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Since fiscal 2020, the economic, social and regulatory impacts associated with the ongoing COVID-19 global pandemic (including its variants), continued measures to prevent its spread, and the resulting economic uncertainty, affected our business in a number of ways.
−Removed: We experienced delays in theatrical distribution of our films, both domestically and internationally, as well as delays in the production of film and television content (resulting in continued changes in future release dates for some titles and series).
−Removed: Although film and television production have resumed, we continue to see some disruption of production activities depending on local circumstances.
−Removed: Additionally, although the lifting of quarantines enabled many theaters to reopen, we are unable to predict patronage and theater capacity going forward.
−Removed: The impact of these disruptions and the extent of their adverse impact on our financial and operating results will be dictated by the length of time that such disruptions continue, which will, in turn, depend on the duration and severity of the COVID-19 global pandemic and its variants, and among other things, the impact of governmental actions imposed in response to the COVID-19 global pandemic, and individuals’ and companies’ responses regarding health matters going forward.
−Removed: The full extent of impacts related to the COVID-19 global pandemic on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict.
+Added: We experienced delays in theatrical distribution of our films, both domestically and internationally, as well as delays in the production of film and television content (resulting in changes in future release dates for some titles and series).
+Added: Although film and television production have generally resumed in full, disruption of production activities could occur again, depending on local circumstances.
+Added: Additionally, although theaters have generally reopened, a shift in government mandates or guidance regarding COVID-19 restrictions may impact patronage and theater capacity going forward.
+Added: Moreover, we are unable to predict patronage and theater capacity going forward.
+Added: The impact of these disruptions and the extent of their adverse impact on our financial and operating results will be dictated by the length of time that such disruptions occur or may continue, which will, in turn, depend on the currently unknowable duration and severity of any impacts of COVID-19 and its variants, and among other things, the impact of governmental actions imposed in response to COVID-19 and its variants, and individuals’ and companies’ risk tolerance regarding health matters going forward.
+Added: The full extent of the impacts related to COVID-19 and its variants on our business, operations and financial results will depend on numerous evolving factors that we may not be able to accurately predict.
See Part I, Item 1A.
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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, certain incremental costs were incurred and expensed, as presented in the table below:
−Removed: Three Months Ended Six Months Ended
−Removed: September 30, September 30,
+Added: Three Months Ended Nine Months Ended
+Added: December 31, December 31,
2022 2021 2022 2021
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Total COVID-19 related charges (benefit) $ (1.8) $ (2.6) $ (8.7) $ (1.1)
−Removed: (1) Amounts reflected in direct operating expense include incremental costs associated with the pausing and restarting of productions including paying/hiring certain cast and crew, maintaining idle facilities and equipment costs, net of insurance recoveries of $6.9 million and $7.9 million, respectively, in the three and six months ended September 30, 2022 (three and six months ended September 30, 2021 - insurance recoveries of $2.8 million and $8.7 million, respectively).
−Removed: In the three and six months ended September 30, 2022 and the three months ended September 30, 2021, insurance recoveries exceeded the incremental costs expensed in the period, resulting in a net benefit included in direct operating expense.
+Added: (1) Amounts reflected in direct operating expense include incremental costs associated with the pausing and restarting of productions including paying/hiring certain cast and crew, maintaining idle facilities and equipment costs, net of insurance recoveries of $2.8 million and $10.7 million, respectively, in the three and nine months ended December 31, 2022 (three and nine months ended December 31, 2021 - insurance recoveries of $5.0 million and $13.6 million, respectively).
+Added: In the three and nine months ended December 31, 2022 and 2021, insurance recoveries exceeded the incremental costs expensed in the period, resulting in a net benefit included in direct operating expense.
(2) Amounts reflected in restructuring and other 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.
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See further discussion in the Results of Operations section below.
−Removed: There are a number of ways in which these uncertainties resulting from the COVID-19 global pandemic have impacted our current results of operations and could continue to impact our future results of operations.
+Added: There are a number of ways in which these uncertainties resulting from COVID-19 and its variants have impacted our current results of operations and could continue to impact our future results of operations.
These impacts include the incremental costs and losses presented in the table above, lower revenues from the closure or reopening of movie theaters and postponement of theatrical releases, partially offset by lower theatrical production and marketing costs, or lower box office revenues from pre-pandemic levels due to shifts in viewing;
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and while STARZ initially experienced an increase in viewership during the fiscal year ended March 31, 2021 of its content, future growth could be impacted by whether productions that have resumed will be paused again, and future consumer viewing patterns as the pandemic eases.
−Removed: International Restructuring and Goodwill Impairment
−Removed: For the quarter ended September 30, 2022, due to continued adverse macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on the Company's growth in subscribers worldwide, the Company began implementing a plan to restructure its LIONSGATE+ business (formerly STARZPLAY International).
−Removed: As a result of this restructuring, we recorded charges of $218.9 million in the three months ended September 30, 2022, reflecting charges of $213.0 million for content impairment of its film group assets in certain international territories and severance charges of $5.9 million, which are included in the restructuring and other line item in the unaudited condensed consolidated statements of operations (see Note 14 to our unaudited condensed consolidated financial statements).
−Removed: During the quarter ended September 30, 2022, we recorded a goodwill impairment charge of $1.475 billion related to the Media Networks reporting unit.
+Added: Media Networks Restructuring and Goodwill Impairment
+Added: Media Networks Restructuring.
+Added: For the second quarter ended September 30, 2022, due to the macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on our growth in subscribers worldwide, we began a plan to restructure our LIONSGATE+ business (formerly STARZPLAY International).
+Added: This restructuring includes exiting the business in seven international territories (France, Germany, Italy, Spain, Benelux, the Nordics and Japan).
+Added: For the third quarter ended December 31, 2022, due to the continuing macro and micro economic conditions which led to the LIONSGATE+ restructuring, we expanded our restructuring plan discussed above to identify additional cost-saving initiatives, which included a strategic review of content performance across Starz’s domestic and international platforms, resulting in certain programming being removed from those platforms and written down to fair value.
+Added: As a result of these restructuring initiatives, we recorded content impairment charges related to the Media Networks segment in the three and nine months ended December 31, 2022 of $80.8 million and $293.8 million, respectively.
+Added: The Company also incurred severance cost under these restructuring initiatives.
+Added: These charges are included in restructuring and other in the unaudited condensed consolidated statement of operations (see Note 14 to our unaudited condensed consolidated financial statements).
+Added: The Company is in the process of executing its LIONSGATE+ restructuring plan including exiting the territories discussed above and its strategic review of content performance for consideration of removal from the Company's various platforms and estimates it will incur additional charges ranging from approximately $100 million to $125 million related to certain contractual content commitments or programming content impairment charges, among other items, as the Company fully implements the plan.
+Added: Of these total estimated future charges, the net future cash outlay is estimated to range from approximately $75 million to $100 million, which includes content commitments on content in territories being exited and estimates of payments on content that may be abandoned as part of the ongoing strategic review, as well as the incremental cost related to the restructuring.
+Added: Of the content impairment charges recorded in the nine months ended December 31, 2022, approximately $85 million reflects the remaining amounts payable for this content.
+Added: As the Company continues to fully implement the plan, including further strategic review of content performance, the Company may incur additional content impairment charges beyond the estimates provided.
+Added: The Company expects the restructuring plan to be substantially completed by March 31, 2023.
+Added: Goodwill Impairment.
+Added: The Company's Starz domestic operations have also been impacted by these current market conditions, and the Company has revised its subscriber growth and forecasted cash flow assumptions and implemented certain cost-saving measures.
+Added: These changes in forecasted cash flow resulted in an impairment of $1.475 billion of goodwill related to the Media Networks reporting unit in the second quarter ended September 30, 2022.
Management's Discussion and Analysis, "Critical Accounting Policies and Estimates", Goodwill and Indefinite-Lived Intangible Assets and Note 5 to our unaudited condensed consolidated financial statements for further information.
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None of the non-U.S.
−Removed: countries individually comprised greater than 10% of total revenues for the three and six months ended September 30, 2022 and 2021.
+Added: countries individually comprised greater than 10% of total revenues for the three and nine months ended December 31, 2022 and 2021.
Studio Business
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General and administration expenses include salaries and other overhead.
+Added: Corporate general and administrative expenses include corporate executive costs, costs of maintaining corporate facilities and common administrative support functions.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
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In addition, in the normal course of our business, some films and titles are more successful or less successful than anticipated.
−Removed: regularly reviews and revises when necessary its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or a write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value (see below).
+Added: Management regularly reviews and revises when necessary its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or a write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value (see below).
An increase in the estimate of ultimate revenue will generally result in a lower amortization rate and, therefore, less film and television program amortization expense, while a decrease in the estimate of ultimate revenue will generally result in a higher amortization rate and, therefore, higher film and television program amortization expense, and also periodically results in an impairment requiring a write-down of the film cost to the title’s fair value.
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Estimate of Fair Value.
−Removed: For content that is predominantly monetized individually (primarily investment in film and television programs related to the Motion Picture and Television Production segments), the fair value is determined based on a discounted cash flow analysis of the cash flows directly attributable to the title.
+Added: For content that is predominantly monetized individually (primarily investment in film and television programs related to the Motion Picture and Television Production segments), the fair value is determined based on a
+Added: discounted cash flow analysis of the cash flows directly attributable to the title.
For motion pictures intended for theatrical release, the discounted cash flow analysis used in the impairment evaluation prior to theatrical release is subjective as key inputs include estimates of future anticipated revenues, estimates of box office performance, which may differ from future actual results.
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Content removed from the service and abandoned is written down to its fair value, if any, determined using a discounted cash flow approach.
−Removed: For the three months ended September 30, 2022, due to the macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on the Company's growth in subscribers worldwide, the Company began a plan to restructure its LIONSGATE+ business (formerly STARZPLAY International).
+Added: For the second quarter ended September 30, 2022, due to the macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on the our growth in subscribers worldwide, we began a plan to restructure our LIONSGATE+ business (formerly STARZPLAY International).
This restructuring includes exiting the business in seven international territories (France, Germany, Italy, Spain, Benelux, the Nordics and Japan).
−Removed: As a result of this restructuring, the Company has recorded charges of $213.0 million in the three months ended September 30, 2022 for content impairment of its film group assets in certain international territories.
−Removed: These charges are excluded from segment results and included in restructuring and other in the unaudited condensed consolidated statement of operations.
−Removed: See Note 3 and Note 14 to our unaudited condensed consolidated financial statements.
+Added: For the third quarter ended December 31, 2022, due to the continuing macro and micro economic conditions which led to the LIONSGATE+ restructuring, we expanded our restructuring plan discussed above to identify additional cost-saving initiatives, which included a strategic review of content performance across Starz’s domestic and international platforms, resulting in certain programming being removed from those platforms and written down to fair value.
+Added: As a result of these restructuring initiatives, we recorded content impairment charges related to the Media Networks segment in the three and nine months ended December 31, 2022 of $80.8 million and $293.8 million, respectively.
+Added: These charges are included in restructuring and other in the unaudited condensed consolidated statement of operations (see Note 3 and Note 14 to our unaudited condensed consolidated financial statements).
Valuation Assumptions.
The discounted cash flow analysis includes cash flows estimates of ultimate revenue and costs as well as a discount rate (a Level 3 fair value measurement, see Note 8 to our unaudited condensed consolidated financial statements).
−Removed: 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
+Added: 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.
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 we overestimate the impact of future returns in a particular period, then we may record additional revenue in later periods when returns are less than estimated.
−Removed: An incremental change of 1% in our estimated sales returns rate (i.e., provisions for returns divided by gross sales of related product) for home entertainment products would have had an impact of approximately $0.2 million and $0.6 million, respectively, on our total revenue in the three and six months ended September 30, 2022 (three and six months ended September 30, 2021 - $0.4 million and $1.0 million, respectively).
+Added: An incremental change of 1% in our estimated sales returns rate (i.e., provisions for returns divided by gross sales of related product) for home entertainment products would have had an impact of approximately $0.3 million and $0.9 million, respectively, on our total revenue in the three and nine months ended December 31, 2022 (three and nine months ended December 31, 2021 - $0.5 million and $1.4 million, respectively).
Revenue from commissions are recognized as such services are provided.
1 unchanged sentence
Media Networks revenue is also generated through the distribution of our SVOD service directly to consumer through the Starz App.
−Removed: The variable distribution fee arrangements represent sales or usage based royalties,
−Removed: which are recognized over the period of such sales or usage by our distributor, which is the same period that the content is provided to the distributor.
+Added: The variable distribution fee arrangements represent sales or usage based royalties, which are recognized over the period of such sales or usage by our distributor, which is the same period that the content is provided to the distributor.
Estimates of revenue generated but not yet reported to us by our distribution partners are made based on the estimated number of subscribers using historical trends and recent reporting.
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Goodwill and Indefinite-Lived Intangibles.
−Removed: At September 30, 2022, the carrying value of goodwill and indefinite-lived intangible assets was $1.29 billion and $250.0 million, respectively.
+Added: At December 31, 2022, the carrying value of goodwill and indefinite-lived intangible assets was $1.29 billion and $250.0 million, respectively.
Our indefinite-lived intangible assets consist of trade names primarily representing the estimated fair value of the Starz brand name determined in connection with the acquisition of Starz as of December 8, 2016.
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Components are aggregated into a single reporting unit if they share similar economic characteristics.
−Removed: Our reporting units for purposes of goodwill impairment testing, along with their respective goodwill balances at September 30, 2022, were Motion Picture (goodwill of $394 million), Media Networks (goodwill of $493.9 million, net of $1.475 billion impairment recorded in the quarter ended September 30, 2022, as discussed further below), and our Television (goodwill of $309 million) and Talent Management (goodwill of $93 million) businesses, both of which are part of our Television Production segment.
+Added: Our reporting units for purposes of goodwill impairment testing, along with their respective goodwill balances at December 31, 2022, were Motion Picture (goodwill of $394 million), Media Networks (goodwill of $493.9 million, net of $1.475 billion impairment recorded in the second quarter ended September
+Added: 30, 2022, as discussed further below), and our Television (goodwill of $309 million) and Talent Management (goodwill of $93 million) businesses, both of which are part of our Television Production segment.
Goodwill and indefinite-lived intangible assets are not amortized but are reviewed for impairment each fiscal year or between the annual tests if an event occurs or circumstances change that indicates it is more-likely-than-not that the fair value of a reporting unit or indefinite-lived intangible asset is less than its carrying value.
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The fair value analysis of our Media Networks reporting unit indicated that the fair value exceeded the related carrying value by approximately 10%.
−Removed: During the quarter ended September 30, 2022, due to continued adverse macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on our growth in subscribers worldwide, we began implementing a plan to restructure our LIONSGATE+ business (formerly STARZPLAY International).
+Added: During the second quarter ended September 30, 2022, due to continued adverse macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on our growth in subscribers worldwide, we began implementing a plan to restructure our LIONSGATE+ business (formerly STARZPLAY International).
This restructuring includes exiting the business in seven international territories (France, Germany, Italy, Spain, Benelux, the Nordics and Japan).
Our Starz domestic operations have also been impacted by these current market conditions and we have revised our subscriber growth and forecasted cash flow assumptions and implemented certain cost-saving measures.
−Removed: Additionally, companies in the media and entertainment industry, and particularly those with significant streaming platforms, have experienced a decline in market valuations, and reflecting this industry trend, as well as potential capital market transactions, and the factors discussed above, the market price of our common shares has continued to decline since June 30, 2022.
−Removed: Accordingly, we updated our quantitative impairment assessment for all of our reporting units based on the most recent data and expected growth trends.
+Added: Additionally, companies in the media and entertainment industry, and particularly those with significant streaming platforms, have experienced a decline in market valuations, and reflecting this industry trend, as well as potential capital market transactions, and the factors discussed above, the market price of our common shares had declined significantly through September 30, 2022.
+Added: Accordingly, for the second quarter ended September 30, 2022, we updated our quantitative impairment assessment for all of our reporting units based on the most recent data and expected growth trends.
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 13.0%, 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 our quantitative impairment assessment, the Company determined that the fair value of our reporting units exceeded the carrying values for all of our reporting units, except the Media Networks reporting unit which was previously disclosed as a reporting unit "at risk" of impairment.
−Removed: The analysis resulted in a goodwill impairment charge of $1.475 billion, related to our Media Networks reporting unit goodwill, which is recorded as a separate line item "goodwill impairment" in the unaudited condensed consolidated statement of operations (see Note 5 to the unaudited condensed consolidated financial statements).
+Added: The analysis resulted in a goodwill impairment charge of $1.475 billion in
+Added: the second quarter ended September 30, 2022, related to our Media Networks reporting unit goodwill, which is recorded as a separate line item "goodwill impairment" in the unaudited condensed consolidated statement of operations (see Note 5 to the unaudited condensed consolidated financial statements).
+Added: Since the impairment charge reduced the carrying value of the Media Networks reporting unit to its fair value, at September 30, 2022 the fair value and carrying value of the Media Networks reporting unit were equal and thus it continues to be considered "at risk" of impairment.
+Added: During the third quarter ended December 31, 2022, we performed a qualitative goodwill impairment assessment for all reporting units which considered the continuing micro and macroeconomic environment, industry considerations, reporting unit performance and updated forecasts, and determined that since the prior quarter's quantitative assessment, there were no events or circumstances that rise to a level that would more-likely-than-not reduce the fair value of those reporting units below their carrying values;
+Added: therefore, no quantitative goodwill impairment analysis was performed.
Management will continue to monitor all of its reporting units for further changes in the business environment that could impact the recoverability in future periods.
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The Company also considered the macroeconomic impact including the uncertainty around the COVID-19 global pandemic, and the resulting uncertain long-term economic impact on discount rates and growth rates, as well as the impact from tax law changes inclusive of the reduction of the federal tax rate since the acquisition of Starz.
−Removed: During the three months ended September 30, 2022, due to the events and their impact discussed above related to our Media Networks reporting unit, we performed a quantitative impairment assessment of our indefinite-lived trade names.
+Added: During the second quarter ended September, 2022, due to the events and their impact discussed above related to our Media Networks reporting unit, we performed a quantitative impairment assessment of our indefinite-lived trade names.
