6 unchanged sentences
COVID-19 Global Pandemic
−Removed: The impacts associated with the ongoing COVID-19 global pandemic and measures to prevent its spread, and the resulting economic uncertainty, continue to affect our business in a number of ways.
+Added: The impacts associated with the COVID-19 global pandemic and measures to prevent its spread, and the resulting economic uncertainty, continue to affect our business in a number of ways.
We have experienced delays in theatrical distribution of our films, both domestically and internationally, as well as delays in the production of film and television content (resulting in continued changes in future release dates for some titles and series).
−Removed: While we have begun (and have, in certain instances, completed) production on a number of films and television series, and theaters have begun to reopen in certain locations with reduced capacity, we are not able to accurately predict when theaters will re-open at scale, at what level consumers will return to movie theaters, when film production will fully resume, whether productions that have resumed will be paused again, the impact of incremental costs required to adhere to health and safety protocols, or if and when certain of our content will be released.
+Added: While we continue production of films and television series, and theaters have begun to reopen in certain locations with reduced capacity, we are not able to accurately predict when theaters will re-open at scale, at what level consumers will return to movie theaters (and in turn, whether box office numbers will return to pre-pandemic levels), whether productions that have resumed will be paused again, the impact of incremental costs required to adhere to health and safety protocols, or if and when certain of our content will be released.
The full extent of impacts related to the COVID-19 global pandemic on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict.
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"Risk Factors" herein.
−Removed: In connection with the disruptions associated with the COVID-19 global pandemic and measures to prevent its spread and mitigate its effects both domestically and internationally, and the related economic disruption, including the worldwide closure of most theaters, international travel restrictions and the pausing of motion picture and television productions, during the three months ended June 30, 2021 we have incurred $1.9 million in incremental costs which were expensed in the period.
−Removed: These costs include $1.6 million reflected in direct operating expense, which include incremental costs associated with the pausing and restarting of productions including certain cast and crew, idle facilities and equipment costs, net of insurance recoveries.
−Removed: In addition, these costs include $0.3 million in restructuring and other costs primarily due to incremental costs required to adhere to health and safety protocols and other incremental costs associated with the COVID-19 global pandemic during these periods.
−Removed: During the three months ended June 30, 2020, we incurred $10.9 million in incremental costs which were expensed in the period, including $5.7 million in direct operating expense, $4.7 million in distribution and marketing expense primarily consisting of contractual marketing spends for film releases and events that have been canceled or delayed and will provide no economic benefit, and $0.5 million in restructuring and other costs primarily due to transitioning the Company to a remote-work environment and other incremental costs associated with the COVID-19 global pandemic.
+Added: In connection with the disruptions associated with the COVID-19 global pandemic and measures to prevent its spread and mitigate its effects both domestically and internationally, and the related economic disruption, including the worldwide closure of most theaters, international travel restrictions and the pausing of motion picture and television productions, during the three and six months ended September 30, 2021 and 2020 we have incurred the following incremental costs which were expensed in the period:
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2021 2020 2021 2020
+Added: (Amounts in millions)
+Added: COVID-19 related charges (benefit) included in:
+Added: Direct operating expense (1)
+Added: $ (1.0) $ 22.3 $ 0.5 $ 28.1
+Added: Distribution and marketing expense (2)
+Added: 0.2 6.1 0.3 10.7
+Added: Restructuring and other (3)
+Added: 0.5 0.3 0.8 0.8
+Added: Total COVID-19 related charges (benefit) $ (0.3) $ 28.7 $ 1.6 $ 39.6
+Added: (1) Amounts reflected in direct operating expense include incremental costs associated with the pausing and restarting of productions including certain cast and crew, idle facilities and equipment costs, net of insurance recoveries, and in the three and six months ended September 30, 2020, these amounts also included film impairment due to changes in performance expectations.
+Added: In the three months ended September 30, 2021, insurance recoveries exceeded the incremental costs expensed in the period, resulting in a net benefit included in direct operating expense.
+Added: (2) Amounts reflected in distribution and marketing expense primarily consist of contractual marketing spends for film releases and events that have been canceled or delayed and will provide no economic benefit.
+Added: (3) Amounts reflected in restructuring and other for the three and six months ended September 30, 2021 represent primarily incremental costs required to adhere to health and safety protocols and other incremental costs associated with the COVID-19 global pandemic.
+Added: In the three and six months ended September 30, 2020, these costs were primarily related to transitioning the Company to a remote-work environment and other incremental costs associated with the COVID-19 global pandemic.
We expect to incur additional incremental costs in future periods.
4 unchanged sentences
The economic impact of the COVID-19 global pandemic and resulting societal changes will depend on numerous evolving factors that cannot be predicted with certainty.
−Removed: There are a number of ways in which these uncertainties resulting from the ongoing COVID-19 global pandemic have impacted our current results of operations and could continue to impact our future results of operations.
−Removed: These impacts include the incremental costs and losses discussed in the previous paragraph, lower revenues from the closure or limited reopenings of movie theaters and postponement of theatrical releases, partially offset by lower theatrical production and marketing costs;
+Added: There are a number of ways in which these uncertainties resulting from the COVID-19 global pandemic have impacted our current results of operations and could continue to impact our future results of operations.
+Added: These impacts include the incremental costs and losses discussed in the previous paragraph, lower revenues from the closure or reopenings of movie theaters and postponement of theatrical releases, partially offset by lower theatrical production and marketing costs, or lower box office revenues from pre-pandemic levels due to shifts in viewing;
increased expenses associated with new health and safety protocols on motion picture and television productions;
changes in the timing of revenues for motion pictures and television productions associated with delays in production and delivery or release;
−Removed: and while STARZ has experienced an increase in viewership of its content, future growth could be impacted by the timing of when productions will fully resume, and whether productions that have resumed will be paused again.
−Removed: We expect that the ultimate impact of these disruptions, including the extent of any adverse impact on our business, results of operations and financial condition, will depend on, among other things, the duration and spread of the pandemic, the impact
−Removed: of governmental regulations that have been, and may continue to be, imposed in response to the pandemic, the effectiveness of actions taken to contain or mitigate the outbreak (including the availability, effectiveness and/or public acceptance of any U.S.
+Added: and while STARZ experienced an increase in viewership in the prior year of its content, future growth could be impacted by whether productions that have resumed will be paused again, and future consumer viewing patterns as the pandemic eases.
+Added: We expect that the ultimate impact of these disruptions, including the extent of any adverse impact on our business, results of operations and financial condition, will depend on, among other things, the duration and spread of the pandemic, the impact of governmental regulations that have been, and may continue to be, imposed in response to the pandemic, the effectiveness of actions taken to contain or mitigate the outbreak (including the availability, effectiveness and/or public acceptance of any U.S.
Food and Drug Administration ("FDA")-approved COVID-19 vaccines), and global economic conditions related to the COVID-19 global pandemic.
7 unchanged sentences
None of the non-U.S.
−Removed: countries individually comprised greater than 10% of total revenues for the three months ended June 30, 2021 and 2020.
+Added: countries individually comprised greater than 10% of total revenues for the three and six months ended September 30, 2021 and 2020.
Motion Picture
13 unchanged sentences
International revenues are derived from (1) licensing of our productions, acquired films, our catalog product and libraries of acquired titles to international distributors, on a territory-by-territory basis;
−Removed: and (2) the direct distribution of our productions, acquired films, and our catalog product and libraries of acquired titles in the United Kingdom.
+Added: and (2) the direct
+Added: distribution of our productions, acquired films, and our catalog product and libraries of acquired titles in the United Kingdom.
Other revenues are derived from, among others, the licensing of our film and television and related content (games, music, location-based entertainment royalties, etc.) to other ancillary markets.
39 unchanged sentences
Accordingly, actual results could differ materially from our estimates.
−Removed: To the extent that there are material differences between these estimates and actual results,
−Removed: our financial condition or results of operations will be affected.
+Added: To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected.
We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.
40 unchanged sentences
For motion pictures intended for theatrical release, the discounted cash flow analysis used in the impairment evaluation prior to theatrical release is subjective as key inputs include estimates of future anticipated revenues, estimates of box office performance, which may differ from future actual results.
−Removed: These estimates are based in part on the historical performance of similar films, test audience results when available, information regarding competing film releases, and critic reviews.
+Added: These estimates are based in part on the historical performance of similar films, test audience results when
+Added: available, information regarding competing film releases, and critic reviews.
See further discussion of Valuation Assumptions below.
8 unchanged sentences
Our Motion Picture and Television Production segments generate revenue principally from the licensing of content in domestic theatrical exhibition, home entertainment (e.g., digital media and packaged media), television, and international market places.
−Removed: Our Media Networks segment generates revenue primarily from the distribution of our STARZ branded premium subscription video services and, through Mach 31, 2021, from our formerly majority owned premium Spanish language streaming services business, Pantaya, which includes subscriber based streaming revenue and other distribution revenue.
+Added: Our Media Networks segment generates revenue primarily from the distribution of our STARZ branded premium subscription video services and, through March 31, 2021, from our formerly majority owned premium Spanish language streaming services business, Pantaya, which includes subscriber based streaming revenue and other distribution revenue.
We sold our interest in Pantaya on March 31, 2021, see Note 2 to our unaudited condensed consolidated financial statements for further information.
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Revenue from the sale of physical discs (DVDs, Blu-ray or 4K Ultra HD), referred to as "Packaged Media", in the retail market, net of an allowance for estimated returns and other allowances, is recognized on the later of receipt by the customer or “street date” (when it is available for sale by the customer).
−Removed: We estimate reserves for Packaged Media returns based on previous returns experience, point-of-sale data available from certain retailers, current economic trends, and projected future sales of the title to the consumer based on the actual performance of similar titles on a title-by-title basis in each of the Packaged Media businesses.
+Added: We estimate reserves for Packaged Media returns based on previous returns experience, point-of-sale data available from certain retailers, current economic trends, and projected future sales of the
+Added: title to the consumer based on the actual performance of similar titles on a title-by-title basis in each of the Packaged Media businesses.
Factors affecting actual returns include, among other factors, limited retail shelf space at various times of the year, success of advertising or other sales promotions, and the near term release of competing titles.
4 unchanged sentences
If we overestimate the impact of future returns in a particular period, then we may record additional revenue in later periods when returns are less than estimated.
−Removed: An incremental change of 1% in our estimated sales returns rate (i.e., provisions for returns divided by gross sales of related product) for home entertainment products would have had an impact of approximately $0.5 million on our total revenue in the three months ended June 30, 2021 (2020 - $0.5 million).
+Added: An incremental change of 1% in our estimated sales returns rate (i.e., provisions for returns divided by gross sales of related product) for home entertainment products would have had an impact of approximately $0.4 million and $1.0 million, respectively, on our total revenue in the three and six months ended September 30, 2021 (2020 - $0.5 million and $1.0 million, respectively).
Revenue from commissions are recognized as such services are provided.
4 unchanged sentences
Goodwill and Indefinite-Lived Intangibles.
−Removed: At June 30, 2021, the carrying value of goodwill and indefinite-lived intangible assets was $2.8 billion and $250.0 million, respectively.
+Added: At September 30, 2021, the carrying value of goodwill and indefinite-lived intangible assets was $2.8 billion and $250.0 million, respectively.
Our indefinite-lived intangible assets consist of trade names primarily representing the estimated fair value of the Starz brand name determined in connection with the acquisition of Starz as of December 8, 2016.
Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (component level).
−Removed: Reporting units are determined by the discrete financial information available for the
−Removed: component and whether that information is regularly reviewed by segment management.
+Added: Reporting units are determined by the discrete financial information available for the component and whether that information is regularly reviewed by segment management.
Components are aggregated into a single reporting unit if they share similar economic characteristics.
−Removed: Our reporting units for purposes of goodwill impairment testing, along with their respective goodwill balances at June 30, 2021, were Motion Picture (goodwill of $394 million), Media Networks (goodwill of $1.97 billion), and our Television (goodwill of $309 million) and Talent Management (goodwill of $93 million) businesses, both of which are part of our Television Production segment.
+Added: Our reporting units for purposes of goodwill impairment testing, along with their respective goodwill balances at September 30, 2021, were Motion Picture (goodwill of $394 million), Media Networks (goodwill of $1.97 billion), and our Television (goodwill of $309 million) and Talent Management (goodwill of $93 million) businesses, both of which are part of our Television Production segment.
Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment each fiscal year or between the annual tests if an event occurs or circumstances change that indicates it is more-likely-than-not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying value.
14 unchanged sentences
Goodwill Impairment Assessment:
−Removed: For our annual goodwill impairment test for fiscal 2021, due to the increase in the market price of our common shares since our most recent quantitative impairment assessment at March 31, 2020, the performance of the Television and Media Networks reporting units in fiscal 2021, and the improvement of overall economic conditions associated with the COVID-19 pandemic, we performed a qualitative assessment for all reporting units.
+Added: For our annual goodwill impairment test for fiscal 2021, due to the increase in the market price of our common shares since our most recent quantitative impairment assessment at March 31, 2020, the performance of the Television and Media Networks reporting units in fiscal 2021, and the improvement of overall economic conditions associated with the COVID-19 pandemic as compared to fiscal 2020, we performed a qualitative assessment for all reporting units.
This assessment included consideration of, but not limited to, the results of our most recent quantitative impairment test, consideration of macroeconomic conditions, industry and market conditions, performance and current and projected cash flows of our reporting units, and changes in our share price.
Based upon our qualitative assessment, we concluded that it was more-likely-than-not that the fair value of our reporting units was greater than their carrying value.
−Removed: During the three months ended June 30, 2021, there were no events or circumstances that have changed that would have resulted in changes to the underlying key assumptions and judgments used in our goodwill impairment test, or that would indicate that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value.
+Added: During the three and six months ended September 30, 2021, there were no events or circumstances that would indicate that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value.
Management will continue to monitor all of its reporting units for changes in the business environment that could impact the recoverability in future periods.
7 unchanged sentences
our subscriber growth rates domestically and internationally across our traditional and OTT platforms and changes in consumer behavior.
−Removed: historical performance and current expectations have resulted in fair values of our reporting units in excess of carrying values, if our assumptions are not realized, it is possible that an impairment charge may need to be recorded in the future.
+Added: While historical performance and current expectations have resulted in fair values of our reporting units in excess of carrying values, if our assumptions are not realized, it is possible that an impairment charge may need to be recorded in the future.
Indefinite-Lived Intangibles Other Than Goodwill Impairment Assessment:
4 unchanged sentences
The Company also considered the macroeconomic impact including the uncertainty around the COVID-19 global pandemic, and the resulting uncertain long-term economic impact on discount rates and growth rates, as well as the impact from tax law changes inclusive of the reduction of the federal tax rate since the acquisition of Starz.
−Removed: During the three months ended June 30, 2021, there were no events or circumstances that have changed that would have resulted in changes to the underlying key assumptions and judgments used in our impairment assessment of our indefinite-lived trade names, or that would indicate that it is more-likely-than-not that the fair value of our indefinite-lived trade names is less than its carrying value.
+Added: During the three and six months ended September 30, 2021, there were no events or circumstances that would indicate that it is more-likely-than-not that the fair value of our indefinite-lived trade names is less than its carrying value.
Finite-Lived Intangible Assets.
−Removed: At June 30, 2021, the carrying value of our finite-lived intangible assets was approximately $1.29 billion.
+Added: At September 30, 2021, the carrying value of our finite-lived intangible assets was approximately $1.26 billion.
Our finite-lived intangible assets primarily relate to customer relationships associated with U.S.
9 unchanged sentences
Impairment would then be measured as the excess of the asset’s carrying value over its fair value.
−Removed: The Company monitors its finite-lived intangible assets and changes in the underlying circumstances each reporting period for indicators of possible impairments or a change in the useful life or method of amortization of our finite-lived intangible assets.
