What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-05-26 compared with 2021-05-28 · 593 added, 604 removed, 1802 unchanged (40% of the section changed)

26 unchanged sentences

There were no changes in internal control over financial reporting during the fiscal fourth quarter ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our employees are working remotely due to disruptions related to the COVID-19 global pandemic, but we are continually monitoring and assessing the COVID-19 situation on our internal controls.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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8-K 3.1 12/8/2016

3.2x Notice of Articles

3.2 Notice of Articles

10-K 3.2 5/28/2021

4.1 Indenture, dated as of April 1, 2021, by and among Lions Gate Capital Holdings, LLC the Guarantors named therein, and Deutsche Bank Trust Company, as Trustee

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8-K 10.1 12/21/2020

Exhibit Number Exhibit Description Incorporated by Reference

Form Exhibit Filing Date/

Period End Date

21.1x Subsidiaries of the Company

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31.2x Certification of CFO pursuant to Section 302 of Sarbanes-Oxley Act of 2002

32.1x Certification of CEO and CFO pursuant to Section 906 of Sarbanes-Oxley Act of 2002

32.1xx Certification of CEO and CFO pursuant to Section 906 of Sarbanes-Oxley Act of 2002

101x The following financial statements from the Company's Annual Report on Form 10-K for the year ended March 31, 2022 , formatted in Inline XBRL:

(i) Consolidated Balance Sheets (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

(i) Consolidated Balance Sheets (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

104x The cover page from the Company’s Annual Report on Form 10-K for the year ended March 31, 2022 (formatted as Inline XBRL and contained in Exhibit 101).

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x Filed herewith

xx Furnished herewith and not deemed to be "filed" for purposes of Section 18 of the Exchange Act and shall not be deemed to be incorporated by reference into any filing under the Securities Act, or the Exchange Act, irrespective of any general incorporation language contained in such filing

FORM 10-K SUMMARY.

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Hardwick Simmons

/s/ HARRY SLOAN Director May 26, 2022

INDEX TO FINANCIAL STATEMENTS

Audited Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Ernst & Young, LLP , I ndependent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets — March 31, 2022 and 2021

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of March 31, 2022, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated May 26, 2022 expressed an unqualified opinion thereon.

Adoption of ASU No.

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for leases in fiscal 2020 due to the adoption of Accounting Standards Update (ASU) No.

2016-02, Leases (Topic 842), and the related amendments.

Basis for Opinion

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Accounts receivable, net 442.2 383.7

Program rights — 310.5

Other current assets 244.7 274.3

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Participations and residuals 468.5 508.8

Film obligations, production loans and production tax credit facility 385.0 353.7

Film related and other obligations 951.1 385.0

Debt - short term portion 222.8 88.0

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Participations and residuals 265.1 304.6

Film obligations, production loans and production tax credit facility 318.5 96.9

Film related and other obligations 729.0 318.5

Other liabilities 298.7 337.1

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Accumulated deficit ( 369.7 ) ( 82.9 )

Accumulated other comprehensive loss ( 83.3 ) ( 206.0 )

Accumulated other comprehensive income (loss) 29.3 ( 83.3 )

Total Lions Gate Entertainment Corp.

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Interest expense ( 176.0 ) ( 181.5 ) ( 191.3 )

Interest expense ( 181.5 ) ( 191.3 ) ( 163.6 )

Interest on dissenting shareholders' liability — — ( 35.3 )

Interest expense ( 181.5 ) ( 191.3 ) ( 198.9 )

Shareholder litigation settlements — — ( 114.1 )

Interest and other income 30.8 5.8 8.8

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Loss before income taxes ( 177.0 ) ( 17.4 ) ( 203.1 )

Income tax (provision) benefit ( 17.1 ) ( 3.3 ) 8.5

Income tax provision ( 28.4 ) ( 17.1 ) ( 3.3 )

Net loss ( 205.4 ) ( 34.5 ) ( 206.4 )

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Diluted 224.1 220.5 217.9

Dividends declared per common share $ — $ — $ 0.18

See accompanying notes.

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Foreign currency translation adjustments, net of tax ( 4.6 ) 3.7 ( 0.6 )

Net unrealized gain (loss) on cash flow hedges, net of tax benefit of nil , nil and $ 0.3 million in 2021, 2020 and 2019, respectively

119.0 ( 125.1 ) ( 62.2 )

Net unrealized gain (loss) on cash flow hedges, net of tax 117.2 119.0 ( 125.1 )

Comprehensive income (loss) ( 92.8 ) 88.2 ( 332.1 )

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Balance at March 31, 2019 82.5 $ 649.7 133.5 $ 2,140.6 $ 208.7 $ ( 80.3 ) $ 2,918.7 $ 3.2 $ 2,921.9

Cumulative effect of accounting changes — — — — 21.3 ( 2.6 ) 18.7 — 18.7

Exercise of stock options — — 0.2 1.7 — — 1.7 — 1.7

Share-based compensation, net 0.3 11.9 0.5 47.0 — — 58.9 — 58.9

Share-based compensation, net of share cancellations for taxes 0.3 4.8 0.6 42.7 — — 47.5 — 47.5

Issuance of common shares related to acquisitions and other 0.9 8.5 2.1 36.7 — — 45.2 — 45.2

Repurchase of common shares, no par value ( 0.7 ) ( 3.8 ) — — — — ( 3.8 ) — ( 3.8 )

Noncontrolling interests — — — — — — — ( 1.4 ) ( 1.4 )

Dividends declared — — — — ( 38.5 ) — ( 38.5 ) — ( 38.5 )

Net income (loss) — — — — ( 188.4 ) — ( 188.4 ) 0.2 ( 188.2 )

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Exercise of stock options — 0.1 0.2 1.3 — — 1.4 — 1.4

Share-based compensation, net 0.3 4.8 0.6 42.7 — — 47.5 — 47.5

Issuance of common shares related to acquisitions and other 0.9 8.5 2.1 36.7 — — 45.2 — 45.2

Share-based compensation, net of share cancellations for taxes 0.2 4.7 1.6 72.8 — — 77.5 — 77.5

Issuance of common shares — 0.2 — 0.2 — — 0.4 — 0.4

Repurchase of common shares, no par value ( 0.2 ) ( 1.0 ) — — — — ( 1.0 ) — ( 1.0 )

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Net income (loss) — — — — ( 18.9 ) — ( 18.9 ) 0.2 ( 18.7 )

Other comprehensive loss — — — — — ( 125.7 ) ( 125.7 ) — ( 125.7 )

Other comprehensive income — — — — — 122.7 122.7 — 122.7

Redeemable noncontrolling interests adjustments to redemption value — — — — ( 47.1 ) — ( 47.1 ) — ( 47.1 )

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Exercise of stock options — 0.5 0.3 3.7 — — 4.2 — 4.2

Share-based compensation, net 0.2 4.7 1.6 72.8 — — 77.5 — 77.5

Share-based compensation, net of share cancellations for taxes 0.3 4.3 3.5 53.9 — — 58.2 — 58.2

Issuance of common shares — 0.2 — 0.2 — — 0.4 — 0.4

Repurchase of common shares, no par value ( 0.2 ) ( 1.0 ) — — — — ( 1.0 ) — ( 1.0 )

Noncontrolling interests — — — — — — — ( 0.3 ) ( 0.3 )

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Amortization of films and television programs and program rights 1,567.7 1,189.8 1,706.7

Interest on dissenting shareholders' liability — — ( 72.0 )

Amortization of debt financing costs and other non-cash interest 50.5 44.8 14.9

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Other amortization 92.5 73.2 68.5

Distributions from equity method investee — — 1.8

Gain on sale of Pantaya — ( 44.1 ) —

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Equity interests loss 3.0 6.1 17.2

Loss (gain) on investments ( 0.5 ) 0.5 87.6

(Gain) loss on investments ( 1.3 ) ( 0.5 ) 0.5

Deferred income taxes ( 1.7 ) 3.4 ( 0.9 )

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Participations and residuals ( 71.3 ) ( 49.1 ) ( 24.5 )

Film obligations ( 64.9 ) 6.8 ( 11.8 )

Program rights and other film obligations 64.9 ( 64.9 ) 6.8

Deferred revenue 1.3 47.9 ( 31.4 )

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Investing Activities:

Proceeds from the sale of equity method and other investments 4.1 — 48.0

Proceeds from the sale of Pantaya 123.6 — —

Proceeds from the sale of other investments 1.5 4.1 —

Investment in equity method investees and other ( 14.0 ) ( 0.2 ) ( 20.6 )

Business acquisitions, net of cash acquired of $ 5.5 in 2019

Distributions from equity method investees 7.2 — —

Acquisition of assets (film library and related assets) ( 161.4 ) — —

Increase in loans receivable ( 4.3 ) — —

Capital expenditures ( 33.1 ) ( 35.0 ) ( 31.1 )

1 unchanged sentence

Financing Activities:

Debt - borrowings 200.0 852.1 3,541.2

Debt - repayments ( 267.6 ) ( 1,033.4 ) ( 3,212.7 )

Production loans - borrowings 273.7 59.0 338.1

Production loans - repayments ( 53.0 ) ( 293.8 ) ( 305.4 )

Production tax credit facility advances 118.8 — —

Debt - borrowings, net of debt issuance and redemption costs 2,448.4 200.0 852.1

Debt - repurchases and repayments ( 2,693.9 ) ( 267.6 ) ( 1,033.4 )

Production and related loans - borrowings, net of debt issuance costs 1,043.2 392.5 59.0

Production and related loans - repayments ( 256.1 ) ( 53.0 ) ( 293.8 )

IP Credit Facility and other financing advances, net of debt issuance costs 210.2 — —

IP Credit Facility and other financing repayments ( 91.5 ) — —

Interest rate swap settlement payments ( 28.5 ) ( 22.3 ) —

Payment of dissenter liability accrued at acquisition — — ( 797.3 )

Repurchase of common shares — ( 2.2 ) ( 2.6 )

Dividends paid — — ( 57.4 )

Distributions to noncontrolling interest ( 1.5 ) ( 3.4 ) ( 5.7 )

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Net Cash Flows Provided By (Used In) Financing Activities 599.4 237.9 ( 426.1 )

Net Change In Cash and Cash Equivalents 206.3 136.8 ( 193.5 )

Foreign Exchange Effects on Cash and Cash Equivalents 4.2 ( 2.9 ) ( 0.3 )

Cash and Cash Equivalents - Beginning Of Period 318.2 184.3 378.1

Cash and Cash Equivalents - End Of Period $ 528.7 $ 318.2 $ 184.3

Net Change In Cash, Cash Equivalents and Restricted Cash ( 142.0 ) 206.3 136.8

Foreign Exchange Effects on Cash, Cash Equivalents and Restricted Cash ( 2.1 ) 4.2 ( 2.9 )

Cash, Cash Equivalents and Restricted Cash - Beginning Of Period 528.7 318.2 184.3

Cash, Cash Equivalents and Restricted Cash - End Of Period $ 384.6 $ 528.7 $ 318.2

See accompanying notes.

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Description of Business

Combining the STARZ premium global subscription platform with world-class motion picture and television studio operations, Lions Gate Entertainment Corp.

(the “Company,” “Lionsgate,” "Lions Gate," “we,” “us” or “our”) brings a unique and varied portfolio of entertainment to consumers around the world.

Its film, television, subscription and location-based entertainment businesses are backed by a 17,000-title library and one of the largest collections of film and television franchises in the independent media space.

Lionsgate Entertainment Corp.

(the “Company,” “Lionsgate,” "Lions Gate," “we,” “us” or “our”) encompasses world-class motion picture and television studio operations aligned with the STARZ premium global subscription platform to bring a unique and varied portfolio of entertainment to consumers around the world.

The Company’s film, television, subscription and location-based entertainment businesses are backed by a 17,000 -title library and a valuable collection of iconic film and television franchises.

Basis of Presentation

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The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions, including the potential impacts arising from the COVID-19 global pandemic, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.

The most significant estimates made by management in the preparation of the financial statements relate to ultimate revenue and costs used for the amortization of investment in films and television programs and program rights;

estimates of sales returns and other allowances and provisions for doubtful accounts;

GAAP requires management to make estimates and assumptions, including the potential impacts arising from the COVID-19 global pandemic and Russia's invasion of Ukraine, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.

estimates of future viewership used for the amortization of licensed program rights;

estimates of sales returns;

estimates related to the revenue recognition of sales or usage-based royalties;

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accruals for contingent liabilities;

and impairment assessments for investment in films and television programs, property and equipment, equity investments, goodwill and intangible assets.

and impairment assessments for investment in films and television programs and licensed program rights, property and equipment, equity investments, goodwill and intangible assets.

Actual results could differ from such estimates.

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The Company's 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.

The Company's Media Networks segment generates revenue primarily from the distribution of the Company's STARZ branded premium subscription video services and from the Company's formerly majority owned premium Spanish language streaming services business, Pantaya.

The Company's Media Networks segment generates revenue primarily from the distribution of the Company's STARZ branded premium subscription video services, and through March 31, 2021, from the Company's formerly majority owned premium Spanish language streaming services business, Pantaya.

The Company sold its interest in Pantaya on March 31, 2021, see Note 2 for further information.

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Television revenues include fixed fee arrangements as well as arrangements in which the Company earns advertising revenue from the exploitation of certain content on television networks.

Television also includes revenue from licenses to SVOD platforms in which the initial license of a television series is to an SVOD platform.

Television also includes revenue from licenses to SVOD platforms in which the initial license of a television series is to an SVOD platform or the traditional pay window for a motion picture is licensed to an SVOD platform.

Revenues associated with a title, right, or window from television licensing arrangements are recognized when the feature film or television program is delivered (on an episodic basis for television product) and the window for the exploitation right has begun.

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Revenues are also generated from sales or usage based royalties received from international distributors based on their distribution performance pursuant to the terms of the contracts after the recoupment of certain costs in some cases, and the initial minimum guarantee, if any, and are recognized when the sale by our customer generating a royalty due to us has occurred.

Other revenues are derived from the licensing of the Company's film and television and related content (games, music, location-based entertainment royalties, etc.) to other ancillary markets and from commissions earned and executive producer fees related to talent management.

Other revenues are derived from the licensing of the Company's film and television and related content (games, music, location-based entertainment royalties, etc.) to other ancillary markets and from commissions and executive producer fees earned related to talent management.

Revenues from the licensing of film and television content and the sales and licensing of music are recognized when the content has been delivered and the license period has begun, as discussed above.

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Media Networks revenues also include international revenues primarily from the OTT distribution of the Company's STARZ branded premium subscription video services outside the United States.

Through March 31, 2021, Media Networks' revenues also include revenues from the Company's formerly majority owned premium Spanish language streaming services business, Pantaya.

Through March 31, 2021, Media Networks' revenues also included revenues from the Company's formerly majority owned premium Spanish language streaming services business, Pantaya.

The Company sold its interest in Pantaya on March 31, 2021, see Note 2 for further information.

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Deferred revenue relates primarily to customer cash advances or deposits received prior to when the Company satisfies the corresponding performance obligation.

Payment terms vary by location and type of customer and the nature of the licensing arrangement, however, other than certain multi-year license arrangements;

payments are generally due within 60 days after revenue is recognized.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

multi-year licensing arrangements, primarily in the television, digital media, and international markets, payments may be due over a longer period.

Payment terms vary by location and type of customer and the nature of the licensing arrangement, however, other than certain multi-year license arrangements;

payments are generally due within 60 days after revenue is recognized.

For certain multi-year licensing arrangements, primarily in the television, digital media, and international markets, payments may be due over a longer period.

When we expect the period between fulfillment of our performance obligation and the receipt of payment to be greater than a year, a significant financing component is present.

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Cash and cash equivalents consist of cash deposits at financial institutions and investments in money market mutual funds.

Restricted Cash

At March 31, 2022, we had restricted cash of $ 13.4 million, representing amounts related to required cash reserves for interest payments associated with the Production Tax Credit Facility and IP Credit Facility ( no material amounts at March 31, 2021).

Restricted cash is included within “other current assets” on the consolidated balance sheet (see Note 19).

Investment in Films and Television Programs and Licensed Program Rights

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For titles included in acquired libraries, ultimate revenue includes estimates over a period not to exceed twenty years following the date of acquisition.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Films and television programs in development include costs of acquiring film rights to books, stage plays or original screenplays and costs to adapt such projects.

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Projects in development are written off at the earlier of the date they are determined not to be recoverable or when abandoned, or three years from the date of the initial investment unless the fair value of the project exceeds its carrying cost.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Licensed Program Rights:

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For content that is predominantly monetized as a group (primarily licensed program rights in the Media Networks segment and internally produced programming, as discussed above), whenever events or changes in circumstances indicate that the fair value of the film group may be less than its unamortized costs, the aggregate unamortized costs of the group are compared to the present value of the discounted cash flows of the group using the lowest level for which identifiable cash flows are independent of other produced and licensed content.

The Company's film groups are generally aligned along the Company's networks and digital content offerings domestically (i.e., Starz Networks and Other Streaming Services) and by territory or groups of territories internationally, wherein content assets are shared across the various territories and therefore, the territory or group of territories is the film group.

If the unamortized costs exceed the present value of discounted cash flows, an impairment charge is recorded for the excess and allocated to individual titles based on the relative carrying value of each title in the group.

The Company's film groups are generally identified by territory (i.e., country) or groups of international territories, wherein content assets are shared across the various territories and therefore, the group of territories is the film group.

If the unamortized costs of the film group exceed the present value of discounted cash flows, an impairment charge is recorded for the excess and allocated to individual titles based on the relative carrying value of each title in the group.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Valuation Assumptions.

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The discount rate utilized in the discounted cash flow analysis is based on the weighted average cost of capital of the Company plus a risk premium representing the risk associated with producing a particular film or television program or film group.

The fair value of any film costs associated with a film or

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

television program that management plans to abandon is zero.

The fair value of any film costs associated with a film or television program that management plans to abandon is zero.

Estimates of future revenue involve measurement uncertainty and it is therefore possible that reductions in the carrying value of investment in films and television programs may be required as a consequence of changes in management’s future revenue estimates.

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If appropriate and where deemed necessary, a reduction in the carrying amount is recorded based on the difference between the carrying amount and the fair value based on discounted cash flows.

The Company adopted the new guidance for accounting for leases on April 1, 2019, utilizing the modified retrospective approach, and therefore, results for reporting periods beginning after April 1, 2019 are presented under the new guidance, while prior periods have not been adjusted.

The Company determines if an arrangement is a lease at its inception.