Based on the quantitative impairment assessment of our trade names, we concluded that the fair value of our trade names was more than its carrying amount, and therefore our trade names were not considered at risk of impairment.
+Added: During the third quarter ended December 31, 2022, there were no events or circumstances that would indicate that it is more-likely-than-not that the fair value of our indefinite-lived trade names is less than its carrying value.
Finite-Lived Intangible Assets.
−Removed: At September 30, 2022, the carrying value of our finite-lived intangible assets was approximately $1.12 billion.
+Added: At December 31, 2022, the carrying value of our finite-lived intangible assets was approximately $1.09 billion.
Our finite-lived intangible assets primarily relate to customer relationships associated with U.S.
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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.
−Removed: The Starz Traditional Affiliate customer relationship intangible asset is amortized in the proportion that current period
−Removed: 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.
+Added: 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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Based on our impairment analysis, the estimated undiscounted cash flows exceeded the carrying amount of the assets and therefore no impairment charge was required.
−Removed: During the three months ended September 30, 2022, due to the events and their impact discussed above related to our Media Networks reporting unit, we updated our impairment analysis of our amortizable intangible assets.
+Added: During the second quarter ended September 30, 2022, due to the events and their impact discussed above related to our Media Networks reporting unit, we updated our impairment analysis of our amortizable intangible assets.
Based on our impairment analysis, the estimated undiscounted cash flows exceeded the carrying amount of the assets and therefore no impairment charge was required.
+Added: During the third quarter ended December 31, 2022, there were no events or circumstances that would indicate that the carrying amount of our finite-lived intangible assets may not be recoverable.
Determining whether an intangible asset is recoverable or impaired requires various estimates and assumptions, including whether events or circumstances indicate that the carrying amount of the asset may not be recoverable, determining estimates of future cash flows for the assets involved and, when applicable, the assumptions applied in determining fair value, including discount rates, growth rates, market risk premiums and other assumptions about the economic environment.
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RESULTS OF OPERATIONS
−Removed: Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021
+Added: Three Months Ended December 31, 2022 Compared to Three Months Ended December 31, 2021
Consolidated Results of Operations
−Removed: The following table sets forth our consolidated results of operations for the three months ended September 30, 2022 and 2021:
+Added: The following table sets forth our consolidated results of operations for the three months ended December 31, 2022 and 2021:
Three Months Ended
−Removed: September 30, Increase (Decrease)
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
5 unchanged sentences
Media Networks 380.3 388.9 (8.6) (2.2) %
−Removed: Intersegment eliminations (175.8) (163.8) (12.0) nm
+Added: Intersegment eliminations (274.4) (217.4) (57.0) 26.2 %
Total revenues 1,000.1 885.4 114.7 13.0 %
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Restructuring and other 75.3 0.5 74.8 nm
−Removed: Goodwill impairment 1,475.0 — 1,475.0 n/a
Total expenses 992.3 876.1 116.2 13.3 %
−Removed: Operating income (loss) (1,747.6) 29.8 (1,777.4) nm
+Added: Operating income 7.8 9.3 (1.5) (16.1) %
Interest expense (59.6) (44.4) (15.2) 34.2 %
Interest and other income 1.7 1.4 0.3 21.4 %
−Removed: Other expense (5.4) (2.7) (2.7) 100.0 %
+Added: Other expense (10.7) (1.9) (8.8) nm
Gain (loss) on extinguishment of debt 38.2 (1.1) 39.3 nm
−Removed: Gain (loss) on investments (3.1) 1.5 (4.6) (306.7) %
+Added: Gain (loss) on investments 43.4 (0.2) 43.6 nm
Equity interests income (loss) — (2.5) 2.5 (100.0) %
7 unchanged sentences
nm - Percentage not meaningful.
−Removed: Consolidated revenues decreased $12.6 million in the three months ended September 30, 2022 reflecting a decrease of $12.0 million from our Studio Business, and an increase in intersegment eliminations, which primarily relate to the licensing of product from our Studio Business (primarily our Television Production segment) to the Media Networks segment.
−Removed: These were partially offset by an increase of $11.4 million from our Media Networks business.
−Removed: Motion Picture revenue decreased $106.9 million in the current quarter due primarily to lower television revenue, home entertainment revenue, international revenue and theatrical revenue.
−Removed: Motion Picture revenue included $10.2 million of revenue from licensing Motion Picture segment product to the Media Networks segment, representing an increase of $7.4 million from the three months ended September 30, 2021.
−Removed: Television Production revenue increased $94.9 million due to increased domestic television revenue from a greater number of television episodes delivered, increased international revenue and digital home entertainment revenue.
−Removed: Television Production revenue included $165.6 million of revenue from licensing Television Production segment product to our Media Networks segment, representing an increase of $4.6 million from the three months ended September 30, 2021.
−Removed: The increase in Television Production revenue was partially offset by slightly increased intersegment eliminations associated with higher Television Production revenues for licenses of original series to Starz Networks and LIONSGATE+, both in the Media Networks segment.
−Removed: Media Networks revenue increased $11.4 million reflecting increased revenue at LIONSGATE+ of $12.5 million, partially offset by a decrease of $1.1 million at Starz Networks.
+Added: Consolidated revenues increased $114.7 million in the three months ended December 31, 2022 reflecting an increase of $180.3 million from our Studio Business offset by increased intersegment eliminations of $57.0 million and a decrease of $8.6 million from our Media Networks business.
+Added: Intersegment eliminations relate to the licensing of product from our Studio Business (primarily our Television Production segment as discussed below) to the Media Networks segment.
+Added: Motion Picture revenue increased $13.5 million in the current quarter due primarily to higher digital home entertainment revenue and theatrical revenue, offset by lower television revenue and packaged media home entertainment revenue.
+Added: Motion Picture revenue included $16.2 million of revenue from licensing Motion Picture segment product to the Media Networks segment, representing a decrease of $12.0 million from the three months ended December 31, 2021.
+Added: Television Production revenue increased $166.8 million due to increased digital home entertainment revenue, increased domestic television revenue from higher intersegment revenues from the licensing of Starz original series, and increased international revenue.
+Added: Television Production revenue included $258.2 million of revenue from licensing Television Production segment product to our Media Networks segment, representing an increase of $69.0 million from the three months ended December 31, 2021.
+Added: The increase in Television Production revenue was partially offset by increased intersegment eliminations associated with higher Television Production revenues for licenses of original series to Starz Networks and LIONSGATE+, both in the Media Networks segment.
+Added: Media Networks revenue decreased $8.6 million reflecting a decrease of $20.8 million at Starz Network, partially offset by increased revenue at LIONSGATE+ of $12.2 million.
See further discussion in the Segment Results of Operations section below.
Direct Operating Expenses.
−Removed: Direct operating expenses by segment were as follows for the three months ended September 30, 2022 and 2021:
+Added: Direct operating expenses by segment were as follows for the three months ended December 31, 2022 and 2021:
Three Months Ended
−Removed: September 30,
2022 2021 Increase (Decrease)
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nm - Percentage not meaningful.
−Removed: Direct operating expenses increased in the three months ended September 30, 2022 due to higher direct operating expenses of our Studio Business and Media Networks segment.
−Removed: The increase at the Studio Business reflects higher direct operating expenses of the Television Production segment due to higher revenues from Television Production, offset by lower direct operating expenses of the Motion Picture segment due to lower Motion Picture revenue.
−Removed: The increase in Media Networks direct operating expense was driven by increases at LIONSGATE+ of $15.2 million and Starz Networks of $9.1 million due to higher programming cost amortization, and foreign currency fluctuations at LIONSGATE+ related to the strengthening U.S.
+Added: Direct operating expenses increased in the three months ended December 31, 2022 due to higher direct operating expenses of our Studio Business partially offset by lower direct operating expenses of our Media Networks segment.
+Added: The increase at the Studio Business reflects higher direct operating expenses of the Television Production segment due to higher revenues from Television Production, and to a lesser extent, higher direct operating expenses of the Motion Picture segment.
+Added: The decrease in Media Networks direct operating expense was driven by a decrease at LIONSGATE+ of $14.7 million due to lower programming cost amortization and a benefit from foreign currency gains, partially offset by an increase at Starz Networks of $4.4 million.
See further discussion in the Segment Results of Operations section below.
1 unchanged sentence
As discussed previously, we incurred certain incremental costs associated with the COVID-19 global pandemic.
−Removed: In the three months ended September 30, 2022, direct operating expense included a benefit of $6.1 million from insurance recoveries in excess of incremental costs associated with the pausing and restarting of productions
−Removed: including paying/hiring certain cast and crew, maintaining idle facilities and equipment costs resulting from circumstances associated with the COVID-19 global pandemic (three months ended September 30, 2021 - benefit of $1.0 million).
+Added: In the three months ended December 31, 2022, direct operating expense included a benefit of $1.8
+Added: million from insurance recoveries in excess of 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 (three months ended December 31, 2021 - benefit of $2.8 million).
We may incur additional incremental costs for direct operating expenses related to the COVID-19 global pandemic in future periods, depending on if there is a continued spread of new variants which may result in disruptions to our operations.
1 unchanged sentence
The ultimate amount of insurance recovery cannot be estimated at this time.
−Removed: In the three months ended September 30, 2022, in connection with certain management changes and changes in the theatrical marketplace in the Motion Picture segment, the Company wrote off approximately $7.2 million of development costs as a result of changes in strategy across its theatrical slate.
−Removed: These charges are excluded from segment operating results but included in direct operating expense in the consolidated statement of operations and reflected in the "other" line item above.
−Removed: In addition, "other" direct operating expense includes share-based compensation, and the amortization of the non-cash fair value adjustments on film and television assets associated with the application of purchase accounting related to recent acquisitions.
+Added: Other direct operating expense includes share-based compensation, and the amortization of the non-cash fair value adjustments on film and television assets associated with the application of purchase accounting related to recent acquisitions.
Distribution and Marketing Expenses.
−Removed: Distribution and marketing expenses by segment were as follows for the three months ended September 30, 2022 and 2021:
+Added: Distribution and marketing expenses by segment were as follows for the three months ended December 31, 2022 and 2021:
Three Months Ended
−Removed: September 30, Increase (Decrease)
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
6 unchanged sentences
Media Networks 103.2 124.4 (21.2) (17.0) %
−Removed: COVID-19 related charges — 0.2 (0.2) (100.0) %
Other 0.2 0.2 — — %
−Removed: Intersegment eliminations 1.1 — 1.1 n/a
$ 171.0 $ 198.9 $ (27.9) (14.0) %
2 unchanged sentences
nm - Percentage not meaningful.
−Removed: Distribution and marketing expenses decreased in the three months ended September 30, 2022, due to lower Media Networks distribution and marketing expense, and lower Studio Business distribution and marketing expense.
−Removed: The decrease in Media Networks distribution and marketing expense was due to a decrease at Starz Networks of $23.8 million and a decrease at LIONSGATE+ of $5.9 million resulting from timing and volume of our Starz Originals' premieres.
−Removed: The decrease at the Studio Business reflects lower Motion Picture home entertainment distribution and marketing expense associated with fewer releases in the current quarter.
+Added: Distribution and marketing expenses decreased in the three months ended December 31, 2022, due to lower Media Networks distribution and marketing expense, and lower Studio Business distribution and marketing expense.
+Added: The decrease in Media Networks distribution and marketing expense was due to a decrease at Starz Networks of $14.7 million resulting from lower advertising purchased in the current year quarter and lower media spend for our Starz Originals, and a decrease at LIONSGATE+ of $6.5 million from the elimination of advertising and marketing activities in the exited international territories due to the restructuring of LIONSGATE+.
+Added: The decrease at the Studio Business reflects lower Motion Picture theatrical P&A and Premium VOD expense.
See further discussion in the Segment Results of Operations section below.
General and Administrative Expenses.
−Removed: General and administrative expenses by segment were as follows for the three months ended September 30, 2022 and 2021:
+Added: General and administrative expenses by segment were as follows for the three months ended December 31, 2022 and 2021:
Three Months Ended
−Removed: September 30, Increase (Decrease)
+Added: December 31, Increase (Decrease)
2022 % of Revenues 2021 % of Revenues Amount Percent
11 unchanged sentences
Total general and administrative expenses $ 115.0 11.5% $ 112.5 12.7% $ 2.5 2.2 %
−Removed: General and administrative expenses increased in the three months ended September 30, 2022, resulting from increased share-based compensation expense, purchase accounting and related adjustments, Media Networks and Studio Business general and administrative expenses.
+Added: General and administrative expenses increased slightly in the three months ended December 31, 2022, resulting from increased Media Networks and Television Production general and administrative expenses, purchase accounting and related adjustments and share-based compensation expense, partially offset by lower Motion Picture and corporate general and administrative expense.
See further discussion in the Segment Results of Operations section below.
−Removed: Corporate general and administrative expenses in the three months ended September 30, 2022 was comparable to the three months ended September 30, 2021.
−Removed: The increase in share-based compensation expense included in general and administrative expense in the three months ended September 30, 2022, as compared to the three months ended September 30, 2021 is primarily due to share-based
−Removed: compensation expense associated with the Company's incentive based compensation program.
−Removed: The following table presents share-based compensation expense by financial statement line item:
+Added: Share-based compensation expense included in general and administrative expense in the three months ended December 31, 2022 is comparable to the three months ended December 31, 2021 The following table presents share-based compensation expense by financial statement line item:
Three Months Ended
−Removed: September 30,
(Amounts in millions)
5 unchanged sentences
Total share-based compensation expense $ 24.8 $ 22.6
+Added: _______________________
+Added: (1) Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of certain vesting schedules for equity awards pursuant to certain severance arrangements.
Purchase accounting and related adjustments represent the charge for the accretion of the noncontrolling interest discount related to Pilgrim Media Group and 3 Arts Entertainment, the amortization of the recoupable portion of the purchase price and the expense associated with earned distributions related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense.
1 unchanged sentence
Depreciation and Amortization Expense.
−Removed: Depreciation and amortization of $45.2 million in the three months ended September 30, 2022 increased $0.8 million, from $44.4 million in the three months ended September 30, 2021.
+Added: Depreciation and amortization of $46.3 million in the three months ended December 31, 2022 was comparable to depreciation and amortization of $46.3 million in the three months ended December 31, 2021.
Restructuring and Other.
−Removed: Restructuring and other increased $229.7 million in the three months ended September 30, 2022 as compared to the three months ended September 30, 2021, and includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable.
−Removed: Restructuring and other costs were as follows for the three months ended September 30, 2022 and 2021 (see Note 14 to our unaudited condensed consolidated financial statements):
+Added: Restructuring and other increased $74.8 million in the three months ended December 31, 2022 as compared to the three months ended December 31, 2021, and includes restructuring and severance costs, certain transaction
+Added: and other costs, and certain unusual items, when applicable.
+Added: Restructuring and other costs were as follows for the three months ended December 31, 2022 and 2021 (see Note 14 to our unaudited condensed consolidated financial statements):
Three Months Ended
−Removed: September 30, Increase (Decrease)
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
4 unchanged sentences
Severance (2)
−Removed: 9.6 1.3 8.3 nm
+Added: Cash 2.4 — 2.4 n/a
+Added: Accelerated vesting on equity awards (see Note 12 to our unaudited condensed consolidated financial statements)
+Added: 1.5 — 1.5 n/a
+Added: 3.9 — 3.9 n/a
COVID-19 related charges (3)
— 0.2 (0.2) (100.0) %
−Removed: Transaction and related costs (4)
−Removed: 4.8 1.7 3.1 182.4 %
+Added: Transaction and other costs (benefits) (4)
(9.4) 0.3 (9.7) nm
+Added: $ 75.3 $ 0.5 $ 74.8 nm
_______________________
nm - Percentage not meaningful.
−Removed: (1) For the three months ended September 30, 2022, due to the macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on the Company's growth in subscribers worldwide, the Company began a plan to restructure its LIONSGATE+ business (formerly STARZPLAY International).
+Added: (1) Media Networks Restructuring:
+Added: For the second quarter ended September 30, 2022, due to the macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on our growth in subscribers worldwide, we began a plan to restructure our LIONSGATE+ business (formerly STARZPLAY International).
This restructuring includes exiting the business in seven international territories (France, Germany, Italy, Spain, Benelux, the Nordics and Japan).
−Removed: As a result of this restructuring, the Company has recorded charges of $213.0 million in the three months ended September 30, 2022 for content impairment of its film group assets in certain international territories.
−Removed: These charges are excluded from segment results and included in restructuring and other in the unaudited condensed consolidated statement of operations.
−Removed: The Company expects to incur additional charges ranging from approximately $75 million to $100 million in the next six months primarily related to certain contractual content commitments and other items as we fully implement the plan.
−Removed: These amounts also reflect the estimated net future cash expenditures for these charges.
−Removed: In addition, the Company expects future cash expenditures of approximately $75 million related to the content charges recorded in the three months ended September 30, 2022.
−Removed: Amounts in the three months ended September 30, 2022 also include an impairment of an operating lease right-of-use asset amounting to $5.8 million associated with a portion of a facility lease that will no longer be utilized by the Company.
−Removed: The impairment reflects a decline in market conditions since the inception of the lease impacting potential sublease opportunities, and represents the difference between the estimated fair value, which was determined based on the expected discounted future cash flows of the lease asset, and the carrying value.
−Removed: (2) In connection with the international restructuring described above, the Company has implemented certain cost-saving initiatives both domestically and internationally, and has recorded severance charges of $5.9 million in the three months ended September 30, 2022 related to the Media Networks segment.
−Removed: In addition, due to the changes in the marketplace and certain management, and the implementation of certain cost-saving initiatives and the streamlining of operations, the Company recorded additional severance charges of $3.7 million primarily related to the Motion Picture segment.
+Added: Our Starz domestic operations have also been impacted by these current market conditions, and we have revised our subscriber growth and forecasted cash flow assumptions and implemented certain cost-saving measures.
+Added: These changes in forecasted cash flow resulted in an impairment of $1.475 billion of goodwill related to the Media Networks segment in the second quarter ended September 30, 2022, as discussed in Note 5 to our unaudited condensed consolidated financial statements.