+Added: The Company monitors its finite-lived intangible assets and changes in the underlying circumstances each reporting period for indicators of possible impairments or a change in the useful life or method of amortization of our finite-lived intangible
During the fiscal year ended March 31, 2021, due to changes in the industry related to the migration from linear to OTT and direct-to-consumer consumption and the economic uncertainty from the COVID-19 global pandemic, we performed an impairment analysis of our amortizable intangible assets.
1 unchanged sentence
Based on our impairment analysis, the estimated undiscounted cash flows exceeded the carrying amount of the assets and therefore no impairment charge was required.
−Removed: During the three months ended June 30, 2021, there were no events or circumstances that have changed that would indicate that the carrying amount of our finite-lived intangible assets may not be recoverable.
+Added: During the three and six months ended September 30, 2021, there were no events or circumstances that have changed that would indicate that the carrying amount of our finite-lived intangible assets may not be recoverable.
Determining whether an intangible asset is recoverable or impaired requires various estimates and assumptions, including whether events or circumstances indicate that the carrying amount of the asset may not be recoverable, determining estimates of future cash flows for the assets involved and, when applicable, the assumptions applied in determining fair value, including discount rates, growth rates, market risk premiums and other assumptions about the economic environment.
2 unchanged sentences
We are subject to federal and state income taxes in the U.S., and in several foreign jurisdictions.
−Removed: We record deferred tax assets related to net operating loss carryforwards and certain temporary differences, net of applicable reserves in
−Removed: these jurisdictions.
+Added: We record deferred tax assets related to net operating loss carryforwards and certain temporary differences, net of applicable reserves in these jurisdictions.
We recognize a future tax benefit to the extent that realization of such benefit is more likely than not on a jurisdiction-by-jurisdiction basis;
13 unchanged sentences
RESULTS OF OPERATIONS
−Removed: Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020
+Added: Three Months Ended September 30, 2021 Compared to Three Months Ended September 30, 2020
Consolidated Results of Operations
−Removed: The following table sets forth our consolidated results of operations for the three months ended June 30, 2021 and 2020.
−Removed: The Media Networks segment results of operations for the three months ended June 30, 2020 included our formerly majority owned premium Spanish language streaming services business, Pantaya (representing substantially all of Other Streaming Services).
+Added: The following table sets forth our consolidated results of operations for the three months ended September 30, 2021 and 2020.
+Added: The Media Networks segment results of operations for the three months ended September 30, 2020 included our formerly majority owned premium Spanish language streaming services business, Pantaya (representing substantially all of Other
+Added: Streaming Services).
We sold our interest in Pantaya on March 31, 2021.
1 unchanged sentence
Three Months Ended
−Removed: June 30, Increase (Decrease)
+Added: September 30, Increase (Decrease)
2021 2020 Amount Percent
3 unchanged sentences
Media Networks 384.7 388.3 (3.6) (0.9) %
−Removed: Intersegment eliminations (158.4) (30.0) (128.4) nm
+Added: Intersegment eliminations (163.8) (98.1) (65.7) 67.0 %
Total revenues 887.8 745.0 142.8 19.2 %
7 unchanged sentences
Interest expense (44.0) (45.7) 1.7 (3.7) %
−Removed: Interest and other income 3.9 1.7 2.2 129.4 %
+Added: Interest and other income 24.1 0.1 24.0 nm
Other expense (2.7) (0.7) (2.0) 285.7 %
Loss on extinguishment of debt (0.4) — (0.4) n/a
−Removed: Gain (loss) on investments (0.1) 5.1 (5.2) nm
+Added: Gain (loss) on investments 1.5 (4.7) 6.2 (131.9) %
Equity interests income (loss) 0.4 (1.9) 2.3 (121.1) %
−Removed: Income (loss) before income taxes (45.2) 47.5 (92.7) (195.2) %
−Removed: Income tax provision (6.5) (1.3) (5.2) 400.0 %
−Removed: Net income (loss) (51.7) 46.2 (97.9) (211.9) %
+Added: Income (loss) before income taxes 8.7 (23.2) 31.9 nm
+Added: Income tax benefit (provision) (5.6) 1.5 (7.1) nm
+Added: Net income (loss) 3.1 (21.7) 24.8 nm
Net loss attributable to noncontrolling interest 4.4 3.3 1.1 33.3 %
Net income (loss) attributable to Lions Gate Entertainment Corp.
−Removed: shareholders $ (45.4) $ 51.1 $ (96.5) (188.8) %
+Added: shareholders $ 7.5 $ (18.4) $ 25.9 nm
_______________________
nm - Percentage not meaningful.
−Removed: Consolidated revenues increased in the three months ended June 30, 2021, due to an increase in Television Production revenue, and to a lesser extent, increases in Media Networks and Motion Picture revenues, partially offset by increased intersegment eliminations associated with higher Television Production revenues (a substantial portion of intersegment eliminations relates to Television Production revenue) for licenses of original series to Starz Networks and STARZPLAY International, both in the Media Networks segment.
−Removed: As theaters have begun to reopen in certain locations with reduced capacity, Motion Picture revenue increased in the current quarter due to higher theatrical and international revenue associated with a greater number of theatrical and international releases, offset partially by lower home entertainment and television revenue.
−Removed: Television Production revenue increased due to higher domestic television revenue with a greater number of television episodes delivered, and increased intersegment revenues from the licensing of Starz original series as compared to the prior year's quarter, which was negatively impacted by the pausing of productions associated with the COVID-19 global pandemic.
−Removed: The increase was also, to a lesser extent, due to higher international revenue and other revenue.
−Removed: These increases were partially offset by decreased home entertainment digital media revenue.
−Removed: Media Networks revenue increased due to increased revenue across STARZPLAY International and Starz Networks, partially offset by a decrease due to the prior year's quarter including revenue from Pantaya, which was sold on March 31, 2021 (reflecting substantially all of our former Other Streaming Services product line).
+Added: Consolidated revenues increased in the three months ended September 30, 2021 due to an increase in Television Production revenue and, to a lesser extent, Motion Picture revenues, partially offset by a slight decrease in Media Networks revenue and increased intersegment eliminations associated with higher Television Production revenues (a substantial portion of intersegment eliminations relates to Television Production revenue) for licenses of original series to Starz Networks and STARZPLAY International, both in the Media Networks segment.
+Added: Motion Picture revenue increased $73.3 million in the current quarter due to a greater number of theatrical and international releases as theaters have begun to reopen in certain locations with varying restrictions.
+Added: Television Production revenue increased $138.8 million due to increased intersegment revenues from the licensing of Starz original series, and a greater number of television episodes delivered to third-parties, as compared to the prior year's quarter which was negatively impacted by the pausing of productions associated with the COVID-19 global pandemic.
+Added: Media Networks revenue decreased $3.6 million due to a decrease of $13.3 million from the prior year's quarter which included revenue from Pantaya, which was sold on March 31, 2021 (reflecting substantially all of our former Other Streaming Services product line), and a slight decrease of $2.2 million at Starz Networks.
+Added: These decreases were mostly offset by increased revenue of $11.9 million at STARZPLAY International.
See further discussion in the Segment Results of Operations section below.
Direct Operating Expenses.
−Removed: Direct operating expenses by segment were as follows for the three months ended June 30, 2021 and 2020:
+Added: Direct operating expenses by segment were as follows for the three months ended September 30, 2021 and 2020:
Three Months Ended
+Added: September 30,
2021 2020 Increase (Decrease)
7 unchanged sentences
Other 0.6 nm 1.2 nm (0.6) (50.0) %
−Removed: Intersegment eliminations (167.0) nm (22.3) nm (144.7) nm
+Added: Intersegment eliminations (160.7) nm (95.4) nm (65.3) 68.4 %
$ 483.2 54.4 % $ 366.8 49.2 % $ 116.4 31.7 %
1 unchanged sentence
nm - Percentage not meaningful.
−Removed: Direct operating expenses increased in the three months ended June 30, 2021 primarily due to higher Television Production revenue, partially offset by slightly lower Media Networks and Motion Picture direct operating expense and lower COVID-19 related charges (as further described below).
+Added: Direct operating expenses increased in the three months ended September 30, 2021 due to higher Television Production and Motion Picture revenue, and higher Media Networks direct operating expense, partially offset by lower COVID-19 related charges (as further described below).
The increase in Television Production direct operating expense was partially offset by the increase in intersegment eliminations, which primarily relate to Television Production direct operating costs associated with licenses of original series to Starz Networks and STARZPLAY International, both in the Media Networks segment.
−Removed: Media Networks direct operating expense decreased due to a decrease at Starz Networks, partially offset by an increase at STARZPLAY International.
+Added: Media Networks direct operating expense increased due to increases at Starz Networks of $25.6 million and STARZPLAY International of $16.2 million.
See further discussion in the Segment Results of Operations section below.
COVID-19 Related Charges.
−Removed: In connection with the disruptions associated with the COVID-19 global pandemic and measures to prevent its spread and mitigate its effects both domestically and internationally, and the related economic disruption, during the three months ended June 30, 2021 and 2020, we incurred $1.6 million and $5.7 million, respectively, in incremental costs which were expensed in the periods which are included in consolidated direct operating expense and are excluded from segment direct operating expense.
−Removed: These costs include incremental costs associated with the pausing and restarting of productions including certain cast and crew, idle facilities and equipment costs resulting from circumstances associated with the COVID-19 global pandemic, net of insurance recoveries.
+Added: In connection with the disruptions associated with the COVID-19 global pandemic and measures to prevent its spread and mitigate its effects both domestically and internationally, and the related economic disruption, during the three months ended September 30, 2021 and 2020, we incurred certain incremental costs which were expensed in the periods which are included in consolidated direct operating expense and are excluded from segment direct operating expense.
+Added: In the three months ended September 30, 2021, the benefit included in direct operating expense of $(1.0) million represents insurance recoveries which were offset by incremental costs associated with the pausing and restarting of productions including certain cast and crew, idle facilities and equipment costs resulting from circumstances associated with the COVID-19 global pandemic.
+Added: In the three months ended September 30, 2020, the costs of $22.3 million include incremental costs associated with film impairment due to changes in performance expectations, the pausing and restarting of productions
+Added: including certain cast and crew, idle facilities and equipment costs resulting from circumstances associated with the COVID-19 global pandemic.
We expect to incur additional incremental costs in future periods.
−Removed: If the adverse economic impact and disruptions associated with the COVID-19 global pandemic continue to
−Removed: improve, we expect that the incremental costs we incur in fiscal 2022 will decrease as compared to fiscal 2021.
+Added: If the adverse economic impact and disruptions associated with the COVID-19 global pandemic continue to improve, we expect that the incremental costs we incur in fiscal 2022 will decrease as compared to fiscal 2021.
We are in the process of seeking additional insurance recovery for some of these costs.
2 unchanged sentences
Distribution and Marketing Expenses.
−Removed: Distribution and marketing expenses by segment were as follows for the three months ended June 30, 2021 and 2020:
+Added: Distribution and marketing expenses by segment were as follows for the three months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: June 30, Increase (Decrease)
+Added: September 30, Increase (Decrease)
2021 2020 Amount Percent
5 unchanged sentences
COVID-19 related charges 0.2 6.1 (5.9) (96.7) %
−Removed: Other 0.1 — 0.1 n/a
+Added: Other 0.2 0.1 0.1 100.0 %
$ 216.9 $ 166.7 $ 50.2 30.1 %
−Removed: theatrical P&A and Premium VOD expense included in Motion Picture distribution and marketing expense $ 57.9 $ — $ 57.9 n/a
−Removed: Distribution and marketing expenses increased in the three months ended June 30, 2021, due to an increase in Motion Picture theatrical P&A as theaters have begun to reopen in certain locations with reduced capacity, and increased Media Networks distribution and marketing expense, partially offset by lower COVID-19 related charges (as further described below).
−Removed: The increase in Media Networks distribution and marketing expense was due to an increase at Starz Networks, partially offset by a decrease due to the prior year's quarter including distribution and marketing expense from Pantaya, which was sold on March 31, 2021 (reflecting substantially all of our former Other Streaming Services product line).
+Added: theatrical P&A and Premium VOD expense included in Motion Picture distribution and marketing expense $ 21.5 $ 17.5 $ 4.0 22.9 %
+Added: Distribution and marketing expenses increased in the three months ended September 30, 2021, due to increased Media Networks and Motion Picture distribution and marketing expense.
+Added: The increase in Media Networks distribution and marketing expense was due to an increase at Starz Networks of $34.7 million, and to a lesser extent, an increase at STARZPLAY International of $17.6 million, partially offset by a decrease of $8.7 million due to the prior year's quarter including distribution and marketing expense from Pantaya, which was sold on March 31, 2021 (reflecting substantially all of our former Other Streaming Services product line).
+Added: The increase in Motion Picture distribution and marketing expense is due to increased home entertainment marketing cost and theatrical P&A expense as theaters have begun to reopen in certain locations with varying restrictions.
See further discussion in the Segment Results of Operations section below.
−Removed: In connection with the disruptions associated with the COVID-19 global pandemic and measures to prevent its spread and mitigate its effects both domestically and internationally, and the related economic disruption, during the three months ended June 30, 2021 and 2020, we incurred immaterial amounts and $4.7 million, respectively, in costs primarily related to contractual marketing spends for film releases and events that have been canceled or delayed and thus will provide no economic benefit.
+Added: In connection with the disruptions associated with the COVID-19 global pandemic and measures to prevent its spread and mitigate its effects both domestically and internationally, and the related economic disruption, during the three months ended September 30, 2021 and 2020, we incurred $0.2 million and $6.1 million, respectively, in costs primarily related to contractual marketing spends for film releases and events that have been canceled or delayed and thus will provide no economic benefit.
These charges are excluded from segment operating results.
2 unchanged sentences
General and Administrative Expenses.
−Removed: General and administrative expenses by segment were as follows for the three months ended June 30, 2021 and 2020:
+Added: General and administrative expenses by segment were as follows for the three months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: June 30, Increase (Decrease)
+Added: September 30, Increase (Decrease)
2021 % of Revenues 2020 % of Revenues Amount Percent
9 unchanged sentences
Total general and administrative expenses $ 110.0 12.4% $ 118.8 15.9% $ (8.8) (7.4) %
−Removed: General and administrative expenses increased in the three months ended June 30, 2021, resulting from increases in share-based compensation expense, purchase accounting and related adjustments, and a slight increase in Media Networks general and administrative expenses, partially offset by decreased Motion Picture, Corporate and Television Production general and administrative expenses.
+Added: General and administrative expenses decreased in the three months ended September 30, 2021, resulting from decreases in Corporate, Motion Picture and Television Production general and administrative expenses and decreases in share-based compensation expense and purchase accounting and related adjustments.
See further discussion in the Segment Results of Operations section below.
−Removed: Corporate general and administrative expenses decreased $2.1 million, or 8.0%, primarily due to a decrease in incentive based compensation.
−Removed: The increase in share-based compensation expense included in general and administrative expense in the three months ended June 30, 2021, as compared to the three months ended June 30, 2020 is primarily due to higher fair values associated with performance-based stock option and other equity awards that are revalued at each reporting period until the stock option or equity award vests and the applicable performance goals are achieved.
−Removed: Additionally, the increase in share-based compensation expense is due to an increase in the number of share-based payment awards incurring expense in the current quarter as compared to the prior year's quarter.
+Added: Corporate general and administrative expenses decreased $2.6 million, or 9.6%, primarily due to a decrease in incentive based compensation and professional fees.
+Added: The decrease in share-based compensation expense included in general and administrative expense in the three months ended September 30, 2021, as compared to the three months ended September 30, 2020 is primarily due to share-based compensation expense in the prior year's quarter associated with the Company's incentive based compensation program.
The following table reconciles this amount to total share-based compensation expense:
Three Months Ended
+Added: September 30,
(Amounts in millions)
1 unchanged sentence
General and administrative expense $ 19.7 $ 22.1
+Added: Restructuring and other (1)
Direct operating expense 0.5 0.5
1 unchanged sentence
Total share-based compensation expense $ 20.4 $ 25.6
+Added: _______________________
+Added: (1) Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of certain vesting schedules for equity awards pursuant to certain severance arrangements.
