollars
Derivative [Line Items]
Derivative, Notional Amount | NZD	NZD 25.2

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Commitments and Contingencies - Guarantees (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Guarantor Obligations [Line Items]
Other income (expense), net	$ (15.7)	$ 4.6	$ 9.0
Performance Guarantee
Guarantor Obligations [Line Items]
Other income (expense), net			$ 8.8

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Other Information Other Information - Supplemental disclosure of cash flow information (Details) - USD ($) $ in Millions		12 Months Ended
	Jan. 10, 2013	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
supplemental cash flow disclosure information [Line Items]
Cash paid for interest, net of amounts capitalized		$ 43.7	$ 44.0	$ 43.4
Cash paid for income taxes		124.7	107.9	184.4
Distributions to Parent Due to Spin Off Arrangement	$ 1,200.0	0.0	0.0	1,200.0
Tax attributes related to Spin-Off (Non-Cash)	11.5	0.0	0.0	11.5
Liberty Media
supplemental cash flow disclosure information [Line Items]
Capital lease with subsidiary of Old LMC		0.0	0.0
Building and Building Improvements [Member]
supplemental cash flow disclosure information [Line Items]
Distributions to Parent Due to Spin Off Arrangement	$ 45.7	$ 0.0	$ 0.0	45.7
Capital Lease Obligations [Member] | Liberty Media
supplemental cash flow disclosure information [Line Items]
Capital lease with subsidiary of Old LMC				$ 44.8

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Other Information - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions		12 Months Ended
		Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period		$ 41.9	$ 32.8	$ 35.0
Charged to costs and expenses	[1]	(0.4)	3.4	0.8
Charged to other accounts(1)	[1]	99.4	126.5	141.4
Deductions	[2]	(105.7)	(120.8)	(144.4)
Balance at end of period		35.2	41.9	32.8
Allowance for doubtful accounts
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period		1.1	1.1	0.3
Charged to costs and expenses	[1]	(0.4)	3.4	0.8
Charged to other accounts(1)	[1]	0.0	0.0	0.0
Deductions	[2]	(0.1)	(3.4)	0.0
Balance at end of period		0.6	1.1	1.1
Allowance for sales returns
Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period		40.8	31.7	34.7
Charged to costs and expenses	[1]	0.0	0.0	0.0
Charged to other accounts(1)	[1]	99.4	126.5	141.4
Deductions	[2]	(105.6)	(117.4)	(144.4)
Balance at end of period		$ 34.6	$ 40.8	$ 31.7

[1] Charges for doubtful accounts are included in selling, general and administrative expense and charges for sales returns are recorded against revenue. During the year ended December 31, 2015, an account receivable previously written off was collected and resulted in a credit balance for amounts charged to costs and expenses.

[2] Actual home video returns, uncollectible accounts written off and foreign currency exchange rate changes.

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Other Information Other Information- other current assets (Details) - USD ($) $ in Millions	Dec. 31, 2015	Dec. 31, 2014
Other Information [Abstract]
Income Taxes Receivable, Current	$ 44.1	$ 29.8
other, excluding income tax receivable	46.0	40.3
Other current assets (Note 12)	$ 90.1	$ 70.1

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Other Information - Net Income Attributable to Common Stockholders (Details) - shares	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Basic weighted average shares outstanding	101,200,000	105,500,000	115,900,000
Diluted weighted average shares outstanding	106,300,000	111,500,000	121,100,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	400,000	1,400,000	0
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Effect of dilution:	4,900,000	5,300,000	3,800,000
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Effect of dilution:	200,000	700,000	1,400,000

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Other Informations - Investment in Equity Affiliate (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Schedule of Equity Method Investments [Line Items]
Investment in and advances to equity investee	$ 6.3	$ 19.1	$ 0.0
Playco Holdings Limited [Member]
Schedule of Equity Method Investments [Line Items]
Investment in and advances to equity investee	$ 6.3	$ 19.1
Equity Method Investment, Ownership Percentage		40.00%

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Other Information - Goodwill (Details) $ in Millions	Dec. 31, 2015 USD ($)
Goodwill [Line Items]
Goodwill, Impaired, Accumulated Impairment Loss	$ 1,718.9
Starz Networks
Goodwill [Line Items]
Goodwill, Impaired, Accumulated Impairment Loss	1,396.7
Starz Distribution
Goodwill [Line Items]
Goodwill, Impaired, Accumulated Impairment Loss	$ 322.2

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Other Information - Advertising and Marketing (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Other Information [Abstract]
Advertising Expense	$ 116.1	$ 110.4	$ 113.5
Marketing Expense	$ 41.1	$ 33.9	$ 35.0