+Added: For the third quarter ended December 31, 2022, due to the continuing macro and microeconomic conditions which led to the LIONSGATE+ restructuring, we expanded our restructuring plan discussed above to identify additional cost-saving initiatives, which included a strategic review of content performance across Starz's domestic and international platforms, resulting in certain programming being removed from those platforms and written down to fair value.
+Added: As a result of these restructuring initiatives, we recorded content impairment charges associated with impairment of programming related to the territories being exited and individual content abandonment upon removal of certain titles from the Starz platforms related to the Media Networks segment in the three months ended December 31, 2022 of $80.8 million.
+Added: We are in the process of executing our LIONSGATE+ restructuring plan including exiting the territories discussed above and our strategic review of content performance for consideration of removal from our various platforms and estimate we will incur additional charges ranging from approximately $100 million to $125 million related to certain contractual content commitments or programming content impairment charges, among other items, as we fully implement the plan.
+Added: Of these total estimated future charges, the net future cash outlay is estimated to range from approximately $75 million to $100 million, which includes content commitments on content in territories being exited and estimates of payments on content that may be abandoned as part of the ongoing strategic review, as well as the incremental cost related to the restructuring.
+Added: Of the content impairment charges recorded in the nine months ended December 31, 2022, approximately $85 million reflects the remaining amounts payable for this content.
+Added: As we continue to fully implement the plan, including further strategic review of content performance, we may incur additional content impairment charges beyond the estimates provided.
+Added: We expect the restructuring plan to be substantially completed by March 31, 2023.
+Added: (2) Severance costs were primarily related to restructuring activities and other cost-saving initiatives.
(3) 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.
−Removed: (4) Transaction and related costs in the three and six months ended September 30, 2022 and 2021 reflect transaction, integration and legal costs associated with certain strategic transactions, restructuring activities and legal matters.
−Removed: Goodwill Impairment.
−Removed: Goodwill impairment of $1.475 billion for the three months ended September 30, 2022 reflects the impairment charge recorded in the current quarter related to the Media Networks reporting unit, as discussed in Item 2.
−Removed: Management's Discussion and Analysis, "Critical Accounting Policies and Estimates", Goodwill and Indefinite-Lived Intangible Assets (see Note 5 to our unaudited condensed consolidated financial statements).
−Removed: There was no comparable charge in the three months ended September 30, 2021.
+Added: (4) Transaction and other costs in the three months ended December 31, 2022 and 2021 reflect transaction, integration and legal costs associated with certain strategic transactions, and restructuring activities and also include costs and benefits associated with certain legal matters.
+Added: In the three months ended December 31, 2022, these amounts include a benefit of $11.0 million for a settlement of a legal matter related to the Media Networks segment.
Interest Expense.
−Removed: Interest expense of $57.3 million for the three months ended September 30, 2022 increased $13.3 million, from $44.0 million in the three months ended September 30, 2021.
−Removed: The following table sets forth the components of interest expense for the three months ended September 30, 2022 and 2021:
+Added: Interest expense of $59.6 million for the three months ended December 31, 2022 increased $15.2 million, from $44.4 million in the three months ended December 31, 2021.
+Added: The following table sets forth the components of interest expense for the three months ended December 31, 2022 and 2021:
Three Months Ended
−Removed: September 30,
(Amounts in millions)
3 unchanged sentences
Senior Notes 13.0 13.9
−Removed: Amortization of debt financing costs and other non-cash interest (2)
+Added: Amortization of debt issuance costs and other non-cash interest (2)
Total interest expense $ 59.6 $ 44.4
_______________________
−Removed: (1) Amounts include payments associated with the Company's interest rate swaps (see Note 17 to our unaudited condensed consolidated financial statements) and interest payments associated with the Company's film related financing and other obligations (Production Tax Credit Facility, IP Credit Facility, Backlog Financing Facility and other).
+Added: (1) Amounts include payments associated with the Company's interest rate swaps (see Note 17 to our unaudited condensed consolidated financial statements) and interest payments associated with certain film related obligations (Production Tax Credit Facility, IP Credit Facility, Backlog Facility and other).
(2) Amounts include the amortization of unrealized losses in accumulated other comprehensive loss related to de-designated interest rate swaps which are being amortized to interest expense.
1 unchanged sentence
Interest and Other Income.
−Removed: Interest and other income of $1.8 million for the three months ended September 30, 2022 compared to interest and other income of $24.1 million for the three months ended September 30, 2021, due to insurance recoveries on prior shareholder litigation of $20.2 million in the prior year's quarter (see Note 16 to our unaudited condensed consolidated financial statements).
+Added: Interest and other income of $1.7 million for the three months ended December 31, 2022 compared to interest and other income of $1.4 million for the three months ended December 31, 2021.
Other Expense.
−Removed: Other expense of $5.4 million for the three months ended September 30, 2022 compared to other expense of $2.7 million for the three months ended September 30, 2021, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 18 to our unaudited condensed consolidated financial statements).
+Added: Other expense of $10.7 million for the three months ended December 31, 2022 compared to other expense of $1.9 million for the three months ended December 31, 2021, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 18 to our unaudited condensed consolidated financial statements).
Gain (Loss) on Extinguishment of Debt.
−Removed: Gain on extinguishment of debt of $3.4 million for the three months ended September 30, 2022 represented a gain associated with the 5.500% Senior Notes repurchased at a discount in the current quarter, partially offset by the write-off of debt issuance costs.
−Removed: This compared to a loss on extinguishment of debt of $0.4 million in the three months ended September 30, 2021 related to the write-off of debt issuance costs.
+Added: Gain on extinguishment of debt of $38.2 million for the three months ended December 31, 2022 represented a gain associated with the 5.500% Senior Notes repurchased at a discount in the current quarter, partially offset by the write-off of debt issuance costs.
+Added: This compared to a loss on extinguishment of debt of $1.1 million in the three months ended December 31, 2021 related to the write-off of debt issuance costs associated with the termination of a portion of our revolving credit commitments.
See Note 6 to our unaudited condensed consolidated financial statements.
Gain (Loss) on Investments.
−Removed: Loss on investments of $3.1 million for the three months ended September 30, 2022 compared to a gain on investments of $1.5 million for the three months ended September 30, 2021.
+Added: Gain on investments of $43.4 million for the three months ended December 31, 2022 represented a gain associated with the sale of a portion of our ownership interest in STARZPLAY Arabia, compared to a loss on investments of $0.2 million for the three months ended December 31, 2021.
Equity Interests Income (Loss).
−Removed: Equity interests loss of $0.1 million in the three months ended September 30, 2022 compared to equity interests income of $0.4 million in the three months ended September 30, 2021.
+Added: Equity interests income of nil in the three months ended December 31, 2022 compared to equity interests loss of $2.5 million in the three months ended December 31, 2021.
Income Tax Provision.
−Removed: We had an income tax provision of $5.0 million in the three months ended September 30, 2022, compared to an income tax provision of $5.6 million in the three months ended September 30, 2021.
−Removed: Our income tax provision differs from the federal statutory rate multiplied by pre-tax income (loss) due to the mix of our pre-tax income (loss) generated across the various jurisdictions in which we operate, changes in the valuation allowance against our deferred tax assets, and certain minimum taxes and foreign withholding taxes.
−Removed: Our income tax provision for the three months ended September 30, 2022 was also impacted by an interest accrual on uncertain tax benefits.
−Removed: Our income tax provision for the three months ended September 30, 2021 was also impacted by an interest accrual on uncertain tax benefits, and the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
+Added: We had an income tax provision of $5.6 million in the three months ended December 31, 2022, compared to an income tax provision of $9.5 million in the three months ended December 31, 2021.
+Added: Our income tax provision
+Added: differs from the federal statutory rate multiplied by pre-tax income (loss) due to the mix of our pre-tax income (loss) generated across the various jurisdictions in which we operate, changes in the valuation allowance against our deferred tax assets, and certain minimum taxes and foreign withholding taxes.
+Added: Our income tax provision for the three months ended December 31, 2022 and 2021 was also impacted by an interest accrual on uncertain tax benefits, and the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
+Added: Our income tax provision for the three months ended December 31, 2021 was also impacted by additional uncertain tax benefits related to state income taxes identified during state tax audits.
Net Income (Loss) Attributable to Lions Gate Entertainment Corp.
Shareholders.
−Removed: Net loss attributable to our shareholders for the three months ended September 30, 2022 was $1,811.1 million, or basic and diluted net loss per common share of $7.95 on 227.9 million weighted average common shares outstanding.
−Removed: This compares to net income attributable to our shareholders for the three months ended September 30, 2021 of $7.5 million, or basic net income per common share of $0.03 on 224.4 million weighted average common shares outstanding and diluted net income per common share of $0.03 on 228.5 million weighted average common shares outstanding.
+Added: Net income attributable to our shareholders for the three months ended December 31, 2022 was $16.6 million, or basic net income per common share of $0.07 on 228.8 million weighted average common shares outstanding and diluted net income per common share of $0.07 on 230.1 million weighted average common shares outstanding.
+Added: This compares to net loss attributable to our shareholders for the three months ended December 31, 2021 of $45.6 million, or basic and diluted net loss per common share of $0.20 on 225.0 million weighted average common shares outstanding.
Segment Results of Operations
1 unchanged sentence
The Company's primary measure of segment performance is segment profit.
−Removed: See Note 15 to the unaudited condensed consolidated financial statements for our definition of segment profit and a reconciliation of segment profit to the Company's consolidated loss before income taxes.
+Added: See Note 15 to the unaudited condensed consolidated financial statements for our definition of segment profit and a reconciliation of segment profit to the Company's consolidated income (loss) before income taxes.
Segment Presentation
2 unchanged sentences
Three Months Ended
−Removed: September 30, Increase (Decrease)
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
13 unchanged sentences
Media Networks 72.4 49.5 22.9 46.3 %
−Removed: Intersegment eliminations (17.9) (3.1) (14.8) 477.4 %
+Added: Intersegment eliminations (8.4) (1.9) (6.5) nm
$ 243.3 $ 166.4 $ 76.9 46.2 %
5 unchanged sentences
Media Networks 49.5 28.5 21.0 73.7 %
−Removed: Intersegment eliminations (17.9) (3.1) (14.8) 477.4 %
+Added: Intersegment eliminations (8.4) (1.9) (6.5) nm
$ 189.1 $ 113.4 $ 75.7 66.8 %
+Added: _______________________
+Added: nm - Percentage not meaningful.
See the following discussion for further detail of our individual segments.
Motion Picture
−Removed: The table below sets forth Motion Picture gross contribution and segment profit for the three months ended September 30, 2022 and 2021:
+Added: The table below sets forth Motion Picture gross contribution and segment profit for the three months ended December 31, 2022 and 2021:
Three Months Ended
−Removed: September 30, Increase (Decrease)
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
10 unchanged sentences
Gross contribution as a percentage of revenue 33.6 % 32.8 %
+Added: The table below sets forth Motion Picture revenue by media and product category for the three months ended December 31, 2022 and 2021:
+Added: Three Months Ended December 31,
2022 2021 (1)
−Removed: nm - Percentage not meaningful.
−Removed: The table below sets forth Motion Picture revenue by media and product category for the three months ended September 30, 2022 and 2021:
−Removed: Three Months Ended September 30,
Total Increase (Decrease)
17 unchanged sentences
Through December 31, 2021, we had previously presented a "Feature Film" and "Other Film" category.
−Removed: Accordingly, amounts presented in the table above for the three months ended September 30, 2021 have been conformed to the current period presentation.
+Added: Accordingly, amounts presented in the table above for the three months ended December 31, 2021 have been conformed to the current period presentation.
(2) Lionsgate Original Releases:
4 unchanged sentences
Includes acquired and licensed brands and libraries originally released by other parties such as third-party library product, including our titles released by acquired companies prior to our acquisition of the company (i.e., Summit Entertainment library), and titles released with our equity method investees, Roadside Attractions and Pantelion Films, and other titles.
−Removed: Theatrical revenue decreased $10.0 million in the three months ended September 30, 2022 as compared to the three months ended September 30, 2021 due to a decrease of $7.3 million from Other Film due to lower revenue from our acquired library titles.
−Removed: Home entertainment revenue decreased $45.2 million, or 28.1%, in the three months ended September 30, 2022, as compared to the three months ended September 30, 2021, due to lower digital media revenue of $27.9 million, and lower packaged media revenue of $17.3 million driven by Lionsgate Original Releases.
−Removed: The decreases in digital and packaged media revenue were due to decreases of $19.5 million and $11.5 million, respectively, from Lionsgate Original Releases due to revenue in the prior year's quarter from The Hitman's Wife's Bodyguard (a fiscal 2022 theatrical release) .
−Removed: In addition, the decreases in digital and packaged media were due to decreases of $8.4 million and $5.8 million, respectively, from Other Film due to lower revenue from our acquired library titles.
−Removed: Television revenue decreased $39.2 million, or 43.1%, in the three months ended September 30, 2022, as compared to the three months ended September 30, 2021, due to a decrease from Lionsgate Original Releases of $36.3 million due to fewer television windows opening for our theatrical slate titles than in the prior year's quarter, and lower revenue recognized for those titles.
−Removed: In particular, the current quarter included revenue from Moonfall (a fiscal 2022 theatrical release), as compared to revenue from Chaos Walking and Barb and Star Go to Vista Del Mar (both fiscal 2021 theatrical releases) in the prior year's quarter.
−Removed: International revenue decreased $13.8 million, or 23.3%, in the three months ended September 30, 2022, as compared to the three months ended September 30, 2021 due to a decrease from Lionsgate Original Releases of $17.1 million due to lower revenue generated from our fiscal 2023 and fiscal 2022 theatrical state titles in the current quarter as compared to the fiscal 2022 and fiscal 2021 theatrical slate titles in the prior year's quarter.
+Added: Theatrical revenue increased $6.0 million in the three months ended December 31, 2022 as compared to the three months ended December 31, 2021 due to an increase of $3.8 million from Lionsgate Original Releases including the release of Prey for the Devil in the current quarter.
+Added: Home entertainment revenue increased $21.8 million, or 15.0%, in the three months ended December 31, 2022, as compared to the three months ended December 31, 2021, due to higher digital media revenue of $33.8 million, and lower packaged media revenue of $12.0 million driven by Lionsgate Original Releases.
+Added: The increase in digital media revenue was due to an increase of $36.7 million from Lionsgate Original Releases driven by the license of Shotgun Wedding to a direct-to-streaming platform in the current quarter .
+Added: The decrease in packaged media revenue was due to a decrease of $7.9 million from Lionsgate Original Releases due to lower revenue from our fiscal 2022 and prior theatrical slates.
+Added: Television revenue decreased $21.1 million, or 31.0%, in the three months ended December 31, 2022, as compared to the three months ended December 31, 2021, due to a decrease from Lionsgate Original Releases of $17.2 million due to fewer television windows opening for our theatrical slate titles than in the prior year's quarter.
+Added: In particular, the current quarter included revenue from The Unbearable Weight of Massive Talent (a fiscal 2023 theatrical release), as compared to revenue from Voyagers and Spiral (both fiscal 2022 theatrical releases) in the prior year's quarter.
+Added: International revenue increased $2.9 million, or 5.5%, in the three months ended December 31, 2022, as compared to the three months ended December 31, 2021.
Direct Operating Expense.
−Removed: The decrease in direct operating expenses is due to lower motion picture revenue in the current quarter.
−Removed: The decrease in direct operating expenses as a percentage of motion picture revenue is driven by the change in the mix of titles and product categories generating revenue in the current quarter as compared to the prior year's quarter.
−Removed: In particular, the current quarter reflected the lower amortization rate of our fiscal 2022 and prior theatrical slate titles, as compared to the higher amortization rate of our fiscal 2021 and prior theatrical slate titles in the prior year's quarter.
−Removed: Investment in film write-downs included in Motion Picture segment direct operating expense were not significant in the three months ended September 30, 2022 or the three months ended September 30, 2021.
+Added: The increase in direct operating expenses is due to higher motion picture revenue and a slight increase in direct operating expense as a percent of motion picture revenue in the current quarter.
+Added: The increase in direct operating expenses as a percentage of motion picture revenue is driven by the change in the mix of titles and product categories generating revenue in the current quarter as compared to the prior year's quarter, including higher expense related to direct-to-platform Lionsgate Original Releases (which require less marketing cost and generally carry less risk, and thus the film cost is higher as a percentage of revenue), which was partially offset by a benefit of $4.7 million from foreign currency gains.
+Added: Investment in film write-downs included in Motion Picture segment direct operating expense were approximately $0.6 million in the three months ended December 31, 2022, compared to approximately $1.1 million in the three months ended December 31, 2021.
Distribution and Marketing Expense.
−Removed: The decrease in distribution and marketing expense in the three months ended September 30, 2022 is due to lower home entertainment distribution and marketing expense associated with fewer releases in the current quarter.
−Removed: In the three months ended September 30, 2022, approximately $9.6 million of theatrical P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $4.2 million in the prior year's quarter in the Motion Picture segment.
+Added: The decrease in distribution and marketing expense in the three months ended December 31, 2022 is due to lower theatrical P&A and Premium VOD expense for releases in the current quarter, partially offset by increased theatrical P&A and Premium VOD expense for films to be released in subsequent quarters.
+Added: In the three months ended December 31, 2022, approximately $15.5 million of theatrical P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $7.2 million in the prior year's quarter in the Motion Picture segment.
Gross Contribution.
−Removed: Gross contribution of the Motion Picture segment for the three months ended September 30, 2022 decreased as compared to the three months ended September 30, 2021, due to lower Motion Picture revenue, partially offset by lower direct operating expense and distribution and marketing expense.
+Added: Gross contribution of the Motion Picture segment for the three months ended December 31, 2022 increased as compared to the three months ended December 31, 2021, due to higher Motion Picture revenue and lower distribution and marketing expense, partially offset by higher direct operating expense as a percentage of motion picture revenue.
General and Administrative Expense.
−Removed: General and administrative expenses of the Motion Picture segment in the three months ended September 30, 2022 was comparable to the three months ended September 30, 2021.
+Added: General and administrative expenses of the Motion Picture segment decreased $2.2 million, or 9.7% primarily due to a decrease in incentive based compensation.