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Identifiable intangible assets with finite lives are amortized to depreciation and amortization expense over their estimated useful lives, ranging from 5 to 16 years.

Through the first quarter of fiscal 2020 (see below), the Company amortized the Starz Traditional Affiliate customer relationships discussed above on a straight-line basis over 17 years.

The Starz Traditional Affiliate customer relationship intangible asset is amortized in the proportion that current period revenues bear to management’s estimate of future revenue over the remaining estimated useful life of the asset, which results in greater amortization in the earlier years of the estimated useful life of the asset than the latter years.

Amortizable intangible assets are tested for impairment whenever events or changes in circumstances (triggering events) indicate that the carrying amount of the asset may not be recoverable.

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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.

Due to changes in the industry related to the migration from linear to OTT and direct-to-consumer consumption, in the second quarter of its fiscal year ended March 31, 2020, the Company changed its pattern of amortization of its Traditional

For fiscal 2022 and fiscal 2021, due to changes in the industry related to the migration from linear to OTT and direct-to-

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Affiliate customer relationship intangible assets from the straight line method over 17 years to an accelerated amortization method which reflects amortization in the proportion that current period revenues bear to management’s estimate of future revenue over the remaining estimated useful life of the asset.

This method results in greater amortization in the earlier years of the estimated useful life of the asset than the latter years.

For fiscal 2021 and fiscal 2020, due to the industry factors discussed above and the economic uncertainty from the COVID-19 global pandemic, we performed an impairment analysis of our amortizable intangible assets.

consumer consumption, and the economic uncertainty from the COVID-19 global pandemic, we performed an impairment analysis of our amortizable intangible assets.

The impairment analysis requires a comparison of undiscounted future cash flows expected to be generated over the useful life of an asset to the carrying value of the asset.

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The Company's 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 represents the excess of acquisition costs over the tangible and intangible assets acquired and liabilities assumed in various business acquisitions by the Company.

Goodwill is allocated to the Company's reporting units, which are its operating segments or one level below its operating segments (component level).

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Fair value determinations require considerable judgment and requires assumptions and estimates of many factors, including revenue and market growth, operating margins and cash flows, market multiples and discount rates, and are sensitive to changes in these underlying assumptions and factors.

For fiscal 2020, due to the decline in the market price of our common shares in the quarter ended March 31, 2020, which was significantly impacted by the economic uncertainty and market volatility resulting from the COVID-19 global pandemic, the Company performed a quantitative impairment assessment for all of its reporting units as of March 31, 2020.

The DCF analysis of fair values were determined primarily by discounting estimated future cash flows, which included perpetual nominal growth rates ranging from 1.5 % to 4.0 %, at a weighted average cost of capital (discount rate) ranging from 11.5 % to 15 %, which considered the risk of achieving the projected cash flows, including the risk applicable to the reporting unit, industry and market as a whole.

Based on the Company's annual quantitative impairment assessment for fiscal 2020, the Company determined that two of its reporting units (Television and Media Networks) were at risk for impairment due to relatively small changes in certain key assumptions that could cause an impairment of goodwill.

As a result, during fiscal 2021, we monitored all of our reporting units for changes in the business environment that could impact recoverability.

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.

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

Goodwill Impairment Assessment:

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 previous 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, the Company 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, the Company concluded that it was more-likely-than-not that the fair value of its reporting units was greater than their carrying value.

For fiscal 2022, due to overall macroeconomic conditions, including the uncertainty of the longer-term economic impacts of the COVID-19 global pandemic, and the competitive environment for subscribers and its impact on subscriber growth rates, and our businesses, the Company performed a quantitative impairment assessment for all of its reporting units as of January 1, 2022.

The DCF analysis components of the fair value estimates were determined primarily by discounting estimated future cash flows, which included weighted average perpetual nominal growth rates ranging from 1.5 % to 3.5 %, at a weighted average cost of capital (discount rate) ranging from 10.5 % to 11.8 %, which considered the risk of achieving the projected cash flows, including the risk applicable to the reporting unit, industry and market as a whole.

Based on the Company's annual quantitative impairment assessment for fiscal 2022, the Company determined that one of its reporting units (Media Networks) was at risk for impairment due to relatively small changes in certain key assumptions that could cause an impairment of goodwill.

The fair value analysis of our Media Networks reporting unit indicated that the fair value exceeded the related carrying value by approximately 10 %.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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.

Management will continue to monitor all of its reporting units for changes in the business environment that could impact the recoverability of goodwill in future periods.

The recoverability of goodwill is dependent upon the continued growth of revenue and cash flows from the Company's business activities.

Examples of events or circumstances that could result in changes to the underlying key assumptions and judgments used in our goodwill impairment tests, and ultimately impact the estimated fair value of the Company's reporting units may include the duration of the COVID-19 global pandemic, its impact on the global economy and the creation and consumption of the Company's content, and the timing of when remaining production can resume and remaining theaters can re-open;

adverse macroeconomic conditions;

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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:

For fiscal 2022, the Company performed a qualitative impairment assessment of its indefinite-lived trade names.

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Tax credits earned with respect to expenditures on qualifying film and television productions are included as an offset to investment in films and television programs when the qualifying expenditures have been incurred provided that there is reasonable assurance that the credits will be realized (see Note 19).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Foreign Currency Translation

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Resulting unrealized and realized gains and losses are included in the consolidated statements of operations.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Foreign company assets and liabilities in foreign currencies are translated into U.S.

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Basic and diluted net loss per common share $ ( 0.84 ) $ ( 0.09 ) $ ( 0.86 )

As a result of the net loss in the fiscal years ended March 31, 2021, 2020 and 2019, the dilutive effect of the share purchase options, restricted share units ("RSUs") and restricted stock, and contingently issuable shares were considered anti-dilutive and, therefore, excluded from diluted loss per share.

As a result of the net loss in the fiscal years ended March 31, 2022, 2021 and 2020, the dilutive effect of the share purchase options, restricted share units ("RSUs") and restricted stock, and contingently issuable shares were considered anti-dilutive and, therefore, excluded from diluted net loss per share.

The weighted average anti-dilutive shares excluded from the calculation due to the net loss for the fiscal years ended March 31, 2022, 2021 and 2020 totaled 5.3 million, 2.2 million and 2.2 million, respectively.

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Accounting Guidance Adopted in Fiscal 2022

Fair Value Measurement - Changes to Disclosure Requirements :

In August 2018, the Financial Accounting Standards Board ("FASB") issued guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements.

This guidance eliminates the requirement that entities disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but requires public companies to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements, among other changes.

The Company adopted this guidance on April 1, 2020, with no material impact to its consolidated financial statements.

Improvements to Accounting for Costs of Films and License Agreements for Program Materials :

On April 1, 2020, the Company adopted, on a prospective basis, FASB guidance on the accounting for costs of films and episodic television series which aligns the accounting for capitalizing production costs of episodic television series with guidance for films.

The following reflects some of the more significant changes under the new guidance:

• Classification in balance sheet:

Allows for the classification of licensed program rights as long-term assets.

Previously, the Company reported a portion of these rights in current assets.

After adoption, the Company now classifies licensed program rights as long-term assets.

Accordingly, as of April 1, 2020, the Company has classified $ 310.5 million of these rights as non-current assets in the balance sheet.

• Removes capitalization constraint for episodic television:

The capitalization of production costs for episodic television series is no longer constrained until persuasive evidence of secondary market revenues exists.

Previously, theatrical content production costs could be fully capitalized while episodic television production costs were generally limited to the amount of contracted revenues.

• Monetization strategy:

Requires the determination of a titles' monetization strategy for purposes of testing impairment as follows:

◦ Monetized individually - lifetime value is predominantly derived from third-party revenues that are directly attributable to the specific film or television title (e.g., theatrical revenues or sales to third-party television programmers).

◦ Monetized as a film group - lifetime value is predominantly derived from third-party revenues that are attributable only to a bundle of titles, which is referred to as a "film group" in the updated guidance.

A film group is defined as the lowest level at which identifiable cash flows are largely independent of the cash flows of other films and/or license agreements.

The determination of the monetization strategy is made at commencement of production on a consolidated basis.

Because the new accounting guidance is applied prospectively, the predominant monetization strategy for content released prior to the beginning of fiscal 2021 is determined based on the expected means of monetization over the remaining life of the content.

The classification of content as individually monetized or monetized as part of a film group only changes if there is a significant change to the title's monetization strategy relative to its initial assessment.

Reference Rate Reform:

In March 2020, the Financial Accounting Standards Board ("FASB") issued guidance which provides optional expedients and exceptions for applying U.S.

GAAP to contract modifications, hedging relationships, and other transactions affected by the market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates, if certain criteria are met.

Additionally, in January 2021, the FASB issued additional guidance, which allows entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates.

The guidance is applicable to contract modifications made and hedging relationships entered into between March 12, 2020 and December 31, 2022.

The Company adopted this guidance on July 1, 2021 and is applying its provisions prospectively through December 31, 2022, with no material impact to the Company’s consolidated financial statements.

See Note 18 for further information.

Accounting for Revenue Contracts Acquired in a Business Combination:

In October 2021, the FASB issued guidance which requires entities to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination in accordance with Accounting Standards Codification Topic 606.

The Company adopted this guidance on October 1, 2021 and is applying its provisions prospectively, with no material impact to the Company's consolidated financial statements.

Accounting Guidance Not Yet Adopted

Government Assistance:

In November 2021, the FASB issued guidance which requires certain annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model.

This guidance is effective for the Company's fiscal year beginning April 1, 2022, with early adoption permitted.

The Company does not expect that the adoption of this guidance will have a material effect on its consolidated financial statements.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For these accounting purposes, the Company generally classifies content that is initially intended for use on the Company's Media Networks services (including its linear television networks, OTT services and direct-to-consumer services) as content monetized as a film group.

Content initially intended for theatrical release, home entertainment distribution, or for license to third parties, is generally classified as content monetized individually.

• Impairment testing:

The new guidance requires that an entity test a film or television program for impairment, when impairment indicators are present, at a film group level when the film or license agreement is predominantly monetized with other films and/or license agreements or individually for titles monetized individually.

An impairment results when the fair value of the film or film group is less than its carrying value.

Under previous guidance, film and television programs accounted for under the broadcasting accounting standard (i.e., licensed product in the Company's Media Networks segment) were carried on the balance sheet at the lower of cost or net realizable value rather than fair value.

Financial Instruments - Credit Losses:

In June 2016, the FASB issued guidance, as amended, that changes the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, from the incurred loss methodology under current U.S.

GAAP to a new, forward-looking current expected credit loss model that would generally result in the earlier recognition of credit losses.

The Company adopted this guidance on April 1, 2020 using a modified retrospective approach, with no material impact to its consolidated financial statements.

Simplifying the Accounting for Income Taxes:

In December 2019, the FASB issued guidance that simplifies the accounting for income taxes.

The guidance amends the rules for recognizing deferred taxes for investments, performing intraperiod tax allocations and calculating income taxes in interim periods.

It also reduces complexity in certain areas, including the accounting for transactions that result in a step-up in the tax basis of goodwill and allocating taxes to members of a consolidated group.

The Company early adopted this guidance on January 1, 2021 and applied its provisions beginning April 1, 2020, with no material impact to the Company's consolidated financial statements.

Dispositions and Acquisitions

On March 31, 2021, the Company sold its 75 % majority interest in Pantaya to Hemisphere Media Group for approximately $ 123.6 million in cash, subject to certain customary adjustments pursuant to the terms of the agreement.

Acquisitions and Dispositions

On July 15, 2021, the Company purchased approximately 200 feature film titles (the "Spyglass Library") from Spyglass Media Group, LLC ("Spyglass").

The Company also formed a strategic content partnership through an investment of a 18.9 % preferred equity interest in Spyglass, and entered into a multiyear first-look television arrangement with Spyglass.

The purchase price, including acquisition costs, of the Spyglass Library and preferred equity interest was $ 191.4 million, of which $ 171.4 million was paid at closing and $ 20.0 million will be paid over two annual installments in July 2022 and July 2023.

The Spyglass Library was accounted for as an asset acquisition and is included in investment in film and television programs and program rights on our consolidated balance sheet.

The preferred equity interest was accounted for as an equity-method investment (see Note 5).

On March 31, 2021, the Company sold its 75 % majority interest in Pantaya to Hemisphere Media Group for approximately $ 123.6 million in cash.

Under the terms of the purchase agreement, control of Pantaya transferred to Hemisphere Media Group on March 31, 2021, with the cash consideration transferred on April 1, 2021.

The receivable for the cash purchase consideration is included in other current assets as of March 31, 2021.

The receivable for the cash purchase consideration was included in other current assets as of March 31, 2021.

Pantaya was previously reflected in and represented substantially all of "Other Streaming Services" in the Company's Media Networks segment (see Note 16).

The Company recorded a gain before income taxes of approximately $ 44.1 million, which is reflected in the gain on sale of Pantaya line item in the consolidated statement of operations in the year ended March 31, 2021.

This gain amount is net of $ 69.0 million of goodwill allocated from the Media Networks segment as required under the applicable accounting guidance (see Note 6).

3 Arts Entertainment.

On May 29, 2018, the Company purchased a 51 % controlling membership interest in 3 Arts Entertainment LLC, a talent management and television/film production company.

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

A portion of the purchase price, up to $ 38.3 million, may be recoupable for a five-year period commencing on the acquisition date of May 29, 2018, contingent upon the continued employment of certain employees, or the achievement of certain EBITDA targets, as defined in the 3 Arts Entertainment acquisition and related agreements.

Accordingly, $ 38.3 million was initially recorded as a deferred compensation arrangement within other current and non-current assets and is being amortized in general and administrative expenses over a five-year period.

See Note 12 for the non-controlling interest holders' equity interest in 3 Arts Entertainment.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

This gain amount was net of $ 69.0 million of goodwill allocated from the Media Networks segment as required under the applicable accounting guidance (see Note 6).

Investment in Films and Television Programs and Licensed Program Rights

Total investment in films and television programs and licensed program rights by predominant monetization strategy is as follows:

2022 March 31,

(Amounts in millions)

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In development 102.7 92.9

1,356.5 986.6

Film Group Monetization

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In development 11.4 28.2

1,161.7 725.7

Licensed program rights, net of accumulated amortization $ 495.4 510.4

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(1) At March 31, 2022, the unamortized balance related to completed and not released and in progress theatrical films was $ 500.8 million.

At March 31, 2021, acquired film and television libraries have remaining unamortized costs of $ 18.3 million, which are monetized individually and are being amortized using the individual-film-forecast method over a remaining period of approximately 19.5 years.

Amortization of investment in film and television programs and licensed program rights by predominant monetization strategy is as follows for the fiscal year ended March 31, 2021, and was included in direct operating expense in the consolidated statement of operations:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

At March 31, 2022, acquired film and television libraries have remaining unamortized costs of $ 149.9 million, which are monetized individually and are being amortized using the individual-film-forecast method over a remaining period of approximately 19.2 years (March 31, 2021 - unamortized costs of $ 18.3 million).

Amortization of investment in film and television programs and licensed program rights by predominant monetization strategy is as follows for the fiscal years ended March 31, 2022 and 2021, and was included in direct operating expense in the consolidated statement of operations:

Amortization expense:

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Licensed program rights 377.4 421.5

Amortization of investment in film and television programs and licensed program rights for the fiscal years ended March 31, 2020 and 2019 was $ 1,706.7 million and $ 1,516.5 million, respectively.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$ 1,567.7 $ 1,189.8

Amortization of investment in film and television programs and licensed program rights for the fiscal year ended March 31, 2020 was $ 1,706.7 million.

The table below summarizes estimated future amortization expense for the Company's investment in film and television programs and licensed program rights as of March 31, 2022:

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Film group monetization $ 133.5 n/a n/a

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Investment in films and television programs and licensed program rights includes write-downs to fair value, which are included in direct operating expense on the consolidated statements of operations, and represented the following amounts by segment for the fiscal years ended March 31, 2022, 2021 and 2020:

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________________________

(1) Impairments not included in segment operating results in the years ended March 31, 2021 and 2020 include charges due to changes in performance expectations resulting from circumstances associated with the COVID-19 global pandemic.

In fiscal 2020 and fiscal 2019, these amounts also include certain programming and content charges recorded as a result of changes to the Company's programming and broadcasting strategy in connection with management changes (see Note 16 and Note 17).

Of these amounts, $ 15.4 million, $ 13.1 million and $ 4.3 million for fiscal 2021, 2020 and 2019, respectively, related to motion picture titles.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) Fiscal 2022:

Represents impairment charges recorded as a result of a strategic review of original programming on the STARZ platform, which identified certain titles with limited viewership or strategic purpose which were removed from the STARZ service and abandoned by the Media Networks segment.

Represents impairment charges as a result of changes in performance expectations associated with the circumstances associated with the COVID-19 global pandemic.

Represents certain programming and content impairment charges of $ 76.5 million recorded as a result of changes to the Company's programming and broadcasting strategy in connection with changes in certain management at Starz Networks and impairment charges of $ 15.1 million due to changes in performance expectations resulting from circumstances associated with the COVID-19 global pandemic.

Of the impairments not included in segment operating results, none , $ 15.4 million and $ 13.1 million for fiscal 2022, 2021 and 2020, respectively, related to motion picture titles.

See Note 15 and Note 16 for programming and content charges and COVID-19 related charges included in direct operating expense.

Property and Equipment

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Distribution equipment $ 18.8 $ 15.2

$ 15.2 $ 29.7

Leasehold improvements 43.5 42.9

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$ 81.2 $ 91.1

_______________

(1) As of March 31, 2020, amounts included the cost of satellite transponders previously accounted for as a finance lease, which as of March 31, 2021 are now accounted for as an operating lease (March 31, 2020 - cost of $ 9.5 million, accumulated depreciation of $ 7.7 million).

(2) As of March 31, 2020, represented the cost of Starz's building in Englewood, Colorado which was previously accounted for as a finance lease.

During the year ended March 31, 2021, the Company reassessed the lease term of the Starz commercial building, which resulted in a change in classification of this lease from a finance lease to an operating lease (see Note 8 for further information).

Accumulated depreciation for the building totaled $ 4.9 million at March 31, 2020.

During the year ended March 31, 2021, depreciation expense amounted to $ 44.0 million and includes the amortization of assets previously recorded under finance leases (2020 - $ 45.6 million;

2019 - $ 50.8 million).