Purchase accounting and related adjustments represent the charge for the accretion of the noncontrolling interest discount related to Pilgrim Media Group and 3 Arts Entertainment, the amortization of the recoupable portion of the purchase price and the expense associated with earned distributions related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense.
−Removed: Purchase accounting and related adjustments increased $7.7 million, or 88.5%, primarily due to the expense associated with the earned distributions related to 3 Arts Entertainment.
+Added: Purchase accounting and related adjustments decreased $0.7 million, or 6.1%, primarily due to the expense associated with the amortization of the discount related to Pilgrim Media Group in the prior year's quarter.
Depreciation and Amortization Expense.
−Removed: Depreciation and amortization of $43.3 million for the three months ended June 30, 2021 decreased $4.3 million, from $47.6 million in the three months ended June 30, 2020.
+Added: Depreciation and amortization of $44.4 million in the three months ended September 30, 2021 decreased $5.2 million, from $49.6 million in the three months ended September 30, 2020 due to lower amortization expense related to our customer relationship intangible assets.
Restructuring and Other.
−Removed: Restructuring and other increased $0.2 million in the three months ended June 30, 2021 as compared to the three months ended June 30, 2020, and includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable.
−Removed: Restructuring and other costs were as follows for the three months ended June 30, 2021 and 2020 (see Note 13 to our unaudited condensed consolidated financial statements):
+Added: Restructuring and other decreased $9.9 million in the three months ended September 30, 2021 as compared to the three months ended September 30, 2020, and includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable.
+Added: Restructuring and other costs were as follows for the three months ended September 30, 2021 and 2020 (see Note 13 to our unaudited condensed consolidated financial statements):
Three Months Ended
−Removed: June 30, Increase (Decrease)
+Added: September 30, Increase (Decrease)
2021 2020 Amount Percent
2 unchanged sentences
Severance (1)
−Removed: $ 2.4 $ 2.2 $ 0.2 9.1 %
+Added: Cash $ 1.3 $ 8.5 $ (7.2) (84.7) %
+Added: Accelerated vesting on equity awards (see Note 11 to our unaudited condensed consolidated financial statements) — 2.8 (2.8) (100.0) %
+Added: Total severance costs 1.3 11.3 (10.0) (88.5) %
COVID-19 related charges (2)
4 unchanged sentences
_______________________
−Removed: (1) Severance costs in the three months ended June 30, 2021 and 2020 were primarily related to restructuring activities in connection with cost-saving initiatives and recent acquisitions.
−Removed: (2) During the three months ended June 30, 2021, the Company has incurred certain costs primarily related to incremental costs required to adhere to health and safety protocols and other incremental costs associated with the COVID-19 global pandemic.
−Removed: In the three months ended June 30 2020, these costs were primarily related to transitioning the Company to a remote-work environment and other incremental costs associated with the COVID-19 global pandemic.
−Removed: (3) Transaction and related costs in the three months ended June 30, 2021 and 2020 reflect transaction, integration and legal costs associated with certain strategic transactions, restructuring activities and legal matters.
+Added: (1) Severance costs in the three months ended September 30, 2021 and 2020 were primarily related to restructuring activities in connection with cost-saving initiatives and recent acquisitions.
+Added: (2) During the three months ended September 30, 2021, the Company has incurred certain costs primarily related to incremental costs required to adhere to health and safety protocols and other incremental costs associated with the COVID-19 global pandemic.
+Added: In the three months ended September 30, 2020, these costs were primarily related to transitioning the Company to a remote-work environment and other incremental costs associated with the COVID-19 global pandemic.
+Added: (3) Transaction and related costs in the three months ended September 30, 2021 and 2020 reflect transaction, integration and legal costs associated with certain strategic transactions, restructuring activities and legal matters.
Interest Expense.
−Removed: Interest expense of $41.7 million in the three months ended June 30, 2021 decreased $2.7 million from the three months ended June 30, 2020, due to lower interest expense on the term loans, Senior Notes and other cash-based interest related to payments associated with the Company's interest rate swaps.
−Removed: These decreases were partially offset by an increase in amortization of debt financing costs, and other non-cash interest due to the amortization of unrealized losses in accumulated other comprehensive loss related to de-designated interest rate swaps which are being amortized to interest expense (see Note 16 to our unaudited condensed consolidated financial statements).
−Removed: The following table sets forth the components of interest expense for the three months ended June 30, 2021 and 2020:
+Added: Interest expense of $44.0 million for the three months ended September 30, 2021 decreased $1.7 million, from $45.7 million in the three months ended September 30, 2020, due to lower interest expense on the term loans and Senior Notes.
+Added: The following table sets forth the components of interest expense for the three months ended September 30, 2021 and 2020:
Three Months Ended
+Added: September 30,
(Amounts in millions)
8 unchanged sentences
(2) Amounts include the amortization of unrealized losses in accumulated other comprehensive loss related to de-designated interest rate swaps which are being amortized to interest expense (see Note 16 to our unaudited condensed consolidated financial statements).
+Added: Interest and Other Income.
+Added: Interest and other income of $24.1 million for the three months ended September 30, 2021 compared to interest and other income of $0.1 million for the three months ended September 30, 2020, due to insurance recoveries on prior shareholder litigation of $20.2 million and other gains in the current quarter (see Note 15 to our unaudited condensed consolidated financial statements).
Other Expense.
−Removed: Other expense of $1.7 million for the three months ended June 30, 2021 compared to other expense of $1.7 million for the three months ended June 30, 2020, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 17 to our unaudited condensed consolidated financial statements).
+Added: Other expense of $2.7 million for the three months ended September 30, 2021 compared to other expense of $0.7 million for the three months ended September 30, 2020, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 17 to our unaudited condensed consolidated financial statements).
Loss on Extinguishment of Debt.
−Removed: Loss on extinguishment of debt for the three months ended June 30, 2021 related to the write-off of a portion of debt issuance costs (including a portion of call premiums) associated with the redemption of the 5.875% Senior Notes and 6.375% Senior Notes and associated issuance of the 5.500% Senior Notes, the amendment of our
−Removed: credit agreement to extend the maturity of a portion of our revolving credit commitments and a portion of our outstanding term A loans, and repurchases of the Term Loan B.
−Removed: There was no comparable loss in the three months ended June 30, 2020.
+Added: Loss on extinguishment of debt for the three months ended September 30, 2021 of $0.4 million related to the write-off of debt issuance costs.
+Added: There was no comparable loss in the three months ended September 30, 2020.
See Note 5 to our unaudited condensed consolidated financial statements.
Gain (Loss) on Investments.
−Removed: Loss on investments of $0.1 million for the three months ended June 30, 2021 compared to a gain on investments of $5.1 million for the three months ended June 30, 2020, primarily due to a gain on sale of equity securities without readily determinable fair values in the prior year's quarter.
+Added: Gain on investments of $1.5 million for the three months ended September 30, 2021 represented other investment gains of $1.7 million, partially offset by $0.2 million of unrealized losses on equity securities.
+Added: This compared to a loss on investments of $4.7 million for the three months ended September 30, 2020, which represented $5.0 million of impairments of equity securities without readily determinable fair values that were written down to their estimated fair value, partially offset by $0.3 million of unrealized gains on equity securities.
Equity Interests Income (Loss).
−Removed: Equity interests income of $0.7 million in the three months ended June 30, 2021 compared to equity interests loss of $2.6 million in the three months ended June 30, 2020 due to lower losses from our equity method investees in the current quarter.
−Removed: Income Tax Provision.
−Removed: We had an income tax provision of $6.5 million in the three months ended June 30, 2021, compared to an income tax provision of $1.3 million in the three months ended June 30, 2020.
−Removed: Our income tax provision differs from the federal statutory rate multiplied by pre-tax income (loss) due to the mix of our pre-tax income (loss) generated across the various jurisdictions in which we operate, changes in the valuation allowance against our deferred tax assets, and certain minimum taxes and foreign withholding taxes.
−Removed: Our income tax provision for the three months ended June 30, 2021 was also impacted by the additional accrual of interest and penalties on uncertain tax benefits.
−Removed: Our income tax provision for the three months ended June 30, 2020 was also impacted by the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
+Added: Equity interests income of $0.4 million in the three months ended September 30, 2021 compared to equity interests loss of $1.9 million in the three months ended September 30, 2020 due to lower losses from our equity method investees in the current quarter.
+Added: Income Tax Benefit (Provision).
+Added: We had an income tax provision of $5.6 million in the three months ended September 30, 2021, compared to an income tax benefit of $1.5 million in the three months ended September 30, 2020.
+Added: Our income tax benefit (provision) differs from the federal statutory rate multiplied by pre-tax income (loss) due to the mix of our pre-tax income (loss) generated across the various jurisdictions in which we operate, changes in the valuation allowance against our deferred tax assets, and certain minimum taxes and foreign withholding taxes.
+Added: Our income tax provision for the three months ended September 30, 2021 and 2020 was also impacted by interest accrual on uncertain tax benefits, and release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
+Added: Our income tax benefit for the three months ended September 30, 2020 was also impacted by the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
Net Income (Loss) Attributable to Lions Gate Entertainment Corp.
Shareholders.
−Removed: Net loss attributable to our shareholders for the three months ended June 30, 2021 was $45.4 million, or basic and diluted net loss per common share of $0.20 on 221.8 million weighted average common shares outstanding.
−Removed: This compares to net income attributable to our shareholders for the three months ended June 30, 2020 of $51.1 million, or basic net income per common share of $0.23 on 219.5 million weighted average common shares outstanding and diluted net income per common share of $0.23 on 219.9 million weighted average common shares outstanding.
+Added: Net income attributable to our shareholders for the three months ended September 30, 2021 was $7.5 million, or basic net income per common share of $0.03 on 224.4 million weighted average common shares outstanding and diluted net income per common share of $0.03 on 228.5 weighted average common shares outstanding.
+Added: This compares to net loss attributable to our shareholders for the three months
+Added: ended September 30, 2020 of $18.4 million, or basic and diluted net loss per common share of $0.08 on 220.4 million weighted average common shares outstanding.
Segment Results of Operations
6 unchanged sentences
Motion Picture
−Removed: The table below sets forth Motion Picture gross contribution and segment profit for the three months ended June 30, 2021 and 2020:
+Added: The table below sets forth Motion Picture gross contribution and segment profit for the three months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: June 30, Increase (Decrease)
+Added: September 30, Increase (Decrease)
2021 2020 Amount Percent
3 unchanged sentences
Direct operating expense 153.0 108.6 44.4 40.9 %
−Removed: Distribution & marketing expense 95.4 23.1 72.3 nm
+Added: Distribution & marketing expense 53.4 41.2 12.2 29.6 %
Gross contribution 124.5 107.8 16.7 15.5 %
1 unchanged sentence
Segment profit $ 101.8 $ 83.0 $ 18.8 22.7 %
−Removed: theatrical P&A and Premium VOD expense included in distribution and marketing expense $ 57.9 $ — $ 57.9 n/a
+Added: theatrical P&A and Premium VOD expense included in distribution and marketing expense $ 21.5 $ 17.5 $ 4.0 22.9 %
Direct operating expense as a percentage of revenue 46.2 % 42.2 %
Gross contribution as a percentage of revenue 37.6 % 41.8 %
−Removed: _______________________
−Removed: nm - Percentage not meaningful.
−Removed: The table below sets forth Motion Picture revenue by media and product category for the three months ended June 30, 2021 and 2020:
−Removed: Three Months Ended June 30,
+Added: The table below sets forth Motion Picture revenue by media and product category for the three months ended September 30, 2021 and 2020:
+Added: Three Months Ended September 30,
2021 2020 Total Increase (Decrease)
19 unchanged sentences
Includes direct-to-DVD motion pictures, acquired and licensed brands, third-party library product and ancillary-driven platform theatrical releases through our specialty films distribution labels including Lionsgate Premiere, through Good Universe, and with our equity method investees, Roadside Attractions and Pantelion Films, and other titles.
−Removed: Theatrical revenue increased $28.1 million in the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 due to revenue in the quarter from The Hitman's Wife's Bodyguard and Spiral, as theaters have begun to reopen in certain locations with reduced capacity.
−Removed: In the prior year's quarter, theaters were mostly closed due to circumstances associated with the COVID-19 global pandemic.
−Removed: Home entertainment revenue decreased $21.0 million, or 12.6%, in the three months ended June 30, 2021, as compared to the three months ended June 30, 2020, due to lower digital media and packaged media revenues as a result of fewer home entertainment releases from our fiscal 2021 theatrical slate in our Feature Film category due to circumstances associated with the COVID-19 global pandemic.
−Removed: Digital media revenue in the prior year's quarter included significant revenue from our fiscal 2020 theatrical slate ( I Still Believe and Knives Out).
−Removed: Television revenue decreased $7.7 million, or 13.2%, in the three months ended June 30, 2021, as compared to the three months ended June 30, 2020 due to fewer television windows opening (and revenue recognized) than in the prior year's quarter.
−Removed: International revenue increased $10.3 million, or 19.6%, in the three months ended June 30, 2021, as compared to the three months ended June 30, 2020 due to higher revenue from our fiscal 2021 and 2022 theatrical slates in the current quarter as theaters have begun to reopen in certain locations with reduced capacity, while the prior year's quarter had no new theatrical releases due to circumstances associated with the COVID-19 global pandemic.
+Added: Theatrical revenue increased $16.0 million in the three months ended September 30, 2021 as compared to the three months ended September 30, 2020 due to an increase of $9.2 million from our Other Film category , and an increase of $6.8 million from our Feature Film category (The Hitman's Wife's Bodyguard and The Protégé), as theaters have begun to reopen in certain locations with varying restrictions.
+Added: In the prior year's quarter, theaters were closed due to circumstances associated with the COVID-19 global pandemic.
+Added: Home entertainment revenue increased $11.0 million, or 7.3%, in the three months ended September 30, 2021, as compared to the three months ended September 30, 2020, due to higher digital media revenues of $13.7 million driven by our Feature Film category, partially offset by slightly lower packaged media revenues of $2.7 million.
+Added: Digital media revenues in our Feature Film category in the current quarter included revenue from The Hitman's Wife's Bodyguard , as compared to revenue from the premium video-on-demand ("Premium VOD") release of Antebellum in the prior year's quarter.
+Added: Television revenue increased $31.8 million, or 53.8%, in the three months ended September 30, 2021, as compared to the three months ended September 30, 2020, driven by an increase in our Feature Film category of $26.9 million due to a greater number of television windows opening (and revenue recognized) than in the prior year's quarter.
+Added: International revenue increased $13.8 million, or 30.3%, in the three months ended September 30, 2021, as compared to the three months ended September 30, 2020 driven by an increase in our Feature Film category of $16.7 million due to higher revenue from our fiscal 2021 and 2022 theatrical slates in the current quarter as theaters have begun to reopen in certain locations with varying restrictions.
+Added: The prior year's quarter had no new theatrical releases due to circumstances associated with the COVID-19 global pandemic.
If the adverse economic impact and disruptions associated with the COVID-19 global pandemic continue to improve, we currently expect that Motion Picture segment revenues will increase in fiscal 2022 as compared to fiscal 2021.
3 unchanged sentences
Direct Operating Expense.
−Removed: The decrease in direct operating expenses is due to lower direct operating expenses as a percentage of motion picture revenue, driven by the change in the mix of titles and product categories generating revenue in the current quarter as compared to the prior year's quarter.
−Removed: In particular, the decrease was impacted by the lower amortization rate of the fiscal 2022 and prior theatrical slate titles generating revenue in the current quarter as compared to the prior year's quarter.
−Removed: There were no investment in film write-downs included in Motion Picture segment direct operating expense in the three months ended June 30, 2021, as compared to $0.6 million in the three months ended June 30, 2020.
+Added: The increase in direct operating expenses is due to higher Motion Picture revenue, and to a lesser extent, due to higher direct operating expenses as a percentage of motion picture revenue.