Television Production
−Removed: The table below sets forth Television Production gross contribution and segment profit for the three months ended September 30, 2022 and 2021:
+Added: The table below sets forth Television Production gross contribution and segment profit for the three months ended December 31, 2022 and 2021:
Three Months Ended
−Removed: September 30, Increase (Decrease)
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
9 unchanged sentences
Gross contribution as a percentage of revenue 13.6 % 6.5 %
−Removed: The table below sets forth Television Production revenue and changes in revenue by media for the three months ended September 30, 2022 and 2021:
+Added: The table below sets forth Television Production revenue and changes in revenue by media for the three months ended December 31, 2022 and 2021:
Three Months Ended
−Removed: September 30, Increase (Decrease)
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
4 unchanged sentences
Home Entertainment
−Removed: Digital 42.6 33.2 9.4 28.3 %
+Added: Digital 131.2 12.8 118.4 nm
Packaged Media 1.3 1.7 (0.4) (23.5) %
−Removed: Total Home Entertainment 43.1 34.2 8.9 26.0 %
+Added: Total Home Entertainment 132.5 14.5 118.0 nm
Other 29.7 27.9 1.8 6.5 %
$ 605.4 $ 438.6 $ 166.8 38.0 %
+Added: _______________________
+Added: nm - Percentage not meaningful.
The primary component of Television Production revenue is domestic television revenue.
−Removed: Domestic television revenue increased in the three months ended September 30, 2022 as compared to the three months ended September 30, 2021, due to a greater number of television episodes delivered, which included revenue in the current quarter from Mythic Quest Season 3, Acapulco Season 2, Home Economics Season 3.
−Removed: International revenue in the three months ended September 30, 2022 increased $17.4 million, or 30.5%, due to significant revenue in the current quarter from Mythic Quest Season 3 and Acapulco Season 2, as compared to significant revenue in the prior year's quarter from Acapulco Season 1.
−Removed: Home entertainment revenue in the three months ended September 30, 2022 increased $8.9 million due to digital media revenue from Ghosts Season 1 and Nashville Seasons 1 to 6 in the current quarter, which compared to digital media revenue in the prior year's quarter for Weeds Seasons 1 to 8.
−Removed: Other revenue increased $2.6 million in the three months ended September 30, 2022 as compared to the three months ended September 30, 2021, and primarily includes revenue of 3 Arts Entertainment.
+Added: Domestic television revenue increased in the three months ended December 31, 2022 as compared to the three months ended December 31, 2021, due to an increase of $49.7 million from intersegment revenues from the licensing of Starz original series ( Heels Season 2, Power Book IV:
+Added: Force - Season 2, Hightown - Season 3, and Power Book II:
+Added: Ghost - Season 3, among others) to Starz Networks, partially offset by lower revenue from reality television programs.
+Added: International revenue in the three months ended December 31, 2022 increased $9.9 million, or 17.7%, due to an increase of $9.3 million from intersegment revenues from the licensing of Starz original series ( Heels Season 2, Power Book IV:
+Added: Force - Season 2, Nacho - Season 1 , among others) to LIONSGATE+.
+Added: Home entertainment revenue in the three months ended December 31, 2022 increased $118.0 million due to digital media revenue from Schitt's Creek Seasons 1 to 6 from the license to a streaming platform, and Nashville Seasons 1 to 6 in the current quarter.
+Added: Other revenue increased $1.8 million in the three months ended December 31, 2022 as compared to the three months ended December 31, 2021, and primarily includes revenue of 3 Arts Entertainment which is generated from commissions and executive producer fees earned related to talent management.
Direct Operating Expense.
−Removed: Direct operating expense of the Television Production segment in the three months ended September 30, 2022 increased $107.0 million, or 36.8% due to the increase in Television Production revenues.
−Removed: Direct operating expenses as a percentage of television production revenue increased primarily due to the mix of titles generating revenue in the current quarter as compared to the prior year's quarter, and in particular, the current quarter included a greater number of deliveries of newer shows in which direct operating expense is typically higher as a percentage of revenue and increased amortization from a show that was not renewed for a second season.
+Added: Direct operating expense of the Television Production segment in the three months ended December 31, 2022 increased $113.1 million, or 28.1% due to the increase in Television Production revenues.
+Added: Direct operating expenses as a percentage of television production revenue decreased primarily due to the mix of titles generating revenue in the current quarter as compared to the prior year's quarter, and this quarter the decrease in direct operating expense as a percentage of revenue was related to the timing of the licensing of higher margin library and acquired titles.
Gross Contribution.
−Removed: Gross contribution of the Television Production segment for the three months ended September 30, 2022 decreased as compared to the three months ended September 30, 2021, due to increased direct operating expenses as a percentage of television production revenue, offset by increased television production revenue.
+Added: Gross contribution of the Television Production segment for the three months ended December 31, 2022 increased as compared to the three months ended December 31, 2021, due to increased television production revenue, offset by increased television production direct operating expense.
General and Administrative Expense.
1 unchanged sentence
Media Networks
−Removed: The table below sets forth Media Networks gross contribution and segment profit for the three months ended September 30, 2022 and 2021.
+Added: The table below sets forth Media Networks gross contribution and segment profit for the three months ended December 31, 2022 and 2021.
Three Months Ended
−Removed: September 30, Increase (Decrease)
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
11 unchanged sentences
Three Months Ended Three Months Ended
−Removed: September 30, 2022 September 30, 2021
+Added: December 31, 2022 December 31, 2021
Starz Networks LIONSGATE+ Total Media Networks Starz Networks LIONSGATE+ Total Media Networks
12 unchanged sentences
The table below sets forth, for the periods presented, subscriptions to our Media Networks and STARZPLAY Arabia services.
−Removed: September 30, September 30,
+Added: December 31, December 31,
(Amounts in millions)
16 unchanged sentences
___________________
+Added: (1) Includes OTT subscribers totaling 8.5 million at December 31, 2022 and 3.5 million at December 31, 2021 for the international territories being exited.
(2) Represents subscribers of STARZPLAY Arabia, a non-consolidated equity method investee.
(3) OTT subscribers includes subscribers of STARZPLAY Arabia, as presented above.
−Removed: Media Networks revenue increased $11.4 million reflecting increased revenue at LIONSGATE+ of $12.5 million as a result of subscriber and revenue growth in the international territories previously launched, and additional territories launched since September 30, 2021, partially offset by a decrease of $1.1 million at Starz Networks.
−Removed: Starz Networks' revenue decreased as a result of declines in revenue of $34.7 million from traditional linear services, which were mostly offset by higher OTT revenue of $32.8 million resulting from increased subscriptions.
−Removed: During the three months ended September 30, 2022 and 2021, the following original series premiered on STARZ:
−Removed: Three Months Ended September 30, 2022 Three Months Ended September 30, 2021
+Added: Media Networks revenue decreased $8.6 million reflecting a decrease of $20.8 million at Starz Networks, partially offset by increased revenue at LIONSGATE+ of $12.2 million as a result of subscriber and revenue growth in the international territories.
+Added: Starz Networks' revenue decreased as a result of declines in revenue of $39.9 million from traditional linear services, which were partially offset by higher OTT revenue of $18.9 million resulting from increased subscriptions.
+Added: As previously announced in November 2022, LIONSGATE+ will exit its service in France, Germany, Italy, Spain, Benelux, the Nordics and Japan (which we also refer to as the "exited territories") by the end of the fiscal year ended March 31, 2023.
+Added: Revenue for these territories was approximately $10.4 million for the three months ended December 31, 2022.
+Added: During the three months ended December 31, 2022 and 2021, the following original series premiered on STARZ:
+Added: Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 (1)
Title Premiere Date Title Premiere Date
−Removed: Second Quarter:
−Removed: Second Quarter:
−Removed: Power Book III:
−Removed: Raising Kanan Season 2
−Removed: August 14, 2022 Power Book III:
−Removed: Raising Kanan Season 1
−Removed: July 18, 2021
−Removed: Serpent Queen Season 1
−Removed: September 11, 2022 Heels Season 1
−Removed: August 15, 2021
−Removed: BMF - Black Mafia Family Season 1
−Removed: September 26, 2021
+Added: Step Up Season 3
+Added: October 16, 2022 Hightown Season 2
+Added: October 17, 2021
+Added: Dangerous Liaisons Season 1
+Added: November 6, 2022 Power Book II:
+Added: Ghost Season 2
+Added: November 21, 2021
+Added: ___________________
+Added: (1) In addition, BMF - Black Mafia Family Season 1 premiered on September 26, 2021, with the majority of episodes airing during the three months ended December 31, 2021.
Direct Operating and Distribution and Marketing Expenses .
3 unchanged sentences
In addition, the LIONSGATE+ international service, in its remaining territories, has and will continue to result in an increase in expenses as the service continues to expand.
−Removed: The increase in Media Networks direct operating expenses is due to increases at LIONSGATE+ of $15.2 million and Starz Networks of $9.1 million in the three months ended September 30, 2022.
−Removed: Direct operating expenses at LIONSGATE+ increased as a result of higher programming cost amortization and foreign currency fluctuations related to the strengthening U.S.
−Removed: The increase in Starz Networks direct operating expense was primarily due to higher programming cost amortization due to our Starz Originals of $11.4 million, higher programming cost amortization of $3.7 million related to library content, and other increases in direct operating expenses, partially offset by a benefit in the current quarter of $10.0 million associated with the modification of a content licensing arrangement.
−Removed: The decrease in Media Networks distribution and marketing expense is due to a decrease of $23.8 million at Starz Networks and $5.9 million at LIONSGATE+, resulting from timing and volume of our Starz Originals' premieres.
−Removed: During the three months ended September 30, 2022, we premiered two series as compared to three series during the prior year's quarter, as presented in the table above.
+Added: The decrease in Media Networks direct operating expenses is due to a decrease at LIONSGATE+ of $14.7 million, partially offset by an increase at Starz Networks of $4.4 million in the three months ended December 31, 2022.
+Added: Direct operating expenses at LIONSGATE+ decreased primarily as a result of lower programming cost amortization of approximately $7.2 million resulting from the impairment write-downs of programming in the exited territories during the second quarter ended September 30, 2022, and a benefit of approximately $7.4 million from foreign currency gains.
+Added: The increase in Starz Networks direct operating expense was primarily due to higher programming amortization of $8.2 million related to theatrical releases under our output agreements, partially offset by lower programming cost amortization from Starz Originals of $3.3 million, and other decreases in direct operating expenses.
+Added: The decrease in Media Networks distribution and marketing expense is due to a decrease of $14.7 million at Starz Networks and $6.5 million at LIONSGATE+.
+Added: Starz Networks distribution and marketing expense decreased as a result of lower overall spend for advertising purchased in the current year quarter and lower media spend for our Starz Originals' premieres.
+Added: The decrease in LIONSGATE+ distribution and marketing expense is due to the elimination of advertising and marketing activities in the exited territories.
Gross Contribution.
−Removed: The increase in gross contribution compared to the three months ended September 30, 2021 was due to increases at Starz Networks of $13.6 million and LIONSGATE+ of $3.2 million, due to lower distribution and marketing expense, and higher LIONSGATE+ revenue, partially offset by higher direct operating expense, all as described above.
+Added: The increase in gross contribution compared to the three months ended December 31, 2021 was due to an decrease in negative gross contribution at LIONSGATE+ of $33.4 million due to higher revenue and lower direct operating expense.
+Added: This increase was partially offset by a decrease in gross contribution at Starz Networks of $10.5 million, due to lower revenue and higher direct operating expense, all as described above.
+Added: The decrease in the negative gross contribution at LIONSGATE+ is due to a reduction in expenses for the exited territories, which also benefited the gross margin.
+Added: The gross contribution for the exited territories was not significant for the three months ended December 31, 2022.
General and Administrative Expense.
−Removed: General and administrative expenses of the Media Networks segment in the three months ended September 30, 2022 increased slightly from the prior year's quarter, due to increases of $0.6 million at Starz Networks, and $0.7 million at LIONSGATE+.
−Removed: Six Months Ended September 30, 2022 Compared to Six Months Ended September 30, 2021
+Added: General and administrative expenses of the Media Networks segment in the three months ended December 31, 2022 increased slightly from the prior year's quarter, due to increases of $1.8 million at Starz Networks, and $0.1 million at LIONSGATE+.
+Added: Nine Months Ended December 31, 2022 Compared to Nine Months Ended December 31, 2021
Consolidated Results of Operations
−Removed: The following table sets forth our consolidated results of operations for the six months ended September 30, 2022 and 2021:
−Removed: Six Months Ended
−Removed: September 30, Increase (Decrease)
+Added: The following table sets forth our consolidated results of operations for the nine months ended December 31, 2022 and 2021:
+Added: Nine Months Ended
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
18 unchanged sentences
Other expense (21.1) (6.2) (14.9) 240.3 %
−Removed: Gain (loss) on extinguishment of debt 2.1 (27.1) 29.2 n/a
−Removed: Gain (loss) on investments (1.3) 1.5 (2.8) nm
−Removed: Equity interests income 0.8 1.1 (0.3) (27.3) %
+Added: Gain (loss) on extinguishment of debt 40.3 (28.2) 68.5 nm
+Added: Gain on investments 42.1 1.2 40.9 nm
+Added: Equity interests income (loss) 0.8 (1.4) 2.2 (157.1) %
Loss before income taxes (1,904.2) (75.8) (1,828.4) nm
6 unchanged sentences
nm - Percentage not meaningful.
−Removed: Consolidated revenues decreased $19.9 million in the six months ended September 30, 2022 reflecting increased intersegment eliminations, which primarily relate to the licensing of product from our Studio Business (primarily our Television Production segment) to the Media Networks segment, partially offset by an increase of $10.3 million from our Media Networks business and an increase of $21.8 million from our Studio Business resulting from the changes in Motion Picture revenue and Television Production revenue as discussed below.
−Removed: Motion Picture revenue decreased $119.3 million in the current period due primarily to fewer theatrical slate releases generating revenue in the period, and lower television, home entertainment, and international revenue.
−Removed: Motion Picture revenue included $13.7 million of revenue from licensing Motion Picture segment product to the Media Networks segment, representing an increase of $6.5 million from the six months ended September 30, 2021.
−Removed: Television Production revenue increased $141.1 million due to a greater number of television episodes delivered, increased intersegment revenues from the licensing of Starz original series, and increased third-party revenue from reality television programs.
−Removed: Television Production revenue included $360.5 million of revenue from licensing Television Production segment product to our Media Networks segment, representing an increase of $45.5 million from the six months ended September 30, 2021.
−Removed: The increase in Television Production revenue was partially offset by increased intersegment eliminations associated with higher Television Production revenues for licenses of original series to Starz Networks and LIONSGATE+, both in the Media Networks segment.
+Added: Consolidated revenues increased $94.7 million in the nine months ended December 31, 2022 reflecting an increase of $202.1 million from our Studio Business offset by increased intersegment eliminations of $109.0 million.
+Added: Intersegment eliminations relate to the licensing of product from our Studio Business (primarily our Television Production segment) to the Media Networks segment.
+Added: Motion Picture revenue decreased $105.7 million in the current period due to lower television, packaged media home entertainment, theatrical and international revenue, partially offset by higher digital media home entertainment and other revenue.
+Added: Motion Picture revenue included $30.0 million of revenue from licensing Motion Picture segment product to the Media Networks segment, representing a decrease of $5.4 million from the nine months ended December 31, 2021.
+Added: Television Production revenue increased $307.8 million due to increased digital home entertainment revenue, increased domestic television revenue from a greater number of television episodes delivered, including increased intersegment revenues from the licensing of Starz original series, and increased international and other revenue.
+Added: Television Production revenue included $618.6 million of revenue from licensing Television Production segment product to our Media Networks segment, representing an increase of $114.4 million from the nine months ended December 31, 2021.
Media Networks revenue increased $1.6 million reflecting increased revenue at LIONSGATE+ of $32.1 million, partially offset by a decrease of $30.5 million at Starz Networks.
+Added: The increase in intersegment eliminations is primarily associated with higher Television Production revenues for licenses of original series to Starz Networks and LIONSGATE+, both in the Media Networks segment as discussed above.
See further discussion in the Segment Results of Operations section below.
Direct Operating Expenses.
−Removed: Direct operating expenses by segment were as follows for the six months ended September 30, 2022 and 2021:
−Removed: Six Months Ended
−Removed: September 30,
+Added: Direct operating expenses by segment were as follows for the nine months ended December 31, 2022 and 2021:
+Added: Nine Months Ended
2022 2021 Increase (Decrease)
13 unchanged sentences
nm - Percentage not meaningful.
−Removed: Direct operating expenses increased in the six months ended September 30, 2022 due to higher direct operating expenses of the Media Networks segment and our Studio Business, partially offset by higher intersegment eliminations.
−Removed: The increase in Media Networks direct operating expense was driven by increases at Starz Networks of $81.9 million and LIONSGATE+ of $30.7 million due to higher programming cost amortization, and foreign currency fluctuations at LIONSGATE+ related to the strengthening U.S.
+Added: Direct operating expenses increased in the nine months ended December 31, 2022 due to higher direct operating expenses of our Studio Business and the Media Networks segment, partially offset by higher intersegment eliminations.
The increase at the Studio Business reflects higher direct operating expenses of the Television Production segment due to higher revenues from Television Production, partially offset by lower direct operating expenses of the Motion Picture segment due to lower revenues.
+Added: The increase in Media Networks direct operating expense was driven by increases at Starz Networks of $86.1 million and LIONSGATE+ of $16.1 million due to higher programming cost amortization, and foreign currency fluctuations at LIONSGATE+ related to the strengthening U.S.
The increase in intersegment eliminations is due to increased revenue from licenses of original series to Starz Networks and LIONSGATE+, as discussed above.
2 unchanged sentences
As discussed previously, we incurred certain incremental costs associated with the COVID-19 global pandemic.
−Removed: In the six months ended September 30, 2022, direct operating expense included a benefit of $7.1 million from insurance recoveries in excess of 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 (six months ended September 30, 2021 - charges of $0.5 million).
+Added: In the nine months ended December 31, 2022, direct operating expense included a benefit of $8.8
+Added: million from insurance recoveries in excess of 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 (nine months ended December 31, 2021 - benefit of $2.3 million).
We may incur additional incremental costs for direct operating expenses related to the COVID-19 global pandemic in future periods, depending on if there is a continued spread of new variants which may result in disruptions to our operations.