During the year ended March 31, 2022, depreciation expense amounted to $ 43.0 million (2021 - $ 44.0 million;

2020 - $ 45.6 million, and amounts in fiscal 2021 and fiscal 2020 include the amortization of assets previously recorded under finance leases).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company's investments consisted of the following:

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$ 56.0 $ 31.9

________________

(1) Includes investments in equity securities without readily determinable fair values of nil and $ 5.4 million at March 31, 2021 and 2020, respectively.

Equity Method Investments:

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Pantelion Films is a joint venture with Videocine, an affiliate of Televisa, which produces, acquires and distributes a slate of English and Spanish language feature films that target Hispanic moviegoers in the U.S.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Atom Tickets.

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Great Point Opportunity Fund.

Great Point Opportunity Fund is a partnership to make investments in an operating company that will operate a studio facility in Yonkers, New York.

Great Point Opportunity Fund is an operating company that operates Lionsgate Studios Yonkers, a studio facility in Yonkers, New York.

Spyglass is a global premium content company, focused on developing, producing, financing and acquiring motion pictures and television programming across all platforms for worldwide audiences.

In addition to the equity method investments discussed above, the Company holds ownership interests in other immaterial equity method investees.

Summarized Financial Information.

Summarized financial information for the Company's equity method investees on an aggregate basis is set forth below (excluding the Company's former equity method investee, Pop, which is separately presented further below):

Summarized financial information for the Company's equity method investees on an aggregate basis is set forth below:

2022 March 31,

9 unchanged sentences

Net loss $ ( 46.1 ) $ ( 62.6 ) $ ( 64.4 )

On March 15, 2019, the Company sold its 50.0 % interest in Pop, resulting in net proceeds of $ 48.0 million (net of transaction costs).

The Company recorded a loss before income taxes on the sale of approximately $ 44.6 million, which is reflected in the gain (loss) on investments line item in the consolidated statement of operations for the year ended March 31, 2019.

Prior to the sale of its interest in Pop, the Company had accounted for such interest as an equity method investment.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Pop Financial Information:

The following table presents the summarized statement of operations for Pop for the period from April 1, 2018 through the date of sale of March 15, 2019, and a reconciliation of the net loss reported by Pop to the equity interest loss recorded by the Company:

Period from April 1, 2018 to March 15, 2019 (date of sale)

Revenues $ 96.9

Cost of services 55.0

Selling, marketing, and general and administration 49.9

Depreciation and amortization 7.4

Operating loss ( 15.4 )

Interest expense, net 2.2

Accretion of redeemable preferred stock units (1)

Total interest expense, net 91.6

Net loss $ ( 107.0 )

Reconciliation of net loss reported by Pop to equity interest loss:

Net loss reported by Pop $ ( 107.0 )

Ownership interest in Pop 50 %

The Company's share of net loss ( 53.5 )

Accretion of dividend and interest income on redeemable preferred stock units (1)

Elimination of the Company's share of profits on licensing sales to Pop ( 0.2 )

Realization of the Company’s share of profits on licensing sales to Pop 0.6

Total equity interest loss recorded $ ( 8.4 )

___________________

(1) Accretion of mandatorily redeemable preferred stock units represents Pop's 10 % dividend and the amortization of discount on its mandatorily redeemable preferred stock units previously held by the Company and the other interest holder.

The Company recorded its share of this expense as income from the accretion of dividend and discount on mandatorily redeemable preferred stock units within equity interest loss.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Gain (Loss) on Investments:

The following table summarizes the components of the gain (loss) on investments:

2021 2020 2019

(Amounts in millions)

Impairments of investments (1)

$ ( 5.7 ) $ — $ ( 36.8 )

Unrealized gains (losses) on equity securities 1.6 ( 0.5 ) ( 6.2 )

Gain (loss) on sale of equity method investees and other investments (2)

4.6 — ( 44.6 )

$ 0.5 $ ( 0.5 ) $ ( 87.6 )

_________________

(1) In fiscal 2021 and fiscal 2019, amounts include impairments of $ 5.0 million and $ 34.2 million, respectively, on equity securities without readily determinable fair values that were written down to their estimated fair value, with the remainder representing charges for other-than-temporary impairments on equity method investees.

(2) In the fiscal year ended March 31, 2019, represents the loss on the sale of the Company's 50.0 % equity interest in Pop in March 2019.

Goodwill and Intangible Assets

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Balance as of March 31, 2020 $ 393.7 $ 401.9 $ 2,037.9 $ 2,833.5

Sale of Pantaya (1)

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Balance as of March 31, 2021 $ 393.7 $ 401.9 $ 1,968.9 $ 2,764.5

Balance as of March 31, 2022 $ 393.7 $ 401.9 $ 1,968.9 $ 2,764.5

______________________

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Intangible Assets

Finite-lived intangible assets consisted of the following as of March 31, 2021 and March 31, 2020:

Finite-Lived Intangible Assets.

Finite-lived intangible assets consisted of the following:

March 31, 2022 March 31, 2021

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(1) Customer relationships primarily represent Starz affiliation agreements with distributors.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Amortization expense associated with the Company's intangible assets for the years ended March 31, 2022, 2021 and 2020 was approximately $ 134.9 million, $ 144.5 million, and $ 152.1 million, respectively.

Amortization expense remaining relating to intangible assets for each of the years ending March 31, 2023 through 2027 is estimated to be approximately $ 130.3 million, $ 125.5 million, $ 123.4 million, $ 119.6 million, and $ 116.6 million, respectively.

Indefinite-Lived Intangible Assets.

Indefinite-lived intangible assets not subject to amortization consisted of the following:

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(1) Tradenames are related to the Starz brand name, which have an indefinite useful life and are not amortized, but rather are assessed for impairment at least annually or more frequently whenever events or circumstances indicate that the rights might be impaired.

Amortization expense associated with the Company's intangible assets for the years ended March 31, 2021, 2020 and 2019 was approximately $ 144.5 million, $ 152.1 million, and $ 112.6 million, respectively.

Amortization expense remaining relating to intangible assets for each of the years ending March 31, 2022 through 2026 is estimated to be approximately $ 127.2 million, $ 118.7 million, $ 117.6 million, $ 118.3 million, and $ 115.1 million, respectively.

Total debt of the Company, excluding film obligations and production loans, was as follows as of March 31, 2021 and March 31, 2020:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Total debt of the Company, excluding film related and other obligations, was as follows

2022 March 31,

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2023 Term Loan A (1)

2026 Term Loan A 444.9 —

Term Loan B 844.2 952.6

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5.875 % Senior Notes

6.375 % Senior Notes

Total corporate debt 2,482.7 2,676.9

Finance lease obligations (3)

Total debt 2,676.9 2,784.3

Unamortized debt issuance costs, net of fair value adjustment on finance lease obligations ( 46.0 ) ( 51.3 )

Unamortized debt issuance costs ( 57.8 ) ( 46.0 )

Total debt, net 2,424.9 2,630.9

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________________

(1) On April 6, 2021, the Company amended its Credit Agreement, as defined below, to extend the maturity of a portion of its revolving credit commitments, amounting to $ 1.25 billion, and a portion of its outstanding term A loans, amounting to $ 444.9 million to April 6, 2026.

Additionally, in April and May 2021, the Company completed a series of repurchases of the Term Loan B and, in aggregate, paid $ 60.1 million to repurchase $ 60.5 million principal amount of the Term Loan B.

See Note 22 - Subsequent Events.

(2) On April 1, 2021, the 5.875 % Senior Notes and 6.375 % Senior Notes were redeemed in full and $ 1.0 billion aggregate principal amount of 5.500 % Senior Notes due April 2029 were issued.

(1) Subsequent to March 31, 2022, in April 2022, the Company voluntarily prepaid the entire outstanding principal amount of the 2023 Term Loan A of $ 193.6 million, together with accrued and unpaid interest.

See Note 21 - Subsequent Events.

(3) As of March 31, 2020, these obligations included a finance lease for Starz's transponder capacity that expired in February 2021, and a finance lease for Starz's commercial building.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table sets forth future annual contractual principal payment commitments of debt as of March 31, 2022:

2 unchanged sentences

(Amounts in millions)

Revolving Credit Facility March 2023 (1)

$ — $ — $ — $ — $ — $ — $ —

Term Loan A March 2023 (1)

75.0 585.0 — — — — 660.0

Revolving Credit Facility April 2026 $ — $ — $ — $ — $ — $ — $ —

2023 Term Loan A (1)

March 2023 193.6 — — — — — 193.6

2026 Term Loan A April 2026 16.7 28.9 41.1 44.5 313.7 — 444.9

Term Loan B March 2025 12.5 12.5 819.2 — — — 844.2

12.5 12.5 12.5 915.1 — — 952.6

5.500 % Senior Notes

November 2024 (2)

— — — 518.7 — — 518.7

6.375 % Senior Notes

February 2024 (2)

— — 545.6 — — — 545.6

April 2029 — — — — — 1,000.0 1,000.0

$ 222.8 $ 41.4 $ 860.3 $ 44.5 $ 313.7 $ 1,000.0 2,482.7

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________________

See Note 22 - Subsequent Events.

(2) On April 1, 2021, the 5.875 % Senior Notes and 6.375 % Senior Notes were redeemed in full and $ 1.0 billion aggregate principal amount of 5.500 % Senior Notes due April 2029 were issued.

See Note 21 - Subsequent Events.

Senior Credit Facilities (Revolving Credit Facility, Term Loan A and Term Loan B)

On April 6, 2021, the Company amended its Credit Agreement, as defined below, to extend the maturity of a portion of its revolving credit commitments, amounting to $ 1.25 billion, and a portion of its outstanding term A loans, amounting to $ 444.9 million to April 6, 2026.

See Note 22 - Subsequent Events for further information.

Revolving Credit Facility Availability of Funds & Commitment Fee.

The revolving credit facility provides for borrowings and letters of credit up to an aggregate of $ 1.25 billion, and at March 31, 2022 there was $ 1.25 billion available.

However, borrowing levels are subject to certain financial covenants as discussed below.

There were no letters of credit outstanding at March 31, 2022.

However, borrowing levels are subject to certain financial covenants as

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

discussed below.

The Company is required to pay a quarterly commitment fee on the revolving credit facility of 0.250 % to 0.375 % per annum, depending on the achievement of certain leverage ratios, as defined in the credit and guarantee agreement dated December 8, 2016, as amended (the "Credit Agreement"), on the total revolving credit facility of $ 1.25 billion less the amount drawn.

Maturity Date:

• Revolving Credit Facility & Term Loan A:

March 22, 2023 (see discussion above and Note 22 - Subsequent Events).

• Revolving Credit Facility:

April 6, 2026.

• Term Loan A:

◦ 2023 Term Loan A:

March 22, 2023 (voluntarily prepaid in April 2022, see Note 21 - Subsequent Events).

◦ 2026 Term Loan A:

April 6, 2026.

• Term Loan B:

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• Term Loan A:

◦ 2023 Term Loan A:

Quarterly principal payments, at quarterly rates of 1.25 % beginning June 30, 2019, 1.75 % beginning June 30, 2020, and 2.50 % beginning June 30, 2021, with the balance payable at maturity.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

◦ 2026 Term Loan A:

Quarterly principal payments, at quarterly rates of 1.25 % beginning September 30, 2022, 1.75 % beginning September 30, 2023, and 2.50 % beginning September 30, 2024 through March 31, 2026, with the balance payable at maturity.

• Term Loan B:

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• Term Loan B:

The Company may voluntarily prepay the Term Loan B at any time.

The Company may voluntarily prepay the Term Loan B at any time without premium or penalty.

The Senior Credit Facilities are guaranteed by the Guarantors (as defined in the Credit Agreement) and are secured by a security interest in substantially all of the assets of Lionsgate and the Guarantors (as defined in the Credit Agreement), subject to certain exceptions.

4 unchanged sentences

The Company may also be subject to an event of default upon a change in control (as defined in the Credit Agreement) which, among other things, includes a person or group acquiring ownership or control in excess of 50 % of the Company’s common shares.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Potential Impact of LIBOR Transition.

The Chief Executive of the U.K.

Financial Conduct Authority (the “FCA”), which regulates the London Interbank Offered Rate, or LIBOR, has announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after the end of 2021.

For U.S dollar LIBOR, publication of the one-week and two-month LIBOR settings will cease after December 31, 2021, and publication of the overnight and 12-month LIBOR settings will cease after June 30, 2023.

Financial Conduct Authority (the “FCA”), which regulates the LIBOR has announced that the FCA will no longer persuade or compel banks to submit rates for the calculation of LIBOR after the end of 2021.

For U.S dollar LIBOR, publication of the one-week and two-month LIBOR settings ceased on December 31, 2021, and publication of the overnight and 12-month LIBOR settings will cease after June 30, 2023.

Immediately after June 30, 2023, the one-month, three-month and six-month U.S.

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LIBOR will be discontinued or modified prior to June 30, 2023.

Under the terms of the Company's Credit Agreement, in the event of the discontinuance of the LIBOR Rate, a mutually agreed-upon alternate benchmark rate will be established to replace the LIBOR Rate.

The Company and Lenders (as defined in the Credit Agreement) shall, in good faith, endeavor to establish an alternate benchmark rate that gives due consideration to prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and which places the Lenders and the Company in the same economic position that existed immediately prior to the discontinuation of the LIBOR Rate.

The Company does not anticipate that the discontinuance or modification of the LIBOR Rate will materially impact its liquidity or financial position.

5.875 % Senior Notes and 6.375 % Senior Notes

On April 1, 2021, the 5.875 % Senior Notes and 6.375 % Senior Notes were redeemed in full and $ 1.0 billion aggregate principal amount of 5.500 % Senior Notes due April 2029 were issued.

See Note 22 - Subsequent Events.

• 5.875 % Senior Notes:

Bore interest at 5.875 % annually (payable semi-annually on May and November 1 of each year).

The Company is unable to predict whether or when an alternative reference rate will become a standard global benchmark and suitable replacement for LIBOR.

In July 2021, the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions and other market participants, recommended replacing U.S.

dollar LIBOR with the Secured Overnight Financing Rate (“SOFR”), a new index based on transactions in the market for short-term treasury securities.

The publication of SOFR began in April 2018, and, therefore, it has a very limited history.

Whether SOFR attains market traction as a LIBOR replacement tool remains in question.

Under the terms of the Company's Credit Agreement, in the event of the discontinuance of LIBOR, a mutually agreed-upon alternate benchmark rate will be established to replace LIBOR.

The Company and Lenders (as defined in the Credit Agreement) shall, in good faith, endeavor to establish an alternate benchmark rate that gives due consideration to prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and which places the lenders under the Credit Agreement and the Company in the same economic position that existed immediately prior to the discontinuation of LIBOR.

The Company does not anticipate that the discontinuance or modification of LIBOR will materially impact its liquidity or financial position.

5.500 % Senior Notes

Bore interest at 6.375 % annually (payable semi-annually in arrears on February 1 and August 1 of each year).

Bears interest at 5.500 % annually (payable semi-annually in arrears on April 15 and October 15 of each year, commencing on October 15, 2021).

Maturity Date:

• 5.875 % Senior Notes:

November 1, 2024.

• 6.375 % Senior Notes:

February 1, 2024.

April 15, 2029.

Optional Redemption:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

• 5.875 % Senior Notes:

(i) Was redeemable by the Company, in whole or in part, at the redemption prices set forth as follows (as a percentage of the principal amount redeemed), plus accrued and unpaid interest to the redemption date:

(i) on or after November 1, 2020 - 102.938 %;

(ii) on or after November 1, 2021 - 101.439 %;

and (iii) on or after November 1, 2022 - 100 %.

• 6.375 % Senior Notes:

(i) on or after February 1, 2021 - 103.188 %;

(ii) on or after February 1, 2022 - 101.594 %;

(iii) on or after February 1, 2023 - 100 %.

The 5.875 % Senior Notes and 6.375 % Senior Notes were unsubordinated, unsecured obligations of the Company.

The 5.875 % Senior Notes and 6.375 % Senior Notes contain certain restrictions and covenants that, subject to certain exceptions, limited 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.

(i) Prior to April 15, 2024, the Company may redeem the 5.500 % Senior Notes in whole at any time, or in part from time to time, at a price equal to 100 % of the principal amount of the notes to be redeemed plus a "make-whole" premium, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

The make-whole premium is the greater of (i) 1.0 % of the principal amount redeemed and (ii) the excess, if any, of the present value at such redemption date of the redemption price at April 15, 2024 (see redemption prices below) plus interest through April 15, 2024 (discounted to the redemption date at the treasury rate plus 50 basis points) over the principal amount of the notes redeemed on the redemption date.

(ii) On or after April 15, 2024, the Company may redeem the 5.500 % Senior Notes in whole at any time, or in part from time to time, at certain specified redemption prices, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

Such redemption prices are as follows (as a percentage of the principal amount redeemed):

(i) on or after April 15, 2024 - 102.750 %;

(ii) on or after April 15, 2025 - 101.375 %;

and (iii) on or after April 15, 2026 - 100 %.

In addition, the Company may redeem up to 40 % of the aggregate principal amount of the notes at any time and from time to time prior to April 15, 2024 with the net proceeds of certain equity offerings at a price of 105.500 % of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

The 5.500 % Senior Notes are unsubordinated, unsecured obligations of the Company.

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.

As of March 31, 2022, the Company was in compliance with all applicable covenants.

Change in Control.

The occurrence of a change of control was a triggering event requiring the Company to offer to purchase from holders all of the 5.875 % Senior Notes and 6.375 % Senior Notes, at a price equal to 101 % of the principal amount, plus accrued and unpaid interest, if any, to the date of purchase.

In addition, certain asset dispositions will be triggering events that may require the Company to use the excess proceeds from such dispositions to make an offer to purchase the 5.875 % Senior Notes and 6.375 % Senior Notes at 100 % of their principal amount, plus accrued and unpaid interest, if any to the date of purchase.

The occurrence of a change of control will be a triggering event requiring the Company to offer to purchase from holders all of the 5.500 % Senior Notes, at a price equal to 101 % of the principal amount, plus accrued and unpaid interest, if any, to the date of purchase.

In addition, certain asset dispositions will be triggering events that may require

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the Company to use the excess proceeds from such dispositions to make an offer to purchase the 5.500 % Senior Notes at 100 % of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.

Capacity to Pay Dividends

At March 31, 2021, the capacity to pay dividends under the Senior Credit Facilities, and the 5.875 % Senior Notes and the 6.375 % Senior Notes significantly exceeded the amount of the Company's accumulated deficit or net loss, and therefore the Company's net loss of $ 34.5 million and accumulated deficit of $ 82.9 million were deemed free of restrictions from paying dividends at March 31, 2021.