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Other Information - Concentration (Details) - networks_distributor	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Concentration Risk [Line Items]
Number of Networks' Distributors	2
Minimum
Concentration Risk [Line Items]
Theatrical Films, Period After Theatrical Release When Available for Exhibition	8 months
Maximum
Concentration Risk [Line Items]
Theatrical Films, Period After Theatrical Release When Available for Exhibition	13 months
Sales Revenue, Net | Customer Concentration Risk
Concentration Risk [Line Items]
Concentration Risk, Percentage	41.00%	36.00%	34.00%
Sales Revenue, Net | Geographic Concentration Risk
Concentration Risk [Line Items]
Concentration Risk, Percentage	5.00%	4.00%	5.00%
Assets, Total | Geographic Concentration Risk | Maximum
Concentration Risk [Line Items]
Concentration Risk, Percentage	1.00%	1.00%

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Information and Operating Segments - Reconciliation of Adjusted OIBDA (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Reconciliation from Segment Totals to Consolidated [Abstract]
Consolidated Adjusted OIBDA	$ 461.6	$ 501.7	$ 476.9
Stock compensation	(32.9)	(30.6)	(34.3)
Depreciation and amortization	(19.0)	(19.4)	(17.4)
Interest expense, net of amounts capitalized	(46.0)	(46.5)	(45.0)
Other income, net	(15.7)	4.6	9.0
Income before income taxes	$ 348.0	$ 409.8	$ 389.2

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Information and Operating Segments - Performance Measures and Other Information (Details) $ in Millions	1 Months Ended	3 Months Ended								10 Months Ended	12 Months Ended
	Oct. 31, 2015	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Oct. 31, 2015 Segment	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Segment Reporting Information [Line Items]
Number of Operating Segments | Segment										3
Revenue:		$ 427.6	$ 404.1	$ 417.7	$ 450.7	$ 425.6	$ 408.2	$ 410.1	$ 420.0		$ 1,700.1	$ 1,663.9	$ 1,777.5
Adjusted OIBDA:											461.6	501.7	476.9
Cash paid for investment in films and television programs:											349.1	389.5	302.5
Total assets:		1,564.2				1,562.4					1,564.2	1,562.4
Starz Networks
Segment Reporting Information [Line Items]
Revenue:											1,324.4	1,312.0	1,297.7
Adjusted OIBDA:											428.6	496.4	456.2
Cash paid for investment in films and television programs:											246.8	227.9	125.2
Total assets:		1,365.9				1,347.2					1,365.9	1,347.2
Starz Distribution
Segment Reporting Information [Line Items]
Revenue:											353.8	321.5	449.5
Adjusted OIBDA:											36.1	7.5	24.0
Cash paid for investment in films and television programs:											102.3	161.6	177.3
Total assets:		166.8				173.5					166.8	173.5
Starz Animation
Segment Reporting Information [Line Items]
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest										100.00%
Revenue:											24.6	31.7	32.5
Adjusted OIBDA:											(1.5)	(2.7)	(2.6)
Cash paid for investment in films and television programs:											0.0	0.0	0.0
Total assets:		0.0				2.4					0.0	2.4
Other unallocated assets (primarily cash, deferred taxes and other assets, including income tax receivables and the commercial lease for Starz’s corporate headquarters facility)
Segment Reporting Information [Line Items]
Total assets:		109.7				92.0					109.7	92.0
Inter-segment eliminations
Segment Reporting Information [Line Items]
Revenue:											(2.7)	(1.3)	(2.2)
Adjusted OIBDA:											(1.6)	0.5	(0.7)
Cash paid for investment in films and television programs:											0.0	0.0	$ 0.0
Total assets:		$ (78.2)				$ (52.7)					$ (78.2)	$ (52.7)
Film Roman
Segment Reporting Information [Line Items]
Subsidiary of Limited Liability Company or Limited Partnership, Ownership Interest	100.00%

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Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Quarterly Financial Information Disclosure [Abstract]
Revenue	$ 427.6	$ 404.1	$ 417.7	$ 450.7	$ 425.6	$ 408.2	$ 410.1	$ 420.0	$ 1,700.1	$ 1,663.9	$ 1,777.5
Operating income	54.9	101.8	110.5	142.5	136.1	97.3	104.8	113.5	409.7	451.7	425.2
Net income	27.9	59.5	63.0	86.1	77.4	55.8	69.0	66.8
Net income attributable to stockholders	$ 27.9	$ 60.2	$ 63.4	$ 84.6	$ 80.0	$ 56.3	$ 70.1	$ 64.9	$ 236.1	$ 271.3	$ 247.3
Basic net income per common share	$ 0.27	$ 0.59	$ 0.63	$ 0.84	$ 0.78	$ 0.54	$ 0.66	$ 0.60	$ 2.33	$ 2.57	$ 2.13
Diluted net income per common share	$ 0.26	$ 0.57	$ 0.59	$ 0.80	$ 0.74	$ 0.51	$ 0.62	$ 0.56	$ 2.22	$ 2.43	$ 2.04