1 unchanged sentence
The ultimate amount of insurance recovery cannot be estimated at this time.
−Removed: In the quarter ended September 30, 2022, in connection with certain management changes and changes in the theatrical marketplace in the Motion Picture segment, the Company wrote off approximately $7.2 million of development costs as a result of changes in strategy across its theatrical slate.
+Added: In the nine months ended December 31, 2022, in connection with certain management changes and changes in the theatrical marketplace in the Motion Picture segment, the Company wrote off approximately $7.2 million of development costs as a result of changes in strategy across its theatrical slate.
These charges are excluded from segment operating results but included in direct operating expense in the consolidated statement of operations and reflected in the "other" line item above.
1 unchanged sentence
Distribution and Marketing Expenses.
−Removed: Distribution and marketing expenses by segment were as follows for the six months ended September 30, 2022 and 2021:
−Removed: Six Months Ended
−Removed: September 30, Increase (Decrease)
+Added: Distribution and marketing expenses by segment were as follows for the nine months ended December 31, 2022 and 2021:
+Added: Nine Months Ended
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
11 unchanged sentences
theatrical P&A and Premium VOD expense included in Motion Picture distribution and marketing expense $ 77.0 $ 114.3 $ (37.3) (32.6) %
−Removed: Distribution and marketing expenses decreased in the six months ended September 30, 2022, due to lower Studio Business distribution and marketing expense, offset by slightly increased Media Networks distribution and marketing expense.
+Added: Distribution and marketing expenses decreased in the nine months ended December 31, 2022, due to lower Studio Business and Media Networks distribution and marketing expense.
The decrease at the Studio Business reflects lower Motion Picture theatrical P&A and Premium VOD expense associated with fewer releases in the current period, and lower home entertainment distribution and marketing expense.
−Removed: The slight increase in Media Networks distribution and marketing expense was due to increases at LIONSGATE+ of $2.7 million and at Starz Networks of $1.0 million.
+Added: The decrease in Media Networks distribution and marketing expense was due to a decrease at Starz Networks of $13.6 million due to lower overall spend for advertising purchased in the current period and lower media spend for our Starz Originals' premieres, and a decrease at LIONSGATE+ of $3.9 million.
See further discussion in the Segment Results of Operations section below.
General and Administrative Expenses.
−Removed: General and administrative expenses by segment were as follows for the six months ended September 30, 2022 and 2021:
−Removed: Six Months Ended
−Removed: September 30, Increase (Decrease)
+Added: General and administrative expenses by segment were as follows for the nine months ended December 31, 2022 and 2021:
+Added: Nine Months Ended
+Added: December 31, Increase (Decrease)
2022 % of Revenues 2021 % of Revenues Amount Percent
11 unchanged sentences
Total general and administrative expenses $ 340.0 12.3% $ 353.1 13.2% $ (13.1) (3.7) %
−Removed: General and administrative expenses decreased in the six months ended September 30, 2022, resulting from decreased share-based compensation expense, Corporate, and Motion Picture general and administrative expenses, partially offset by increases in Media Networks and Television Production general and administrative expenses and purchase accounting and related adjustments.
+Added: General and administrative expenses decreased in the nine months ended December 31, 2022, resulting from decreased share-based compensation expense, Motion Picture and corporate general and administrative expenses, partially offset by increases in Media Networks and Television Production general and administrative expenses and purchase accounting and related adjustments.
See further discussion in the Segment Results of Operations section below.
Corporate general and administrative expenses decreased $1.1 million, or 1.6%, primarily due to a decrease in incentive based compensation.
−Removed: The decrease in share-based compensation expense included in general and administrative expense in the six months ended September 30, 2022, as compared to the six months ended September 30, 2021 is primarily due to lower fair values associated with performance-based stock option and other equity awards that are revalued at each reporting period until the stock option or equity award vests and the applicable performance goals are achieved.
+Added: The decrease in share-based compensation expense included in general and administrative expense in the nine months ended December 31, 2022, as compared to the nine months ended December 31, 2021 is primarily due to lower fair values associated with performance-based stock option and other equity awards that are revalued at each reporting period until the stock option or equity award vests and the applicable performance goals are achieved.
The following table presents share-based compensation expense by financial statement line item:
−Removed: Six Months Ended
−Removed: September 30,
+Added: Nine Months Ended
(Amounts in millions)
10 unchanged sentences
Depreciation and Amortization Expense.
−Removed: Depreciation and amortization of $87.6 million for the six months ended September 30, 2022 decreased $0.2 million from $87.8 million in the six months ended September 30, 2021.
+Added: Depreciation and amortization of $133.9 million for the nine months ended December 31, 2022 decreased $0.2 million from $134.1 million in the nine months ended December 31, 2021.
Restructuring and Other.
−Removed: Restructuring and other increased $234.6 million in the six months ended September 30, 2022 as compared to the six months ended September 30, 2021, and includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable.
−Removed: Restructuring and other costs were as follows for the six months ended September 30, 2022 and 2021 (see Note 14 to our unaudited condensed consolidated financial statements):
−Removed: Six Months Ended
−Removed: September 30, Increase (Decrease)
+Added: Restructuring and other increased $309.3 million in the nine months ended December 31, 2022 as compared to the nine months ended December 31, 2021, and includes restructuring and severance costs, certain transaction and other costs, and certain unusual items, when applicable.
+Added: Restructuring and other costs were as follows for the nine months ended December 31, 2022 and 2021 (see Note 14 to our unaudited condensed consolidated financial statements):
+Added: Nine Months Ended
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
10 unchanged sentences
0.1 0.9 (0.8) (88.9) %
−Removed: Transaction and related costs (4)
+Added: Transaction and other costs (benefits) (4)
(0.2) 2.5 (2.7) nm
2 unchanged sentences
nm - Percentage not meaningful
−Removed: (1) For the three months ended September 30, 2022, due to the macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on the Company's growth in subscribers worldwide, the Company began a plan to restructure its LIONSGATE+ business (formerly STARZPLAY International).
+Added: (1) Media Networks Restructuring:
+Added: For the second quarter ended September 30, 2022, due to the macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on the Company's growth in subscribers worldwide, we began a plan to restructure our LIONSGATE+ business (formerly STARZPLAY International).
This restructuring includes exiting the business in seven international territories (France, Germany, Italy, Spain, Benelux, the Nordics and Japan).
−Removed: As a result of this restructuring, the Company has recorded charges of $213.0 million in the quarter ended September 30, 2022 for content impairment of its film group assets in certain international territories.
−Removed: These charges are excluded from segment results and included in restructuring and other in the unaudited condensed consolidated statement of operations.
−Removed: The Company expects to incur additional charges ranging from approximately $75 million to $100 million in the next six months primarily related to certain contractual content commitments and other items as we fully implement the plan.
−Removed: These amounts also reflect the estimated net future cash expenditures for these charges.
−Removed: In addition, the Company expects future cash expenditures of approximately $75 million related to the content charges recorded in the three months ended September 30, 2022.
−Removed: Amounts in the six months ended September 30, 2022 also include an impairment of an operating lease right-of-use asset amounting to $5.8 million associated with a portion of a facility lease that will no longer be utilized by the Company.
+Added: Our Starz domestic operations have also been impacted by these current market conditions, and we have revised our subscriber growth and forecasted cash flow assumptions and implemented certain cost-saving measures.
+Added: These changes in forecasted cash flow resulted in an impairment of $1.475 billion of goodwill related to the Media Networks segment in the second quarter ended September 30, 2022, as discussed in Note 5 to our unaudited condensed consolidated financial statements.
+Added: For the third quarter ended December 31, 2022, due to the continuing macro and microeconomic conditions which led to the LIONSGATE+ restructuring, we expanded our restructuring plan discussed above to identify additional cost-saving initiatives, which included a strategic review of content performance across Starz's domestic and international platforms, resulting in certain programming being removed from those platforms and written down to fair value.
+Added: As a result of these restructuring initiatives, we recorded content impairment charges associated with impairment of programming related to the territories being exited and individual content abandonment upon removal of certain titles from the Starz platforms related to the Media Networks segment in the nine months ended December 31, 2022 of $293.8 million, respectively.
+Added: We are in the process of executing our LIONSGATE+ restructuring plan including exiting the territories discussed above and our strategic review of content performance for consideration of removal from our various platforms and estimate we will incur additional charges ranging from approximately $100 million to $125 million related to certain contractual content commitments or programming content impairment charges, among other items, as we fully implement the plan.
+Added: Of these total estimated future charges, the net future cash outlay is estimated to range from approximately $75 million to $100 million, which includes content commitments on content in territories being exited and estimates of payments on content that may be abandoned as part of the ongoing strategic review, as well as the incremental cost related to the restructuring.
+Added: Of the content impairment charges recorded in the nine months ended December 31, 2022, approximately $85 million reflects the remaining amounts payable for this content.
+Added: As we continue to fully implement the plan, including further strategic review of content performance, we may incur additional content impairment charges beyond the estimates provided.
+Added: We expect the restructuring plan to be substantially completed by March 31, 2023.
+Added: Other Impairments:
+Added: Amounts in the nine months ended December 31, 2022 also include an impairment of an operating lease right-of-use asset related to the Studio business and corporate facilities amounting to $5.8 million associated with a portion of a facility lease that will no longer be utilized by the Company.
The impairment reflects a decline in market conditions since the inception of the lease impacting potential sublease opportunities, and represents the difference between the estimated fair value, which was determined based on the expected discounted future cash flows of the lease asset, and the carrying value.
−Removed: (2) In connection with the international restructuring described above, the Company has implemented certain cost-saving initiatives both domestically and internationally, and has recorded severance charges of $5.9 million in the quarter ended September 30, 2022 related to the Media Networks segment.
−Removed: In addition, due to the changes in the marketplace and certain management, and the implementation of certain cost-saving initiatives and the streamlining of operations, the Company recorded additional severance charges of $3.7 million primarily related to the Motion Picture segment.
+Added: (2) Severance costs were primarily related to restructuring activities and other cost-saving initiatives.
(3) 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.
−Removed: (4) Transaction and related costs in the six months ended September 30, 2022 and 2021 reflect transaction, integration and legal costs associated with certain strategic transactions, restructuring activities and legal matters.
+Added: (4) Transaction and other costs in the nine months ended December 31, 2022 and 2021 reflect transaction, integration and legal costs associated with certain strategic transactions, and restructuring activities and also include costs and benefits associated with certain legal matters.
+Added: In the nine months ended December 31, 2022, these amounts include a benefit of $11.0 million for a settlement of a legal matter related to the Media Networks segment.
Goodwill Impairment.
−Removed: Goodwill impairment of $1.475 billion for the six months ended September 30, 2022 reflects the impairment charge recorded in the current quarter related to the Media Networks reporting unit, as discussed in Item 2.
+Added: Goodwill impairment of $1.475 billion for the nine months ended December 31, 2022 reflects the impairment charge recorded in the second quarter ended September 30, 2022 related to the Media Networks reporting unit, as discussed in Item 2.
Management's Discussion and Analysis, "Critical Accounting Policies and Estimates", Goodwill and Indefinite-Lived Intangible Assets (see Note 5 to our unaudited condensed consolidated financial statements).
−Removed: There was no comparable charge in the six months ended September 30, 2021.
+Added: There was no comparable charge in the nine months ended December 31, 2021.
Interest Expense.
−Removed: Interest expense of $103.4 million in the six months ended September 30, 2022 increased $17.7 million from the six months ended September 30, 2021.
−Removed: The following table sets forth the components of interest expense for the six months ended September 30, 2022 and 2021:
−Removed: Six Months Ended
−Removed: September 30,
+Added: Interest expense of $163.0 million in the nine months ended December 31, 2022 increased $33.0 million from the nine months ended December 31, 2021.
+Added: The following table sets forth the components of interest expense for the nine months ended December 31, 2022 and 2021:
+Added: Nine Months Ended
(Amounts in millions)
3 unchanged sentences
Senior Notes 40.3 41.0
−Removed: Amortization of debt financing costs and other non-cash interest (2)
+Added: Amortization of debt issuance costs and other non-cash interest (2)
Total interest expense $ 163.0 $ 130.0
______________________
−Removed: (1) Amounts include payments associated with the Company's interest rate swaps (see Note 17 to our unaudited condensed consolidated financial statements) and interest payments associated with the Company's film related financing and other obligations (Production Tax Credit Facility, IP Credit Facility, Backlog Financing Facility and other).
+Added: (1) Amounts include payments associated with the Company's interest rate swaps (see Note 17 to our unaudited condensed consolidated financial statements) and interest payments associated with certain film related obligations (Production Tax Credit Facility, IP Credit Facility, Backlog Facility and other).
(2) Amounts include the amortization of unrealized losses in accumulated other comprehensive income (loss) related to de-designated interest rate swaps which are being amortized to interest expense.
1 unchanged sentence
Interest and Other Income.
−Removed: Interest and other income of $3.1 million for the six months ended September 30, 2022 compared to interest and other income of $28.0 million for the six months ended September 30, 2021, due to insurance recoveries on prior shareholder litigation of $22.7 million in the prior year's period (see Note 16 to our unaudited condensed consolidated financial statements).
+Added: Interest and other income of $4.8 million for the nine months ended December 31, 2022 compared to interest and other income of $29.4 million for the nine months ended December 31, 2021, due to insurance recoveries on prior shareholder litigation of $22.7 million in the prior year's period (see Note 16 to our unaudited condensed consolidated financial statements).
Other Expense.
−Removed: Other expense of $10.4 million for the six months ended September 30, 2022 compared to other expense of $4.3 million for the six months ended September 30, 2021, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 18 to our unaudited condensed consolidated financial statements).
+Added: Other expense of $21.1 million for the nine months ended December 31, 2022 compared to other expense of $6.2 million for the nine months ended December 31, 2021, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 18 to our unaudited condensed consolidated financial statements).
Gain (Loss) on Extinguishment of Debt.
−Removed: Gain on extinguishment of debt of $2.1 million for the six months ended September 30, 2022 represented a gain associated with the 5.500% Senior Notes repurchased at a discount in the current quarter, partially offset by the write-off of debt issuance costs associated with the voluntary prepayment of the entire outstanding amount of Term Loan A due March 22, 2023 and the repurchase of the Senior Notes.
−Removed: In the six months ended September 30, 2021, the loss on extinguishment of debt of $27.1 million related to the write-off of a portion of debt issuance costs (including a portion of call premiums) associated with the redemption of the 5.875% Senior Notes and 6.375% Senior Notes and associated issuance of the 5.500% Senior Notes, the amendment of our credit agreement to extend the maturity of a portion of our revolving credit commitments and a portion of our outstanding term A loans, and repurchases of the Term Loan B.
+Added: Gain on extinguishment of debt of $40.3 million for the nine months ended December 31, 2022 represented a gain associated with the 5.500% Senior Notes repurchased at a discount in the current period, partially offset by the write-off of debt issuance costs associated with the voluntary prepayment of the entire outstanding amount of Term Loan A due March 22, 2023 and the repurchase of the 5.500% Senior Notes.
+Added: In the nine months ended December 31, 2021, the loss on extinguishment of debt of $28.2 million related to the write-off of a portion of debt issuance costs (including a portion of call premiums) associated with the redemption of the 5.875% Senior Notes and 6.375% Senior Notes and associated issuance of the 5.500% Senior Notes, the amendment of our credit agreement to extend the maturity of a portion of our revolving credit commitments and a portion of our outstanding term A loans, repurchases of the Term Loan B, and the termination of a portion of our revolving credit commitments.
See Note 6 to our unaudited condensed consolidated financial statements.
−Removed: Gain (Loss) on Investments.
−Removed: Loss on investments of $1.3 million for the six months ended September 30, 2022 compared to a gain on investments of $1.5 million for the six months ended September 30, 2021.
−Removed: Equity Interests Income.
−Removed: Equity interests income of $0.8 million in the six months ended September 30, 2022 compared to equity interests income of $1.1 million in the six months ended September 30, 2021.
+Added: Gain on Investments.
+Added: Gain on investments of $42.1 million for the nine months ended December 31, 2022 primarily represented a gain associated with the sale of a portion of our ownership interest in STARZPLAY Arabia, compared to a gain on investments of $1.2 million for the nine months ended December 31, 2021.
+Added: Equity Interests Income (Loss).
+Added: Equity interests income of $0.8 million in the nine months ended December 31, 2022 compared to equity interests loss of $1.4 million in the nine months ended December 31, 2021.
Income Tax Provision.
−Removed: We had an income tax provision of $11.0 million in the six months ended September 30, 2022, compared to an income tax provision of $12.1 million in the six months ended September 30, 2021.
+Added: We had an income tax provision of $16.6 million in the nine months ended December 31, 2022, compared to an income tax provision of $21.6 million in the nine months ended December 31, 2021.
Our income tax provision differs from the federal statutory rate multiplied by pre-tax income (loss) due to the mix of our pre-tax income (loss) generated across the various jurisdictions in which we operate, changes in the valuation allowance against our deferred tax assets, and certain minimum taxes and foreign withholding taxes.
−Removed: Our income tax provision for the six months ended September 30, 2022 and 2021 was also impacted by an interest accrual on uncertain tax benefits, and the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
+Added: Our income tax provision for the nine months ended December 31, 2022 and 2021 was also impacted by an interest accrual on uncertain tax benefits, and the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
+Added: Our income tax provision for the nine months ended December 31, 2021 was also impacted by additional uncertain tax benefits related to state income taxes identified during state tax audits.
Net Loss Attributable to Lions Gate Entertainment Corp.
Shareholders.
−Removed: Net loss attributable to our shareholders for the six months ended September 30, 2022 was $1,930.1 million, or basic and diluted net loss per common share of $8.51 on 226.8 million weighted average common shares outstanding.
−Removed: This compares to net loss attributable to our shareholders for the six months ended September 30, 2021 of $37.9 million, or basic and diluted net loss per common share of $0.17 on 223.1 million weighted average common shares outstanding.
+Added: Net loss attributable to our shareholders for the nine months ended December 31, 2022 was $1,913.5 million, or basic and diluted net loss per common share of $8.41 on 227.4 million weighted average common shares outstanding.