+Added: The slight increase in direct operating expenses as a percentage of motion picture revenue was driven by the change in the mix of titles and product categories generating revenue in the current quarter as compared to the prior year's quarter.
+Added: In particular, the increase was impacted by the higher amortization rate of the fiscal 2022 and 2021 theatrical slate titles generating revenue in the current quarter, as compared to the prior year's quarter, which was impacted by the lower amortization rate of the fiscal 2019 and prior theatrical slate titles generating revenue in the prior year's quarter.
+Added: Investment in film write-downs included in Motion Picture segment direct operating expense for the quarter were $0.1 million in the three months ended September 30, 2021, as compared to $0.3 million in the three months ended September 30, 2020.
Distribution and Marketing Expense.
−Removed: The increase in distribution and marketing expense in the three months ended June 30, 2021 is due to higher theatrical P&A and premium video-on-demand ("Premium VOD") expense compared to the prior year's quarter, which had no theatrical P&A expense in the Motion Picture segment due to the closure of theaters as a result of circumstances associated with the COVID-19 global pandemic.
−Removed: Theatrical P&A and Premium VOD expense in the three months ended June 30, 2021 includes expense associated with the release of The Hitman's Wife's Bodyguard, Spiral and Voyagers.
−Removed: In the three months ended June 30, 2021, approximately $2.7 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, with no comparable expense in the Motion Picture segment in the prior year's quarter.
+Added: The increase in distribution and marketing expense in the three months ended September 30, 2021 is due to increased home entertainment distribution and marketing expense and theatrical P&A and Premium VOD expense compared to the prior year's quarter, which was impacted by the closure of theaters as a result of circumstances associated with the COVID-19 global pandemic .
+Added: In the three months ended September 30, 2021, approximately $4.2 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $1.7 million in the prior year's quarter in the Motion Picture segment.
Gross Contribution.
−Removed: Gross contribution of the Motion Picture segment for the three months ended June 30, 2021 decreased as compared to the three months ended June 30, 2020 due to higher Motion Picture distribution and marketing expense as a percentage of Motion Picture revenue.
+Added: Gross contribution of the Motion Picture segment for the three months ended September 30, 2021 increased as compared to the three months ended September 30, 2020, due to increased revenue which was partially offset by slightly increased direct operating expense as a percentage of Motion Picture revenue.
General and Administrative Expense.
−Removed: General and administrative expenses of the Motion Picture segment in the three months ended June 30, 2021 decreased $4.4 million, or 15.3%, primarily due to decreases in incentive based compensation and salaries and related compensation.
+Added: General and administrative expenses of the Motion Picture segment decreased $2.1 million, or 8.5%, primarily due to decreases in salaries and related compensation and incentive based compensation.
Television Production
−Removed: The table below sets forth Television Production gross contribution and segment profit for the three months ended June 30, 2021 and 2020:
+Added: The table below sets forth Television Production gross contribution and segment profit for the three months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: June 30, Increase (Decrease)
+Added: September 30, Increase (Decrease)
2021 2020 Amount Percent
9 unchanged sentences
Gross contribution as a percentage of revenue 11.3 % 10.8 %
−Removed: The table below sets forth Television Production revenue and changes in revenue by media for the three months ended June 30, 2021 and 2020:
+Added: ________________________
+Added: nm - Percentage not meaningful.
+Added: The table below sets forth Television Production revenue and changes in revenue by media for the three months ended September 30, 2021 and 2020:
Three Months Ended
−Removed: June 30, Increase (Decrease)
+Added: September 30, Increase (Decrease)
2021 2020 Amount Percent
−Removed: Television Production (Amounts in millions)
+Added: (Amounts in millions)
+Added: Television Production Revenue
Television $ 228.2 $ 116.7 $ 111.5 95.5 %
6 unchanged sentences
$ 336.0 $ 197.2 $ 138.8 70.4 %
+Added: ________________________
+Added: nm - Percentage not meaningful.
The primary component of Television Production revenue is domestic television revenue.
−Removed: Domestic television revenue increased in the three months ended June 30, 2021, as compared to the three months ended June 30, 2020, due to a greater number of television episodes delivered, increased intersegment revenues from the licensing of Starz original series (Power Book III:
−Removed: Raising Kanan, Blindspotting Season 1, Heels Season 1 among others), and increased revenue from reality television series, all of which were negatively impacted in the prior year's quarter by disruptions associated with the COVID-19 global pandemic and the associated pausing of productions.
−Removed: International revenue in the three months ended June 30, 2021 increased $21.1 million, or 45.5% as compared to the three months ended June 30, 2020 due to revenue in the current quarter from Dear White People Season 4 and higher intersegment revenues from STARZPLAY International from the licensing of Starz original series.
−Removed: Home entertainment revenue in the three months ended June 30, 2021 decreased $19.8 million due to significant digital media revenue in the prior year's quarter for Mad Men Seasons 1 - 7.
−Removed: Other revenue increased in the three months ended June 30, 2021 as compared to the three months ended June 30, 2020.
−Removed: The increase is primarily due to revenue of 3 Arts Entertainment, which was negatively impacted in the three months ended June 30, 2020 as a result of the COVID-19 global pandemic related disruptions.
−Removed: While television production has mostly resumed, the extent of the future impact on other revenue of the COVID-19 global pandemic is uncertain and will depend on film and television productions and releases fully returning to and remaining at pre COVID-19 levels.
+Added: Domestic television revenue increased in the three months ended September 30, 2021 as compared to the three months ended September 30, 2020, due to an increase of $68.4 million from intersegment revenues driven by the licensing of Starz original series (Power Book III:
+Added: Raising Kanan, Hightown Season 2, Heels Season 1, BMF Season 1 among others), and an increase of $43.3 million from a greater number of television episodes delivered to third-parties, both of which were negatively impacted in the prior year's quarter by disruptions associated with the COVID-19 global pandemic and the associated pausing of productions.
+Added: International revenue in the three months ended September 30, 2021 increased $9.1 million, or 19.0%, due to revenue in the current quarter from Acapulco Season 1.
+Added: Home entertainment revenue in the three months ended September 30, 2021 increased $17.2 million due to digital media revenue in the current quarter for Weeds Seasons 1 - 8.
If the adverse economic impact and disruptions associated with the COVID-19 global pandemic continue to improve, we currently expect that Television Production segment revenues will increase in fiscal 2022 as compared to fiscal 2021.
2 unchanged sentences
Direct Operating Expense.
−Removed: Direct operating expense of the Television Production segment in the three months ended June 30, 2021 increased $222.0 million, or 155.0% due to the increase in Television Production revenues.
−Removed: Direct operating expenses as a percentage of television production revenue increased primarily due to the mix of titles generating revenue in the current quarter as compared to the prior year's quarter, and in particular, due to the recent ramp up of production, the current quarter included a greater number of deliveries of newer shows in which direct operating expense is typically higher as a percentage of revenue.
−Removed: Due to the increase in cost associated with production and changes in season orders, the current quarter also included increased write-downs to fair value of investment in film and television programs amounting to $25.0 million in aggregate.
−Removed: This compared to lower direct operating expenses as a percentage of television revenue in the prior year's quarter, which included fewer deliveries of newer shows primarily associated with the pausing of productions due to the COVID-19
−Removed: global pandemic related disruptions.
+Added: Direct operating expense of the Television Production segment in the three months ended September 30, 2021 increased $121.8 million, or 72.2% due to the increase in Television Production revenues.
+Added: Direct operating expenses as a percentage of television production revenue remained relatively consistent in the current quarter as compared to the prior year's quarter.
Gross Contribution.
−Removed: Gross contribution of the Television Production segment for the three months ended June 30, 2021 decreased as compared to the three months ended June 30, 2020, due to higher direct operating expenses as a percentage of television production revenue, partially offset by higher television production revenue.
+Added: Gross contribution of the Television Production segment for the three months ended September 30, 2021 increased as compared to the three months ended September 30, 2020, due to increased television production revenue.
General and Administrative Expense.
−Removed: General and administrative expenses of the Television Production segment decreased $0.7 million, or 6.5%.
+Added: General and administrative expenses of the Television Production segment decreased $1.8 million, or 15.9%, primarily due to a decrease in incentive based compensation.
Media Networks
−Removed: The table below sets forth Media Networks gross contribution and segment profit for the three months ended June 30, 2021 and 2020.
−Removed: The Media Networks segment results of operations for the three months ended June 30, 2020 included our formerly majority owned premium Spanish language streaming services business, Pantaya (representing substantially all of our former Other Streaming Services product line).
+Added: The table below sets forth Media Networks gross contribution and segment profit for the three months ended September 30, 2021 and 2020.
+Added: The Media Networks segment results of operations for the three months ended September 30, 2020 included our formerly majority owned premium Spanish language streaming services business, Pantaya (representing substantially all of our former Other Streaming Services product line).
We sold our interest in Pantaya on March 31, 2021.
1 unchanged sentence
Three Months Ended
−Removed: June 30, Increase (Decrease)
+Added: September 30, Increase (Decrease)
2021 2020 Amount Percent
11 unchanged sentences
Three Months Ended Three Months Ended
−Removed: June 30, 2021 June 30, 2020
+Added: September 30, 2021 September 30, 2020
Starz Networks STARZPLAY International Total Media Networks Starz Networks STARZPLAY International Other Streaming Services Total Media Networks
11 unchanged sentences
The table below sets forth, for the periods presented, subscriptions to our Media Networks and STARZPLAY Arabia services.
−Removed: June 30, June 30,
+Added: September 30, September 30,
(Amounts in millions)
18 unchanged sentences
(1) Represents subscribers of STARZPLAY Arabia, a non-consolidated equity method investee.
−Removed: (2) Due to the March 31, 2021 sale of Pantaya, total domestic and international subscribers, OTT subscribers and total global subscribers amounts have been adjusted from amounts previously reported for June 30, 2020 to exclude Pantaya in order to be consistent with the presentation at June 30, 2021.
−Removed: Subscribers of Pantaya (all OTT) at June 30, 2020 amounted to 0.8 million.
+Added: (2) Due to the March 31, 2021 sale of Pantaya, total domestic and international subscribers, OTT subscribers and total global subscribers amounts have been adjusted from amounts previously reported for September 30, 2020 to exclude Pantaya in order to be consistent with the presentation at September 30, 2021.
+Added: Subscribers of Pantaya (all OTT) at September 30, 2020 amounted to 0.8 million.
(3) OTT subscribers includes subscribers of STARZPLAY Arabia, as presented above.
−Removed: The increase in Media Networks' revenue was due to higher STARZPLAY International revenue of $14.1 million, and increased Starz Networks' revenue of $12.4 million, partially offset by a decrease due to the prior year's quarter including revenue from Pantaya (representing substantially all of Other Streaming Services), which was sold on March 31, 2021.
−Removed: STARZPLAY International revenue increased as a result of subscriber and revenue growth in the international territories previously launched, and additional territories launched since June 30, 2020.
−Removed: Starz Networks' revenue increased as a result of higher OTT revenue resulting from increased subscriptions, which was partially offset by declines in revenue from traditional linear services.
−Removed: As a result of events related to the COVID-19 global pandemic, television and streaming consumption around the globe increased, as well as home entertainment demand.
−Removed: STARZ experienced an increase in viewership in the prior year of its content across all platforms as well as an increase in subscribers to its OTT services, both domestically and internationally.
−Removed: This increase in subscribers is dependent upon future economic conditions, our ability to deliver original content and may vary due to changes in consumer viewing and subscription patterns.
−Removed: However, it is too early to say whether this increase is indicative of future results and whether the slowing of growth will continue as governmental and other restrictions are relaxed, and as a result of the current and possible longer term negative economic impact of the pandemic.
−Removed: During the three months ended June 30, 2021 and 2020, the following original series premiered on STARZ:
−Removed: Three Months Ended June 30, 2021 Three Months Ended June 30, 2020
+Added: The slight decrease in Media Networks' revenue of $3.6 million was due to a decrease of $13.3 million due to the prior year's quarter including revenue from Pantaya (representing substantially all of Other Streaming Services), which was sold on March 31, 2021, and lower Starz Networks revenue of $2.2 million primarily due to declines in revenue from traditional linear services of $28.8 million, which were partially offset by higher OTT revenue resulting from increased subscriptions of $26.2 million.
+Added: These decreases were partially offset by higher STARZPLAY International revenue of $11.9 million, as a result of subscriber and revenue growth in the international territories previously launched, and additional territories launched since September 30, 2020.
+Added: During the three months ended September 30, 2021 and 2020, the following original series premiered on STARZ:
+Added: Three Months Ended September 30, 2021 Three Months Ended September 30, 2020
+Added: Power Book III:
+Added: Raising Kanan Season 1
+Added: P-Valley Season 1
+Added: Heels Season 1
+Added: Power Book II:
+Added: Ghost Season 1
+Added: BMF - Black Mafia Family Season 1
+Added: Direct Operating and Distribution and Marketing Expenses .
+Added: Direct operating and distribution and marketing expenses primarily represent programming cost amortization and advertising and marketing costs, respectively.
+Added: The level of programming cost amortization and advertising and marketing costs and thus the gross contribution margin for the Media Networks' segment can fluctuate from period to period depending on the number of new original series and first-run output theatrical movies premiering on the network during the period.
+Added: Programming cost amortization and advertising and marketing costs generally increase in periods where new original series premiere.
+Added: In addition, the launch of the STARZPLAY international service has and will continue to result in an increase in expenses as the service continues to expand.
+Added: The increase in Media Networks direct operating expenses is due to an increase of $25.6 million at Starz Networks, and an increase of $16.2 million at STARZPLAY International in the three months ended September 30, 2021.
+Added: These increases were partially offset by a decrease of $2.4 million due to the prior year's quarter including direct operating expense from Pantaya (representing substantially all of our former Other Streaming Services product line), which was sold on March 31, 2021.
+Added: The increase in Starz Networks direct operating expense was primarily due to higher programming cost amortization related to our Starz Originals of $55.3 million due to a higher number of, and more expensive, series premieres, partially offset by lower programming amortization of $28.6 million related to fewer theatrical releases under our programming output agreement with Sony, and lower programming cost amortization of $3.3 million related to our library content.
+Added: Direct operating expenses at STARZPLAY International increased as a result of the continued expansion of STARZPLAY International.
+Added: The increase in Media Networks distribution and marketing expense is due to an increase of $34.7 million at Starz Networks due to increased advertising and marketing due to increased spend to drive growth in our subscribers and increased spend on our Starz Originals, and an increase of $17.6 million at STARZPLAY International due to increased advertising and marketing to drive growth in subscribers.
+Added: These increases were partially offset by a decrease of $8.7 million due to the prior year's quarter including distribution and marketing expense from Pantaya (representing substantially all of our former Other Streaming Services product line), which was sold on March 31, 2021.
+Added: Gross Contribution.
+Added: The decrease in gross contribution of the Media Networks segment compared to the prior year's quarter was due to decreases at Starz Networks of $62.5 million and STARZPLAY International of $21.9 million driven by higher advertising and marketing expense and direct operating expense as described above.
+Added: General and Administrative Expense.
+Added: General and administrative expenses of the Media Networks segment in the three months ended September 30, 2021 increased slightly from the prior year's quarter, driven by increases at STARZPLAY International of $1.5 million and Starz Networks of $0.6 million, offset by a decrease of $1.3 million due to the prior year's quarter including general and administrative expense from Pantaya (representing substantially all of our former Other Streaming Services product line), which was sold on March 31, 2021.
+Added: Six Months Ended September 30, 2021 Compared to Six Months Ended September 30, 2020
+Added: Consolidated Results of Operations
+Added: The following table sets forth our consolidated results of operations for the six months ended September 30, 2021 and 2020.
+Added: The Media Networks segment results of operations for the six months ended September 30, 2020 included our formerly majority owned premium Spanish language streaming services business, Pantaya (representing substantially all of Other Streaming Services).
+Added: We sold our interest in Pantaya on March 31, 2021.
+Added: See Note 2 to our unaudited condensed consolidated financial statements for further information.
