What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2021-05-28 compared with 2020-05-27 · 17 added, 65 removed, 61 unchanged (57% of the section changed)

1 unchanged sentence

Market Information

Our common shares were previously listed on the NYSE under the symbols “LGF.” Effective December 9, 2016, each then existing Lionsgate common share was converted into 0.5 shares of a newly issued class of Class A voting shares and 0.5 shares of a newly issued class of Lionsgate Class B non-voting shares, no par value per share (the "Class B non-voting shares").

Our Class A voting shares are listed on the NYSE under the symbol “LGF.A”.

Our Class B non-voting shares are listed on the NYSE under the symbol “LGF.B”.

We have two (2) classes of common shares listed on the NYSE.

Our Class A voting shares, no par value per share (the "Class A non-voting shares"), are listed on the NYSE under the symbol “LGF.A” and our Class B non-voting shares, no par value per share (the "Class B non-voting shares”), are listed on the NYSE under the symbol “LGF.B”.

As of May 24, 2021, there were approximately 526 and 707 shareholders of record of our Class A voting shares and Class B non-voting shares, respectively.

23 unchanged sentences

Canadian withholding tax applies to dividends that are formally declared and paid by the Company and also to deemed dividends such as those that may be triggered by a cancellation of common shares if the cancellation occurs otherwise than as a result of a simple open market transaction.

For either deemed or actual dividends, withholding tax is levied at a basic rate of 25%, which may be reduced pursuant to the terms of an applicable tax treaty between Canada and the country of residence of the non-resident shareholder.

For either deemed or actual dividends, withholding tax is levied at a rate of 25%, which rate may be reduced pursuant to the terms of an applicable tax treaty between Canada and the country of residence of the non-resident shareholder.

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the “MLI”), of which Canada is a signatory, affects many of Canada’s bilateral tax treaties (excluding the Convention), including the ability to claim benefits thereunder.

Affected Non-Resident Holders should consult their own tax advisors in this regard.

Under the Convention, the rate of Canadian non-resident withholding tax on the gross amount of dividends received by a U.S.

4 unchanged sentences

Holder also needs to consider the potential application of Canadian income tax on capital gains.

Holder will generally not be subject to tax under the ITA in respect of any capital gain arising on a disposition of common shares (including, generally, on a purchase by the Company on the open market) unless at the time of disposition such shares constitute taxable Canadian property of the holder for purposes of the ITA and such U.S.

Holder will generally not be subject to tax under the ITA in respect of any capital gain arising on an actual or deemed disposition of common shares (including, generally, on a purchase by the Company on the open market) unless at the time of disposition such shares constitute taxable Canadian property of the holder for purposes of the ITA and such U.S.

Holder is not entitled to relief under the Convention.

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Holder does not deal at arm's length, or the U.S.

Holder together with such non-arm's length persons, owned 25% or more of the issued shares of any class or series of the capital stock of the Company and at any time during the immediately preceding 60-month period, the shares derived their value principally from one or any combination of (i) real or immovable property situated in Canada, (ii) Canadian resource properties, (iii) timber resource properties, and (iv) options in respect of, or interests in, such properties.

Holder together with such non-arm's length persons, owned 25% or more of the issued shares of any class or series of the capital stock of the Company and at such time, more than 50% of the fair market value of the shares was derived from one or any combination of (i) real or immovable property situated in Canada, (ii) Canadian resource properties, (iii) timber resource properties, and (iv) options in respect of, or interests in, such properties.

Assuming that the common shares have never derived their value principally from any of the items listed in (i)-(iv) above, capital gains derived by a U.S.

4 unchanged sentences

On December 17, 2013, our Board of Directors authorized the Company to increase its stock repurchase plan to $300 million and on February 2, 2016, our Board of Directors authorized the Company to further increase its stock repurchase plan to $468 million.

To date, including repurchases subsequent to March 31, 2020 of approximately $1.0 million, approximately $288.1 million (or 16,608,796) of our common shares have been purchased, leaving approximately $179.9 million of authorized potential purchases.

To date, approximately $288.1 million (or 16,608,796) of our common shares have been purchased, leaving approximately $179.9 million of authorized potential purchases.