At March 31, 2022, the capacity to pay dividends under the Senior Credit Facilities, and the 5.500 % Senior Notes significantly exceeded the amount of the Company's accumulated deficit or net loss, and therefore the Company's net loss of $ 205.4 million and accumulated deficit of $ 369.7 million were deemed free of restrictions from paying dividends at March 31, 2022.

Debt Transactions

Subsequent to March 31, 2022, in April 2022, the Company voluntarily prepaid the entire outstanding principal amount of the 2023 Term Loan A of $ 193.6 million, together with accrued and unpaid interest.

See Note 21 - Subsequent Events.

Senior Notes Redemption and Issuance.

On April 1, 2021, the Company redeemed in full all $ 518.7 million outstanding principal amount of its 5.875 % Senior Notes due November 2024 (" 5.875 % Senior Notes") and all $ 545.6 million outstanding principal amount of its 6.375 % Senior Notes due February 2024 (" 6.375 % Senior Notes").

In connection with the early redemption of the 5.875 % Senior Notes and the 6.375 % Senior Notes, the Company paid a prepayment premium of $ 15.2 million and $ 17.4 million, respectively, plus accrued and unpaid interest to the date of redemption, pursuant to the terms of the indentures governing the 5.875 % Senior Notes and the 6.375 % Senior Notes, respectively.

In connection with the redemption of the 5.875 % Senior Notes and the 6.375 % Senior Notes, on April 1, 2021, the Company issued $ 1.0 billion aggregate principal amount of 5.500 % Senior Notes due April 15, 2029 (" 5.500 % Senior Notes").

Credit Agreement Amendment.

On April 6, 2021, the Company amended its Credit Agreement to, among other things, extend the maturity (the "Extension") of a portion of its revolving credit commitments, amounting to $ 1.25 billion, and a portion of its outstanding term A loans, amounting to $ 444.9 million (the "2026 Term Loan A"), to April 6, 2026, and make certain other changes to the covenants and other provisions therein.

After giving effect to the Extension, $ 250.0 million of revolving credit commitments and $ 215.1 million of term A loans (the "2023 Term Loan A", and together with the 2026 Term Loan A, the "Term Loan A") remained outstanding with a maturity of March 22, 2023.

Termination of a Portion of Revolving Credit Facility Commitments.

On November 2, 2021, the Company terminated its revolving credit commitments with a maturity of March 22, 2023, amounting to $ 250.0 million remaining after giving effect to the Extension (the "Termination").

After giving effect to the Termination, the Company's remaining revolving credit commitments under its Credit Agreement amounted to $ 1.25 billion with a maturity of April 6, 2026 (the "Revolving Credit Facility").

Term Loan B Repurchases.

During the year ended March 31, 2022, the Company completed a series of repurchases of the term B loans due March 24, 2025 ("Term Loan B") and, in aggregate, paid $ 95.3 million to repurchase $ 96.0 million principal amount of the Term Loan B.

See the Loss on Extinguishment of Debt section further below for a description of the accounting for these transactions.

Senior Notes Repurchases.

During the year ended March 31, 2020, the Company paid $ 1.0 million to repurchase $ 1.3 million principal amount of the 5.875 % Senior Notes, and the Company paid $ 3.5 million to repurchase $ 4.4 million principal amount of the 6.375 % Senior Notes.

Term Loan B Repurchases.

Term Loan B Repurchases and Prepayments.

During the year ended March 31, 2020, the Company paid $ 22.0 million to repurchase $ 28.0 million principal amount of the Term Loan B.

Term Loan Prepayments.

During the year ended March 31, 2020, the Company made voluntary prepayments totaling $ 101.9 million in principal outstanding under the Term Loan B, together with accrued and unpaid interest.

6.375 % Senior Notes Issuance.

On February 4, 2019, the Company issued $ 550.0 million aggregate principal amount of 6.375 % Senior Notes.

The Company used the proceeds of the 6.375 % Senior Notes to pay down outstanding amounts under its Revolving Credit Facility and for working capital purposes.

Convertible Senior Subordinated Notes Repayment.

On April 15, 2018, the 1.25 % convertible senior subordinated notes due April 2018 (the "April 2013 1.25 % Notes") matured, and upon maturity, the Company repaid the outstanding principal amount of $ 60.0 million, together with accrued and unpaid interest.

In addition, during the year ended March 31, 2020, the Company made voluntary prepayments totaling $ 101.9 million in principal outstanding under the Term Loan B, together with accrued and unpaid interest.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Term Loan Prepayments.

During the year ended March 31, 2019, the Company made voluntary prepayments totaling $ 130.0 million in principal outstanding under the Term Loan B, together with accrued and unpaid interest.

Gain (Loss) on Extinguishment of Debt

During the years ended March 31, 2020 and 2019, the Company recorded a gain (loss) on extinguishment of debt related to the transactions discussed above, as presented below ( none in the year ended March 31, 2021):

Year Ended March 31,

Gain (loss) on extinguishment of debt:

Senior Notes repurchases $ 1.1 $ —

Term Loan B repurchases 5.7 —

Term Loan B prepayments ( 1.4 ) ( 1.9 )

Loss on Extinguishment of Debt

Accounting for the Fiscal 2022 Debt Transactions Discussed Above:

Revolving Credit Facility.

• Unamortized debt issuance costs:

In connection with the Company's credit agreement amendment on April 6, 2021 described above, where the borrowing capacity (measured as the amount available under the revolving credit facility multiplied by the remaining term) was less than it was prior to the amendment to the Revolving Credit Facility on April 6, 2021, on a creditor-by-creditor basis, the unamortized debt issuance costs were written off as a loss on extinguishment of debt in proportion to the decrease in borrowing capacity.

The remaining unamortized debt issuance costs were allocated between the revolving credit commitments with maturities in 2023 and 2026 in proportion to the borrowing capacity of each facility and were being amortized over the respective terms of the revolving credit commitments with maturities in 2023 and 2026, as applicable.

During the three months ended December 31, 2021, in connection with the Company's termination of its revolving credit commitments with a maturity of March 22, 2023 as discussed above, the associated debt issuance costs were written off as a loss on extinguishment of debt.

• Fees paid to creditors and third-party costs:

In connection with the Company's credit agreement amendment on April 6, 2021 described above, all fees paid to creditors or third parties (i.e., new debt issuance costs) were recorded as a reduction of amounts outstanding under the 2026 Revolving Credit Facility and are being amortized over the term of the 2026 Revolving Credit Facility.

In connection with the Company's credit agreement amendment on April 6, 2021 described above, with respect to substantially all creditors participating in the Term Loan A, the amendment was considered a modification of terms since the present value of the cash flows after the amendment differed by less than a 10% change from the present value of the cash flows on a creditor-by-creditor basis prior to the amendment.

Accordingly, the associated costs were accounted for as follows:

• Unamortized debt issuance costs:

Previously incurred unamortized debt issuance costs and fees were allocated between the 2023 Term Loan A and the 2026 Term Loan A based on the relative balances outstanding after the amendment and are being amortized over the respective terms of the 2023 Term Loan A and 2026 Term Loan A.

To the extent there was a reduction of the outstanding balance on a creditor-by-creditor basis (i.e., a partial prepayment of debt), previously incurred unamortized debt issuance costs and fees were expensed as a loss on extinguishment of debt on the consolidated statement of operations.

• Fees paid to creditors:

Certain fees were paid to creditors based on their 2026 Term Loan A participation.

These fees paid to creditors were recorded as a reduction of amounts outstanding under the 2026 Term Loan A and are being amortized over the term of the 2026 Term Loan A.

• Third-party costs:

Substantially all third-party costs were expensed as a result of the modification and included in loss on extinguishment of debt in the consolidated statement of operations.

Senior Notes.

In accounting for the issuance and redemption of the 5.875 % and 6.375 % Senior Notes on April 1, 2021 as discussed above, a portion of the Senior Notes redemption and issuance was considered a modification of terms with creditors who participated in both the redeemed Senior Notes and new 5.500 % Senior Notes, a portion was considered a debt extinguishment, and a portion represented new issuances to new creditors, and the debt issuance costs were accounted for as follows:

• Unamortized debt issuance costs:

Previously incurred unamortized debt issuance costs and fees on the redeemed Senior Notes are being amortized over the term of the new Senior Notes, to the extent considered a modification of terms, and expensed as a loss on extinguishment of debt to the extent considered an extinguishment.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

• Fees paid to creditors:

Fees paid to creditors or call premiums were recorded as a reduction of amounts outstanding under the new Senior Notes and are being amortized over the term of the new Senior Notes, to the extent considered a modification of terms or associated with new issuances to new creditors, and expensed as a loss on extinguishment of debt to the extent considered an extinguishment or a partial prepayment of debt.

• Third-party costs:

Costs incurred with third parties were recorded as a reduction of amounts outstanding under the new Senior Notes and will be amortized over the term of the new Senior Notes, to the extent considered an extinguishment or associated with new issuances to new creditors, and expensed as a loss on extinguishment of debt to the extent considered a modification of terms.

For all of the above transactions, debt issuance costs recorded as a reduction of outstanding debt are amortized using the effective interest method.

In connection with the repurchases of the Term Loan B discussed above, during the year ended March 31, 2022, the Company recorded a loss on extinguishment of debt of $ 0.2 million related to the write-off of debt issuance costs.

Loss (Gain) on Extinguishment of Debt.

During the year ended March 31, 2022, the Company recorded a loss on extinguishment of debt related to the transactions described above, as summarized in the table below:

March 31, 2022

Loss on Extinguishment of Debt Recorded as a Reduction of Outstanding Debt Balances & Amortized Over Life of New Issuances Total

(Amounts in millions)

Credit Agreement amendment (Revolving Credit Facility and Term Loan A) and Senior Notes redemption and issuance:

New debt issuance costs and call premiums $ 21.2 $ 31.0 $ 52.2

Previously incurred debt issuance costs 5.2 31.1 36.3

$ 26.4 $ 62.1 $ 88.5

Termination of a portion of Revolving Credit Facility commitments, Term Loan B repurchases and other (1)

Total loss on extinguishment of debt $ 28.2

________________

(1) During the year ended March 31, 2022, the Company recorded a loss on extinguishment of debt of $ 1.1 million related to the write-off of debt issuance costs associated with the termination of its revolving credit commitments with maturities in March 2023.

There was no loss on extinguishment of debt in the year ended March 31, 2021.

During the year ended March 31, 2020, the Company recorded an aggregate gain on extinguishment of debt of $ 5.4 million related to the fiscal 2020 transactions discussed above, which represented a gain of $ 1.1 million on the Senior Notes repurchases, a gain of $ 5.7 million on the Term Loan B repurchases, and a loss of $ 1.4 million on the Term Loan B prepayments.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Film Related and Other Obligations

2022 March 31,

(Amounts in millions)

Program rights and film obligations $ 278.4 $ 214.6

Production and related loans 1,286.7 493.5

IP Credit Facility and other financing obligations (1)

Total film related and other obligations 1,688.6 708.1

Unamortized debt issuance costs ( 8.5 ) ( 4.6 )

Total film related and other obligations, net 1,680.1 703.5

Less current portion ( 951.1 ) ( 385.0 )

Total non-current film related and other obligations $ 729.0 $ 318.5

________________________

(1) See further discussion under the "IP Credit Facility and Other Financing Obligations" section below and Note 21 - Subsequent Events for amounts received under the IGR Facility (as defined below) subsequent to March 31, 2022.

The following table sets forth future annual repayment of film related and other obligations as of March 31, 2022.

Year Ending March 31,

2023 2024 2025 2026 2027 Thereafter Total

(Amounts in millions)

Program rights and film obligations $ 199.6 $ 46.7 $ 17.7 $ 4.6 $ 1.3 $ 8.5 $ 278.4

Production and related loans 732.9 190.1 363.7 — — — 1,286.7

IP Credit Facility and other financing obligations (1)

27.1 25.4 26.3 26.3 18.4 — 123.5

$ 959.6 $ 262.2 $ 407.7 $ 30.9 $ 19.7 $ 8.5 $ 1,688.6

Less unamortized debt issuance costs ( 8.5 )

________________________

(1) IP Credit Facility amounts represent outstanding amounts under our IP Credit Facility at March 31, 2022, 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 (see further information below).

See further discussion under the "IP Credit Facility and Other Financing Obligations" section below and Note 21 - Subsequent Events for amounts received under the IGR Facility (as defined below) subsequent to March 31, 2022.

Program Rights and Film Obligations

Program rights and film obligations include minimum guarantees and accrued licensed program rights obligations, which represent amounts payable for film or television rights that the Company has acquired or licensed and certain theatrical marketing obligations for amounts received from third parties that are contractually committed for theatrical marketing expenditures associated with specific titles.

Production and Related Loans

Production and related loans include individual loans for the production or license of film and television programs that the Company produces or licenses and the Company's Production Tax Credit Facility (as defined below).

Individual Loans .

The majority of the Company's individual production and related loans have contractual repayment dates either at or near the expected completion date, with the exception of certain loans containing repayment dates on a longer term basis, and incur primarily LIBOR and SOFR-based interest at a weighted average rate of 3.00 % (before the impact of interest rate swaps, see Note 18 for interest rate swaps).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Production Tax Credit Facility.

In January 2021, as amended on March 31, 2021 and March 29, 2022, the Company entered into a non-recourse senior secured revolving credit facility (the "Production Tax Credit Facility") based on collateral consisting of certain of the Company’s tax credit receivables.

The maximum principal amount of the Production Tax Credit Facility is $ 235.0 million, subject to the amount of collateral available, which is based on specified percentages of amounts payable to the Company by governmental authorities pursuant to the tax incentive laws of certain eligible jurisdictions that arise from the production or exploitation of motion pictures and television programming in such jurisdiction.

Advances under the Production Tax Credit Facility bear interest at a rate equal to SOFR plus 0.10 % to 0.25 % depending on the SOFR term (i.e., one, three or six months), plus 1.50 % per annum or the base rate plus 0.50 % per annum (effective interest rate of 1.90 % at March 31, 2022).

The Production Tax Credit Facility matures on January 27, 2025.

As of March 31, 2022, there was $ 224.0 million outstanding under the Production Tax Credit Facility, and there was $ 10.5 million available under the Production Tax Credit Facility (March 31, 2021 - $ 120.0 million outstanding).

IP Credit Facility and Other Financing Obligations

IP Credit Facility.

In July 2021, as amended on September 30, 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 certain of the Company’s rights in certain library titles, including the Spyglass and other recently acquired libraries.

The maximum principal amount of the IP Credit Facility is $ 140.0 million, subject to the amount of collateral available, which is based on the valuation of cash flows from the libraries.

The cash flows generated from the exploitation of the rights will be applied to repay the IP Credit Facility subject to cumulative minimum guaranteed payment amounts as set forth below:

Cumulative Period Through:

Cumulative Minimum Guaranteed Payment Amounts Payment Due Date

(in millions)

September 30, 2022 $ 26.3 November 14, 2022

September 30, 2023 $ 52.5 November 14, 2023

September 30, 2024 $ 78.8 November 14, 2024

September 30, 2025 $ 105.0 November 14, 2025

July 30, 2026 $ 140.0 July 30, 2026

Advances under the IP Credit Facility bear interest at a rate equal to, at the Company’s option, LIBOR plus 2.25 % per annum (with a LIBOR floor of 0.25 %) or the base rate plus 1.25 % per annum (effective interest rate of 2.70 % at March 31, 2022).

The IP Credit Facility matures on July 30, 2026.

As of March 31, 2022, there was $ 123.5 million outstanding under the IP Credit Facility.

Other Financing Obligations.

During the third quarter ended December 31, 2021, the Company repaid its previously outstanding other financing obligations incurred in the second quarter ended September 30, 2021, which included financing collateralized by certain contractual payments to be received in the future.

On March 31, 2022 certain subsidiaries of the Company entered into a committed secured revolving credit facility (the "Investment Grade Receivables (IGR) Facility") based on collateral consisting of certain of the Company's fixed fee or minimum guarantee contracts where cash will be received in the future.

The maximum principal amount of the IGR Facility is $ 125.0 million, subject to the amount of eligible collateral contributed to the facility.

Advances under the IGR Facility bear interest at a rate equal to Term SOFR plus 0.10 % to 0.25 % depending on the SOFR term (i.e., one, three or six months), plus an applicable margin amounting to 1.15 % per annum at March 31, 2022.

The applicable margin is subject to a potential increase to either 1.25 % or 1.50 % based on the weighted average credit quality rating of the collateral contributed to the facility.

The IGR Facility revolving period finishes on March 31, 2025, at which point cash collections from the underlying collateral is used to repay the facility.

The facility maturity date is up to 2 years, 90 days after the revolving period ends, currently June 28, 2027.

As of March 31, 2022, there were no amounts outstanding under the IGR Facility, however, on April 1, 2022, the Company received $ 125.0 million under the IGR Facility.

See Note 21 - Subsequent Events.

The Company has operating leases primarily for office space, studio facilities, and other equipment.

Through the first quarter of fiscal 2021, the Company had classified its lease for the Starz commercial building as a finance lease.

During the second quarter ended September 30, 2020, due to a change in the expected lease term of the Starz commercial building, the Company reassessed the lease classification of the Starz commercial building, which resulted in a change in classification of this lease from a finance lease to an operating lease.

As a result, the right-of-use assets and lease liabilities (including the fair value adjustment) under finance leases decreased by $ 42.0 million and $ 48.6 million, respectively, and the right-of-use assets and lease liabilities under operating leases increased by $ 6.0 million and $ 12.6 million, respectively in the fiscal year ended March 31, 2021.

The Company's leases have remaining lease terms of up to approximately 10 years, and the Starz commercial building lease includes four successive five-year renewal periods at the Company's option.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The components of lease cost were as follows:

2022 2021 2020

(Amounts in millions)

6 unchanged sentences

Short-term lease cost (2)

233.1 129.5 93.3

Variable lease cost (3)

1 unchanged sentence

___________________

(1) Operating lease cost amounts primarily represent the amortization of right-of-use assets and are included in the “other amortization” line of the consolidated statements of cash flows.

Amounts include costs capitalized during the period for leased assets used in the production of film and television programs.

Operating lease cost amounts primarily represent the amortization of right-of-use assets and are included in the “other amortization” line of the consolidated statement of cash flows.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2) Short-term lease cost primarily consists of leases of facilities and equipment associated with film and television productions.

(2) Short-term lease cost primarily consists of leases of facilities and equipment associated with film and television productions and are capitalized when incurred.

(3) Variable lease cost primarily consists of insurance, taxes, maintenance and other operating costs.