+Added: Six Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2021 2020 Amount Percent
+Added: (Amounts in millions)
+Added: Motion Picture $ 622.1 $ 538.3 $ 83.8 15.6 %
+Added: Television Production 722.1 392.9 329.2 83.8 %
+Added: Media Networks 767.0 755.5 11.5 1.5 %
+Added: Intersegment eliminations (322.2) (128.0) (194.2) 151.7 %
+Added: Total revenues 1,789.0 1,558.7 230.3 14.8 %
+Added: Direct operating 969.3 789.8 179.5 22.7 %
+Added: Distribution and marketing 434.5 308.5 126.0 40.8 %
+Added: General and administration 240.6 227.8 12.8 5.6 %
+Added: Depreciation and amortization 87.8 97.1 (9.3) (9.6) %
+Added: Restructuring and other 6.7 16.4 (9.7) (59.1) %
+Added: Total expenses 1,738.9 1,439.6 299.3 20.8 %
+Added: Operating income 50.1 119.1 (69.0) (57.9) %
+Added: Interest expense (85.7) (90.2) 4.5 (5.0) %
+Added: Interest and other income 28.0 1.8 26.2 nm
+Added: Other expense (4.3) (2.3) (2.0) 87.0 %
+Added: Loss on extinguishment of debt (27.1) — (27.1) n/a
+Added: Gain on investments 1.5 0.4 1.1 275.0 %
+Added: Equity interests income (loss) 1.1 (4.5) 5.6 (124.4) %
+Added: Income (loss) before income taxes (36.4) 24.3 (60.7) (249.8) %
+Added: Income tax benefit (provision) (12.1) 0.2 (12.3) nm
+Added: Net income (loss) (48.5) 24.5 (73.0) (298.0) %
+Added: Net loss attributable to noncontrolling interest 10.6 8.2 2.4 29.3 %
+Added: Net income (loss) attributable to Lions Gate Entertainment Corp.
+Added: shareholders $ (37.9) $ 32.7 $ (70.6) (215.9) %
+Added: _______________________
+Added: nm - Percentage not meaningful.
+Added: Consolidated revenues increased in the six months ended September 30, 2021, due to an increase in Television Production revenue, and to a lesser extent, increases in Motion Picture and Media Networks revenues, partially offset by increased intersegment eliminations associated with higher Television Production revenues (a substantial portion of intersegment eliminations relates to Television Production revenue) for licenses of original series to Starz Networks and STARZPLAY International, both in the Media Networks segment.
+Added: Motion Picture revenue increased $83.8 million in the current period due to a greater number of theatrical and international releases as theaters have begun to reopen in certain locations with varying restrictions.
+Added: Television Production revenue increased $329.2 million due to increased intersegment revenues from the licensing of Starz original series, and a greater number of television episodes delivered to third-parties as compared to the prior year's period, which was negatively impacted by the pausing of productions associated with the COVID-19 global pandemic.
+Added: Media Networks revenue increased $11.5 million due to increased revenue across STARZPLAY International of $26.1 million and Starz Networks of $10.2 million, partially offset by a decrease of $24.8 million due to the prior year's period including revenue from Pantaya, which was sold on March 31, 2021 (reflecting substantially all of our former Other Streaming Services product line).
+Added: See further discussion in the Segment Results of Operations section below.
+Added: Direct Operating Expenses.
+Added: Direct operating expenses by segment were as follows for the six months ended September 30, 2021 and 2020:
+Added: Six Months Ended
+Added: September 30,
+Added: 2021 2020 Increase (Decrease)
+Added: Amount % of Segment Revenues Amount % of Segment Revenues Amount Percent
+Added: (Amounts in millions)
+Added: Direct operating expenses
+Added: Motion Picture $ 280.1 45.0 % $ 236.4 43.9 % $ 43.7 18.5 %
+Added: Television Production 655.6 90.8 311.7 79.3 343.9 110.3 %
+Added: Media Networks 359.8 46.9 329.4 43.6 30.4 9.2 %
+Added: COVID-19 related charges 0.5 nm 28.0 nm (27.5) (98.2) %
+Added: Other 1.0 nm 1.9 nm (0.9) (47.4) %
+Added: Intersegment eliminations (327.7) nm (117.6) nm (210.1) 178.7 %
+Added: $ 969.3 54.2 % $ 789.8 50.7 % $ 179.5 22.7 %
+Added: _______________________
+Added: nm - Percentage not meaningful.
+Added: Direct operating expenses increased in the six months ended September 30, 2021 due to higher Television Production and Motion Picture revenue, and higher Media Networks direct operating expense, partially offset by lower COVID-19 related charges (as further described below).
+Added: The increase in Television Production direct operating expense was partially offset by the increase in intersegment eliminations, which primarily relate to Television Production direct operating costs associated with licenses of original series to Starz Networks and STARZPLAY International, both in the Media Networks segment.
+Added: The increase in Media Networks direct operating expense was driven by an increase at STARZPLAY International of $31.4 million.
+Added: See further discussion in the Segment Results of Operations section below.
+Added: COVID-19 Related Charges.
+Added: In connection with the disruptions associated with the COVID-19 global pandemic and measures to prevent its spread and mitigate its effects both domestically and internationally, and the related economic disruption, during the six months ended September 30, 2021 and 2020, we incurred certain incremental costs which were expensed in the periods which are included in consolidated direct operating expense and are excluded from segment direct operating expense.
+Added: In the six months ended September 30, 2021, the charges of $0.5 million represent incremental costs associated with the pausing and restarting of productions including certain cast and crew, idle facilities and equipment costs resulting from circumstances associated with the COVID-19 global pandemic, which were mostly offset by insurance recoveries.
+Added: In the six months ended September 30, 2020, the charges of $28.0 million include incremental costs associated with film impairment due to changes in performance expectations, the pausing and restarting of productions including certain cast and crew, idle facilities and equipment costs resulting from circumstances associated with the COVID-19 global pandemic.
+Added: expect to incur additional incremental costs in future periods.
+Added: If the adverse economic impact and disruptions associated with the COVID-19 global pandemic continue to improve, we expect that the incremental costs we incur in fiscal 2022 will decrease as compared to fiscal 2021.
+Added: We are in the process of seeking additional insurance recovery for some of these costs.
+Added: The ultimate amount of insurance recovery cannot be estimated at this time.
+Added: Other direct operating expenses in the table above includes the amortization of the non-cash fair value adjustments on film and television assets associated with the application of purchase accounting related to recent acquisitions.
+Added: Distribution and Marketing Expenses.
+Added: Distribution and marketing expenses by segment were as follows for the six months ended September 30, 2021 and 2020:
+Added: Six Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2021 2020 Amount Percent
+Added: (Amounts in millions)
+Added: Distribution and marketing expenses
+Added: Motion Picture $ 148.8 $ 64.3 $ 84.5 131.4 %
+Added: Television Production 15.5 14.3 1.2 8.4 %
+Added: Media Networks 269.6 218.9 50.7 23.2 %
+Added: COVID-19 related charges 0.3 10.7 (10.4) (97.2) %
+Added: Other 0.3 0.3 — — %
+Added: $ 434.5 $ 308.5 $ 126.0 40.8 %
+Added: theatrical P&A and Premium VOD expense included in Motion Picture distribution and marketing expense $ 79.3 $ 17.5 $ 61.8 353.1 %
+Added: Distribution and marketing expenses increased in the six months ended September 30, 2021, due to increased Motion Picture and Media Networks distribution and marketing expense.
+Added: The increase in Motion Picture distribution and marketing expense is due to increased theatrical P&A as theaters have begun to reopen in certain locations with varying restrictions.
+Added: The increase in Media Networks distribution and marketing expense was due to an increase at Starz Networks of $52.9 million, and to a lesser extent, an increase at STARZPLAY International of $16.6 million, partially offset by a decrease of $18.8 million due to the prior year's period including distribution and marketing expense from Pantaya, which was sold on March 31, 2021 (reflecting substantially all of our former Other Streaming Services product line).
+Added: See further discussion in the Segment Results of Operations section below.
+Added: In connection with the disruptions associated with the COVID-19 global pandemic and measures to prevent its spread and mitigate its effects both domestically and internationally, and the related economic disruption, during the six months ended September 30, 2021 and 2020, we incurred $0.3 million and $10.7 million, respectively, in costs primarily related to contractual marketing spends for film releases and events that have been canceled or delayed and thus will provide no economic benefit.
+Added: These charges are excluded from segment operating results.
+Added: We expect to incur additional incremental costs in future periods.
+Added: If the adverse economic impact and disruptions associated with the COVID-19 global pandemic continue to improve, we expect that the incremental costs we incur in fiscal 2022 will decrease as compared to fiscal 2021.
+Added: General and Administrative Expenses.
+Added: General and administrative expenses by segment were as follows for the six months ended September 30, 2021 and 2020:
+Added: Six Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2021 % of Revenues 2020 % of Revenues Amount Percent
+Added: (Amounts in millions)
+Added: General and administrative expenses
+Added: Motion Picture $ 47.1 $ 53.6 $ (6.5) (12.1) %
+Added: Television Production 19.5 22.0 (2.5) (11.4) %
+Added: Media Networks 43.9 42.5 1.4 3.3 %
+Added: Corporate 48.8 53.5 (4.7) (8.8) %
+Added: 159.3 8.9% 171.6 11.0% (12.3) (7.2) %
+Added: Share-based compensation expense 54.1 36.0 18.1 50.3 %
+Added: Purchase accounting and related adjustments 27.2 20.2 7.0 34.7 %
+Added: Total general and administrative expenses $ 240.6 13.4% $ 227.8 14.6% $ 12.8 5.6 %
+Added: General and administrative expenses increased in the six months ended September 30, 2021, resulting from increases in share-based compensation expense, purchase accounting and related adjustments, and a slight increase in Media Networks general and administrative expenses, partially offset by decreased Motion Picture, Corporate and Television Production general and administrative expenses.
+Added: See further discussion in the Segment Results of Operations section below.
+Added: Corporate general and administrative expenses decreased $4.7 million, or 8.8%, primarily due to decreases in incentive based compensation and professional fees.
+Added: The increase in share-based compensation expense included in general and administrative expense in the six months ended September 30, 2021, as compared to the six months ended September 30, 2020 is primarily due to higher fair values associated with performance-based stock option and other equity awards that are revalued at each reporting period until the stock option or equity award vests and the applicable performance goals are achieved.
+Added: Additionally, the increase in share-based compensation expense is due to an increase in the number of share-based payment awards incurring expense in the current period as compared to the prior year's period.
+Added: The following table reconciles this amount to total share-based compensation expense:
+Added: Six Months Ended
+Added: September 30,
+Added: (Amounts in millions)
+Added: Share-based compensation expense by expense category
+Added: General and administrative expense $ 54.1 $ 36.0
+Added: Restructuring and other (1)
+Added: Direct operating expense 0.5 0.9
+Added: Distribution and marketing expense 0.3 0.3
+Added: Total share-based compensation expense $ 54.9 $ 40.0
+Added: _______________________
+Added: (1) Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of certain vesting schedules for equity awards pursuant to certain severance arrangements.
+Added: Purchase accounting and related adjustments represent the charge for the accretion of the noncontrolling interest discount related to Pilgrim Media Group and 3 Arts Entertainment, the amortization of the recoupable portion of the purchase price and the expense associated with earned distributions related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense.
+Added: Purchase accounting and related adjustments increased $7.0 million, or 34.7%, primarily due to the expense associated with the earned distributions related to 3 Arts Entertainment.
+Added: Depreciation and Amortization Expense.
+Added: Depreciation and amortization of $87.8 million for the six months ended September 30, 2021 decreased $9.3 million, from $97.1 million in the six months ended September 30, 2020 due to lower amortization expense related to our customer relationship intangible assets.
+Added: Restructuring and Other.
+Added: Restructuring and other decreased $9.7 million in the six months ended September 30, 2021 as compared to the six months ended September 30, 2020, and includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable.
+Added: Restructuring and other costs were as follows for the six months ended September 30, 2021 and 2020 (see Note 13 to our unaudited condensed consolidated financial statements):
+Added: Six Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2021 2020 Amount Percent
+Added: (Amounts in millions)
+Added: Restructuring and other:
+Added: Severance (1)
+Added: Cash $ 3.8 $ 10.6 $ (6.8) (64.2) %
+Added: Accelerated vesting on equity awards (see Note 11 to our unaudited condensed consolidated financial statements) — 2.8 (2.8) (100.0) %
+Added: Total severance costs 3.8 13.4 (9.6) (71.6) %
+Added: COVID-19 related charges (2)
+Added: 0.8 0.8 — — %
+Added: Transaction and related costs (3)
+Added: 2.1 2.2 (0.1) (4.5) %
+Added: $ 6.7 $ 16.4 $ (9.7) (59.1) %
+Added: _______________________
+Added: (1) Severance costs in the six months ended September 30, 2021 and 2020 were primarily related to restructuring activities in connection with cost-saving initiatives and recent acquisitions.
+Added: (2) During the six months ended September 30, 2021, the Company has incurred certain costs primarily related to incremental costs required to adhere to health and safety protocols and other incremental costs associated with the COVID-19 global pandemic.
+Added: In the six months ended September 30, 2020, these costs were primarily related to transitioning the Company to a remote-work environment and other incremental costs associated with the COVID-19 global pandemic.
+Added: (3) Transaction and related costs in the six months ended September 30, 2021 and 2020 reflect transaction, integration and legal costs associated with certain strategic transactions, restructuring activities and legal matters.
+Added: Interest Expense.
+Added: Interest expense of $85.7 million in the six months ended September 30, 2021 decreased $4.5 million from the six months ended September 30, 2020, due to lower interest expense on the term loans, Senior Notes and other cash-based interest related to payments associated with the Company's interest rate swaps.
+Added: These decreases were partially offset by an increase in amortization of debt financing costs, and other non-cash interest due to the amortization of unrealized losses in accumulated other comprehensive loss related to de-designated interest rate swaps which are being amortized to interest expense (see Note 16 to our unaudited condensed consolidated financial statements).
+Added: The following table sets forth the components of interest expense for the six months ended September 30, 2021 and 2020:
+Added: Six Months Ended
+Added: September 30,
+Added: (Amounts in millions)
+Added: Interest Expense
+Added: Revolving credit facility $ 3.5 $ 2.0
+Added: Term loans 16.9 20.0
+Added: Senior Notes 27.1 32.4
+Added: Amortization of debt financing costs and other non-cash interest (2)
+Added: Total interest expense $ 85.7 $ 90.2
+Added: ______________________
+Added: (1) Amounts include payments associated with the Company's interest rate swaps (see Note 16 to our unaudited condensed consolidated financial statements).
+Added: (2) Amounts include the amortization of unrealized losses in accumulated other comprehensive loss related to de-designated interest rate swaps which are being amortized to interest expense (see Note 16 to our unaudited condensed consolidated financial statements).
+Added: Interest and Other Income.
+Added: Interest and other income of $28.0 million for the six months ended September 30, 2021 compared to interest and other income of $1.8 million for the six months ended September 30, 2020, due to insurance recoveries on prior shareholder litigation of $22.7 million in the current period and other gains (see Note 15 to our unaudited condensed consolidated financial statements).
+Added: Other Expense.
+Added: Other expense of $4.3 million for the six months ended September 30, 2021 compared to other expense of $2.3 million for the six months ended September 30, 2020, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 17 to our unaudited condensed consolidated financial statements).
+Added: Loss on Extinguishment of Debt.
+Added: Loss on extinguishment of debt for the six months ended September 30, 2021 related to the write-off of a portion of debt issuance costs (including a portion of call premiums) associated with the redemption of the 5.875% Senior Notes and 6.375% Senior Notes and associated issuance of the 5.500% Senior Notes, the amendment of our credit agreement to extend the maturity of a portion of our revolving credit commitments and a portion of our outstanding term A loans, and repurchases of the Term Loan B.
+Added: There was no comparable loss in the six months ended September 30, 2020.