+Added: This compares to net loss attributable to our shareholders for the nine months ended December 31, 2021 of $83.5 million, or basic and diluted net loss per common share of $0.37 on 223.7 million weighted average common shares outstanding.
Segment Results of Operations
5 unchanged sentences
The table below sets forth the revenues, gross contribution and segment profit of our collective Studio Business and Media Networks segment.
−Removed: Six Months Ended
−Removed: September 30, Increase (Decrease)
+Added: Nine Months Ended
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
13 unchanged sentences
Media Networks 104.0 187.1 (83.1) (44.4) %
−Removed: Intersegment eliminations (22.8) 5.5 (28.3) (514.5) %
+Added: Intersegment eliminations (31.3) 3.7 (35.0) nm
$ 458.2 $ 553.7 $ (95.5) (17.2) %
5 unchanged sentences
Media Networks 33.5 122.1 (88.6) (72.6) %
−Removed: Intersegment eliminations (22.8) 5.5 (28.3) (514.5) %
+Added: Intersegment eliminations (31.3) 3.7 (35.0) nm
$ 289.5 $ 390.1 $ (100.6) (25.8) %
+Added: _______________________
+Added: nm - Percentage not meaningful.
See the following discussion for further detail of our individual segments.
Motion Picture
−Removed: The table below sets forth Motion Picture gross contribution and segment profit for the six months ended September 30, 2022 and 2021:
−Removed: Six Months Ended
−Removed: September 30, Increase (Decrease)
+Added: The table below sets forth Motion Picture gross contribution and segment profit for the nine months ended December 31, 2022 and 2021:
+Added: Nine Months Ended
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
10 unchanged sentences
Gross contribution as a percentage of revenue 31.4 % 31.6 %
+Added: The table below sets forth Motion Picture revenue by media and product category for the nine months ended December 31, 2022 and 2021:
+Added: Nine Months Ended December 31,
2022 2021 (1)
−Removed: nm - Percentage not meaningful.
−Removed: The table below sets forth Motion Picture revenue by media and product category for the six months ended September 30, 2022 and 2021:
−Removed: Six Months Ended September 30,
Total Increase (Decrease)
17 unchanged sentences
Through December 31, 2021, we had previously presented a "Feature Film" and "Other Film" category.
−Removed: Accordingly, amounts presented in the table above for the six months ended September 30, 2022 have been conformed to the current period presentation.
+Added: Accordingly, amounts presented in the table above for the nine months ended December 31, 2021 have been conformed to the current period presentation.
(2) Lionsgate Original Releases:
4 unchanged sentences
Includes acquired and licensed brands and libraries originally released by other parties such as third-party library product, including our titles released by acquired companies prior to our acquisition of the company (i.e., Summit Entertainment library), and titles released with our equity method investees, Roadside Attractions and Pantelion Films, and other titles.
−Removed: Theatrical revenue decreased $27.5 million in the six months ended September 30, 2022 as compared to the six months ended September 30, 2021 due to a decrease of $20.2 million from Lionsgate Original Releases driven by fewer theatrical slate releases generating revenue in the period, and a decrease of $7.3 million from Other Film due to lower revenue from our acquired library titles.
−Removed: Home entertainment revenue decreased $40.1 million, or 13.1%, in the six months ended September 30, 2022, as compared to the six months ended September 30, 2021, due to lower packaged media revenue of $29.2 million and lower digital media revenue of $10.9 million driven by Lionsgate Original Releases.
−Removed: The decreases in packaged and digital media revenue were due to decreases of $18.8 million and $8.9 million, respectively, from Lionsgate Original Releases due to lower revenue from our theatrical slate titles and multi-platform releases, and offset by higher digital media revenue from direct-to-platform (i.e., SVOD) releases.
−Removed: In addition, the decrease in packaged media revenue was due to a decrease of $10.4 million from Other Film due to lower revenue from our acquired library titles.
−Removed: Television revenue decreased $41.6 million, or 29.4%, in the six months ended September 30, 2022, as compared to the six months ended September 30, 2021, due to a decrease from Lionsgate Original Releases of $44.0 million due to fewer television windows opening for our theatrical slate titles than in the prior year's quarter, and lower revenue recognized for those titles.
−Removed: In particular, the current period included revenue from American Underdog and Moonfall (both fiscal 2022 theatrical releases), as compared to revenue from Chaos Walking, Barb and Star Go to Vista Del Mar and Fatale (all fiscal 2021 theatrical releases) in the prior year's period.
−Removed: International revenue decreased $10.9 million, or 8.9%, in the six months ended September 30, 2022, as compared to the six months ended September 30, 2021 due to a decrease from Lionsgate Original Releases of $15.3 million due to lower revenue generated from our fiscal 2023 and fiscal 2022 theatrical slate titles in the current period as compared to the fiscal 2022 and fiscal 2021 theatrical slate titles in the prior year's quarter, partially offset by increased revenue from direct-to-platform releases.
+Added: Theatrical revenue decreased $21.4 million in the nine months ended December 31, 2022 as compared to the nine months ended December 31, 2021 due to a decrease of $16.4 million from Lionsgate Original Releases driven by fewer theatrical slate releases generating revenue in the period, and a decrease of $5.0 million from Other Film due to lower revenue from our acquired library titles.
+Added: Home entertainment revenue decreased $18.2 million, or 4.0%, in the nine months ended December 31, 2022, as compared to the nine months ended December 31, 2021, due to lower packaged media revenue of $41.1 million, partially offset by higher digital media revenue of $22.9 million driven by Lionsgate Original Releases.
+Added: The decrease in packaged media revenue was due to a decrease of $26.7 million from Lionsgate Original Releases due to lower revenue from our theatrical slate titles and multi-platform releases, and a decrease of $14.4 million from Other Film due to lower revenue from our acquired library titles.
+Added: The increase in digital media revenue was due to an increase of $27.9 million from Lionsgate Original Releases due to higher revenue from our theatrical slate titles and direct-to-platform (i.e., SVOD) releases.
+Added: Television revenue decreased $62.7 million, or 29.9%, in the nine months ended December 31, 2022, as compared to the nine months ended December 31, 2021, due to a decrease from Lionsgate Original Releases of $61.3 million due to fewer television windows opening for our theatrical slate titles than in the prior year's period, and lower revenue recognized for those titles.
+Added: In particular, the current period included revenue from the fiscal 2023 theatrical release, The Unbearable Weight of Massive Talent , and the fiscal 2022 theatrical releases, American Underdog and Moonfall.
+Added: These compared to revenue in the prior year's period from the fiscal 2022 theatrical releases, Spiral and Voyager , and the fiscal 2021 theatrical releases, Chaos Walking, Barb and Star Go to Vista Del Mar and Fatale .
+Added: International revenue decreased $8.0 million, or 4.6%, in the nine months ended December 31, 2022, as compared to the nine months ended December 31, 2021 due to a decrease from Lionsgate Original Releases of $12.9 million due to lower revenue generated from our fiscal 2022 theatrical slate titles in the current period as compared to the fiscal 2021 theatrical slate titles in the prior year's period, partially offset by increased revenue from direct-to-platform releases, and higher revenue generated from our fiscal 2023 theatrical slate titles in the current period as compared to the fiscal 2022 theatrical slate titles in the prior year's period.
Direct Operating Expense.
The decrease in direct operating expenses is due to lower motion picture revenue in the current period.
−Removed: The increase in direct operating expenses as a percentage of motion picture revenue is driven by the change in the mix of titles and product categories generating revenue in the current period as compared to the prior year's period, including higher expense related to direct-to-platform Lionsgate Original Releases (which require less marketing cost and generally carry less risk, and thus the film cost is higher as a percentage of revenue) contributing approximately 1.9% to the increase, and increased development write-offs on Lionsgate Original Releases in the current period, contributing approximately 4.2% to the increase.
−Removed: Investment in film write-downs included in Motion Picture segment direct operating expense in the six months ended September 30, 2022 were $0.5 million, as compared to $0.1 million in the six months ended September 30, 2021.
+Added: The increase in direct operating expenses as a percentage of motion picture revenue is driven by the change in the mix of titles and product categories generating revenue in the current period as compared to the prior year's period, including higher expense related to direct-to-platform Lionsgate Original Releases (which require less marketing cost and generally carry less risk, and thus the film cost is higher as a percentage of revenue).
+Added: In addition, the current period included an increase in development write-offs of $12.8 million on Lionsgate Original Releases, and additional expense of $3.2 million related to foreign currency losses.
+Added: Investment in film write-downs included in Motion Picture segment direct operating expense in the nine months ended December 31, 2022 were $1.1 million, as compared to $1.2 million in the nine months ended December 31, 2021.
Distribution and Marketing Expense.
−Removed: The decrease in distribution and marketing expense in the six months ended September 30, 2022 is due to lower theatrical P&A and Premium VOD expense associated with fewer releases in the current period, and lower home entertainment distribution and marketing expense.
−Removed: In the six months ended September 30, 2022 approximately $14.8 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $5.6 million in the six months ended September 30, 2021 in the Motion Picture segment.
+Added: The decrease in distribution and marketing expense in the nine months ended December 31, 2022 is due to lower theatrical P&A and Premium VOD expense, and lower home entertainment distribution and marketing expense.
+Added: Theatrical P&A and Premium VOD expense decreased due to lower expense associated with fewer releases in the current period, partially offset by higher expense for films to be released in subsequent quarters.
+Added: In the nine months ended December 31, 2022 approximately $27.3 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $10.3 million in the nine months ended December 31, 2021 in the Motion Picture segment.
Gross Contribution.
−Removed: Gross contribution of the Motion Picture segment for the six months ended September 30, 2022 decreased as compared to the six months ended September 30, 2021 due to lower Motion Picture revenue, and higher direct operating expense as a percentage of Motion Picture revenue, partially offset by lower distribution and marketing expense.
+Added: Gross contribution of the Motion Picture segment for the nine months ended December 31, 2022 decreased as compared to the nine months ended December 31, 2021 due to lower Motion Picture revenue, and higher direct operating expense as a percentage of Motion Picture revenue, partially offset by lower distribution and marketing expense.
General and Administrative Expense.
−Removed: General and administrative expenses of the Motion Picture segment in the six months ended September 30, 2022 decreased $1.4 million, or 3.0%, primarily due to a decrease in incentive based compensation.
+Added: General and administrative expenses of the Motion Picture segment in the nine months ended December 31, 2022 decreased $3.6 million, or 5.2%, primarily due to a decrease in incentive based compensation.
Television Production
−Removed: The table below sets forth Television Production gross contribution and segment profit for the six months ended September 30, 2022 and 2021:
−Removed: Six Months Ended
−Removed: September 30, Increase (Decrease)
+Added: The table below sets forth Television Production gross contribution and segment profit for the nine months ended December 31, 2022 and 2021:
+Added: Nine Months Ended
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
9 unchanged sentences
Gross contribution as a percentage of revenue 9.3 % 6.9 %
−Removed: The table below sets forth Television Production revenue and changes in revenue by media for the six months ended September 30, 2022 and 2021:
−Removed: Six Months Ended
−Removed: September 30, Increase (Decrease)
+Added: The table below sets forth Television Production revenue and changes in revenue by media for the nine months ended December 31, 2022 and 2021:
+Added: Nine Months Ended
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
9 unchanged sentences
The primary component of Television Production revenue is domestic television revenue.
−Removed: Domestic television revenue increased in the six months ended September 30, 2022, as compared to the six months ended September 30, 2021, due to a greater number of television episodes delivered, which included revenue in the current period from The First Lady Season 1, Mythic Quest Season 3 and Acapulco Season 2, an increase of $21.7 million from intersegment revenues from the licensing of Starz original series (Power Book II:
−Removed: Ghost Season 3, P-Valley Season 2 , Power Book III:
−Removed: Raising Kanan, and The Serpent Queen Season 1 , among others) to Starz Networks, and increased third-party revenue from reality television programs.
−Removed: International revenue in the six months ended September 30, 2022 increased $29.3 million, or 23.6% as compared to the six months ended September 30, 2021 due to significant revenue in the current period from Mythic Quest Season 3, The First Lady Season 1 and Acapulco Season 2, as compared to significant revenue in the prior year's period from Dear White People Season 4 and Acapulco Season 1.
+Added: Domestic television revenue increased in the nine months ended December 31, 2022, as compared to the nine months ended December 31, 2021, due to a greater number of television episodes delivered, which included an increase of $71.5 million from intersegment revenues from the licensing of Starz original series (Power Book II:
+Added: Ghost Season 3 , P-Valley Season 2 , BMF Season 2, Heels Season 2, Power Book III:
+Added: Raising Kanan Season 2 , and Power Book IV:
+Added: Force Season 2, among others) to Starz Networks, and third-party revenue in the current period from The First Lady Season 1, Minx Season 2, Mythic Quest Season 3 and Home Economics Season 3.
+Added: International revenue in the nine months ended December 31, 2022 increased $39.2 million, or 21.8% as compared to the nine months ended December 31, 2021 due to revenue in the current period from Mythic Quest Season 3, The First Lady Season 1 and Acapulco Season 2, as compared to revenue in the prior year's period from Dear White People Season 4 and Acapulco Season 1.
In addition, the increase reflects an increase of $18.1 million from intersegment revenues from the licensing of Starz original series to LIONSGATE+.
−Removed: Home entertainment revenue in the six months ended September 30, 2022 increased $14.3 million, or 23.4% as compared to the six months ended September 30, 2021 due to an increase of $14.8 million from digital media intersegment revenues from the licensing of Starz original series.
−Removed: In addition, significant digital media revenue in the current period included Ghosts Season 1, Nashville Seasons 1 to 6, and The First Lady Season 1, and in the prior year's period included Weeds Seasons 1 to 8 and Welcome to Flatch Season 1.
−Removed: Other revenue in the six months ended September 30, 2022 increased slightly from the six months ended September 30, 2021, and primarily includes revenue of 3 Arts Entertainment.
+Added: Home entertainment revenue in the nine months ended December 31, 2022 increased $132.1 million, or 174.5% as compared to the nine months ended December 31, 2021 due to digital media revenue in the current period from Schitt's Creek Seasons 1 to 6 from the license to a streaming platform, Nashville Season 1 to 6, and Ghosts Season 1, which compared to digital media revenue in the prior year's period for Weeds Seasons 1 to 8 and Welcome to Flatch Season 1.
+Added: In addition, the increase reflects an increase of $23.4 million from digital media intersegment revenues from the licensing of Starz original series to Starz Networks.
+Added: Other revenue in the nine months ended December 31, 2022 increased slightly from the nine months ended December 31, 2021, and primarily includes revenue of 3 Arts Entertainment which is generated from commissions and executive producer fees earned related to talent management.
Direct Operating Expense.
−Removed: Direct operating expense of the Television Production segment in the six months ended September 30, 2022 increased $135.0 million, or 20.6% due to the increase in Television Production revenues.
−Removed: Direct operating expenses as a percentage of television production revenue increased slightly as compared to the prior year's period, reflecting an increase in the current period for a greater number of deliveries of newer shows in which direct operating expense is typically higher as a percentage of revenue and increased amortization from one show that was not renewed for a second season, offset by a decrease from higher write-downs to fair value of investment in film and television programs in the prior year's period.
−Removed: The current period included write-downs to fair value of investment in film and television programs amounting to $4.7 million in aggregate, as compared to $26.6 million in the prior year's period.
+Added: Direct operating expense of the Television Production segment in the nine months ended December 31, 2022 increased $248.0 million, or 23.4% due to the increase in Television Production revenues.
+Added: Direct operating expenses as a percentage of television production revenue decreased slightly as compared to the prior year's period, primarily due to the mix of titles generating revenue in the current period as compared to the prior year's period.
+Added: The decrease in direct operating expense as a percentage of revenue was related to the timing of the licensing of higher margin library and acquired titles.
+Added: In addition, the current period included lower write-downs to fair value of investment in film and television programs, amounting to $4.7 million in aggregate, as compared to $28.1 million in the prior year's period.
Gross Contribution.
−Removed: Gross contribution of the Television Production segment for the six months ended September 30, 2022 increased as compared to the six months ended September 30, 2021, due to increased television production revenue and slightly higher direct operating expenses as a percentage of television production revenue.
+Added: Gross contribution of the Television Production segment for the nine months ended December 31, 2022 increased as compared to the nine months ended December 31, 2021, due to increased television production revenue and slightly lower direct operating expenses as a percentage of television production revenue.
General and Administrative Expense.
1 unchanged sentence
Media Networks
−Removed: The table below sets forth Media Networks gross contribution and segment profit for the six months ended September 30, 2022 and 2021:
−Removed: Six Months Ended
−Removed: September 30, Increase (Decrease)
+Added: The table below sets forth Media Networks gross contribution and segment profit for the nine months ended December 31, 2022 and 2021:
+Added: Nine Months Ended
+Added: December 31, Increase (Decrease)
2022 2021 Amount Percent
10 unchanged sentences
The following table sets forth the Media Networks segment profit by product line:
−Removed: Six Months Ended Six Months Ended
−Removed: September 30, 2022 September 30, 2021
+Added: Nine Months Ended Nine Months Ended
+Added: December 31, 2022 December 31, 2021
Starz Networks LIONSGATE+ Total Media Networks Starz Networks LIONSGATE+ Total Media Networks
7 unchanged sentences
Segment profit $ 135.4 $ (101.9) $ 33.5 $ 241.7 $ (119.6) $ 122.1
−Removed: Media Networks revenue increased $10.3 million reflecting increased revenue at LIONSGATE+ of $19.9 million as a result of subscriber and revenue growth in the international territories previously launched, and additional territories launched since September 30, 2021, partially offset by a decrease of $9.6 million at Starz Networks.
−Removed: Starz Networks' revenue decreased as a result of declines in revenue of $71.7 million from traditional linear services, which were mostly offset by higher OTT revenue of $60.6 million resulting from increased subscriptions.
−Removed: During the six months ended September 30, 2022 and 2021, the following original series premiered on STARZ:
−Removed: Six Months Ended September 30, 2022 Six Months Ended September 30, 2021
+Added: Media Networks revenue increased $1.6 million reflecting increased revenue at LIONSGATE+ of $32.1 million as a result of subscriber and revenue growth in the international territories, mostly offset by a decrease of $30.5 million at Starz Networks.