7 unchanged sentences

$ 200.7 161.3

Finance Leases

Right-of-use assets Property and equipment, net $ — 46.4

Lease liabilities (current) Debt - short-term portion $ — 3.0

Lease liabilities (non-current) Debt - non-current — 39.4

2022 March 31,

1 unchanged sentence

Operating leases 6.0 5.1

Finance leases — 21.6

Weighted average discount rate:

Operating leases 3.32 % 3.88 %

Finance leases — 6.40 %

The expected future payments relating to the Company's operating lease liabilities at March 31, 2021 are as follows (no finance lease liabilities outstanding at March 31, 2021):

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The expected future payments relating to the Company's lease liabilities at March 31, 2022 are as follows:

(Amounts in millions)

4 unchanged sentences

Total $ 200.7

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of March 31, 2021, the Company has entered into a lease that has not yet commenced related to a studio facility owned by an equity-method investee, for which construction has not yet been completed.

The lease is for a term of 10.5 years, commencing upon completion of construction of the studio facility (currently expected to be in calendar year 2021), and includes an option to extend the term for an additional 5 years.

The total minimum lease payments under this lease, as amended, are approximately $ 72.8 million.

Additionally, as of March 31, 2021, the Company has entered into a lease that has not yet commenced for office space for which construction has not yet been completed, also related to the studio facility described above.

The lease is for a term of 10.5 years commencing upon completion of construction of the studio facility.

The total minimum lease payments under this lease are approximately $ 11.7 million.

Under the accounting guidance in effect prior to April 1, 2019, the Company incurred rent expense of $ 27.0 million in the year ended March 31, 2019.

Participations and Residuals

Theatrical Slate Participation

On March 10, 2015, the Company entered into a theatrical slate participation arrangement with TIK Films (U.S.), Inc.

and TIK Films (Hong Kong) Limited (collectively, "TIK Films"), both wholly owned subsidiaries of Hunan TV & Broadcast Intermediary Co.

Under the arrangement, TIK Films, in general and subject to certain limitations including per picture and annual caps, contributed a minority share of 25 % of the Company’s production or acquisition costs of “qualifying” theatrical feature films, released generally during the three-year period ended January 23, 2018, and participated in a pro-rata portion of the pictures’ net profits or losses similar to a co-production arrangement based on the portion of costs funded.

The arrangement excluded, among others, any theatrical feature film incorporating any elements from the Twilight, Hunger Games or Divergent franchises.

The percentage of the contribution could vary on certain pictures.

Amounts provided from TIK Films are reflected as a participation liability in the Company's consolidated balance sheets and amounted to $ 35.9 million at March 31, 2021 (March 31, 2020 - $ 32.8 million).

The difference between the ultimate participation expected to be paid to TIK Films and the amount provided by TIK Films is amortized as a charge to or a reduction of participation expense under the individual-film-forecast method.

Film Obligations, Production Loans and Production Tax Credit Facility

2021 March 31,

(Amounts in millions)

Film obligations $ 214.6 $ 299.3

Production loans 373.5 151.4

Production tax credit facility 120.0 —

Total film obligations, production loans and production tax credit facility 708.1 450.7

Unamortized debt issuance costs ( 4.6 ) ( 0.1 )

Total film obligations, production loans, and production tax credit facility, net 703.5 450.6

Less current portion ( 385.0 ) ( 353.7 )

Total non-current film obligations, production loans and production tax credit facility $ 318.5 $ 96.9

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table sets forth future annual repayment of film obligations, production loans and the Production Tax Credit Facility (as defined and discussed below) as of March 31, 2021:

Year Ended March 31,

2022 2023 2024 2025 2026 Thereafter Total

(Amounts in millions)

Film obligations $ 146.3 $ 38.1 $ 13.1 $ 5.7 $ 4.5 $ 6.6 $ 214.3

Production loans 238.7 102.1 32.7 — — — 373.5

Production tax credit facility (1)

— — — 120.0 — — 120.0

$ 385.0 $ 140.2 $ 45.8 $ 125.7 $ 4.5 $ 6.6 $ 707.8

Less imputed interest on film obligations and issuance costs on production loans and production tax credit facility ( 4.3 )

________________________

(1) The repayment amount for the Production Tax Credit Facility represents the amount outstanding at March 31, 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.

Film Obligations

Film obligations include minimum guarantees and accrued licensed program rights obligations, which represent amounts payable for film or television rights that the Company has acquired or licensed and certain theatrical marketing obligations for amounts received from third parties that are contractually committed for theatrical marketing expenditures associated with specific titles.

Production Loans

Production loans represent individual loans for the production of film and television programs that the Company produces.

The majority of production loans have contractual repayment dates either at or near the expected completion date, with the exception of certain loans containing repayment dates on a longer term basis, and incur LIBOR-based interest at rates ranging from 2.25 % to 2.92 % (before the impact of interest rate swaps, see Note 19 for interest rate swaps).

Production Tax Credit Facility

In January 2021, as amended on March 31, 2021, the Company entered into a non-recourse senior secured revolving credit facility (the "Production Tax Credit Facility") based on collateral consisting of certain of the Company’s tax credit receivables.

The maximum principal amount of the Production Tax Credit Facility is $ 220.0 million, subject to the amount of collateral available, which is based on specified percentages of amounts payable to the Company by governmental authorities pursuant to the tax incentive laws of certain eligible jurisdictions that arise from the production or exploitation of motion pictures and television programming in such jurisdiction.

Advances under the Production Tax Credit Facility bear interest at a rate equal to, at the Company’s option, LIBOR plus 1.50 % per annum or the base rate plus 0.50 % per annum (effective interest rate of 1.61 % at March 31, 2021).

The Production Tax Credit Facility matures on January 27, 2025.

As of March 31, 2021, there was $ 79.2 million available under the Production Tax Credit Facility.

As of March 31, 2022, the Company has entered into certain leases that have not yet commenced primarily related to studio facilities, certain of which are owned by an equity-method investee, for which construction related to those leases has not yet been completed.

The leases are for terms up to 10.5 years, commencing upon completion of construction (currently expected to be ranging from calendar years 2022 to 2024).

The leases include an option to terminate the leases prior to expiration of lease year seven , and an option to extend the initial term for an additional 10 years.

The total minimum lease payments under these leases in aggregate are approximately $ 179.0 million.

See Note 20 for further information related to leases with equity-method investees.

Fair Value Measurements

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Fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

A financial instrument’s categorization within the fair value hierarchy is based upon the

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

lowest level of input that is significant to the fair value measurement.

A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The accounting guidance and standards establish three levels of inputs that may be used to measure fair value:

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The following table sets forth the assets and liabilities required to be carried at fair value on a recurring basis as of March 31, 2022 and 2021:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

March 31, 2022 March 31, 2021

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(Amounts in millions)

Available-for-sale equity securities $ 1.8 $ — $ 1.8 $ 0.6 $ — $ 0.6

Equity securities with a readily determinable fair value $ 0.5 $ — $ 0.5 $ 1.8 $ — $ 1.8

Forward exchange contracts (see Note 18) — 3.5 3.5 — 1.5 1.5

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________________

(1) Amounts exclude $ 98.2 million of financing component of interest rate swaps presented in the table below.

The following table sets forth the carrying values and fair values of the Company’s outstanding debt, Production Tax Credit Facility and interest rate swaps at March 31, 2021 and 2020:

(1) Amounts at March 31, 2022 and 2021 exclude $ 88.1 million and $ 98.2 million, respectively, of financing component of interest rate swaps recorded as a reduction of assets under master netting arrangements which are presented in the table below.

The following table sets forth the carrying values and fair values of the Company’s outstanding debt, production and related loans, IP Credit Facility, and interest rate swaps at March 31, 2022 and 2021:

March 31, 2022 March 31, 2021

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Term Loan A (2)

$ 631.9 $ 625.7 $ 651.4 $ 647.6

Term Loan B 837.5 828.3 942.8 936.0

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— — 506.7 533.9

Production loans 372.5 373.5 151.3 151.3

Production tax credit facility 116.5 120.0 — —

6.375 % Senior Notes

— — 540.8 563.0

Production and related loans 1,281.2 1,286.7 489.0 493.5

IP Credit Facility and other financing obligations (3)

120.6 123.5 — —

Financing component of interest rate swaps (4)

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(1) The Company measures the fair value of its outstanding debt and interest rate swaps using discounted cash flow techniques that use observable market inputs, such as LIBOR-based yield curves, swap rates, and credit ratings (Level 2 measurements).

(2) Amounts include $ 98.2 million recorded as a reduction of assets under master netting arrangements.

(2) Subsequent to March 31, 2022, in April 2022, the Company voluntarily prepaid the entire outstanding principal amount of the 2023 Term Loan A of $ 193.6 million, together with accrued and unpaid interest.

See Note 21 - Subsequent Events.

(3) See Note 21 - Subsequent Events for amounts received under the IGR Facility subsequent to March 31, 2022.

(4) Amounts at March 31, 2022 and 2021 include $ 88.1 million and $ 98.2 million, respectively, recorded as a reduction of assets under master netting arrangements.

The Company’s financial instruments also include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, other liabilities, and borrowings under the Revolving Credit Facility, if any.

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Beginning balance $ 219.1 $ 167.8 $ 127.6

Initial fair value of redeemable noncontrolling interests — — 15.8

Net loss attributable to redeemable noncontrolling interests ( 17.7 ) ( 15.9 ) ( 18.2 )

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In connection with the acquisition of a controlling interest in 3 Arts Entertainment on May 29, 2018, the Company recorded a non-compensatory (see below) redeemable noncontrolling interest of $ 15.8 million, representing the noncontrolling interest holders' 49 % equity interest in 3 Arts Entertainment.

The noncontrolling interest holders have a right to put the noncontrolling interest of 3 Arts Entertainment, at fair value, exercisable at five years after the acquisition date of May 29, 2018, for a 60 day period.

The noncontrolling interest holders have a right to put the noncontrolling interest of 3 Arts Entertainment, at fair value, exercisable beginning May 29, 2023, for a 60 day period.

Beginning 30 days after the expiration of the exercise period for the put rights held by the noncontrolling interest holders, the Company has a right to call the noncontrolling interest of 3 Arts Entertainment, at fair value, for a 60 day period.

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Additionally, the amount of the put and call proceeds subject to the discount is also accounted for as compensation, and is being amortized over the vesting period within general and administrative expense and reflected as an addition to redeemable noncontrolling interest.

A portion of the purchase price of the controlling interest in 3 Arts Entertainment, up to $ 38.3 million, may be recoupable for a five-year period commencing on the acquisition date of May 29, 2018, contingent upon the continued employment of certain employees, or the achievement of certain EBITDA targets, as defined in the 3 Arts Entertainment acquisition and related agreements.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Pilgrim Media Group.

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In addition, the noncontrolling interest holder is the President and CEO of Pilgrim Media Group.

Pursuant to the original operating agreement of Pilgrim Media Group, if the employment of the noncontrolling interest holder was terminated, under

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

certain circumstances as defined in the operating agreement, the Company could call and the noncontrolling interest holder could put the noncontrolling interest at a discount to fair value, which was being expensed over the call periods in the original operating agreement.

Pursuant to the amendment to the operating agreement on April 2, 2021, this discount was eliminated and therefore any remaining unamortized discount will be expensed in the quarter ended June 30, 2021.

The amortization of the discount through March 31, 2021 is included in general and administrative expense of Pilgrim Media Group and reflected as an addition to redeemable noncontrolling interest.

Pursuant to the original operating agreement of Pilgrim Media Group, if the employment of the noncontrolling interest holder was terminated, under certain circumstances as defined in the operating agreement, the Company could call and the noncontrolling interest holder could put the noncontrolling interest at a discount to fair value, which was being expensed over the call periods in the original operating agreement.

Pursuant to the amendment to the operating agreement on April 2, 2021, this discount was eliminated and therefore the remaining unamortized discount of $ 2.7 million was expensed in the first quarter ended June 30, 2021.

The amortization of the discount through June 30, 2021 was included in general and administrative expense of Pilgrim Media Group for the year ended March 31, 2022, and reflected as an addition to redeemable noncontrolling interest.

Redeemable noncontrolling interests are measured at the greater of (i) the redemption amount that would be paid if settlement occurred at the balance sheet date less the amount attributed to unamortized noncontrolling interest discount if applicable, or (ii) the historical value resulting from the original acquisition date value plus or minus any earnings or loss attribution, plus the amount of amortized noncontrolling interest discount, less the amount of cash distributions that are not accounted for as compensation, if any.

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The Company has other immaterial noncontrolling interests that are not redeemable.

Revenue by Segment, Market or Product Line

The table below presents revenues by segment, market or product line for the fiscal years ended March 31, 2021, 2020 and 2019:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Revenue by Segment, Market or Product Line

The table below presents revenues by segment, market or product line for the fiscal years ended March 31, 2022, 2021 and 2020:

2022 2021 2020

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__________________

(1) Media Networks domestic revenues include revenue from the Company's Other Streaming Services product line of $ 50.3 million, $ 33.8 million and $ 18.0 million in the years ended March 31, 2021, 2020 and 2019, respectively, substantially all of which related to the Company's former interest in Pantaya, which was sold on March 31, 2021 (see Note 2).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) Media Networks domestic revenues for the years ended March 31, 2021 and 2020 include revenue from the Company's former Other Streaming Services product line of $ 50.3 million and $ 33.8 million, respectively, substantially all of which related to the Company's former interest in Pantaya, which was sold on March 31, 2021 (see Note 2).

Remaining Performance Obligations

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Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at March 31, 2022 are as follows:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ending March 31,

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Changes in the provision for doubtful accounts consisted of the following:

March 31, 2020 (Benefit) provision for doubtful accounts (1)

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

March 31, 2021 Provision for doubtful accounts (1)

Uncollectible accounts written-off March 31,

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_______________________

(1) Represents collections on accounts receivable previously reserved.

(1) Represents a provision for doubtful accounts of $ 5.9 million for accounts receivable from customers in Russia related to Russia's invasion of Ukraine, offset by collections on accounts receivable previously reserved.

Contract Assets.

Contract assets relate to the Company’s conditional right to consideration for completed performance under the contract (e.g., unbilled receivables).

Amounts relate primarily to contractual payment holdbacks in cases in which the

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Company is required to deliver additional episodes or seasons of television content in order to receive payment, complete certain administrative activities, such as guild filings, or allow the Company's customers' audit rights to expire.

Amounts relate primarily to contractual payment holdbacks in cases in which the Company is required to deliver additional episodes or seasons of television content in order to receive payment, complete certain administrative activities, such as guild filings, or allow the Company's customers' audit rights to expire.

The change in balance of contract assets is primarily due to the satisfaction of the condition related to payment holdbacks.

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(Amounts in millions)

Stock options and SARs outstanding 26.7 35.7

Restricted stock and restricted share units — unvested 9.1 3.7

Stock options and Share Appreciation Rights outstanding 27.6 26.7

Restricted share units and restricted stock — unvested 7.9 9.1

Common shares available for future issuance 18.4 15.6

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On February 2, 2016, the Company's Board of Directors authorized the Company to increase its previously announced share repurchase plan from a total authorization of $ 300 million to $ 468 million.

During the fiscal year ended March 31, 2022, the Company did not repurchase any common shares.

During the fiscal year ended March 31, 2021, the Company repurchased 0.2 million of its Class A voting shares for an aggregate cost of $ 1.0 million, with an average repurchase price per share of $ 5.75 .

During the fiscal year ended March 31, 2020, the Company repurchased 0.7 million of its Class A voting shares for an aggregate cost of $ 3.8 million, with an average repurchase price per share of $ 5.43 .

During the year ended March 31, 2019 the Company did not repurchase any common shares.

To date, approximately $ 288.1 million common shares have been repurchased, leaving approximately $ 179.9 million of authorized potential repurchases.

The amount of dividends, if any, that the Company pays to its shareholders is determined by its 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 its credit agreements, and shall be in compliance with applicable law.

In November 2018, the Company's Board of Directors suspended the Company's quarterly cash dividend to focus on driving long-term shareholder value by investing in global growth opportunities for Starz, while also strengthening its balance sheet.

During the fiscal year ended March 31, 2019, the Company's Board of Directors declared the following quarterly cash dividends:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Dividends Declared Per Common Share Total Amount Payment Date

(in millions)

Fiscal Year 2019:

Second quarter ended September 30, 2018 $ 0.09 $ 19.3 November 8, 2018

First quarter ended June 30, 2018 $ 0.09 19.2 August 9, 2018

Total cash dividends declared in fiscal year 2019 $ 0.18 $ 38.5

As of March 31, 2021, the Company was not limited in its capacity to pay dividends under the Senior Credit Facilities Amended Credit Agreement and the indentures governing the 5.875 % Senior Notes and the 6.375 % Senior Notes (see Note 7).

(d) Share-based Compensation

On September 10, 2019, the Company’s shareholders approved the Lions Gate Entertainment Corp.

2 unchanged sentences

Persons eligible to receive awards under the 2019 Plan include directors of the Company, officers or employees of the Company or any of its subsidiaries, and certain consultants and advisors to the Company or any of its subsidiaries.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On September 14, 2021, the Company’s shareholders approved an amendment to the 2019 Plan previously adopted by the Board of Directors of the Company to increase the maximum number of the Company’s common shares that may be issued or transferred pursuant to awards under the 2019 Plan by an additional 5.0 million shares so that the new aggregate share limit under the 2019 Plan is 21.1 million common shares (not including shares that were originally approved for issuance under the Company’s prior stock incentive plans that have become available for issuance under the 2019 Plan pursuant to the terms of the 2019 Plan).

Stock options are generally granted at exercise prices equal to or exceeding the market price of the Company's Common Shares at the date of grant.

Substantially all stock options vest ratably over one to five years from the grant date based on continuous service and expire five to ten years from the date of grant.

Restricted stock and restricted share units generally vest ratably over one to four years based on continuous service.

Substantially all stock options vest ratably over one to five years from the grant date based on continuous service and expire seven to ten years from the date of grant.

Restricted stock and restricted share units generally vest ratably over one to three years based on continuous service.

The Company satisfies stock option exercises and vesting of restricted stock and restricted share units with newly issued shares.

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There was no incremental compensation expense recorded by the Company as a result of the Exchange Program.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Share-Based Compensation Expense.

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(1) Represents the impact of the acceleration of certain vesting schedules for equity awards pursuant to certain severance arrangements.

(2) Represents the income tax benefit recognized in the statements of operations for share-based compensation arrangements.