+Added: See Note 5 to our unaudited condensed consolidated financial statements.
+Added: Gain on Investments.
+Added: Gain on investments of $1.5 million for the six months ended September 30, 2021 represented $2.2 million of other investment gains which were partially offset by $0.7 million of unrealized losses on equity securities.
+Added: This compared to a gain on investments of $0.4 million for the six months ended September 30, 2020, which represented a gain on sale of equity securities without readily determinable fair values of $4.6 million and $0.8 million of unrealized gains on equity securities, offset by $5.0 million of impairments of equity securities without readily determinable fair values that were written down to their estimated fair value.
+Added: Equity Interests Income (Loss).
+Added: Equity interests income of $1.1 million in the six months ended September 30, 2021 compared to equity interests loss of $4.5 million in the six months ended September 30, 2020 due to lower losses from our equity method investees.
+Added: Income Tax Benefit (Provision).
+Added: We had an income tax provision of $12.1 million in the six months ended September 30, 2021, compared to an income tax benefit of $0.2 million in the six months ended September 30, 2020.
+Added: Our income tax benefit (provision) differs from the federal statutory rate multiplied by pre-tax income (loss) due to the mix of our pre-tax income (loss) generated across the various jurisdictions in which we operate, changes in the valuation allowance against our deferred tax assets, and certain minimum taxes and foreign withholding taxes.
+Added: Our income tax provision for the six months ended September 30, 2021 and 2020 was also impacted by interest accrual on uncertain tax benefits, and release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
+Added: Our income tax benefit for the six months ended September 30, 2020 was also impacted by the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
+Added: Net Income (Loss) Attributable to Lions Gate Entertainment Corp.
+Added: Shareholders.
+Added: Net loss attributable to our shareholders for the six months ended September 30, 2021 was $37.9 million, or basic and diluted net loss per common share of $0.17 on 223.1 million weighted average common shares outstanding.
+Added: This compares to net income attributable to our shareholders for the six months ended September 30, 2020 of $32.7 million, or basic net income per common share of $0.15 on 220.0 million weighted average common shares outstanding and diluted net income per common share of $0.15 on 220.6 million weighted average common shares outstanding.
+Added: Segment Results of Operations
+Added: The segment results of operations presented below do not include the elimination of intersegment transactions which are eliminated when presenting consolidated results, and exclude items separately identified in the restructuring and other line item in the unaudited condensed consolidated statements of operations.
+Added: The Company's primary measure of segment performance is segment profit.
+Added: Segment profit is defined as gross contribution (revenues, less direct operating and distribution and marketing expense) less segment general and administration expenses.
+Added: Segment profit excludes, when applicable, corporate general and administrative expense, restructuring and other costs, share-based compensation, certain programming and content charges as a result of changes in management and associated programming and content strategy, certain charges related to the COVID-19 global pandemic, and purchase accounting and related adjustments.
+Added: The Company believes the presentation of segment profit is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by the Company's management and enables them to understand the fundamental performance of the Company's businesses.
+Added: The reconciliation of segment profit to the Company's consolidated income (loss) before income taxes is presented in Note 14 to the unaudited condensed consolidated financial statements.
+Added: Motion Picture
+Added: The table below sets forth Motion Picture gross contribution and segment profit for the six months ended September 30, 2021 and 2020:
+Added: Six Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2021 2020 Amount Percent
+Added: (Amounts in millions)
+Added: Motion Picture Segment:
+Added: Revenue $ 622.1 $ 538.3 $ 83.8 15.6 %
+Added: Direct operating expense 280.1 236.4 43.7 18.5 %
+Added: Distribution & marketing expense 148.8 64.3 84.5 131.4 %
+Added: Gross contribution 193.2 237.6 (44.4) (18.7) %
+Added: General and administrative expenses 47.1 53.6 (6.5) (12.1) %
+Added: Segment profit $ 146.1 $ 184.0 $ (37.9) (20.6) %
+Added: theatrical P&A and Premium VOD expense included in distribution and marketing expense $ 79.3 $ 17.5 $ 61.8 nm
+Added: Direct operating expense as a percentage of revenue 45.0 % 43.9 %
+Added: Gross contribution as a percentage of revenue 31.1 % 44.1 %
+Added: _______________________
+Added: nm - Percentage not meaningful.
+Added: The table below sets forth Motion Picture revenue by media and product category for the six months ended September 30, 2021 and 2020:
+Added: Six Months Ended September 30,
+Added: 2021 2020 Total Increase (Decrease)
+Added: Feature Film (1)
+Added: Other Film (2)
+Added: Total Feature Film (1)
+Added: Other Film (2)
+Added: (Amounts in millions)
+Added: Motion Picture Revenue
+Added: Theatrical $ 33.7 $ 10.7 $ 44.4 $ — $ 0.3 $ 0.3 $ 44.1
+Added: Home Entertainment
+Added: Digital Media 126.9 115.1 242.0 130.8 113.1 243.9 (1.9)
+Added: Packaged Media 30.4 34.8 65.2 38.6 34.9 73.5 (8.3)
+Added: Total Home Entertainment 157.3 149.9 307.2 169.4 148.0 317.4 (10.2)
+Added: Television 112.9 28.7 141.6 93.5 24.1 117.6 24.0
+Added: International 95.7 26.4 122.1 58.8 39.1 97.9 24.2
+Added: Other 3.5 3.3 6.8 2.6 2.5 5.1 1.7
+Added: $ 403.1 $ 219.0 $ 622.1 $ 324.3 $ 214.0 $ 538.3 $ 83.8
+Added: ____________________
+Added: (1) Feature Film:
+Added: Includes theatrical releases through our Lionsgate and Summit Entertainment film labels, which includes films developed and produced in-house, films co-developed and co-produced and films acquired from third parties.
+Added: (2) Other Film:
+Added: Includes direct-to-DVD motion pictures, acquired and licensed brands, third-party library product and ancillary-driven platform theatrical releases through our specialty films distribution labels including Lionsgate Premiere, through Good Universe, and with our equity method investees, Roadside Attractions and Pantelion Films, and other titles.
+Added: Theatrical revenue increased $44.1 million in the six months ended September 30, 2021 as compared to the six months ended September 30, 2020 due to an increase of $33.7 million from our Feature Film category ( The Hitman's Wife's Bodyguard and Spiral), and an increase of $10.4 million from our Other Film category, as theaters have begun to reopen in certain locations with varying restrictions.
+Added: In the prior year's period, theaters were closed due to circumstances associated with the COVID-19 global pandemic.
+Added: Home entertainment revenue decreased $10.2 million, or 3.2%, in the six months ended September 30, 2021, as compared to the six months ended September 30, 2020, due to lower packaged media revenues of $8.3 million, and to a lesser extent, lower digital media revenues of $1.9 million driven by our Feature Film category, as a result of fewer home entertainment releases from our fiscal 2021 theatrical slate due to circumstances associated with the COVID-19 global pandemic.
+Added: Television revenue increased $24.0 million, or 20.4%, in the six months ended September 30, 2021, as compared to the six months ended September 30, 2020, driven by an increase in our Feature Film category of $19.4 million due to a greater number of television windows opening (and revenue recognized) than in the prior year's period.
+Added: International revenue increased $24.2 million, or 24.7%, in the six months ended September 30, 2021, as compared to the six months ended September 30, 2020 due to an increase in our Feature Film category of $36.9 million, offset by a decrease in Other Film of $12.7 million.
+Added: The increase in Feature Film related to higher revenue from our fiscal 2022 and 2021 theatrical slates in the current period as theaters have begun to reopen in certain locations with varying restrictions, while the prior year's period had no new theatrical releases due to circumstances associated with the COVID-19 global pandemic.
+Added: If the adverse economic impact and disruptions associated with the COVID-19 global pandemic continue to improve, we currently expect that Motion Picture segment revenues will increase in fiscal 2022 as compared to fiscal 2021.
+Added: The extent of the increase, if any, to Motion Picture segment revenues, will depend on, among other things, the impact of governmental regulations that have been, and may continue to be, imposed in response to the pandemic, the continued effectiveness of actions taken to contain or mitigate the outbreak (including the availability, effectiveness and/or public acceptance of any FDA-approved COVID-19 vaccines), potential resurgences of COVID-19 in certain parts of the world, and the discovery and spread of new variants of the virus which could result in the re-imposition of certain restrictions and may lead to more restrictions being implemented again to reduce the spread of COVID-19, general global economic conditions, the rate at which theaters are
+Added: able to re-open at scale, the rate of consumers' return to the theaters, and the impact of a potentially crowded marketplace from movies which are awaiting theatrical release in the market.
+Added: The evolving and uncertain nature of the situation could result in further interruptions to our operations, including delays in domestic and international theatrical distribution and production and the pausing of productions, which could impact Motion Picture segment revenues.
+Added: Direct Operating Expense.
+Added: The increase in direct operating expenses is due to higher Motion Picture revenue.
+Added: The slight increase in direct operating expenses as a percentage of motion picture revenue was driven by the change in the mix of titles and product categories generating revenue in the current period as compared to the prior year's period.
+Added: Investment in film write-downs included in Motion Picture segment direct operating expense in the six months ended September 30, 2021 were $0.1 million, as compared to $0.9 million in the six months ended September 30, 2020.
+Added: Distribution and Marketing Expense.
+Added: The increase in distribution and marketing expense in the six months ended September 30, 2021 is due to higher theatrical P&A and Premium VOD expense compared to the prior year's period, which was impacted by the closure of theaters as a result of circumstances associated with the COVID-19 global pandemic.
+Added: Theatrical P&A and Premium VOD expense in the six months ended September 30, 2021 includes expense associated with the release of The Hitman's Wife's Bodyguard, The Protégé, Spiral and Voyagers.
+Added: In the six months ended September 30, 2021, approximately $5.6 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $1.7 million in the prior year's period in the Motion Picture segment.
+Added: Gross Contribution.
+Added: Gross contribution of the Motion Picture segment for the six months ended September 30, 2021 decreased as compared to the six months ended September 30, 2020 due to higher Motion Picture distribution and marketing expense as a percentage of Motion Picture revenue.
+Added: General and Administrative Expense.
+Added: General and administrative expenses of the Motion Picture segment in the six months ended September 30, 2021 decreased $6.5 million, or 12.1%, primarily due to decreases in incentive based compensation, salaries and related compensation and professional fees.
+Added: Television Production
+Added: The table below sets forth Television Production gross contribution and segment profit for the six months ended September 30, 2021 and 2020:
+Added: Six Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2021 2020 Amount Percent
+Added: (Amounts in millions)
+Added: Television Production Segment:
+Added: Revenue $ 722.1 $ 392.9 $ 329.2 83.8 %
+Added: Direct operating expense 655.6 311.7 343.9 110.3 %
+Added: Distribution & marketing expense 15.5 14.3 1.2 8.4 %
+Added: Gross contribution 51.0 66.9 (15.9) (23.8) %
+Added: General and administrative expenses 19.5 22.0 (2.5) (11.4) %
+Added: Segment profit $ 31.5 $ 44.9 $ (13.4) (29.8) %
+Added: Direct operating expense as a percentage of revenue 90.8 % 79.3 %
+Added: Gross contribution as a percentage of revenue 7.1 % 17.0 %
+Added: The table below sets forth Television Production revenue and changes in revenue by media for the six months ended September 30, 2021 and 2020:
+Added: Six Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2021 2020 Amount Percent
+Added: Television Production (Amounts in millions)
+Added: Television $ 500.4 $ 212.6 $ 287.8 135.4 %
+Added: International 124.4 94.3 30.1 31.9 %
+Added: Home Entertainment
+Added: Digital 57.8 61.8 (4.0) (6.5) %
+Added: Packaged Media 3.2 1.8 1.4 77.8 %
+Added: Total Home Entertainment 61.0 63.6 (2.6) (4.1) %
+Added: Other 36.3 22.4 13.9 62.1 %
+Added: $ 722.1 $ 392.9 $ 329.2 83.8 %
+Added: The primary component of Television Production revenue is domestic television revenue.
+Added: Domestic television revenue increased in the six months ended September 30, 2021, as compared to the six months ended September 30, 2020, due to an increase of $188.0 million from intersegment revenues from the licensing of Starz original series (Power Book III:
+Added: Raising Kanan, Heels Season 1 , BMF Season 1 , Blindspotting Season 1 among others), an increase of $89.3 million from a greater number of television episodes delivered to third-parties, and increased revenue of $23.7 million from reality television series, all of which were negatively impacted in the prior year's period by disruptions associated with the COVID-19 global pandemic and the associated pausing of productions.
+Added: International revenue in the six months ended September 30, 2021 increased $30.1 million, or 31.9% as compared to the six months ended September 30, 2020 due to revenue in the current period from Dear White People Season 4, Acapulco Season 1, and higher intersegment revenues of $13.7 million from STARZPLAY International from the licensing of Starz original series.
+Added: Home entertainment revenue in the six months ended September 30, 2021 decreased $2.6 million due to digital media revenue in the prior year's period for Mad Men Seasons 1 - 7, which compared to digital media revenue in the current period from Weeds Seasons 1 - 8 and Welcome to Flatch Season 1.
+Added: Other revenue increased in the six months ended September 30, 2021 as compared to the six months ended September 30, 2020.
+Added: The increase is primarily due to revenue of 3 Arts Entertainment, which was negatively impacted in the six months ended September 30, 2020 as a result of the COVID-19 global pandemic related disruptions.
+Added: While television production has mostly resumed, the extent of the future impact on other revenue of the COVID-19 global pandemic is uncertain and will depend on film and television productions and releases fully returning to and remaining at pre COVID-19 levels.
+Added: If the adverse economic impact and disruptions associated with the COVID-19 global pandemic continue to improve, we currently expect that Television Production segment revenues will increase in fiscal 2022 as compared to fiscal 2021.
+Added: The extent of the increase, if any, to Television Production segment revenues, will depend on, among other things, the impact of governmental regulations that have been, and may continue to be, imposed in response to the pandemic, the continued effectiveness of actions taken to contain or mitigate the outbreak (including the availability, effectiveness and/or public acceptance of any FDA-approved COVID-19 vaccines), potential resurgences of COVID-19 in certain parts of the world, and the discovery and spread of new variants of the virus which could result in the re-imposition of certain restrictions and may lead to more restrictions being implemented again to reduce the spread of COVID-19, and general global economic conditions.
+Added: The evolving and uncertain nature of the situation could result in further interruptions to our operations, including delays in domestic and international distribution and production throughout the U.S., Canada and worldwide, and the pausing of productions, which could impact Television Production segment revenues.
+Added: Direct Operating Expense.
+Added: Direct operating expense of the Television Production segment in the six months ended September 30, 2021 increased $343.9 million, or 110.3% due to the increase in Television Production revenues.
+Added: Direct operating expenses as a percentage of television production revenue increased primarily due to the mix of titles generating revenue in the current period as compared to the prior year's period, and in particular, due to the recent ramp up of production, the current period included a greater number of deliveries of newer shows in which direct operating expense is typically higher as a percentage of revenue.
+Added: Due to the increase in cost associated with production and changes in season orders, the current
+Added: period also included increased write-downs to fair value of investment in film and television programs amounting to $26.6 million in aggregate.
+Added: This compared to lower direct operating expenses as a percentage of television revenue in the prior year's period, which included fewer deliveries of newer shows primarily associated with the pausing of productions due to the COVID-19 global pandemic related disruptions.
+Added: Gross Contribution.
+Added: Gross contribution of the Television Production segment for the six months ended September 30, 2021 decreased as compared to the six months ended September 30, 2020, due to higher direct operating expenses as a percentage of television production revenue.
+Added: General and Administrative Expense.
+Added: General and administrative expenses of the Television Production segment decreased $2.5 million, or 11.4% due to a decrease in incentive based compensation.
+Added: Media Networks
+Added: The table below sets forth Media Networks gross contribution and segment profit for the six months ended September 30, 2021 and 2020.