The remaining $179.9 million of our common shares may be purchased from time to time at the Company’s discretion, including quantity, timing and price thereof, and will be subject to market conditions.

1 unchanged sentence

The share repurchase program has no expiration date.

The following table sets forth information with respect to our common shares purchased by us during the three months ended March 31, 2020:

ISSUER PURCHASES OF EQUITY SECURITIES

(a) Total Number of Shares Purchased

(b) Average Price Paid per Share

(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs

January 1, 2020 - January 31, 2020

February 1, 2020 - February 29, 2020

March 1, 2020 - March 31, 2020

No common shares were purchased by us during the three months ended March 31, 2021.

Additionally, during the three months ended March 31, 2021, no Class A voting shares and 64,261 Class B non-voting shares were withheld upon the vesting of restricted share units and share issuances to satisfy minimum statutory federal, state and local tax withholding obligations.

Unregistered Sales of Equity Securities

AT&T Media Holdings

On October 21, 2016, the Company, its indirect subsidiary Lions Gate Entertainment Inc.

(“LGEI”) and AT&T Media Holdings entered into a Securities Issuance and Payment Agreement (the “Securities Issuance Agreement”), pursuant to which the Company and LGEI agreed to issue to AT&T Media Holdings, Inc.

(“AT&T”) $50 million in, at LGEI’s election, (a) an equal number of the Company’s Class A voting shares and Class B non-voting shares, (b) cash or (c) a combination thereof, and paid in three $16.67 million annual installments, beginning on the first anniversary of December 8, 2016, the consummation of the Company’s acquisition of Starz.

The Company issued the Company's Class A voting shares and the Company's Class B non-voting shares to AT&T in 2017, 2018 and 2019.

The Company’s Class A voting shares and Class B non-voting shares were deemed to have a value equal to the 30-day volume weighted average price of the Company’s Class A voting shares and Class B non-voting shares on the New York Stock Exchange, respectively, as of the business day immediately prior to the applicable payment date.

On December 19, 2019, in connection with the Securities Issuance Agreement, the Company issued 929,023 of the Company's Class A voting shares and 980,392 of the Company's Class B non-voting shares to AT&T.

The Company’s Class A voting shares and Class B non-voting shares issued pursuant to the Securities Issuance Agreement were issued as a private placement to AT&T in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.

3 Arts Entertainment

On May 29, 2018, the Company and LGEI entered into a Membership Interest Purchase Agreement with 3 Arts Entertainment (“3 Arts”) and certain other sellers therewith (the “Purchase Agreement”) pursuant to which the Company purchased a 51% membership interest in 3 Arts.

The purchase price was approximately $166.6 million, of which 50% was paid in cash at closing, 32.5% was paid in the Company's Class B non-voting shares at closing, and 17.5% was paid in the Company's Class B non-voting shares on the one-year anniversary of closing, subject to certain conditions.

The number of shares issued was determined by dividing the dollar value of the portion of the purchase price to be paid by the daily weighted average closing price of the Company's Class B non-voting shares on the New York Stock Exchange for the twenty (20) consecutive trading days immediately preceding the closing date.

On June 17, 2019, in connection with the Purchase Agreement, the Company issued 1,334,332 of the Company's Class B non-voting shares to the sellers therewith as the balance of the purchase price.

The Company’s Class B non-voting shares issued pursuant to the Purchase Agreement were issued as a private placement to 3 Arts in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.

On April 2, 2021, the Company entered into an amendment to the Amended and Restated Limited Liability Company Operating Agreement of Pilgrim Media Group, LLC dated as of November 12, 2015 (the “Agreement”).

In consideration for certain amendments under the Agreement, the Company issued a warrant to purchase 459,217 Class B non-voting shares to Pilgrim Media Group Holdings, LLC and a warrant to purchase 40,783 Class B non-voting shares to Whirlwind Entertainment

The Company’s Class B non-voting shares issued pursuant to the Agreement were issued as a private placement in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.

Stock Performance Graph

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The comparisons shown in the graph below are based on historical data and we caution that the stock price performance shown in the graph below is not indicative of, and is not intended to forecast, the potential future performance of our common shares.