(2) Represents the income tax benefit recognized in the statements of operations for share-based compensation arrangements prior to the effects of changes in the valuation allowance.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Share-based compensation expense, by expense category, consisted of the following:

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(Amounts in millions)

Compensation Expense:

Share-Based Compensation Expense:

Direct operating $ 1.2 $ 2.0 $ 1.0

3 unchanged sentences

$ 100.0 $ 89.0 $ 50.6

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Stock Options

7 unchanged sentences

Exercised — (2)

Awards canceled in exchange program ( 1.1 ) $ 31.56 ( 4.3 ) $ 26.49

Awards issued in exchange program 0.1 $ 7.70 0.8 $ 7.13

$ 10.52 ( 0.4 ) $ 11.19

Forfeited or expired ( 0.1 )

$ 24.31 ( 0.6 ) $ 24.49

Outstanding at March 31, 2022 5.4 $ 24.34 2.62 $ 0.7 22.2 $ 15.36 6.00 $ 50.7

6 unchanged sentences

The following table presents the weighted average grant-date fair value of options granted in the years ended March 31, 2022, 2021 and 2020, and the weighted average applicable assumptions used in the Black-Scholes option-pricing model for stock options and share-appreciation rights granted during the years then ended:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Year Ended March 31,

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2.5 - 7 years

0.4 - 7 years

Expected volatility for options (3)

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____________________________

(1) The risk-free rate assumed in valuing the options is based on the U.S.

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The total intrinsic value of options exercised during the year ended March 31, 2022 was $ 2.3 million (2021 — $ 1.7 million, 2020 — $ 0.3 million).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the year ended March 31, 2021, less than 0.1 million shares (2020 — none , 2019 — less than 0.1 million shares) were cancelled to fund withholding tax obligations upon exercise of options.

During the year ended March 31, 2022, less than 0.1 million shares (2021 — less than 0.1 million shares, 2020 — none ) were cancelled to fund withholding tax obligations upon exercise of options.

Restricted Share Units

The following table sets forth the restricted share unit and restricted stock activity during the year ended March 31, 2022:

Restricted Share Units Restricted Stock

Class A Voting Shares Weighted-Average Grant-Date Fair Value Class B Non-Voting Shares Weighted-Average Grant-Date Fair Value Class B Non-Voting Shares Weighted-Average Grant-Date Fair Value

Restricted Share Units and Restricted Stock

Class A Voting Shares Weighted-Average Grant-Date Fair Value Class B Non-Voting Shares Weighted-Average Grant-Date Fair Value

(Amounts in millions, except for weighted-average grant date fair value)

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$ 12.05 ( 5.7 ) $ 9.10

Forfeited — (1)

— ( 0.6 ) $ 10.00

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(1) Represents less than 0.1 million shares.

The fair values of restricted stock and restricted share units are determined based on the market value of the shares on the date of grant.

The fair values of restricted share units and restricted stock are determined based on the market value of the shares on the date of grant.

The total fair value of restricted share units and restricted stock vested during the year ended March 31, 2022 was $ 67.8 million (2021 - $ 35.3 million, 2020 - $ 18.7 million).

3 unchanged sentences

Stock Options $ 17.4 1.0

Restricted Stock and Restricted Share Units 41.1 1.4

Under the Company’s stock option and long term incentive plans, the Company withholds shares to satisfy minimum statutory federal, state and local tax withholding obligations arising from the vesting of restricted stock and restricted share units.

During the year ended March 31, 2021, 0.9 million shares (2020 — 0.4 million shares, 2019 — 0.5 million shares) were withheld upon the vesting of restricted stock and restricted share units.

Restricted Share Units and Restricted Stock 49.5 1.4

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the year ended March 31, 2022, 2.3 million shares (2021 — 0.9 million shares, 2020 — 0.4 million shares) were withheld upon the vesting of restricted share units and restricted stock.

The Company becomes entitled to an income tax deduction in an amount equal to the taxable income reported by the holders of the stock options and restricted share units when vesting or exercise occurs, the restrictions are released and the shares are issued.

Restricted share units are forfeited if the employees are terminated prior to vesting.

The Company recognized excess tax deficiencies of $ 12.1 million associated with its equity awards in its tax benefit for the year ended March 31, 2021 (2020 — $ 11.3 million, 2019 — $ 14.9 million).

The Company recognized excess tax benefits of $ 14.9 million associated with its equity awards in its tax provision for the year ended March 31, 2022 (2021 — deficiencies of $ 12.1 million, 2020 — deficiencies of $ 11.3 million).

Other Share-Based Compensation

1 unchanged sentence

Pursuant to this arrangement, for the year ended March 31, 2022, the Company issued 0.1 million shares (2021 - 0.3 million shares, 2020 - 0.2 million shares), net of shares withheld to satisfy minimum tax withholding obligations.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In connection with an amendment of an affiliation agreement with a customer and effective upon the close of the Starz merger, the Company has issued to the customer three $ 16.67 million annual installments of equity.

11 unchanged sentences

The Company's international pre-tax income may be significantly impacted by these foreign affiliate dividends related to its internal capital structure.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s current and deferred income tax provision (benefits) are as follows:

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Total deferred provision (benefit) ( 1.7 ) 3.4 ( 0.9 )

Total provision (benefit) for income taxes $ 17.1 $ 3.3 $ ( 8.5 )

The Company's income tax provision (benefit) differs from the federal statutory rate multiplied by pre-tax income (loss) due to the mix of the Company's pre-tax income (loss) generated across the various jurisdictions in which the Company operates and the tax deductions generated by the Company's capital structure.

Total provision for income taxes $ 28.4 $ 17.1 $ 3.3

The Company's income tax provision differs from the federal statutory rate multiplied by pre-tax income (loss) due to the mix of the Company's pre-tax income (loss) generated across the various jurisdictions in which the Company operates and the tax deductions generated by the Company's capital structure.

The Company's income tax provision for the fiscal years ended March 31, 2022, March 31, 2021 and March 31, 2020 was impacted by changes in the valuation allowances against certain U.S.

and foreign deferred tax assets, certain minimum taxes and foreign withholding taxes.

The Company's income tax provision for fiscal 2022 was also impacted by an interest accrual on uncertain tax benefits, additional uncertain tax benefits related to state income taxes identified during state audits, and the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.

The Company's income tax provision for fiscal 2021 and fiscal 2020 was also impacted by the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations and additional settlements with tax authorities.

The Company's income tax benefit for the fiscal year ended March 31, 2019 was offset by valuation allowances against certain U.S.

and foreign deferred tax assets, certain minimum taxes imposed by the Tax Act, and the nondeductible portion of shareholder litigation settlements.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company's income tax provision (benefit) can be affected by many factors, including the overall level of pre-tax income, the mix of pre-tax income generated across the various jurisdictions in which the Company operates, changes in tax laws and regulations in those jurisdictions, changes in uncertain tax positions, changes in valuation allowances on its deferred tax assets, tax planning strategies available to the Company, and other discrete items.

The Company's income tax provision can be affected by many factors, including the overall level of pre-tax income, the mix of pre-tax income generated across the various jurisdictions in which the Company operates, changes in tax laws and regulations in those jurisdictions, changes in uncertain tax positions, changes in valuation allowances on its deferred tax assets, tax planning strategies available to the Company, and other discrete items.

Although the Company is incorporated under Canadian law, the majority of its global operations are currently subject to tax in the U.S.

13 unchanged sentences

Permanent differences 0.8 0.9 1.6

Nondeductible settlement costs — — 16.9

Nondeductible share based compensation ( 3.3 ) 27.1 15.0

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Nondeductible interest expense — 3.5 —

Examination settlements 0.6 ( 3.2 ) 1.7

Uncertain tax benefits 3.6 0.6 ( 3.2 )

Other 1.2 ( 0.3 ) ( 2.4 )

Changes in valuation allowance 32.4 ( 57.0 ) 18.0

Total provision (benefit) for income taxes $ 17.1 $ 3.3 $ ( 8.5 )

__________________

(1) Certain amounts presented in fiscal 2020 and fiscal 2019 have been reclassified from "permanent differences" and "other" in order to conform to the current year presentation.

For the fiscal years ended March 31, 2021, 2020 and 2019, our total provision (benefit) for income taxes includes certain foreign affiliate dividends that can be received in our Canadian jurisdiction without being subject to tax under local tax law.

Total provision for income taxes $ 28.4 $ 17.1 $ 3.3

For the fiscal years ended March 31, 2022, 2021 and 2020, our total provision for income taxes includes certain foreign affiliate dividends that can be received in our Canadian jurisdiction without being subject to tax under local tax law.

As a result of an internal capital restructuring during the year ended March 31, 2019, the Company generated a net operating loss carryforward under local law in another foreign jurisdiction which was offset by a valuation allowance based on the Company’s assessment and which is being absorbed by taxable income annually.

7 unchanged sentences

Foreign tax credits 76.8 77.3

Investment in film and television obligations 41.8 35.1

Investment in film and television programs 14.5 41.8

Accrued compensation 56.7 65.0

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net operating loss carryforwards ("NOLs") of approximately $ 1,602.2 million available to reduce future federal income taxes which expire beginning in 2029 through 2042.

At March 31, 2021, the Company had state NOLs of approximately $ 740.1 million available to reduce future state income taxes which expire in varying amounts beginning 2022.

At March 31, 2022, the Company had state NOLs of approximately $ 910.6 million available to reduce future state income taxes which expire in varying amounts beginning in 2023.

At March 31, 2022, the Company had Canadian loss carryforwards of $ 3.9 million which will expire beginning in 2028.

At March 31, 2022, the Company had Luxembourg loss carryforwards of $ 413.0 million which will expire beginning in 2036.

At March 31, 2022, the Company had other foreign jurisdiction loss carryforwards of $ 12.8 million which will expire beginning in 2028.

In addition, at March 31, 2022, the Company had U.S.

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The Company records interest and penalties on unrecognized tax benefits as part of its income tax provision.

The total amount of unrecognized tax benefits as of March 31, 2021 that, if realized, would affect the Company's tax benefit (provision) are $ 74.1 million.

The total amount of unrecognized tax benefits as of March 31, 2022 that, if realized, would affect the Company's tax provision are $ 80.2 million.

The Company estimates the liability for unrecognized tax benefits will decrease in the next twelve months by $ 79.9 million as a result of projected audit settlements in certain jurisdictions.

7 unchanged sentences

Restructuring and other includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable.

During the years ended March 31, 2021 and 2020, the Company also incurred certain other unusual charges related to the COVID-19 global pandemic, which are included in direct operating and distribution and marketing expense in the consolidated statements of operations.

In addition, during the years ended March 31, 2020 and 2019, the Company incurred certain other unusual charges related to programming write-downs, which are included in direct operating expense in the consolidated statements of operations.

The following table sets forth restructuring and other and these unusual COVID-19 related and programming charges and the statement of operations line items they are included in for the years ended March 31, 2021, 2020 and 2019:

During the years ended March 31, 2022, 2021 and 2020, the Company also incurred certain other unusual charges, which are included in direct operating and distribution and marketing expense in the consolidated statements of operations and are described below.

The following table sets forth restructuring and other and these other unusual charges and the statement of operations line items they are included in for the years ended March 31, 2022, 2021 and 2020:

LIONS GATE ENTERTAINMENT CORP.

11 unchanged sentences

Total Restructuring and Other 16.8 24.7 24.3

COVID-19 related charges and programming and content charges not included in restructuring and other:

Other unusual charges not included in restructuring and other:

Programming and content charges included in direct operating expense (4)

COVID-19 related charges included in:

COVID-19 related charges (benefit) included in:

Direct operating expense (5)

( 3.6 ) 50.6 46.0

Distribution and marketing expense (5)

Total restructuring and other, COVID-19 related charges, and programming and content charges $ 92.2 $ 151.0 $ 113.1

Charges related to Russia's invasion of Ukraine included in direct operating expense (6)

Total restructuring and other and other unusual charges not included in restructuring and other $ 56.2 $ 92.2 $ 151.0

_______________________

(1) Severance costs in the fiscal years ended March 31, 2021, 2020 and 2019 were primarily related to restructuring activities in connection with cost-saving initiatives and recent acquisitions.

(2) During the years ended March 31, 2021 and 2020, the Company has incurred certain costs including costs primarily related to transitioning the Company to a remote-work environment and other incremental costs associated with the COVID-19 global pandemic.

(1) Severance costs in the fiscal years ended March 31, 2022, 2021 and 2020 were primarily related to restructuring activities in connection with cost-saving initiatives.

(2) Amounts represent certain incremental general and administrative costs associated with the COVID-19 global pandemic, such as costs related to transitioning the Company to a remote-work environment, costs associated with return-to-office safety protocols, and other incremental general and administrative costs associated with the COVID-19 global pandemic.

(3) Transaction and related costs in the fiscal years ended March 31, 2022, 2021 and 2020 reflect transaction, integration and legal costs associated with certain strategic transactions, restructuring activities and legal matters.

In fiscal 2019, these costs were primarily related to the legal fees associated with the Starz class action lawsuits and other matters and, to a lesser extent, costs related to the acquisition of 3 Arts Entertainment and other strategic transactions.

(4) In the fiscal years ended March 31, 2020 and 2019, in connection with management changes, the Company implemented changes to its programming and broadcasting strategy including programming acquired or produced under prior management.

As a result, the Company recorded certain programming and content charges of $ 76.5 million and $ 35.1 million in fiscal 2020 and 2019, respectively, which are included in direct operating expense in the consolidated statement of operations.

(5) 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 theaters, international travel restrictions and the pausing of motion picture and television productions, during fiscal 2021 and fiscal 2020, the Company incurred certain incremental costs which were expensed in the period.

The costs included in direct operating expense primarily represent 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.

In addition, the costs included in distribution and marketing expense primarily consist of contractual marketing spends for film releases and events that were canceled or delayed and will provide no economic benefit.

The Company is in the process of seeking insurance recovery for some of these costs, which cannot be estimated at this time, and therefore no material amounts of insurance proceeds have been recorded in the consolidated financial statements.

(4) Amounts represent certain unusual programming and content charges, see Note 3 for further information.

(5) 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 theaters, international travel restrictions and the pausing of motion picture and television productions, certain incremental costs were incurred and expensed.

The charges (benefit) included in direct operating expense includes incremental costs associated with the pausing and restarting of productions including paying/hiring certain cast and crew, maintaining idle facilities and equipment costs resulting from circumstances associated with the COVID-19 global pandemic, net of insurance recoveries.

In fiscal 2021 and 2020, these charges also included film impairment due to changes in performance expectations resulting from circumstances associated with the COVID-19 global pandemic.

In the fiscal year ended March 31, 2022, insurance recoveries exceeded the incremental costs expensed in the year, resulting in a net benefit included in direct operating expense.

The costs included 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.

The Company is in the process of seeking additional insurance recovery for some of these costs.

The ultimate amount of insurance recovery cannot be estimated at this time.

(6) Amounts represent charges related to Russia's invasion of Ukraine, primarily related to bad debt reserves for accounts receivable from customers in Russia, included in direct operating expense in the consolidated statements of operations.

Changes in the restructuring and other severance liability were as follows for the years ended March 31, 2022, 2021 and 2020:

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(1) Motion Picture, (2) Television Production and (3) Media Networks.

We refer to our Motion Picture and Television Production segments collectively as our Studio Business.

Studio Business:

Motion Picture.

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Television Production includes the licensing of Starz original series productions to Starz Networks and STARZPLAY International, and the ancillary market distribution of Starz original productions and licensed product.

Additionally, the Television Production segment includes the results of operations of 3 Arts Entertainment from the acquisition date of May 29, 2018.

Additionally, the Television Production segment includes the results of operations of 3 Arts Entertainment.

Media Networks Business:

Media Networks.

Media Networks consists of the following product lines (i) Starz Networks, which includes the domestic distribution of STARZ branded premium subscription video services through OTT platforms and Distributors and on a direct-to-consumer basis through the Starz App (ii) STARZPLAY International, which represents revenues primarily from the OTT distribution of the Company's STARZ branded premium subscription video services outside of the U.S.

and (iii) Other Streaming Services, which represents primarily the Company's formerly majority owned premium Spanish language streaming services business, Pantaya.

The Company sold its interest in Pantaya on March 31, 2021, see Note 2 for further information.

Media Networks consists of the following product lines (i) Starz Networks, which includes the domestic distribution of STARZ branded premium subscription video services through OTT platforms and Distributors and on a direct-to-consumer basis through the Starz App and (ii) STARZPLAY International, which represents revenues primarily from the OTT distribution of the Company's STARZ branded premium subscription video services outside of the U.S.

Through March 31, 2021, Media Networks also included Other Streaming Services, which represented primarily the Company's formerly majority owned premium Spanish language streaming services business, Pantaya.

The Company sold its interest in Pantaya on March 31, 2021 (see Note 2).

In the ordinary course of business, the Company's reportable segments enter into transactions with one another.

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Segment revenues

Studio Business:

Motion Picture $ 1,185.3 $ 1,081.1 $ 1,670.9

Television Production 1,531.0 831.8 1,001.3

Total Studio Business 2,716.3 1,912.9 2,672.2

Media Networks 1,536.2 1,562.7 1,486.8

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Intersegment revenues

Studio Business:

Motion Picture $ 38.0 $ 19.8 $ 17.7

Television Production 610.2 184.3 248.9

Total Studio Business 648.2 204.1 266.6

Media Networks — — 2.4

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Gross contribution

Studio Business:

Motion Picture $ 356.0 $ 401.8 $ 313.5

Television Production 124.1 126.3 90.7

Total Studio Business 480.1 528.1 404.2

Media Networks 243.2 383.4 380.5

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Segment general and administration

Studio Business:

Motion Picture $ 93.1 $ 106.2 $ 104.8

Television Production 40.2 42.7 37.3

Total Studio Business 133.3 148.9 142.1

Media Networks 88.0 93.9 87.5

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Segment profit

Studio Business:

Motion Picture $ 262.9 $ 295.6 $ 208.7

Television Production 83.9 83.6 53.4

Total Studio Business 346.8 379.2 262.1

Media Networks 155.2 289.5 293.0

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Segment profit is defined as gross contribution (revenues, less direct operating and distribution and marketing expense) less segment general and administration expenses.

Segment profit excludes 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, and, when applicable, certain charges related to the COVID-19 global pandemic and purchase accounting and related adjustments.

Segment profit excludes, when applicable, corporate general and administrative expense, restructuring and other

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

costs, share-based compensation, certain programming and content charges as a result of changes in management and/or programming and content strategy, certain charges related to the COVID-19 global pandemic, charges related to Russia's invasion of Ukraine, and purchase accounting and related adjustments.