+Added: The Media Networks segment results of operations for the six months ended September 30, 2020 included our formerly majority owned premium Spanish language streaming services business, Pantaya (representing substantially all of our former Other Streaming Services product line).
+Added: We sold our interest in Pantaya on March 31, 2021.
+Added: See Note 2 to our unaudited condensed consolidated financial statements for further information.
+Added: Six Months Ended
+Added: September 30, Increase (Decrease)
+Added: 2021 2020 Amount Percent
+Added: (Amounts in millions)
+Added: Media Networks Segment:
+Added: Revenue $ 767.0 $ 755.5 $ 11.5 1.5 %
+Added: Direct operating expense 359.8 329.4 30.4 9.2 %
+Added: Distribution & marketing expense 269.6 218.9 50.7 23.2 %
+Added: Gross contribution 137.6 207.2 (69.6) (33.6) %
+Added: General and administrative expenses 43.9 42.5 1.4 3.3 %
+Added: Segment profit $ 93.7 $ 164.7 $ (71.0) (43.1) %
+Added: Direct operating expense as a percentage of revenue 46.9 % 43.6 %
+Added: Gross contribution as a percentage of revenue 17.9 % 27.4 %
+Added: The following table sets forth the Media Networks segment profit by product line:
+Added: Six Months Ended Six Months Ended
+Added: September 30, 2021 September 30, 2020
+Added: Starz Networks STARZPLAY International Total Media Networks Starz Networks STARZPLAY International Other Streaming Services Total Media Networks
+Added: (Amounts in millions)
+Added: Media Networks Segment:
+Added: Revenue $ 716.7 $ 50.3 $ 767.0 $ 706.5 $ 24.2 $ 24.8 $ 755.5
+Added: Direct operating expense 293.9 65.9 359.8 290.0 34.5 4.9 329.4
+Added: Distribution & marketing expense 218.9 50.7 269.6 166.0 34.1 18.8 218.9
+Added: Gross contribution 203.9 (66.3) 137.6 250.5 (44.4) 1.1 207.2
+Added: General and administrative expenses 32.5 11.4 43.9 31.8 8.0 2.7 42.5
+Added: Segment profit $ 171.4 $ (77.7) $ 93.7 $ 218.7 $ (52.4) $ (1.6) $ 164.7
+Added: The increase in Media Networks' revenue of $11.5 million was due to higher STARZPLAY International revenue of $26.1 million, and increased Starz Networks' revenue of $10.2 million, partially offset by a decrease of $24.8 million due to the prior year's period including revenue from Pantaya (representing substantially all of Other Streaming Services), which was sold on March 31, 2021.
+Added: STARZPLAY International revenue increased as a result of subscriber and revenue growth in the international territories previously launched, and additional territories launched since September 30, 2020.
+Added: Starz Networks' revenue primarily increased as a result of higher OTT revenue of $69.4 million resulting from increased subscriptions, which was partially offset by declines in revenue of $59.9 million from traditional linear services.
+Added: During the six months ended September 30, 2021 and 2020, the following original series premiered on STARZ:
+Added: Six Months Ended September 30, 2021 Six Months Ended September 30, 2020
First Quarter:
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Blindspotting Season 1
+Added: Second Quarter:
+Added: Second Quarter:
+Added: Power Book III:
+Added: Raising Kanan Season 1
+Added: P-Valley Season 1
+Added: Heels Season 1
+Added: Power Book II:
+Added: Ghost Season 1
+Added: BMF - Black Mafia Family Season 1
Direct Operating and Distribution and Marketing Expenses .
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In addition, the launch of the STARZPLAY international service has and will continue to result in an increase in expenses as the service continues to expand.
−Removed: The decrease in Media Networks direct operating expenses is due to lower direct operating expenses at Starz Networks, partially offset by an increase at STARZPLAY International in the three months ended June 30, 2021.
−Removed: In addition, the prior year's quarter included direct operating expense from Pantaya (representing substantially all of our former Other Streaming Services product line), which was sold on March 31, 2021.
−Removed: The decrease in Starz Networks direct operating expense was due to lower programming amortization related to theatrical releases under our programming output agreement with Sony, lower programming cost amortization related to our Starz Originals due to a higher number of lower cost series premieres, and lower programming cost amortization related to our library content.
+Added: The increase in Media Networks direct operating expenses is due to an increase at STARZPLAY International of $31.4 million, and a slight increase at Starz Networks of $3.9 million in the six months ended September 30, 2021.
+Added: These increases were partially offset by a decrease of $4.9 million due to the prior year's period including direct operating expense from Pantaya (representing substantially all of our former Other Streaming Services product line), which was sold on March 31, 2021.
Direct operating expenses at STARZPLAY International increased as a result of the continued expansion of STARZPLAY International.
−Removed: The increase in Media Networks distribution and marketing expense is due to an increase at Starz Networks due to an increase in operating expense related to continued growth in the OTT service and increased advertising and marketing due to increased spend on our Starz Originals, partially offset by a decrease due to the prior year's quarter including distribution and marketing expense from Pantaya (representing substantially all of our former Other Streaming Services product line), which was sold on March 31, 2021, and a slight decrease at STARZPLAY International.
+Added: The increase in Starz Networks direct operating expense was primarily due to higher programming cost amortization related to our Starz Originals of $46.2 million due to a higher number of, and more expensive, series premieres, partially offset by lower programming amortization of $39.6 million related to theatrical releases under our programming output agreement with Sony, and lower programming cost amortization of $6.5 million related to our library content.
+Added: The increase in Media Networks distribution and marketing expense is due to an increase of $52.9 million at Starz Networks due to an increase in operating expense related to continued growth in the OTT service and increased advertising and marketing due to increased spend on our Starz Originals and increased spend to drive growth in our subscriptions, and an increase of $16.6 million at STARZPLAY International due to increased advertising and marketing to drive growth in subscribers.
+Added: These increases were partially offset by a decrease of $18.8 million due to the prior year's period including distribution and marketing expense from Pantaya (representing substantially all of our former Other Streaming Services product line), which was sold on March 31, 2021.
Gross Contribution.
−Removed: The increase in gross contribution compared to the three months ended June 30, 2020 was due to an increase at Starz Networks driven by higher revenues and lower direct operating expense.
+Added: The decrease in gross contribution compared to the six months ended September 30, 2020 was due to decreases at Starz Networks of $46.6 million and STARZPLAY International of $21.9 million, driven by higher advertising and marketing expense and direct operating expense as described above.
General and Administrative Expense.
−Removed: General and administrative expenses of the Media Networks segment in the three months ended June 30, 2021 increased slightly from the prior year's quarter, driven by slightly increased general and administrative expenses at STARZPLAY International, which were partially offset by a decrease due to the prior year's quarter including general and administrative expense from Pantaya (representing substantially all of our former Other Streaming Services product line), which was sold on March 31, 2021.
+Added: General and administrative expenses of the Media Networks segment in the six months ended September 30, 2021 increased slightly from the prior year's period, driven by increases of $3.4 million at STARZPLAY International and $0.7 million at Starz Networks, offset by a decrease of $2.7 million due to the prior year's period including general and administrative expense from Pantaya (representing substantially all of our former Other Streaming Services product line), which was sold on March 31, 2021.
LIQUIDITY AND CAPITAL RESOURCES
Sources and Uses of Cash
−Removed: Our liquidity and capital resources have been provided principally through cash generated from operations, corporate debt, our production loans, the monetization of trade accounts receivable and our $220.0 million non-recourse senior secured revolving credit facility due January 2025 based on collateral consisting of certain of the Company’s tax credit receivables (the "Production Tax Credit Facility") (with $184.5 million outstanding, and no amounts available at June 30, 2021).
−Removed: As of June 30, 2021, we had cash and cash equivalents of $261.6 million.
−Removed: Our debt at June 30, 2021 consisted of the following:
+Added: Our liquidity and capital resources have been provided principally through cash generated from operations, corporate debt, our production and related loans, our $220.0 million non-recourse senior secured revolving credit facility due January 2025 based on collateral consisting of certain of the Company’s tax credit receivables (the "Production Tax Credit Facility"), our $140.0 million senior secured amortizing term credit facility due July 2026 (the "IP Credit Facility") based on the collateral consisting solely of the Company’s rights in certain library titles, the monetization of trade accounts receivable, and other financing obligations collateralized by certain contractual payments to be received in the future.
+Added: As of September 30, 2021, we had cash and cash equivalents of $442.6 million.
+Added: Our debt at September 30, 2021, excluding production and related loans and IP Credit Facility and other financing obligations discussed above, consisted of the following:
• Senior Credit Facilities:
◦ Revolving Credit Facility.
−Removed: We have a $1.5 billion revolving credit facility (with no amounts outstanding at June 30, 2021).
−Removed: A portion of the revolving credit commitments, amounting to $1.25 billion, is due April 2026 (the "2026 Revolving Credit Facility"), and a portion of the revolving credit commitments, amounting to $250.0 million, is due March 2023 (the "2023 Revolving Credit Facility, and together with the 2026 Revolving Credit Facility, the "Revolving Credit Facility").
+Added: As of September 30, 2021, we had a $1.5 billion revolving credit facility (with no amounts outstanding at September 30, 2021).
+Added: A portion of the revolving credit commitments, amounting to $1.25 billion, is due April 2026 (the "2026 Revolving Credit Facility"), and a portion of the revolving credit commitments, amounting to $250.0 million, was due March 2023 (the "2023 Revolving Credit Facility, and together with the 2026 Revolving Credit Facility, the "Revolving Credit Facility").
+Added: Subsequent to September 30, 2021, the Company terminated the remaining portion of the revolving credit commitments, amounting to $250.0 million, under the 2023 Revolving Credit Facility (the "Termination").
+Added: After giving effect to the Termination, the Company's remaining revolving credit commitments under its Credit Agreement amounted to $1.25 billion under the 2026 Revolving Credit Facility (see Note 18 - Subsequent Events to our unaudited condensed consolidated financial statements).
◦ Term Loan A.
−Removed: We have a term loan A facility, of which a portion of its outstanding loans, amounting to $444.9 million at June 30, 2021 is due April 2026 (the "2026 Term Loan A") and a portion of its outstanding loans, amounting to $209.7 million at June 30, 2021 is due March 2023 (the "2023 Term Loan A" and together with the 2026 Term Loan A, the "Term Loan A").
+Added: We have a term loan A facility, of which a portion of its outstanding loans, amounting to $444.9 million at September 30, 2021 is due April 2026 (the "2026 Term Loan A") and a portion of its outstanding loans, amounting to $204.3 million at September 30, 2021 is due March 2023 (the "2023 Term Loan A" and together with the 2026 Term Loan A, the "Term Loan A").
◦ Term Loan B.
−Removed: We have a term loan B facility due March 2025 (the "Term Loan B", and, together with the Revolving Credit Facility and the Term Loan A, the "Senior Credit Facilities"), with $898.0 million outstanding at June 30, 2021.
+Added: We have a term loan B facility due March 2025 (the "Term Loan B", and, together with the Revolving Credit Facility and the Term Loan A, the "Senior Credit Facilities"), with $850.4 million outstanding at September 30, 2021.
• Senior Notes:
◦ 5.500% Senior Notes.
−Removed: We have $1.0 billion outstanding of 5.500% senior notes due 2029 (the "5.500% Senior Notes") at June 30, 2021.
−Removed: Subsequent to June 30, 2021, in July 2021, certain subsidiaries of the Company entered into a senior secured amortizing term credit facility (the "IP Credit Facility") based on the collateral consisting solely of the Company’s rights in certain library titles, including the Spyglass and other recently acquired libraries and non-recourse to other assets of the Company.
−Removed: The maximum principal amount of the IP Credit Facility is $100.0 million, subject to the amount of collateral available, which is based on the valuation amount of cash flows from the libraries.
−Removed: The cash flows generated from the exploitation of the rights will be applied to repay the IP Credit Facility subject to a minimum guaranteed payment amount and are expected to be sufficient to fully repay the facility by the stated maturity date.
−Removed: Advances under the IP Credit Facility bear interest at a rate equal to, at the Company’s option, LIBOR plus 2.25% per annum or the base rate plus 1.25% per annum.
−Removed: The IP Credit Facility matures on July 30, 2026.
−Removed: See Note 18 - Subsequent Events in the unaudited condensed consolidated financial statements.
+Added: We have $1.0 billion outstanding of 5.500% senior notes due 2029 (the "5.500% Senior Notes") at September 30, 2021.
Our principal uses of cash in operations include the funding of film and television productions, film and programming rights acquisitions, and the distribution and marketing of films and television programs.
1 unchanged sentence
principal and interest payments) requirements, equity method or other equity investments, quarterly cash dividends, the purchase of common shares under our share repurchase program, capital expenditures, and acquisitions of businesses.
−Removed: In addition, the Company has a redeemable noncontrolling interest balance of $231.4 million as of June 30, 2021 related to its acquisition of a controlling interest in Pilgrim Media Group and 3 Arts Entertainment, which may require the use of cash in the event the holders of the noncontrolling interests require the Company to repurchase their interests (see Note 8 to our unaudited condensed consolidated financial statements).
+Added: In addition, the Company has a redeemable noncontrolling interest balance of $243.2 million as of September 30, 2021 related to its acquisition of a controlling interest in Pilgrim Media Group and 3 Arts Entertainment, which may require the use of cash in the event the holders of the noncontrolling interests require the Company to repurchase their interests (see Note 8 to our unaudited condensed consolidated financial statements).
We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise.
6 unchanged sentences
While we cannot predict the outcome of the disruptions associated with the COVID-19 global pandemic on our operating results, cash flows and financial position, we currently expect that as production activity increases and theaters begin to reopen, our cash requirements for productions and marketing spends will increase in fiscal 2022 as compared to fiscal 2021.
−Removed: However, we currently believe that cash flow from operations, cash on hand, revolving credit facility availability, the monetization of trade accounts receivable, tax-efficient financing, the availability of our Production Tax Credit Facility, and available production financing will be adequate to meet known operational cash and debt service (i.e.
+Added: However, we currently believe that cash flow from operations, cash on hand, revolving credit facility availability, the monetization of trade accounts receivable, tax-efficient financing, the availability of our Production Tax Credit Facility and IP Credit Facility, and available production or license financing will be adequate to meet known operational cash and debt service (i.e.
principal and interest payments) requirements for the foreseeable future, including the funding of future film and television production, film and programming rights acquisitions and theatrical and home entertainment release schedules, and future equity method or other investment funding requirements, and international expansion.
We monitor our cash flow liquidity, availability, fixed charge coverage, capital base, film spending and leverage ratios with the long-term goal of maintaining our credit worthiness.
−Removed: Our current financing strategy is to fund operations and to leverage investment in films and television programs through our cash flow from operations, our revolving credit facility, single-purpose production financing, government incentive programs, film funds, distribution commitments, the monetization of trade accounts receivable, and our Production Tax Credit Facility.
+Added: Our current financing strategy is to fund operations and to leverage investment in films and television programs through our cash flow from operations, our revolving credit facility, single-purpose production or license financing, government incentive programs, film funds, distribution commitments, the monetization of trade accounts receivable, our Production Tax Credit Facility and our IP Credit Facility.
In addition, we continue to expand our STARZPLAY international service and may acquire businesses or assets, including individual films or libraries that are complementary to our business.
6 unchanged sentences
In addition, a net first lien leverage maintenance covenant and an interest coverage ratio maintenance covenant apply to the Revolving Credit Facility and the Term Loan A and are tested quarterly.
−Removed: As of June 30, 2021, the Company was in compliance with all applicable covenants.
+Added: As of September 30, 2021, the Company was in compliance with all applicable covenants.
The 5.500% Senior Notes contain certain restrictions and covenants that, subject to certain exceptions, limit the Company’s ability to incur additional indebtedness, pay dividends or repurchase the Company’s common shares, make certain loans or investments, and sell or otherwise dispose of certain assets subject to certain conditions, among other limitations.
−Removed: As of June 30, 2021, the Company was in compliance with all applicable covenants.