+Added: Revenue for the international territories announced to be exited was approximately $30.3 million for the nine months ended December 31, 2022 and accounted for approximately $6.0 million of the $32.1 million increase in LIONSGATE+ revenue mentioned above.
+Added: Starz Networks' revenue decreased as a result of declines in revenue of $111.6 million from traditional linear services, which were offset by higher OTT revenue of $79.6 million resulting from increased subscriptions.
+Added: During the nine months ended December 31, 2022 and 2021, the following original series premiered on STARZ:
+Added: Nine Months Ended December 31, 2022 Nine Months Ended December 31, 2021
Title Premiere Date Title Premiere Date
20 unchanged sentences
September 26, 2021
+Added: Third Quarter:
+Added: Third Quarter:
+Added: Step Up Season 3
+Added: October 16, 2022 Hightown Season 2
+Added: October 17, 2021
+Added: Dangerous Liaisons Season 1
+Added: November 6, 2022 Power Book II:
+Added: Ghost Season 2
+Added: November 21, 2021
+Added: ___________________
+Added: (1) In addition, BMF - Black Mafia Family Season 1 premiered on September 26, 2021, with the majority of episodes airing during the three months ended December 31, 2021.
Direct Operating and Distribution and Marketing Expenses .
3 unchanged sentences
In addition, the LIONSGATE+ international service, in its remaining territories, has and will continue to result in an increase in expenses as the service continues to expand.
−Removed: The increase in Media Networks direct operating expenses is due to increases at Starz Networks of $81.9 million and LIONSGATE+ of $30.7 million in the six months ended September 30, 2022.
+Added: The increase in Media Networks direct operating expenses is due to increases at Starz Networks of $86.1 million and LIONSGATE+ of $16.1 million in the nine months ended December 31, 2022.
The increase in Starz Networks direct operating expense was primarily due to higher programming cost amortization related to our Starz Originals of $87.7 million primarily related to higher cost original series premieres, and higher programming cost amortization of $8.7 million related to library content, partially offset by lower programming amortization of $4.5 million related to theatrical releases under our programming output agreements, and a benefit in the current period of $10.0 million associated with the modification of a content licensing arrangement.
−Removed: Direct operating expenses at LIONSGATE+ increased as a result of higher programming cost amortization and foreign currency fluctuations related to the strengthening U.S.
−Removed: The slight increase in Media Networks distribution and marketing expense is due to an increase of $1.0 million at Starz Networks and $2.7 million at LIONSGATE+.
+Added: Direct operating expenses at LIONSGATE+ increased as a result of higher programming cost amortization of approximately $9.4 million and foreign currency loss of approximately $5.6 million related to the strengthening U.S.
+Added: The decrease in Media Networks distribution and marketing expense is due to a decrease of $13.6 million at Starz Networks due to overall spend for advertising purchased in the current period and lower media spend for our Starz Originals' premieres, and a decrease of $3.9 million at LIONSGATE+.
Gross Contribution.
−Removed: The decrease in gross contribution compared to the six months ended September 30, 2021 was due to decreases at Starz Networks of $92.5 million and LIONSGATE+ of $13.5 million, driven by higher direct operating expense, partially offset by higher LIONSGATE+ revenue, as described above.
+Added: The decrease in gross contribution compared to the nine months ended December 31, 2021 was due to a decrease in gross contribution at Starz Networks of $103.0 million, partially offset by an decrease in negative gross contribution at LIONSGATE+ of $19.9 million, driven by higher direct operating expense and lower Starz Networks revenue, partially offset by higher LIONSGATE+ revenue and lower distribution and marketing expense, as described above.
+Added: The gross contribution on the international territories announced to be exited was approximately $36.1 million for the nine months ended December 31, 2022.
General and Administrative Expense.
−Removed: General and administrative expenses in the six months ended September 30, 2022 increased slightly from the prior year's period, due to increases of $1.6 million at Starz Networks, and $2.1 million at LIONSGATE+.
+Added: General and administrative expenses in the nine months ended December 31, 2022 increased slightly from the prior year's period, due to increases of $3.3 million at Starz Networks, and $2.2 million at LIONSGATE+.
LIQUIDITY AND CAPITAL RESOURCES
Sources of Cash
−Removed: Our liquidity and capital requirements in the six months ended September 30, 2022 were provided principally through cash generated from operations, corporate debt, our film related financing and other obligations (as further discussed below), and the monetization of trade accounts receivable.
−Removed: As of September 30, 2022, we had cash and cash equivalents of $557.1 million.
+Added: Our liquidity and capital requirements in the nine months ended December 31, 2022 were provided principally through cash generated from operations, corporate debt, our film related obligations (as further discussed below), and the monetization of trade accounts receivable.
+Added: As of December 31, 2022, we had cash and cash equivalents of $425.4 million.
Corporate Debt
−Removed: Our corporate debt at September 30, 2022, excluding film related financing and other obligations discussed further below, consisted of the following:
+Added: Our corporate debt at December 31, 2022, excluding film related obligations discussed further below, consisted of the following:
• Senior Credit Facilities:
◦ Revolving Credit Facility.
−Removed: We have a $1.25 billion revolving credit facility (with no amounts outstanding at September 30, 2022) due April 2026 (the "Revolving Credit Facility").
+Added: We have a $1.25 billion revolving credit facility (with no amounts outstanding at December 31, 2022) due April 2026 (the "Revolving Credit Facility").
We maintain significant availability under our Revolving Credit Facility, which is currently used to meet our short-term liquidity requirements, and could also be used for longer term liquidity requirements.
◦ Term Loan A.
−Removed: We have a term loan A facility due April 2026 (the "Term Loan A"), with $439.3 million outstanding at September 30, 2022.
+Added: We have a term loan A facility due April 2026 (the "Term Loan A"), with $433.8 million outstanding at December 31, 2022.
◦ Term Loan B.
−Removed: We have a term loan B facility due March 2025 (the "Term Loan B", and, together with the Revolving Credit Facility and the Term Loan A, the "Senior Credit Facilities"), with $837.9 million outstanding at September 30, 2022.
+Added: We have a term loan B facility due March 2025 (the "Term Loan B", and, together with the Revolving Credit Facility and the Term Loan A, the "Senior Credit Facilities"), with $834.8 million outstanding at December 31, 2022.
• Senior Notes:
−Removed: We have $981.4 million outstanding of 5.500% senior notes due 2029 (the "5.500% Senior Notes") at September 30, 2022.
+Added: We have $857.6 million outstanding of 5.500% senior notes due 2029 (the "5.500% Senior Notes") at December 31, 2022.
See Note 6 to our unaudited condensed consolidated financial statements for a discussion of our corporate debt.
−Removed: Film Related Financing and Other Obligations
−Removed: We utilize our film related financing and other obligations to fund our film and television productions or licenses.
−Removed: Our film related financing and other obligations at September 30, 2022 include the following:
+Added: Film Related Obligations
+Added: We utilize our film related obligations to fund our film and television productions or licenses.
+Added: Our film related obligations at December 31, 2022 include the following:
• Production Loans:
1 unchanged sentence
The majority of the Company's production loans have contractual repayment dates either at or near the expected completion or release dates, with the exception of certain loans containing repayment dates on a longer term basis.
−Removed: At September 30, 2022, there was $1,444.6 million outstanding of production loans.
+Added: At December 31, 2022, there was $1,435.7 million outstanding of production loans.
• Programming Notes:
Programming notes represent individual loans for the license of film and television programs that we license.
−Removed: The Company's programming notes have contractual repayment dates in January 2023.
−Removed: At September 30, 2022, there was $21.1 million outstanding of programming notes.
+Added: The Company's programming notes have contractual repayment dates in January and April 2023.
+Added: At December 31, 2022, there was $54.2 million outstanding of programming notes.
• Production Tax Credit Facility:
−Removed: We have a $235.0 million limited-recourse senior secured revolving credit facility due January 2025 based on collateral consisting of certain of the Company’s tax credit receivables (the "Production Tax Credit Facility").
−Removed: At September 30, 2022, there was $235.0 million outstanding under the Production Tax Credit Facility.
+Added: We have a $235.0 million non-recourse senior secured revolving credit facility due January 2025 based on collateral consisting solely of certain of the Company’s tax credit receivables (the "Production Tax Credit Facility").
+Added: Cash collections from the underlying collateral (tax credit receivables) are used to repay the Production Tax Credit Facility.
+Added: At December 31, 2022, there was $231.2 million outstanding under the Production Tax Credit Facility.
• IP Credit Facility:
1 unchanged sentence
The maximum principal amount of the IP Credit Facility is $161.9 million, subject to the amount of collateral available, which is based on the valuation of cash flows from the libraries.
−Removed: At September 30, 2022, there was $161.9 million outstanding under the IP Credit Facility.
−Removed: • Backlog Financing Facility and Other:
−Removed: ◦ Backlog Financing Facility.
−Removed: In March 2022, as amended in August 2022, certain subsidiaries of the Company entered into a committed secured revolving credit facility (the "Backlog Financing 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.
−Removed: The maximum principal amount of the Backlog Financing Facility as of June 30, 2022 was $175.0 million, subject to the amount of eligible collateral contributed to the facility.
−Removed: The Backlog Financing Facility revolving period finishes on May 16, 2025, at which point cash collections from the underlying collateral is used to repay the facility.
+Added: At December 31, 2022, there was $152.3 million outstanding under the IP Credit Facility.
+Added: • Backlog Facility and Other:
+Added: ◦ Backlog Facility.
+Added: In March 2022, as amended in August 2022, certain subsidiaries of the Company entered into a committed secured revolving credit facility (the "Backlog Facility") based on collateral consisting solely of certain of the Company's fixed fee or minimum guarantee contracts where cash will be received in the future.
+Added: The maximum principal amount of the Backlog Facility is $175.0 million, subject to the amount of eligible collateral contributed to the facility.
+Added: The Backlog Facility revolving period finishes on May 16, 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 and 90 days after the revolving period ends, currently August 14, 2027.
−Removed: As of September 30, 2022, there was $175.0 million outstanding under the Backlog Financing Facility.
−Removed: In June 2022, the Company borrowed $118.6 million under a loan agreement which is secured by contracted receivables which are not yet recognized as revenue under certain licensing agreements (the "June 2022 Distribution Loan Agreement"), which was to mature on December 28, 2025, of which $18.6 million was repaid during the quarter ended September 30, 2022, and the remaining outstanding amount of $100.0 million was repaid on October 3, 2022 (see Note 19 - Subsequent Events to our unaudited condensed consolidated financial statements).
−Removed: In September 2022, the Company borrowed $43.4 million under a loan agreement which matures on March 28, 2026 (the "September 2022 Distribution Loan Agreement", and together with the June 2022 Distribution Loan Agreement, the "Distribution Loan Agreements").
−Removed: Outstanding loan balances under the Distribution Loan Agreements must be repaid with any cash collections from the underlying collateral if and when received by the Company, and may be voluntarily repaid at any time without prepayment penalty fees.
−Removed: See Note 7 to our unaudited condensed consolidated financial statements for a discussion of our film related and other financing obligations.
+Added: As of December 31, 2022, there was $175.0 million outstanding under the Backlog Facility.
+Added: In September 2022, the Company borrowed $43.4 million under a loan agreement which is secured by contracted receivables which are not yet recognized as revenue under certain licensing agreements, which matures on March 28, 2026 (the "September 2022 Distribution Loan").
+Added: In December 2022, the Company borrowed $16.2 million under a loan agreement which matures on November 1, 2025 (the "December 2022 Distribution Loan", and together with the September 2022 Distribution Loan and the previously outstanding June 2022 Distribution Loan, the "Distribution Loans").
+Added: Outstanding loan balances under the Distribution Loans must be repaid with any cash collections from the underlying collateral if and when received by the Company, and may be voluntarily repaid at any time without prepayment penalty fees.
+Added: As of December 31, 2022, $58.6 million remains outstanding under the Distribution Loans.
+Added: See Note 7 to our unaudited condensed consolidated financial statements for a discussion of our film related and other obligations.
Accounts Receivable Monetization and Governmental Incentives
6 unchanged sentences
Redeemable Noncontrolling Interests.
−Removed: In addition, the Company has a redeemable noncontrolling interest balance of $343.2 million as of September 30, 2022 related to its acquisition of a controlling interest in Pilgrim Media Group and 3 Arts Entertainment, which may require the use of cash in the event the holders of the noncontrolling interests require the Company to repurchase their interests (see Note 9 to our unaudited condensed consolidated financial statements).
+Added: In addition, the Company has a redeemable noncontrolling interest balance of $357.1 million as of December 31, 2022 related to its acquisition of a controlling interest in Pilgrim Media Group and 3 Arts Entertainment, which may require the use of cash in the event the holders of the noncontrolling interests require the Company to repurchase their interests (see Note 9 to our unaudited condensed consolidated financial statements).
• 3 Arts Entertainment.
2 unchanged sentences
• Pilgrim Media Group.
−Removed: Pursuant to an amendment dated April 2, 2021, the put and call rights associated with the noncontrolling interest were extended and modified, such that the noncontrolling interest holder has a right to put and the Company has a right to call a portion of the noncontrolling interest, equal to 25% of Pilgrim Media Group, at fair value, exercisable for thirty (30) days beginning November 12, 2022.
−Removed: In addition, the noncontrolling interest holder has a right to put and the Company has a right to call the remaining amount of noncontrolling interest at fair value, subject to a cap, exercisable for thirty (30) days beginning November 12, 2024, as amended.
+Added: Pursuant to an amendment dated April 2, 2021, the put and call rights associated with the noncontrolling interest were extended and modified, such that the noncontrolling interest holder had a right to put and the Company had a right to call a portion of the noncontrolling interest, equal to 25% of Pilgrim Media Group, at fair value, exercisable for thirty (30) days beginning November 12, 2022.
+Added: On November 14, 2022, the noncontrolling interest holder exercised the right to put a portion of the noncontrolling interest, equal to 25% of Pilgrim Media Group.
+Added: As of December 31, 2022, the purchase of shares pursuant to the exercise of the put had not been completed.
+Added: The noncontrolling interest holder has a right to put and the Company has a right to call the remaining amount of noncontrolling interest at fair value, subject to a cap, exercisable for thirty (30) days beginning November 12, 2024, as amended.
We may from time to time seek to retire or purchase or refinance our outstanding debt through cash purchases, and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, refinancings, or otherwise.
5 unchanged sentences
In addition, the LIONSGATE+ international service, in its remaining territories, has and will require capital investment as the service continues to expand.
−Removed: In connection with the restructuring of our LIONSGATE+ business previously discussed under Item 2.
−Removed: Management's Discussion and Analysis, "Overview", we expect to incur additional charges ranging from approximately $75 million to $100 million in the next six months primarily related to certain contractual content commitments and other items as we fully implement the plan.
−Removed: These amounts also reflect the estimated net future cash expenditures for these charges.
−Removed: In addition, the Company expects future cash expenditures of approximately $75 million related to the content charges recorded in the three months ended September 30, 2022.
+Added: We are in the process of executing our LIONSGATE+ restructuring plan previously discussed under Item 2.
+Added: Management's Discussion and Analysis, "Overview", including exiting certain territories and our strategic review of content performance for consideration of removal from our various platforms, and estimate we will incur additional charges ranging from approximately $100 million to $125 million related to certain contractual content commitments or programming content impairment charges, among other items, as we fully implement the plan.
+Added: Of these total estimated future charges, the net future cash outlay is estimated to range from approximately $75 million to $100 million, which is inclusive of the amounts payable for the content, as well as the incremental cost related to the restructuring.
+Added: Of the content impairment charges recorded in the nine months ended December 31, 2022, approximately $85 million reflects the remaining amounts payable for this content.
+Added: As we continue to fully implement the plan, including further strategic review of content performance, we may incur additional content impairment charges beyond the estimates provided.
+Added: We expect the restructuring plan to be substantially completed by March 31, 2023.
In the short-term, we currently expect that our cash requirements for productions will increase and that our cash requirements for marketing spends will be comparable in fiscal 2023 as compared to fiscal 2022, due to the expected increase in film and television programs, productions or acquisitions in fiscal 2023.
−Removed: However, we currently believe that cash flow from operations, cash on hand, revolving credit facility availability, the monetization of trade accounts receivable, tax-efficient financing, the availability of our Production Tax Credit Facility, IP Credit Facility and Backlog Financing Facility and other financing obligations, and available production or license financing will be adequate to meet known operational cash and debt service (i.e.
+Added: However, we currently believe that cash flow from operations, cash on hand, revolving credit facility availability, the monetization of trade accounts receivable, tax-efficient financing, the availability of our Production Tax Credit Facility, IP Credit Facility and Backlog Facility and other financing obligations, and available production or license financing will be adequate to meet known operational cash and debt service (i.e.
principal and interest payments) requirements for the next twelve months and beyond, including the funding of future film and television production, film and programming rights acquisitions and theatrical and home entertainment release schedules, and future equity method or other investment funding requirements, and international expansion in our remaining international territories.
We monitor our cash flow liquidity, availability, fixed charge coverage, capital base, film spending and leverage ratios with the long-term goal of maintaining our credit worthiness.
−Removed: Our current financing strategy is to fund operations and to leverage investment in films and television programs in the short-term and long-term through our cash flow from operations, our revolving credit facility, production loans and programming notes, government incentive programs, film funds, the monetization of trade accounts receivable, our Production Tax Credit Facility, our IP Credit Facility, our Backlog Financing Facility, and other financing obligations.
+Added: Our current financing strategy is to fund operations and to leverage investment in films and television programs in the short-term and long-term through our cash flow from operations, our revolving credit facility, production loans and programming notes, government incentive programs, the monetization of trade accounts receivable, our Production Tax Credit Facility, our IP Credit Facility, our Backlog Facility, and other obligations.
In addition, we continue to expand our LIONSGATE+ international service, in its remaining territories, and may acquire businesses or assets, including individual films or libraries that are complementary to our business.
2 unchanged sentences
Our ability to obtain any additional financing will depend on, among other things, our business plans, operating performance, the condition of the capital markets at the time we seek financing, and short and long-term debt ratings assigned by independent rating agencies.