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.

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The reconciliation of total segment profit to the Company’s loss before income taxes is as follows:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2022 2021 2020

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( 16.8 ) ( 24.7 ) ( 24.3 )

COVID-19 related charges included in direct operating expense and distribution and marketing expense (4)

COVID-19 related benefit (charges) included in direct operating expense and distribution and marketing expense (4)

3.4 ( 67.5 ) ( 50.2 )

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( 36.9 ) — ( 76.5 )

Charges related to Russia's invasion of Ukraine (6)

Adjusted share-based compensation expense (7)

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Interest expense ( 176.0 ) ( 181.5 ) ( 191.3 )

Shareholder litigation settlements (8)

— — ( 114.1 )

Interest and other income 30.8 5.8 8.8

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Adjusted depreciation and amortization $ 43.0 $ 44.3 $ 41.8

(3) Restructuring and other includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable (see Note 16).

(4) 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, during fiscal 2021 and fiscal 2020, the Company has incurred $ 67.5 million and $ 50.2 million, respectively, in incremental direct operating and distribution and marketing expense (see Note 16).

These charges are excluded from segment operating results.

(5) In the fiscal years ended March 31, 2020 and 2019, in connection with management changes, the Company implemented changes to its programming and broadcasting strategy including programming acquired or produced under prior management.

As a result, the Company recorded certain programming and content charges of $ 76.5 million and $ 35.1

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

million in fiscal 2020 and 2019, respectively, which are included in direct operating expense in the consolidated statements of operations.

(3) Restructuring and other includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable (see Note 15).

(4) 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, during fiscal 2022, the Company has incurred a benefit of $ 3.4 million, net of insurance recoveries, in incremental direct operating and distribution and marketing expense (2021 - charges of $ 67.5 million;

2020 - charges of $ 50.2 million) (see Note 15).

These charges are excluded from segment operating results.

(5) Programming and content charges represent certain charges included in direct operating expense in the consolidated statements of operations, and excluded from segment operating results (see Note 3 and Note 15 for further information).

(7) The following table reconciles total share-based compensation expense to adjusted share-based compensation expense:

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$ 194.0 $ 192.4 $ 216.6

(8) Shareholder litigation settlements of $ 114.1 million in the year ended March 31, 2019 was related to previous shareholder litigation in connection with the Starz merger and includes the following:

(i) $ 54.8 million for the net expense recorded for the settlement of the fiduciary litigation (representing the settlement amount of $ 92.5 million, net of aggregate insurance reimbursement of $ 37.8 million and (ii) $ 59.3 million related to the appraisal litigation, representing the amount by which the settlement amount of approximately $ 964 million exceeded the previously accrued (at date of acquisition) dissenting shareholders' liability plus interest through the date agreed in the settlement.

The portion of the settlement payment representing the $ 797.3 million value of the original merger consideration attributable to the dissenting shareholders that was accrued at the time of acquisition is reflected within cash flows from financing activities in the statement of cash flows, with the remainder of the settlement payment reflected within cash flows from operating activities in the statement of cash flows.

See Note 12 for revenues by media or product line as broken down by segment for the fiscal years ended March 31, 2022, 2021, and 2020.

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Long-lived assets (1)

Canada $ — $ —

United States $ 3,101.3 $ 2,279.7

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For the year ended March 31, 2022, the Company had revenue from one individual customer which represented greater than 10% of consolidated revenues, amounting to $ 639.2 million, primarily related to the Company's Media Networks and Motion Picture segments (2021 - revenue from one individual customer which represented greater than 10% of consolidated revenues, amounting to $ 638.8 million, primarily related to the Company's Media Networks and Motion Picture segments;

2019 - revenue from one individual customer which represented greater than 10% of consolidated revenues, amounting to $ 401.9 million, primarily related to the Company's Media Networks segment).

As of March 31, 2021, the Company did not have any accounts receivable due from customers which individually represented greater than 10% of total consolidated accounts receivable.

As of March 31, 2020, the Company had accounts receivable due from one individual customer which represented 11 % of consolidated gross accounts receivable (current and non-current), or gross accounts receivable of approximately $ 82.0 million.

2020 - revenue from one individual customer which represented greater than 10% of consolidated revenues, amounting to $ 438.6 million, primarily related to the Company's Media Networks and Motion Picture segments).

As of March 31, 2022 and 2021, the Company did not have any accounts receivable due from customers which individually represented greater than 10% of total consolidated accounts receivable.

Commitments and Contingencies

The following table sets forth our future annual repayment of contractual commitments as of March 31, 2022:

Year Ended March 31,

Year Ending March 31,

2023 2024 2025 2026 2027 Thereafter Total

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Contractual commitments by expected repayment date (off-balance sheet arrangements)

Film obligation and production loan commitments (1)

Film related obligations commitments (1)

$ 510.9 $ 203.1 $ 64.7 $ 11.7 $ 2.6 $ 0.2 $ 793.2

Interest payments (2)

Interest payments on corporate debt (2)

118.0 117.0 115.8 62.3 55.0 123.7 591.8

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____________________________

(1) Film obligation commitments include distribution and marketing commitments, minimum guarantee commitments and program rights commitments.

Distribution and marketing commitments represent contractual commitments for future expenditures associated with distribution and marketing of films which we will distribute.

(1) Film related obligations commitments include distribution and marketing commitments, minimum guarantee commitments, program rights commitments, and production loan commitments not reflected on the consolidated balance sheets as they did not then meet the criteria for recognition, as described below:

(i) Distribution and marketing commitments represent contractual commitments for future expenditures associated with distribution and marketing of films which we will distribute.

The payment dates of these amounts are primarily based on the anticipated release date of the film.

Minimum guarantee commitments represent contractual commitments related to the purchase of film rights for pictures to be delivered in the future.

Program rights commitments represent contractual commitments under programming license agreements related to films that are not available for exhibition until some future date (see below for further details).

Production loan commitments represent amounts committed for future film production and development to be funded through production financing and recorded as a production loan liability when incurred.

Future payments under these commitments are based on anticipated delivery or release dates of the related film or contractual due dates of the commitment.

The amounts include estimated future interest payments associated with the commitment.

(ii) Minimum guarantee commitments represent contractual commitments related to the purchase of film rights for pictures to be delivered in the future.

(iii) Program rights commitments represent contractual commitments under programming license agreements related to films that are not available for exhibition until some future date (see below for further details).

(iv) Production loan commitments represent amounts committed for future film production and development to be funded through production financing and recorded as a production loan liability when incurred.

Future payments under these commitments are based on anticipated delivery or release dates of the related film or contractual due

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2) Includes cash interest payments on the Company's debt outstanding at March 31, 2021, excluding the interest payments on the revolving credit facility as future amounts are not fixed or determinable due to fluctuating balances and interest rates.

Subsequent to March 31, 2021, the Company amended its Credit Agreement to, among other things, extend the maturity of a portion of its outstanding term A loans, amounting to $ 444.9 million, to April 6, 2026.

Additionally, subsequent to March 31, 2021, the Company redeemed in full the 5.875 % Senior Notes and 6.375 % Senior Notes, and $ 1.0 billion aggregate principal amount of 5.500 % Senior Notes due April 2029 were issued.

See Note 22 - Subsequent Events.

dates of the commitment.

The amounts include estimated future interest payments associated with the commitment.

(2) Includes cash interest payments on the Company's corporate debt, excluding the interest payments on the revolving credit facility as future amounts are not fixed or determinable due to fluctuating balances and interest rates.

(3) Not included in the amounts above are $ 321.2 million of redeemable noncontrolling interest, as future amounts and timing are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimations of future payments (see Note 11).

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The programming fees to be paid by the Company to Sony are based on the quantity and domestic theatrical exhibition receipts of qualifying films.

Since the term of the output programming agreement with Sony applies to all films released theatrically through December 31, 2021, the Company is obligated to pay fees for films that have not yet been released in theaters.

The Company is unable to estimate the amounts to be paid under these agreements for films that have not yet been released in theaters, however, such amounts are expected to be significant.

The Company has also entered into agreements with a number of other motion picture producers and is obligated to pay fees for the rights to exhibit certain films that are released by these producers.

The Company also has an exclusive multiyear post pay-one output licensing agreement with Universal for live-action films theatrically released in the U.S.

starting January 1, 2022.

The Universal agreement provides the Company with rights to exhibit these films immediately following their pay-one windows.

The Company is unable to estimate the amounts to be paid under the Universal agreement for films that have not yet been released in theaters, however, such amounts are expected to be significant.

Multiemployer Benefit Plans.

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The Fiduciary Litigation settlement was approved by the Court of Chancery of the State of Delaware and the settlement amount and insurance reimbursement discussed above were paid during the quarter ended December 31, 2018.

The Company is continuing to seek additional insurance reimbursement, including pursuant to a lawsuit filed by the Company on November 7, 2018 against certain insurers.

On November 5, 2018, an insurer that entered into an agreement and contributed $ 10.0 million to the Company's aggregate insurance reimbursement filed a lawsuit seeking declaratory judgment for reimbursement of its agreed upon payment.

The Company believes the lawsuit to be without merit and intends to vigorously defend it.

On November 7, 2018, in support of its effort to obtain additional insurance reimbursements, the Company filed a lawsuit against certain insurers.

Additionally, on November 5, 2018, an insurer that entered into an agreement and contributed $ 10.0 million to the Company's aggregate insurance reimbursement filed a lawsuit seeking declaratory judgment for reimbursement of its agreed upon payment.

During the fiscal year ended March 31, 2022, the Company settled with all of the insurers in both lawsuits, which resulted in a net settlement amount derived by the Company during the year ended March 31, 2022 of $ 22.7 million, which is included in the “interest and other income” line item on the consolidated statement of operations.

Financial Instruments

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As of March 31, 2022, the Company had the following outstanding forward foreign exchange contracts (all outstanding contracts have maturities of less than 30 months from March 31, 2022):

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

March 31, 2022

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(Amounts in millions) (Amounts in millions)

British Pound Sterling £ 2.3 in exchange for $ 2.9 £ 0.77

British Pound Sterling 1.9 GBP in exchange for $ 2.5 0.75 GBP

Hungarian Forint 4,089.2 HUF in exchange for $ 13.5 303.41 HUF

Euro € 18.5 in exchange for $ 22.2 € 0.83

Canadian Dollar C$ 13.9 in exchange for $ 10.8 C$ 1.29

Czech Koruna CZK 482.0 in exchange for $ 21.9 CZK 21.97

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Euro 18.0 EUR in exchange for $ 17.5 1.03 EUR

Canadian Dollar 7.6 CAD in exchange for $ 6.2 1.24 CAD

Polish Zloty 10.4 PLN in exchange for $ 2.5 4.15 PLN

Bulgarian Lev 5.5 BGN in exchange for $ 3.2 1.69 BGN

Mexican Peso 217.3 MXN in exchange for $ 10.6 20.47 MXN

Interest Rate Swaps

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Changes in the fair value of interest rate swaps that are not designated as hedges are recorded in interest expense (see further explanation below).

As of March 31, 2020, the Company had the following pay-fixed interest rate swaps outstanding (all related to the Company's LIBOR-based debt, see Note 7 and Note 10):

Effective Date Notional Amount (in millions) Fixed Rate Paid Maturity Date

May 23, 2018 $ 1,000.0 2.915 % March 24, 2025

June 25, 2018 $ 200.0 2.723 % March 23, 2025

July 31, 2018 $ 300.0 2.885 % March 23, 2025

December 24, 2018 $ 50.0 2.744 % March 23, 2025

December 24, 2018 $ 100.0 2.808 % March 23, 2025

December 24, 2018 $ 50.0 2.728 % March 23, 2025

Total $ 1,700.0

During the fiscal year ended March 31, 2021, the Company completed a series of transactions to amend and extend certain interest rate swap agreements.

These transactions effectively replaced $ 1.4 billion of the interest rate swaps presented in the table above, and resulted in an extension of the maturity date on an aggregate of $ 1.4 billion of the Company's interest rate swaps by an additional 2 to 5 years, subject to mandatory early termination dates, and a decrease of the weighted average fixed pay rate from 2.870 % to 2.250 % per annum.

These interest rate swap transactions consisted of the following in the fiscal year ended March 31, 2021:

(i) $ 1.4 billion of the interest rate swaps presented in the table above were de-designated as cash flow hedges, (ii) the Company entered into $ 1.4 billion of pay-variable receive-fixed interest rate swaps which are designed to offset the terms of the $ 1.4 billion of swaps in (i) and which are not designated as cash flow hedges, and (iii) the Company entered into $ 1.4 billion of new pay-fixed interest rate swaps with extended maturities.

These new pay-fixed interest rate swaps are considered hybrid instruments with a financing component and an embedded at-market derivative that was designated as a cash flows hedge (see discussion of cash flow presentation below).

Key terms of the new offsetting pay-variable receive-fixed interest rate swaps outstanding at March 31, 2021 are presented below (not designated as hedges):

Effective Date Notional Amount (in millions) Fixed Rate Received Maturity Date

Cash settlements related to interest rate contracts are generally classified as operating activities on the consolidated statements of cash flows.

However, due to an other-than-insignificant financing element on a portion of our interest rate swaps (see designated cash flow hedges table below), the cash flows related to these contracts are classified as financing activities.

Designated Cash Flow Hedges.

As of March 31, 2022, the Company had the following designated cash flow hedge pay-fixed interest rate swaps outstanding (all related to the Company's LIBOR-based debt, see Note 7 and Note 8):

Effective Date Notional Amount Fixed Rate Paid Maturity Date (1)

(in millions)

May 23, 2018 $ 300.0 2.915 % March 24, 2025

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June 15, 2020 $ 150.0 2.343 % March 23, 2027 (2)

June 15, 2020 $ 50.0 2.728 % March 23, 2025

August 14, 2020 $ 200.0 1.840 % March 23, 2030 (2)

Total $ 1,700.0

Key terms of the new designated cash flow hedge pay-fixed interest rate swaps outstanding at March 31, 2021 are presented below:

__________________

(1) Subject to a mandatory early termination date of March 23, 2025.

(2) These pay-fixed interest rate swaps are considered hybrid instruments with a financing component and an embedded at-market derivative that was designated as a cash flow hedge (see discussion of cash flow presentation above).

Not Designated.

As of March 31, 2022, the Company had the following pay-fixed receive-variable and offsetting pay-variable receive-fixed interest rate swaps outstanding, which are not designated as cash flow hedges:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Effective Date Notional Amount (in millions) Fixed Rate Paid Maturity Date (1)

May 19, 2020 $ 700.0 1.923 % March 23, 2030

May 19, 2020 $ 350.0 2.531 % March 23, 2027

June 15, 2020 $ 150.0 2.343 % March 23, 2027

August 14, 2020 $ 200.0 1.840 % March 23, 2030

Total $ 1,400.0

Pay-Fixed Receive-Variable (1)

Offsetting Pay-Variable Receive-Fixed (1)

Effective Date Notional Amount Fixed Rate Paid Effective Date Notional Amount Fixed Rate Received Maturity Date

(in millions) (in millions)

May 23, 2018 $ 700.0 2.915 % May 19, 2020 $ 700.0 2.915 % March 24, 2025

June 25, 2018 $ 200.0 2.723 % August 14, 2020 $ 200.0 2.723 % March 23, 2025

July 31, 2018 $ 300.0 2.885 % May 19, 2020 $ 300.0 2.885 % March 23, 2025

December 24, 2018 $ 50.0 2.744 % May 19, 2020 $ 50.0 2.744 % March 23, 2025

December 24, 2018 $ 100.0 2.808 % June 15, 2020 $ 100.0 2.808 % March 23, 2025

December 24, 2018 $ 50.0 2.728 % June 15, 2020 $ 50.0 2.728 % March 23, 2025

Total $ 1,400.0 Total $ 1,400.0

__________________

(1) Subject to a mandatory early termination date of March 23, 2025.

At the time of the de-designation of the above $ 1.4 billion in interest rate swaps, there was approximately $ 163.0 million of unrealized losses recorded in accumulated other comprehensive income (loss).

This amount will be amortized to interest expense through the remaining term of the original de-designated swaps unless it becomes probable that the cash flows originally hedged will not occur, in which case the proportionate amount of the loss will be recorded to interest expense at that time.

The $ 1.4 billion of interest rate swaps de-designated as cash flow hedges and the $ 1.4 billion of offsetting swaps will be marked to market with changes in fair value recognized, along with the fixed and variable payments on these swaps, in interest expense, which are expected to nearly offset each other.

Cash settlements related to interest rate contracts are generally classified as operating activities on the consolidated statements of cash flows.

However, due to an other-than-insignificant financing element on a portion of our interest rate swaps (see table above for new designated cash flow hedge pay-fixed interest rate swaps), the cash flows related to these contracts are classified as financing activities.

(1) During the fiscal year ended March 31, 2021, the Company completed a series of transactions to amend and extend certain interest rate swap agreements, and as part of these transactions, the $ 1.4 billion pay-fixed receive-variable interest rate swaps presented in the table above were de-designated, and the Company entered into $ 1.4 billion of pay-variable receive-fixed interest rate swaps, as presented in the table above, which are designed to offset the terms of the $ 1.4 billion of pay-fixed receive-variable swaps in the table above.

At the time of the de-designation of the above $ 1.4 billion in pay-fixed receive-variable interest rate swaps, there was approximately $ 163.0 million of unrealized losses recorded in accumulated other comprehensive income (loss).

This amount is being amortized to interest expense through the remaining term of the de-designated swaps unless it becomes probable that the cash flows originally hedged will not occur, in which case the proportionate amount of the loss will be recorded to interest expense at that time.

The $ 1.4 billion of pay-fixed receive-variable interest rate swaps de-designated as cash flow hedges and the $ 1.4 billion of offsetting pay-variable receive-fixed swaps are marked to market with changes in fair value recognized, along with the fixed and variable payments on these swaps, in interest expense, which are expected to nearly offset each other.