+Added: As of September 30, 2021, the Company was in compliance with all applicable covenants.
Share Repurchase Plan.
3 unchanged sentences
Such purchases will be structured as permitted by securities laws and other legal requirements.
−Removed: During the three months ended June 30, 2021, the Company did not repurchase any common shares.
+Added: During the three and six months ended September 30, 2021, the Company did not repurchase any common shares.
The amount of dividends, if any, that we pay to our shareholders is determined by our Board of Directors, at its discretion, and is dependent on a number of factors, including our financial position, results of operations, cash flows, capital requirements and restrictions under our credit agreements, and shall be in compliance with applicable law.
1 unchanged sentence
Capacity to Pay Dividends.
−Removed: At June 30, 2021, the capacity to pay dividends under the Senior Credit Facilities and the Senior Notes significantly exceeded the amount of the Company's accumulated deficit or net loss, and therefore the Company's net loss of $51.7 million and accumulated deficit of $139.1 million were deemed free of restrictions from paying dividends at June 30, 2021.
+Added: At September 30, 2021, the capacity to pay dividends under the Senior Credit Facilities and the Senior Notes significantly exceeded the amount of the Company's accumulated deficit or net loss, and therefore the Company's net loss of $48.5 million and accumulated deficit of $143.0 million were deemed free of restrictions from paying dividends at September 30, 2021.
Discussion of Operating, Investing, Financing Cash Flows
−Removed: Cash, cash equivalents and restricted cash decreased by $261.3 million for the three months ended June 30, 2021 and increased by $57.8 million for the three months ended June 30, 2020, before foreign exchange effects on cash.
+Added: Cash, cash equivalents and restricted cash decreased by $78.4 million for the six months ended September 30, 2021 and increased by $142.8 million for the six months ended September 30, 2020, before foreign exchange effects on cash.
Components of these changes are discussed below in more detail.
Operating Activities.
−Removed: Cash flows provided by (used in) operating activities for the three months ended June 30, 2021 and 2020 were as follows:
−Removed: Three Months Ended
+Added: Cash flows provided by (used in) operating activities for the six months ended September 30, 2021 and 2020 were as follows:
+Added: Six Months Ended
+Added: September 30,
2021 2020 Net Change
5 unchanged sentences
Cash interest (61.5) (71.7) 10.2
−Removed: Current income tax provision (5.6) (1.3) (4.3)
+Added: Current income tax (provision) benefit (10.4) 0.2 (10.6)
Other non-cash charges included in operating activities 74.2 31.7 42.5
7 unchanged sentences
Net Cash Flows Provided By (Used In) Operating Activities $ (332.5) $ 203.5 $ (536.0)
−Removed: Cash flows used in operating activities for the three months ended June 30, 2021 were $348.7 million compared to cash flows provided by operating activities of $81.4 million for the three months ended June 30, 2020.
−Removed: The decrease in cash provided by operating activities for the three months ended June 30, 2021 as compared to the three months ended June 30, 2020 is due to greater cash used from changes in operating assets and liabilities as shown above, partially offset by increased cash flows from operations before changes in operating assets and liabilities.
−Removed: The greater use of cash from changes in operating assets and liabilities was driven by increased cash used for investment in films and television programs and program rights, and increases in accounts receivable, net and other assets, partially offset by lower cash used from changes in other operating assets and liabilities and lower cash used for accounts payable and accrued liabilities as reflected above.
−Removed: In addition, cash flows provided by operating activities for the three months ended June 30, 2021 included a net use of cash of approximately $51.0 million from the monetization of accounts receivables programs, as compared to a net use of cash of approximately $16.5 million for the three months ended June 30, 2020 (see Note 17 to our unaudited condensed consolidated financial statements).
+Added: Cash flows used in operating activities for the six months ended September 30, 2021 were $332.5 million compared to cash flows provided by operating activities of $203.5 million for the six months ended September 30, 2020.
+Added: The increase in cash used in operating activities for the six months ended September 30, 2021 as compared to the six months ended September 30, 2020 is due to greater cash used from changes in operating assets and liabilities as shown above, partially offset by increased cash flows from operations before changes in operating assets and liabilities.
+Added: The greater use of cash from changes in operating assets and liabilities was driven by increased cash used for investment in films and television programs and program rights, and increases in accounts receivable, net and other assets.
+Added: These decreases were partially offset by greater cash provided by changes in other operating assets and liabilities and lower cash used for accounts payable and accrued liabilities as reflected above, and the receipt of $24.9 million from insurance recoveries on prior shareholder litigation.
+Added: In addition, cash flows used in operating activities for the six months ended September 30, 2021 included a net use of cash of approximately $46.2 million from the monetization of accounts receivables programs, as compared to a net benefit of approximately $0.9 million for the six months ended September 30, 2020 (see Note 17 to our unaudited condensed consolidated financial statements).
Investing Activities.
−Removed: Cash flows provided by (used in) investing activities for the three months ended June 30, 2021 and 2020 were as follows:
−Removed: Three Months Ended
+Added: Cash flows used in investing activities for the six months ended September 30, 2021 and 2020 were as follows:
+Added: Six Months Ended
+Added: September 30,
(Amounts in millions)
Proceeds from the sale of Pantaya $ 123.6 $ —
−Removed: Proceeds from the sale of equity method and other investments — 5.1
+Added: Proceeds from the sale of other investments — 5.1
Investment in equity method investees and other (9.4) (0.2)
+Added: Acquisition of assets (film library and related assets) (161.4) —
Capital expenditures (14.6) (17.1)
−Removed: Net Cash Flows Provided By (Used In) Investing Activities $ 115.7 $ (1.5)
−Removed: Cash provided by investing activities of $115.7 million for the three months ended June 30, 2021 compared to cash used in investing activities of $1.5 million for the three months ended June 30, 2020, primarily due to proceeds from the sale of Pantaya, as reflected above (see Note 2 to our unaudited condensed consolidated financial statements).
+Added: Net Cash Flows Used In Investing Activities $ (61.8) $ (12.2)
+Added: Cash used in investing activities of $61.8 million for the six months ended September 30, 2021 compared to cash used in investing activities of $12.2 million for the six months ended September 30, 2020, primarily due to cash used for the acquisition of a film library and related assets and investment in equity method investees as reflected above, offset by proceeds from the sale of Pantaya (see Note 2 to our unaudited condensed consolidated financial statements).
Financing Activities.
−Removed: Cash flows used in financing activities for the three months ended June 30, 2021 and 2020 were as follows:
−Removed: Three Months Ended
+Added: Cash flows provided by (used in) financing activities for the six months ended September 30, 2021 and 2020 were as follows:
+Added: Six Months Ended
+Added: September 30,
(Amounts in millions)
1 unchanged sentence
Debt - repurchases and repayments (2,175.6) (109.1)
−Removed: Net repayments of debt (174.0) (17.0)
−Removed: Production loans - borrowings 214.3 46.1
−Removed: Production loans - repayments (113.2) (44.1)
−Removed: Net proceeds from production loans 101.1 2.0
−Removed: Production tax credit facility advances, net of debt issuance costs 94.9 —
−Removed: Production tax credit facility repayments (32.8) —
−Removed: Net proceeds from production tax credit facility 62.1 —
+Added: Net repayments and repurchases of debt (228.4) (34.1)
+Added: Production and related loans - borrowings, net of debt issuance costs 562.1 47.8
+Added: Production and related loans - repayments (186.6) (44.1)
+Added: Net proceeds from production and related loans 375.5 3.7
+Added: IP Credit Facility and other financing advances 213.6 —
Repurchase of common shares — (2.2)
Other financing activities (44.8) (15.9)
−Removed: Net Cash Flows Used In Financing Activities $ (28.3) $ (22.1)
−Removed: Cash flows used in financing activities of $28.3 million for the three months ended June 30, 2021 compared to cash flows used in financing activities of $22.1 million for the three months ended June 30, 2020.
−Removed: Cash flows used in financing activities for the three months ended June 30, 2021 primarily reflects net debt repayments of $174.0 million, net production loan borrowings of $101.1 million as production activity increased in the quarter, and net Production Tax Credit Facility advances of $62.1 million.
−Removed: In addition, other financing activities in the three months ended June 30, 2021 includes $6.9 million for interest rate swap settlement payments due to an other-than-insignificant financing element on a portion of our interest rate swaps (see Note 16 to our unaudited condensed consolidated financial statements) and tax withholding required on equity awards of $13.1 million.
−Removed: Net debt repayments of $174.0 million in the three months ended June 30, 2021 included the below transactions and associated debt issuance and redemption costs, along with required repayments on our term loans:
+Added: Net Cash Flows Provided By (Used In) Financing Activities $ 315.9 $ (48.5)
+Added: Cash flows provided by financing activities of $315.9 million for the six months ended September 30, 2021 compared to cash flows used in financing activities of $48.5 million for the six months ended September 30, 2020.
+Added: Cash flows provided by financing activities for the six months ended September 30, 2021 primarily reflects net production and related loan borrowings of $375.5 million as production activity increased in the period, net IP Credit Facility and other financing advances of $213.6 million, offset by net debt repayments and repurchases of $228.4 million.
+Added: In addition, other financing activities in the six months ended September 30, 2021 includes $14.4 million for interest rate swap settlement payments due to an other-than-insignificant financing element on a portion of our interest rate swaps (see Note 16 to our unaudited condensed consolidated financial statements) and tax withholding required on equity awards of $33.2 million.
+Added: Net debt repayments and repurchases of $228.4 million in the six months ended September 30, 2021 included the below transactions and associated debt issuance and redemption costs, along with required repayments on our term loans:
• On April 1, 2021, we redeemed in full all $518.7 million outstanding principal amount of our 5.875% Senior Notes and all $545.6 million outstanding principal amount of our 6.375% Senior Notes, and paid a prepayment premium of $15.2 million and $17.4 million on the 5.875% Senior Notes and 6.375% Senior Notes, respectively, plus accrued and unpaid interest to the date of redemption.
1 unchanged sentence
• On April 6, 2021, we amended our Credit Agreement to, among other things, extend the maturity of a portion of our revolving credit commitments, amounting to $1.25 billion, and a portion of our outstanding term A loans, amounting to $444.9 million to April 6, 2026.
−Removed: • In April and May 2021, the Company completed a series of repurchases of the Term Loan B and, in aggregate, paid $51.1 million to repurchase $51.5 million principal amount of the Term Loan B.
−Removed: Cash flows used in financing activities for the three months ended June 30, 2020 primarily reflects net debt repayments of $17.0 million, and net production loan borrowings of $2.0 million.
+Added: • During the six months ended September 30, 2021, the Company completed a series of repurchases of the Term Loan B and, in aggregate, paid $95.3 million to repurchase $96.0 million principal amount of the Term Loan B.
+Added: Cash flows used in financing activities of $48.5 million for the six months ended September 30, 2020 primarily reflects net debt repayments of $34.1 million, and net production and related loan borrowings of $3.7 million, which reflected minimal activity in the period due to the delay of productions associated with the COVID-19 global pandemic.
See Note 5 to our unaudited condensed consolidated financial statements for a discussion of our debt.
−Removed: Production Loans and Production Tax Credit Facility
−Removed: See Note 6 to our unaudited condensed consolidated financial statements for a discussion of our production loans and Production Tax Credit Facility.
+Added: Production and Related Loans, IP Credit Facility and Other Financing Obligations
+Added: See Note 6 to our unaudited condensed consolidated financial statements for a discussion of our production and related loans, IP Credit Facility and other financing obligations.
Table of Debt and Contractual Commitments
−Removed: The following table sets forth our future annual repayment of debt, and our contractual commitments as of June 30, 2021:
−Removed: Nine Months Ending March 31, Year Ending March 31,
+Added: The following table sets forth our future annual repayment of debt, and our contractual commitments as of September 30, 2021:
+Added: Six Months Ending March 31, Year Ending March 31,
2022 2023 2024 2025 2026 Thereafter Total
(Amounts in millions)
−Removed: Future annual repayment of debt recorded as of June 30, 2021 (on-balance sheet arrangements)
+Added: Future annual repayment of debt recorded as of September 30, 2021 (on-balance sheet arrangements)
Revolving credit facility $ — $ — $ — $ — $ — $ — $ —
2 unchanged sentences
5.500% Senior Notes — — — — — 1,000.0 1,000.0
−Removed: Film obligations (1)
+Added: Film related and other obligations (1)
341.8 499.1 111.6 240.9 30.7 41.6 1,265.7
11 unchanged sentences
___________________
−Removed: (1) Film obligations include program rights and other film obligations, production loans and our Production Tax Credit Facility.
−Removed: Program rights and other film obligations include minimum guarantees, theatrical marketing obligations, and accrued licensed program rights obligations.
−Removed: Production loans represent loans for the production of film and television programs that we produce.
−Removed: Repayment dates are based on anticipated delivery or release date of the related film or contractual due dates of the obligation.
−Removed: Production tax credit facility represent amounts due at June 30, 2021 under our
−Removed: Production Tax Credit Facility, and the repayment date represents the maturity date of the Production Tax Credit Facility (January 27, 2025), however net advances and payments under the Production Tax Credit Facility can fluctuate depending on the amount of collateral available.
+Added: (1) Film related and other obligations include program rights and film obligations, production and related loans, and our IP Credit Facility and other financing obligations.
+Added: Program rights and film obligations include minimum guarantees, theatrical marketing obligations, and accrued licensed program rights obligations.
+Added: Production and related loans include individual
+Added: loans for the production of film and television programs that we produce or license and our Production Tax Credit Facility.
+Added: Repayment dates of our individual production loans are based on anticipated delivery or release date of the related film or contractual due dates of the obligation.
+Added: Production Tax Credit Facility amounts represent outstanding amounts under our Production Tax Credit Facility at September 30, 2021, and the repayment date represents the maturity date of the Production Tax Credit Facility (January 27, 2025), however net advances and payments under the Production Tax Credit Facility can fluctuate depending on the amount of collateral available.
+Added: IP Credit Facility amounts represent outstanding amounts under our IP Credit Facility at September 30, 2021, and repayment dates are based on the projected future cash flows generated from the exploitation of the rights, subject to a minimum guaranteed payment amount, as applicable.
+Added: Other financing obligations include other financing collateralized by certain contractual payments to be received in the future.
See Note 6 to our unaudited condensed consolidated financial statements.
18 unchanged sentences
Remaining performance obligations represent deferred revenue on the balance sheet plus fixed fee or minimum guarantee contracts where the revenue will be recognized and the cash received in the future (i.e., backlog).
−Removed: As disclosed in Note 9 to our unaudited condensed consolidated financial statements, remaining performance obligations were $1.5 billion at June 30, 2021 (March 31, 2021 - $1.6 billion).
−Removed: The backlog portion of remaining performance obligations (excluding deferred revenue) related to our Motion Picture and Television Production segments was $1.1 billion at June 30, 2021 (March 31, 2021 - $1.2 billion).
+Added: As disclosed in Note 9 to our unaudited condensed consolidated financial statements, remaining performance obligations were $1.6 billion at September 30, 2021 (March 31, 2021 - $1.6 billion).
+Added: The backlog portion of remaining performance obligations (excluding deferred revenue) related to our Motion Picture and Television Production segments was $1.0 billion at September 30, 2021 (March 31, 2021 - $1.2 billion).
Off-Balance Sheet Arrangements
1 unchanged sentence
We have no special purpose entities that provided off-balance sheet financing, liquidity or market or credit risk support, nor do we engage in leasing, hedging or research and development services that could expose us to liability that is not reflected on the face of our unaudited condensed consolidated financial statements.
−Removed: Our commitments to fund operating leases, minimum guarantees, production loans, equity method investment funding requirements and all other contractual commitments not reflected on the face of our unaudited condensed consolidated financial statements are presented in the table above.
+Added: Our commitments to fund operating leases, minimum guarantees, production and related loans, equity method investment funding requirements and all other contractual commitments not reflected on the face of our unaudited condensed consolidated financial statements are presented in the table above.
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.