−Removed: Additionally, circumstances related to the COVID-19 global pandemic, inflation and rising interest rates has caused disruption in the capital markets, which could make financing more difficult and/or expensive, and we may not be able to obtain such financing.
+Added: Additionally, circumstances related to the COVID-19 global pandemic, inflation and rising interest rates has caused disruption in the capital markets, which could make financing more difficult and/or expensive, and we
+Added: may not be able to obtain such financing.
We may also dispose of businesses or assets, including individual films or libraries, and use the net proceeds from such dispositions to fund operations or such acquisitions, or to repay debt.
1 unchanged sentence
Our material cash requirements from known contractual and other obligations primarily relate to our corporate debt and film related and other obligations.
−Removed: The following table sets forth our significant contractual and other obligations as of September 30, 2022 and the estimated timing of payment:
+Added: The following table sets forth our significant contractual and other obligations as of December 31, 2022 and the estimated timing of payment:
Total Next 12 Months Beyond 12 Months
(Amounts in millions)
−Removed: Future annual repayment of debt and other obligations recorded as of September 30, 2022 (on-balance sheet arrangements)
+Added: Future annual repayment of debt and other obligations recorded as of December 31, 2022 (on-balance sheet arrangements)
Corporate debt (1) :
3 unchanged sentences
5.500% Senior Notes 857.6 — 857.6
−Removed: 981.4 — 981.4
Film related and other obligations (2)
13 unchanged sentences
(1) See Note 6 to our unaudited condensed consolidated financial statements for further information on our corporate debt.
−Removed: (2) Film related and other obligations include program rights and film obligations, and film related financing and other obligations (i.e., production loans, Production Tax Credit Facility, programming notes, Backlog Financing Facility and other, and IP Credit Facility), included on the consolidated balance sheets.
+Added: (2) Film related and other obligations include program rights and film obligations, and film related obligations (i.e., production loans, Production Tax Credit Facility, programming notes, Backlog Facility and other, and IP Credit Facility), included on the consolidated balance sheets.
See Note 7 to our unaudited condensed consolidated financial statements for further information.
1 unchanged sentence
(4) Includes cash interest payments on our 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.
−Removed: (5) Not included in the amounts above are $343.2 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 9 to our unaudited condensed consolidated financial statements).
+Added: (5) Not included in the amounts above are $357.1 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.
+Added: On November 14, 2022, the noncontrolling interest holder exercised the right to put a portion of the noncontrolling interest, equal to 25% of Pilgrim Media Group.
+Added: As of December 31, 2022, the purchase of shares pursuant to the exercise of the put had not been completed.
+Added: See Note 9 to our unaudited condensed consolidated financial statements.
We are obligated to pay programming fees for all qualifying films that are released theatrically in the U.S.
6 unchanged sentences
We are 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.
−Removed: In addition, as of September 30, 2022, we had gross unrecognized tax benefits of $70.2 million.
−Removed: We are unable to reasonably predict the ultimate amount or timing of settlement of our unrecognized tax benefits because, until formal resolutions are reached, reasonable estimates of the amount and timing of cash settlements with the respective taxing authorities are not practicable.
−Removed: However, we estimate the liability for unrecognized tax benefits will decrease in the next twelve months by $82.4 million as a result of projected audit settlements in certain jurisdictions.
For additional details of contingencies, see Note 16 to our unaudited condensed consolidated financial statements.
1 unchanged sentence
In addition, a net first lien leverage maintenance covenant and an interest coverage ratio maintenance covenant apply to the Revolving Credit Facility and the Term Loan A and are tested quarterly.
−Removed: As of September 30, 2022, the Company was in compliance with all applicable covenants.
+Added: As of December 31, 2022, the Company was in compliance with all applicable covenants.
The 5.500% Senior Notes contain certain restrictions and covenants that, subject to certain exceptions, limit the Company’s ability to incur additional indebtedness, pay dividends or repurchase the Company’s common shares, make certain loans or investments, and sell or otherwise dispose of certain assets subject to certain conditions, among other limitations.
−Removed: As of September 30, 2022, the Company was in compliance with all applicable covenants.
+Added: As of December 31, 2022, the Company was in compliance with all applicable covenants.
Share Repurchase Plan.
3 unchanged sentences
Such purchases will be structured as permitted by securities laws and other legal requirements.
−Removed: During the three months ended September 30, 2022, the Company did not repurchase any common shares.
+Added: During the three months ended December 31, 2022, the Company did not repurchase any common shares.
The amount of dividends, if any, that we pay to our shareholders is determined by our Board of Directors, at its discretion, and is dependent on a number of factors, including our financial position, results of operations, cash flows, capital requirements and restrictions under our credit agreements, and shall be in compliance with applicable law.
Capacity to Pay Dividends.
−Removed: At September 30, 2022, the capacity to pay dividends under the Senior Credit Facilities and the Senior Notes significantly exceeded the amount of the Company's accumulated deficit or net loss, and therefore the Company's net loss of $1,936.0 million and accumulated deficit of $2,320.4 million were deemed free of restrictions from paying dividends at September 30, 2022.
+Added: At December 31, 2022, the capacity to pay dividends under the Senior Credit Facilities and the Senior Notes significantly exceeded the amount of the Company's accumulated deficit or net loss, and therefore the Company's net loss of $1,920.8 million and accumulated deficit of $2,317.9 million were deemed free of restrictions from paying dividends at December 31, 2022.
Discussion of Operating, Investing, Financing Cash Flows
−Removed: Cash, cash equivalents and restricted cash increased by $220.5 million for the six months ended September 30, 2022 and decreased by $78.4 million for the six months ended September 30, 2021, before foreign exchange effects on cash.
+Added: Cash, cash equivalents and restricted cash increased by $89.9 million for the nine months ended December 31, 2022 and decreased by $207.2 million for the nine months ended December 31, 2021, before foreign exchange effects on cash.
Components of these changes are discussed below in more detail.
Operating Activities.
−Removed: Cash flows used in operating activities for the six months ended September 30, 2022 and 2021 were as follows:
−Removed: Six Months Ended
−Removed: September 30,
+Added: Cash flows used in operating activities for the nine months ended December 31, 2022 and 2021 were as follows:
+Added: Nine Months Ended
2022 2021 Net Change
19 unchanged sentences
Net Cash Flows Used In Operating Activities $ (128.0) $ (489.8) $ 361.8
−Removed: Cash flows used in operating activities for the six months ended September 30, 2022 were $139.4 million compared to cash flows used in operating activities of $332.5 million for the six months ended September 30, 2021.
+Added: Cash flows used in operating activities for the nine months ended December 31, 2022 were $128.0 million compared to cash flows used in operating activities of $489.8 million for the nine months ended December 31, 2021.
The lower cash used in operating activities is due to lower cash used from changes in operating assets and liabilities as shown above, partially offset by lower cash flows from operations before changes in operating assets and liabilities.
−Removed: The lower use of cash from changes in operating assets and liabilities was driven by proceeds from the termination of interest rate swaps (see further discussion below for interest rate swap transactions in the current period), lower increases in accounts receivable, net and other assets, lower cash used for investment in films and television programs and program rights, and lower decreases in accounts payable and accrued liabilities, partially offset by higher cash used from other changes in operating assets and liabilities.
−Removed: In addition, cash flows used in operating activities for the six months ended September 30, 2022 included a net use of cash of approximately $10.9 million from the monetization of accounts receivables programs, as compared to a net use of cash of approximately $46.2 million for the six months ended September 30, 2021 (see Note 18 to our unaudited condensed consolidated financial statements).
−Removed: During the six months ended September 30, 2022, we terminated certain interest rate swaps (a portion of which were considered hybrid instruments with a financing component and an embedded at-market derivative that was a designated cash flow hedge), and received approximately $56.4 million.
−Removed: The $56.4 million received was classified in the unaudited condensed consolidated statement of cash flows as cash provided by operating activities of $188.7 million reflecting the amount received for the derivative portion of the termination of swaps, and a use of cash in financing activities of $134.5 million reflecting the pay down of the financing component of the Terminated Swaps (inclusive of payments made between April 1, 2022 and the
−Removed: termination date amounting to $3.2 million) (see Financing Activities below).
+Added: The lower use of cash from changes in operating assets and liabilities was driven by proceeds from the termination of interest rate swaps (see further discussion below for interest rate swap transactions in the current period), lower increases in accounts receivable, net and other assets, lower cash used for investment in films and television programs and program rights, and higher cash from other changes in operating assets and liabilities, partially offset by higher decreases in accounts payable and accrued liabilities.
+Added: In addition, cash flows used in operating activities for the nine months ended December 31, 2022 included a net benefit of approximately $77.0 million from the monetization of accounts receivables programs, as compared to a net use of cash of approximately $125.8 million for the nine months ended December 31, 2021 (see Note 18 to our unaudited condensed consolidated financial statements).
+Added: During the nine months ended December 31, 2022, we terminated certain interest rate swaps (a portion of which were considered hybrid instruments with a financing component and an embedded at-market derivative that was a designated cash flow hedge), and received approximately $56.4 million.
+Added: The $56.4 million received was classified in the unaudited condensed consolidated statement of cash flows as cash provided by operating activities of $188.7 million reflecting the amount received for the derivative portion of the termination of swaps (and presented in the "proceeds from the termination of interest rate swaps" line item above), and a use of cash in financing activities of $134.5 million reflecting the pay down of the financing
+Added: component of the Terminated Swaps (inclusive of payments made between April 1, 2022 and the termination date amounting to $3.2 million) (see Financing Activities below).
See Note 17 to our unaudited condensed consolidated financial statements.
Investing Activities.
−Removed: Cash flows used in investing activities for the six months ended September 30, 2022 and 2021 were as follows:
−Removed: Six Months Ended
−Removed: September 30,
+Added: Cash flows used in investing activities for the nine months ended December 31, 2022 and 2021 were as follows:
+Added: Nine Months Ended
(Amounts in millions)
Proceeds from the sale of Pantaya $ — $ 123.6
−Removed: Proceeds from the sale of other investments 3.0 —
+Added: Proceeds from the sale of equity method and other investments 46.3 —
Investment in equity method investees and other (17.5) (14.0)
1 unchanged sentence
Acquisition of assets (film library and related assets) — (161.4)
+Added: Increase in loans receivable — (4.3)
Capital expenditures (36.6) (22.2)
Net Cash Flows Used In Investing Activities $ (7.8) $ (75.1)
−Removed: Cash flows used in investing activities of $36.0 million for the six months ended September 30, 2022 compared to cash flows used in investing activities of $61.8 million for the six months ended September 30, 2021, primarily due to cash used for the acquisition of a film library and related assets and investment in equity method investees as reflected above, offset by the receipt of proceeds during the six months ended September 30, 2021 from the sale of Pantaya.
+Added: Cash flows used in investing activities of $7.8 million for the nine months ended December 31, 2022 compared to cash flows used in investing activities of $75.1 million for the nine months ended December 31, 2021, primarily due to proceeds from the sale of a portion of our ownership interest in STARZPLAY Arabia in the nine months ended December 31, 2022, compared to cash used for the acquisition of a film library and related assets offset by the receipt of proceeds during the nine months ended December 31, 2021 from the sale of Pantaya.
Financing Activities.
−Removed: Cash flows provided by financing activities for the six months ended September 30, 2022 and 2021 were as follows:
−Removed: Six Months Ended
−Removed: September 30,
+Added: Cash flows provided by financing activities for the nine months ended December 31, 2022 and 2021 were as follows:
+Added: Nine Months Ended
(Amounts in millions)
2 unchanged sentences
Net repayments and repurchases of debt (310.3) (237.0)
−Removed: Film related financing and other obligations - borrowings, net of debt issuance costs 1,137.9 775.7
−Removed: Film related financing and other obligations - repayments (372.2) (186.6)
−Removed: Net proceeds from film related financing and other obligations 765.7 589.1
+Added: Film related and other obligations - borrowings 1,384.0 954.0
+Added: Film related and other obligations - repayments (694.8) (305.3)
+Added: Net proceeds from film related and other obligations 689.2 648.7
Other financing activities (153.2) (54.0)
Net Cash Flows Provided By Financing Activities $ 225.7 $ 357.7
−Removed: Cash flows provided by financing activities of $395.9 million for the six months ended September 30, 2022 compared to cash flows provided by financing activities of $315.9 million for the six months ended September 30, 2021.
−Removed: Cash flows provided by financing activities for the six months ended September 30, 2022 primarily reflects net film related financing and other obligations borrowings of $765.7 million due to net borrowings under production loans and the Production Tax Credit Facility of $411.4 million and increased net borrowings under the Backlog Financing Facility, IP Credit Facility and Distribution Loans of $354.3 million, offset by net debt repayments of $220.0 million.
−Removed: Net debt repayments and repurchases of $220.0 million in the six months ended September 30, 2022 included the below transactions, along with required repayments on our term loans:
−Removed: • In April 2022, we voluntarily prepaid the entire outstanding principal amount of the Term Loan A due March 22, 2023 of $193.6 million, together with accrued and unpaid interest.
−Removed: • In July 2022, we repurchased $18.7 million principal amount of the 5.500% Senior Notes for $14.6 million, together with accrued and unpaid interest.
−Removed: In addition, other financing activities in the six months ended September 30, 2022 includes $134.5 million for interest rate swap settlement payments due to $134.5 million for the pay down of the financing component of our terminated interest rate
−Removed: swaps in the current period (inclusive of payments made between April 1, 2022 and the termination date amounting to $3.2 million) (see discussion above in Operating Activities , and Note 17 to our unaudited condensed consolidated financial statements).
+Added: Cash flows provided by financing activities of $225.7 million for the nine months ended December 31, 2022 compared to cash flows provided by financing activities of $357.7 million for the nine months ended December 31, 2021.
+Added: Cash flows provided by financing activities for the nine months ended December 31, 2022 primarily reflects net film related and other obligations borrowings of $689.2 million due to net borrowings under production loans and the Production Tax Credit Facility of $430.2 million and increased net borrowings under the Backlog Facility, IP Credit Facility and Distribution Loans of $259.0 million, offset by net debt repayments of $310.3 million.
+Added: Net debt repayments and repurchases of $310.3 million in the nine months ended December 31, 2022 included the below transactions, along with required repayments on our term loans:
+Added: • In April 2022, we voluntarily prepaid the entire outstanding principal amount of the Term Loan A due March 22, 2023 of $193.6 million.
+Added: • During the nine months ended December 31, 2022, we repurchased $142.4 million principal amount of the 5.500% Senior Notes for $96.2 million.
+Added: In addition, other financing activities in the nine months ended December 31, 2022 includes $134.5 million for interest rate swap settlement payments due to $134.5 million for the pay down of the financing component of our terminated interest rate swaps in the current period (inclusive of payments made between April 1, 2022 and the termination date amounting to $3.2 million) (see discussion above in Operating Activities , and Note 17 to our unaudited condensed consolidated financial statements).
Other financing activities also includes tax withholding required on equity awards of $17.3 million.
−Removed: Cash flows provided by financing activities of $315.9 million for the six months ended September 30, 2021 primarily reflects net film related financing and other obligations borrowings of $589.1 million, as production activity increased in the six months ended September 30, 2021, offset by net debt repayments and repurchases of $228.4 million.
−Removed: In addition, other financing activities in the six months ended September 30, 2021 includes $14.4 million for interest rate swap settlement payments due to a financing component on a portion of our interest rate swaps (see Note 17 to our unaudited condensed consolidated financial statements).
−Removed: Net debt repayments and repurchases of $228.4 million in the six months ended September 30, 2021 included the below transactions and associated debt issuance and redemption costs, along with required repayments on our term loans:
+Added: Cash flows provided by financing activities of $357.7 million for the nine months ended December 31, 2021 primarily reflects net film related and other obligations borrowings of $648.7 million, as production activity increased in the nine months ended December 31, 2021, offset by net debt repayments and repurchases of $237.0 million.
+Added: In addition, other financing activities in the nine months ended December 31, 2021 includes $21.5 million for interest rate swap settlement payments due to a financing component on a portion of our interest rate swaps (see Note 17 to our unaudited condensed consolidated financial statements).
+Added: Net debt repayments and repurchases of $237.0 million in the nine months ended December 31, 2021 included the below transactions and associated debt issuance and redemption costs, along with required repayments on our term loans:
• On April 1, 2021, we redeemed in full all $518.7 million outstanding principal amount of our 5.875% Senior Notes and all $545.6 million outstanding principal amount of our 6.375% Senior Notes, and paid a prepayment premium of $15.2 million and $17.4 million on the 5.875% Senior Notes and 6.375% Senior Notes, respectively, plus accrued and unpaid interest to the date of redemption.
1 unchanged sentence
• On April 6, 2021, we amended our Credit Agreement to, among other things, extend the maturity of a portion of our revolving credit commitments, amounting to $1.25 billion, and a portion of our outstanding term A loans, amounting to $444.9 million to April 6, 2026.
−Removed: • During the six months ended September 30, 2022, the Company completed a series of repurchases of the Term Loan B and, in aggregate, paid $95.3 million to repurchase $96.0 million principal amount of the Term Loan B.
+Added: • During the nine months ended December 31, 2021, we completed a series of repurchases of the Term Loan B and, in aggregate, paid $95.3 million to repurchase $96.0 million principal amount of the Term Loan B.
Remaining Performance Obligations and Backlog
Remaining performance obligations represent deferred revenue on the balance sheet plus fixed fee or minimum guarantee contracts where the revenue will be recognized and the cash received in the future (i.e., backlog).
−Removed: As disclosed in Note 10 to our unaudited condensed consolidated financial statements, remaining performance obligations were $2.1 billion at September 30, 2022 (March 31, 2022 - $1.8 billion).
−Removed: The backlog portion of remaining performance obligations (excluding deferred revenue) related to our Motion Picture and Television Production segments was $1.6 billion at September 30, 2022 (March 31, 2022 - $1.3 billion).
+Added: As disclosed in Note 10 to our unaudited condensed consolidated financial statements, remaining performance obligations were $2.0 billion at December 31, 2022 (March 31, 2022 - $1.8 billion).
+Added: The backlog portion of remaining performance obligations (excluding deferred revenue) related to our Motion Picture and Television Production segments was $1.6 billion at December 31, 2022 (March 31, 2022 - $1.3 billion).
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.