Financial Statement Effect of Derivatives

Consolidated statement of operations and comprehensive loss:

Consolidated statement of operations and comprehensive income (loss):

The following table presents the pre-tax effect of the Company's derivatives on the accompanying consolidated statements of operations and comprehensive income (loss) for the years ended March 31, 2022, 2021 and 2020:

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Gain (loss) recognized in accumulated other comprehensive income (loss) $ 1.7 $ ( 1.0 ) $ 0.8

Gain reclassified from accumulated other comprehensive income (loss) into direct operating expense 0.2 1.6 —

Gain (loss) reclassified from accumulated other comprehensive income (loss) into direct operating expense ( 0.2 ) 0.2 1.6

Interest rate swaps

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Interest rate swaps

Loss reclassified from accumulated other comprehensive loss into interest expense $ ( 28.3 ) $ — $ —

Loss reclassified from accumulated other comprehensive income (loss) into interest expense $ ( 33.8 ) $ ( 28.3 ) $ —

Total direct operating expense on consolidated statements of operations $ 2,064.2 $ 1,725.9 $ 2,226.1

Total interest expense on consolidated statements of operations $ 176.0 $ 181.5 $ 191.3

$ 181.5 $ 191.3 $ 163.6

________________

(1) Represents interest expense before interest on dissenting shareholders' liability.

Consolidated balance sheets:

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Pursuant to the Company's accounting policy to offset the fair value amounts recognized for derivative instruments, the Company presents the asset or liability position of the swaps that are with the same counterparty under a master netting arrangement net as either an asset or liability in its consolidated balance sheets.

The gross amount of swaps in an asset and liability position that were subject to a master netting arrangement was $ 211.2 million and $ 236.3 million, respectively, resulting in an asset recorded in other assets - non-current of $ 50.8 million and a liability recorded in other liabilities - non-current of $ 75.9 million as of March 31, 2021.

As of March 31, 2022, the gross amount of swaps in an asset and liability position that were subject to a master netting arrangement was $ 169.6 million and $ 147.3 million, respectively, resulting in an asset recorded in other assets - non-current of $ 32.0 million and a liability recorded in other liabilities - non-current of $ 9.8 million.

As of March 31, 2021, the gross amount of swaps in an asset and liability position that were subject to a master netting arrangement was $ 211.2 million and $ 236.3 million, respectively, resulting in an asset recorded in other assets - non-current of $ 50.8 million and a liability recorded in other liabilities - non-current of $ 75.9 million.

As of March 31, 2022 and 2021, the Company had the following amounts recorded in the accompanying consolidated balance sheets related to the Company's use of derivatives:

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________________

(1) Includes $ 98.2 million and $ 54.3 million included in other non-current assets and other non-current liabilities, respectively, representing the financing element of certain hybrid instruments, which is offset by the new pay-variable receive-fixed interest rate swaps outstanding at March 31, 2021.

(1) Includes $ 88.1 million and $ 46.0 million included in other non-current assets and other non-current liabilities, respectively, representing the financing element of certain hybrid instruments, which is offset by the pay-variable receive-fixed interest rate swaps outstanding at March 31, 2022.

March 31, 2021

Other Current Assets Accounts Payable and Accrued Liabilities Other Non-Current Liabilities

Other Current Assets Other Non-Current Assets Accounts Payable and Accrued Liabilities Other Non-Current Liabilities

(Amounts in millions)

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Derivatives not designated as cash flow hedges:

Forward exchange contracts — 0.4 —

Interest rate swaps (1)

— ( 21.9 ) — 127.1

Fair value of derivatives $ 1.5 $ 50.8 $ 2.6 $ 132.7

As of March 31, 2021, based on the current release schedule, the Company estimates approximately $ 0.3 million of gains associated with forward foreign exchange contract cash flow hedges in accumulated other comprehensive loss will be reclassified into earnings during the one-year period ending March 31, 2022.

As of March 31, 2021, the Company estimates approximately $ 47.2 million of losses recorded in accumulated other comprehensive loss associated with interest rate swap agreement cash flow hedges will be reclassified into interest expense during the one-year period ending March 31, 2022.

________________

(1) Includes $ 98.2 million and $ 54.3 million included in other non-current assets and other non-current liabilities, respectively, representing the financing element of certain hybrid instruments, which is offset by the pay-variable receive-fixed interest rate swaps outstanding at March 31, 2021.

As of March 31, 2022, based on the current release schedule, the Company estimates approximately $ 1.8 million of gains associated with forward foreign exchange contract cash flow hedges in accumulated other comprehensive income (loss) will be reclassified into earnings during the one-year period ending March 31, 2023.

As of March 31, 2022, the Company estimates approximately $ 20.6 million of losses recorded in accumulated other comprehensive income (loss) associated with interest rate swap agreement cash flow hedges will be reclassified into interest expense during the one-year period ending March 31, 2023.

Additional Financial Information

4 unchanged sentences

The Company classifies its cash equivalents within Level 1 of the fair value hierarchy because the Company uses quoted market prices to measure the fair value of these investments (see Note 10).

The Company monitors concentrations of credit risk with respect to cash and cash equivalents by placing such balances with higher quality financial institutions or investing such amounts in liquid, short-term, highly-rated instruments or investment funds holding similar instruments.

As of March 31, 2021, the majority of the Company’s cash and cash equivalents were held in bank depository accounts.

There were no material amounts of restricted cash in the consolidated balance sheets as of March 31, 2021 or 2020.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of March 31, 2022, the majority of the Company’s cash and cash equivalents were held in bank depository accounts.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet to the total amounts reported in the consolidated statement of cash flows at March 31, 2022.

At March 31, 2022, restricted cash included in other current assets represents amounts related to required cash reserves for interest payments associated with the Production Tax Credit Facility and IP Credit Facility.

There were no material amounts of restricted cash in the consolidated balance sheet as of March 31, 2021.

(Amounts in millions)

Cash and cash equivalents $ 371.2

Restricted cash included in other current assets 13.4

Total cash, cash equivalents and restricted cash $ 384.6

Accounts Receivable Monetization

10 unchanged sentences

2022 2021 2020

(Amounts in millions)

Carrying value of receivables transferred and derecognized $ 1,400.2 $ 1,377.2 $ 1,603.2

3 unchanged sentences

Pooled Monetization Agreement.

In December 2019, the Company entered into a revolving agreement to transfer up to $ 150.0 million of certain receivables to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred.

In December 2019, the Company entered into a revolving agreement, as amended in July 2021, to transfer up to $ 150.0 million of certain receivables to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred, which expires July 27, 2022.

As customers pay their balances, the Company transfers additional receivables into the program.

The transferred receivables are fully guaranteed by a bankruptcy-remote wholly-owned subsidiary of the Company, which holds additional receivables in the amount of $ 48.1 million as of March 31, 2021 that are pledged as collateral under this agreement.

The third-party purchasers have no recourse to other assets of the Company in the event of non-payment by the customers.

The following table sets forth a summary of the receivables transferred under the pooled monetization agreement during the years ended March 31, 2021 and 2020 (2019 - none):

The transferred receivables are fully guaranteed by a bankruptcy-remote wholly-owned subsidiary of the Company, which holds additional receivables in the amount of $ 72.0 million as of March 31,

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2022 that are pledged as collateral under this agreement.

The third-party purchasers have no recourse to other assets of the Company in the event of non-payment by the customers.

The following table sets forth a summary of the receivables transferred under the pooled monetization agreement during the years ended March 31, 2022, 2021 and 2020:

2022 2021 2020

(Amounts in millions)

Gross cash proceeds received for receivables transferred and derecognized $ 155.5 $ 173.1 $ 192.6

3 unchanged sentences

Net cash proceeds received (1)

$ 6.0 $ 6.5 $ 92.5

Carrying value of receivables transferred and derecognized (2)

3 unchanged sentences

___________________

(1) In addition, during the year ended March 31, 2022, the Company repurchased $ 25.5 million of receivables previously transferred, as separately agreed upon with the third-party purchasers, in order to monetize such receivables under the individual monetization program discussed above without being subject to the collateral requirements under the pooled monetization program.

(2) Receivables net of unamortized discounts on long-term, non-interest bearing receivables.

1 unchanged sentence

The composition of the Company’s other assets is as follows as of March 31, 2022 and March 31, 2021:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2022 March 31,

18 unchanged sentences

(2) Unamortized discounts on contract assets included in prepaid expenses and other were $ 0.5 million and $ 0.5 million at March 31, 2022 and 2021, and unamortized discounts on long-term, non-interest bearing receivables were $ 1.8 million and $ 2.4 million at March 31, 2022 and 2021, respectively.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accumulated Other Comprehensive Loss

The following table summarizes the changes in the components of accumulated other comprehensive loss, net of tax:

Foreign currency translation adjustments Net unrealized gain (loss) on available-for-sale securities Net unrealized gain (loss) on cash flow hedges Total

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in the components of accumulated other comprehensive income (loss), net of tax:

Foreign currency translation adjustments Net unrealized gain (loss) on cash flow hedges Total

(Amounts in millions)

March 31, 2019 $ ( 18.2 ) $ ( 62.1 ) $ ( 80.3 )

Cumulative effect of accounting changes — ( 2.6 ) — ( 2.6 )

Other comprehensive loss ( 0.6 ) ( 137.8 ) ( 138.4 )

March 31, 2019 ( 18.2 ) — ( 62.1 ) ( 80.3 )

Other comprehensive loss ( 0.6 ) — ( 125.1 ) ( 125.7 )

Reclassifications to net loss (1)

March 31, 2020 ( 18.8 ) ( 187.2 ) ( 206.0 )

Other comprehensive income 3.7 70.9 74.6

Reclassifications to net loss (1)

March 31, 2021 ( 15.1 ) ( 68.2 ) ( 83.3 )

Other comprehensive income (loss) ( 4.6 ) 68.2 63.6

Reclassifications to net loss (1)

March 31, 2022 $ ( 19.7 ) $ 49.0 $ 29.3

___________________

(1) Represents a loss of $ 0.2 million included in direct operating expense and a loss of $ 48.8 million included in interest expense on the consolidated statement of operations in the year ended March 31, 2022 (2021 - gain of $ 0.2 million included in direct operating expense and loss of $ 48.3 million included in interest expense;

2020 - gain of $ 1.6 million included in direct operating expense and loss of $ 14.3 million included in interest expense) (see Note 18).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Supplemental Cash Flow Information

1 unchanged sentence

2020 — $ 173.8 million).

Income taxes paid (refunded) during the fiscal year ended March 31, 2021 amounted to net tax refunds received of $ 54.0 million (2020 — net tax refunds received of $ 5.3 million;

2019 — net tax paid of $ 13.5 million).

Significant non-cash transactions during the fiscal year ended March 31, 2021 include certain interest rate swap agreements, which are discussed in Note 19, "Financial Instruments".

Income taxes paid (refunded) during the fiscal year ended March 31, 2022 amounted to net tax paid of $ 16.9 million (2021 — net tax refunds received of $ 54.0 million;

2020 — net tax refunds received of $ 5.3 million).

Significant non-cash transactions during the fiscal years ended March 31, 2022 include certain interest rate swap agreements, which are discussed in Note 18, "Financial Instruments".

The supplemental schedule of non-cash investing and financing activities is presented below:

3 unchanged sentences

Non-cash investing activities:

Accrued equity method investment $ 19.0 $ — $ —

Cash consideration receivable for sale of Pantaya (see Note 2) $ — $ 123.6 $ —

Decrease in finance lease right-of-use asset due to a reassessment event $ ( 42.0 ) $ — n/a

Issuance of common shares related to business acquisitions $ — $ — $ 83.7

Decrease in finance lease right-of-use asset due to a reassessment event (1)

n/a $ ( 42.0 ) n/a

Non-cash financing activities:

Decrease in finance lease liability due to a reassessment event $ ( 48.6 ) $ — n/a

Decrease in finance lease liability due to a reassessment event (1)

n/a $ ( 48.6 ) n/a

______________

(1) During the year ended March 31, 2021, the Company reassessed the lease term of the Starz commercial building, which resulted in a change in classification of this lease from a finance lease to an operating lease (see Note 9).

Supplemental cash flow information related to leases was as follows:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2022 2021 2020

(Amounts in millions)

8 unchanged sentences

Operating leases - increase in lease liability $ 27.5 $ 12.6 $ —

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Related Party Transactions

In the year ended March 31, 2021, the Company paid less than $ 0.1 million to MLC Strategies, LLC (“MLC Strategies”) for certain consulting services (2020 - $ 0.1 million).

No amounts were paid in the year ended March 31, 2022.

Clyburn, a director of the Company, is the President of MLC Strategies.

In the years ended March 31, 2020 and 2019, we incurred expenses on behalf of Mark H.

Rachesky, the Chairman of the Board of the Company and principal of MHR Fund Management, for reimbursement of certain litigation costs of less than $ 0.1 million and $ 0.8 million, respectively, which are included in restructuring and other in the consolidated statements of operations (2021 - none ).

In the year ended March 31, 2020, we incurred expenses on behalf of Mark H.

Rachesky, the Chairman of the Board of the Company and principal of MHR Fund Management, for reimbursement of certain litigation costs of less than $ 0.1 million, which are included in restructuring and other in the consolidated statements of operations (2022 and 2021 - none ).

MHR Fund Management holds approximately 23 % of the Company’s outstanding Class A voting shares and 11 % of the Company's outstanding Class B non-voting common stock as of May 20, 2022.

In the years ended March 31, 2020 and 2019, we incurred expenses on behalf of John C.

Malone, a former director of the Company, for reimbursement of certain litigation costs of approximately $ 1.6 million and $ 2.4 million, respectively, which are included in restructuring and other in the consolidated statements of operations.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In the year ended March 31, 2020, we incurred expenses on behalf of John C.

Malone, a former director of the Company, for reimbursement of certain litigation costs of approximately $ 1.6 million, which are included in restructuring and other in the consolidated statements of operations.

Transactions with Equity Method Investees

Equity Method Investees.

In the ordinary course of business, we are involved in related party transactions with equity method investees.

These related party transactions primarily relate to the licensing and distribution of the Company's films and television programs, for which the impact on the Company's consolidated balance sheets and consolidated statements of operations is as follows (see Note 1 and Note 5):

These related party transactions primarily relate to the licensing and distribution of the Company's films and television programs and the lease of a studio facility owned by an equity-method investee, for which the impact on the Company's consolidated balance sheets and consolidated statements of operations is as follows (see Note 1 and Note 5):

(Amounts in millions)

1 unchanged sentence

Accounts receivable $ 13.1 $ 9.4

Investment in films and television programs (1)

Other assets, noncurrent (1)(2)

4 unchanged sentences

Participations and residuals, noncurrent 1.1 1.2

Other liabilities (1)

Total due to related parties $ 67.5 $ 24.2

10 unchanged sentences

__________________________________

(1) During the years ended March 31, 2021, 2020 and 2019, the Company made loans (including accrued interest) of $ 2.9 million, $ 12.5 million and $ 20.7 million, respectively, to certain of its equity method investees, of which no amounts, $ 3.3 million and $ 7.3 million, respectively, are included in other assets, noncurrent in the Company's consolidated balance sheets (net of equity interests losses applied against such loans), and included in the table above.

(1) During the year ended March 31, 2022, the Company entered into certain operating leases related to a studio facility owned by an equity-method investee.

Amounts related to these leases are included in investment in films and television programs, other assets - noncurrent, accounts payable and accrued liabilities and other liabilities in the consolidated balance sheet at March 31, 2022.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2) During the years ended March 31, 2022, 2021, and 2020, the Company made loans (including accrued interest) of $ 3.0 million, $ 2.9 million and $ 12.5 million, respectively, to certain of its equity method investees, of which no amounts, none and $ 3.3 million, respectively, are included in other assets, noncurrent in the Company's consolidated balance sheets (net of equity interests losses applied against such loans), and included in the table above.

(3) Amounts primarily represent production related advances due to certain of its equity method investees.

(3) Amounts primarily represent reimbursement for certain shared services for equity method investees.

In addition, as of March 31, 2021, the Company has entered into certain leases that have not yet commenced related to a studio facility owned by an equity-method investee, for which construction has not yet been completed.

(4) In the year ended March 31, 2020, amounts primarily represent reimbursement for certain shared services for equity method investees.

In addition, as of March 31, 2022, the Company has entered into certain leases that have not yet commenced primarily related to studio facilities owned by an equity-method investee, for which construction has not yet been completed.

See Note 9 for further information.

Subsequent Events

Senior Notes Redemption and Issuance.

On April 1, 2021, the Company redeemed in full all $ 518.7 million outstanding principal amount of its 5.875 % Senior Notes due November 2024 and all $ 545.6 million outstanding principal amount of its 6.375 % Senior Notes due February 2024.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The 5.500 % Senior Notes are unsubordinated, unsecured obligations of the Company.

Interest is payable on the 5.500 % Senior Notes semiannually in arrears on April 15 and October 15 of each year, commencing on October 15, 2021.

The Company may redeem the 5.500 % Senior Notes in whole at any time, or in part from time to time, prior to April 15, 2024 at a price equal to 100 % of the principal amount of the notes to be redeemed plus a "make-whole" premium, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

The Company may redeem the 5.500 % Senior Notes in whole at any time, or in part from time to time, on or after April 15, 2024 at certain specified redemption prices, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

Such redemption prices are as follows (as a percentage of the principal amount redeemed):

(i) on or after April 15, 2024 - 102.750 %;

(ii) on or after April 15, 2025 - 101.375 %;

and (iii) on or after April 15, 2026 - 100 %.

Credit Agreement Amendment.

On April 6, 2021, the Company amended its Credit Agreement to, among other things, extend the maturity (the "Extension") of a portion of its revolving credit commitments, amounting to $ 1.25 billion, and a portion of its outstanding term A loans, amounting to $ 444.9 million, to April 6, 2026 (the "2026 Term Loan A"), and make certain other changes to the covenants and other provisions therein.

After giving effect to the Extension, $ 250.0 million of revolving credit commitments and $ 215.1 million of term A loans remained outstanding with a maturity of March 22, 2023 (the "2023 Term Loan A").

The 2026 Term Loan A requires mandatory quarterly principal payments beginning September 30, 2022 at a quarterly rate of 1.25 %, then at quarterly rates of 1.75 % beginning September 30, 2023, and 2.50 % beginning September 30, 2024 through March 31, 2026, with the balance payable at maturity.

The 2023 Term Loan A will continue to require mandatory quarterly principal payments under the original repayment schedule, at quarterly rates of 2.50 % beginning June 30, 2021, with the balance payable at maturity (see Note 7).

Term Loan B Repurchases.

In April and May 2021, the Company completed a series of repurchases of the Term Loan B and, in aggregate, paid $ 60.1 million to repurchase $ 60.5 million principal amount of the Term Loan B.

IGR Facility Funding.

On April 1, 2022, the Company received $ 125.0 million under the IGR Facility (see Note 8).

Term Loan A Prepayment.

In April 2022, the Company voluntarily prepaid the entire outstanding principal amount of the 2023 Term Loan A of $ 193.6 million, together with accrued and unpaid interest (see Note 7).

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

What changed 10-K

Item 9A. Controls and Procedures