3/16 12/9/16 3/17 3/18 3/19 3/20 3/21

Lions Gate Entertainment Corporation-Class A (1)

$100.00 $122.10 $119.16 $72.70 $28.26 $69.49

Lions Gate Entertainment Corporation-Class B (1)

$100.00 $92.45 $91.66 $57.94 $21.41 $49.50

NYSE Composite $100.00 $115.53 $128.25 $134.18 $111.74 $173.26

1 unchanged sentence

________________

Immediately prior to the December 8, 2016 consummation of the Starz merger, we effected the reclassification of our capital stock, pursuant to which each existing Lionsgate common share was converted into 0.5 shares of a newly issued Class A voting shares and 0.5 shares of a newly issued Class B non-voting shares, subject to the terms and conditions of the merger agreement.

(1) Immediately prior to the December 8, 2016 consummation of the Starz merger, we effected the reclassification of our capital stock, pursuant to which each existing Lionsgate common share was converted into 0.5 shares of a newly

issued Class A voting shares and 0.5 shares of a newly issued Class B non-voting shares, subject to the terms and conditions of the merger agreement.

The graph and related information are being furnished solely to accompany this Form 10-K pursuant to Item 201(e) of Regulation S-K.

1 unchanged sentence

SELECTED FINANCIAL DATA.

The consolidated financial statements for all periods presented in this Form 10-K are prepared in conformity with U.S.

The Selected Consolidated Financial Data below includes the results of 3 Arts Entertainment from its acquisition date of May 29, 2018 onwards, Starz from its acquisition date of December 8, 2016 onwards, and Pilgrim Media Group from its acquisition date of November 12, 2015 onwards.

Due to the acquisitions of 3 Arts Entertainment, Starz, and Pilgrim Media Group, the Company’s results of operations for the years ended March 31, 2020, 2019, 2018, 2017, and 2016 and financial positions as at March 31, 2020, 2019, 2018, 2017, and 2016 are not directly comparable to prior reporting periods.

Year Ended March 31,

(Amounts in millions, except per share amounts)

Statement of Operations Data:

Operating income (loss)

Net income (loss)

Net income (loss) attributable to Lions Gate Entertainment Corp.

Per share information attributable to Lions Gate Entertainment Corp.

shareholders:

Basic net income (loss) per common share

Diluted net income (loss) per common share

Weighted average number of common shares outstanding:

Dividends declared per common share

Balance Sheet Data (at end of period):

Cash and cash equivalents

Investment in films and television programs and program rights

Total debt, net (6)

Production loans, net

Dissenting shareholders' liability (7)

Redeemable noncontrolling interests

Total Lions Gate Entertainment Corp.

shareholders' equity

_______________________

Results for fiscal 2020 included restructuring and other charges of $24.3 million , incremental direct operating and distribution and marketing expense incurred as a direct result of the COVID-19 global pandemic of $50.2 million , certain programming and content charges of $76.5 million in connection with the implementation of changes to the Company's programming and broadcasting strategy, and a charge of $21.4 million from the net increase in the valuation allowance for certain of the Company's deferred tax assets.

Results for fiscal 2019 included restructuring and other charges of $78.0 million , certain programming and content charges of $35.1 million in connection with the implementation of changes to the Company's programming and broadcasting strategy, shareholder litigation settlements of $114.1 million , and a charge of $53.7 million from the net increase in the valuation allowance for certain of the Company's deferred tax assets.

Results for fiscal 2018 included restructuring and other charges of $59.8 million , gain on investments of $171.8 million , and a net tax benefit of $259.1 million from the impact of the corporate tax rate change on net deferred tax liabilities and other discrete items.

Results for fiscal 2017 and fiscal 2016 included restructuring and other charges of $88.7 million and $19.8 million , respectively, and fiscal 2017 also included a gain on investments of $20.4 million.

Effective April 1, 2018, the Company adopted new guidance on revenue recognition on a modified-retrospective basis.

Accordingly, the selected financial data for periods prior to April 1, 2018 is not directly comparable.

See Note 13 to the Company's consolidated financial statements for further information.

Total debt includes corporate debt, convertible senior subordinated notes and finance lease obligations, net of unamortized discount and debt issuance costs, if applicable.

Dissenting shareholders' liability was classified as a current liability as of March 31, 2018, and as a non-current liability as of March 31, 2017.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity