What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-05-25 compared with 2022-05-26 · 427 added, 345 removed, 616 unchanged (56% of the section changed)

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

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

The Company’s film, television, subscription and location-based entertainment businesses are backed by an 18,000-title library and a valuable collection of iconic film and television franchises.

We classify our operations through three reporting segments:

Motion Picture, Television Production, and Media Networks (see further discussion below).

Proposed Spin-off of Studio Business

In March 2023, we announced that we had confidentially submitted a draft registration statement on Form 10 with the SEC relating to the proposed spin-off of our studio business, consisting of our Television Production and Motion Picture segments.

The proposed spin-off will be subject to the satisfaction of a number of conditions and our board of directors may decide not to proceed with the spin-off at any time.

A failure to satisfy required conditions, or disruptions in market conditions, could delay the completion of the proposed spin-off for a significant period of time or prevent it from occurring at all.

Additionally, the proposed spin-off is complex in nature, and unanticipated developments or changes, including disruptions in general market conditions, changes in law or challenges in executing the spin-off, may affect our ability to complete the spin-off on the terms or on the timeline we announced, or at all.

These or other developments could cause us not to realize some of all of the expected benefits, or to realize them on a different timeline than expected.

Media Networks Restructuring and Goodwill Impairment

Media Networks Restructuring.

In fiscal 2023, 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).

During 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.

As a result of these restructuring initiatives, we recorded content impairment charges related to the Media Networks segment in fiscal 2023 of $379.3 million.

The Company also incurred severance cost under these restructuring initiatives.

These charges are included in restructuring and other in the consolidated statement of operations (see Note 15 to our consolidated financial statements).

The Company is substantially complete with executing its LIONSGATE+ restructuring plan including exiting the territories discussed above, negotiating certain content related contractual commitments and performing its strategic review of content performance for consideration of removal from the Company's various platforms.

As of March 31, 2023, a portion of the territories had been exited, with the remaining territories fully exited in May 2023.

The Company estimates it will incur additional charges ranging from approximately $20 million to $50 million related to certain contractual content commitments or programming content impairment charges, among other items, as the Company fully implements the plan.

Of these total estimated future charges, the net future cash outlay is estimated to range from approximately $20 million to $50 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.

Of the content impairment charges recorded in fiscal 2023, approximately $90 million reflects the future cash to be paid for the remaining amounts payable for this content.

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 these estimates.

expects the restructuring plan to be substantially completed by June 30, 2023, however certain settlements of contractual commitments could extend beyond that date.

Goodwill Impairment.

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.

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 of fiscal 2023 (quarter ended September 30, 2022).

Management's Discussion and Analysis, "Critical Accounting Policies and Estimates", Goodwill and Indefinite-Lived Intangible Assets and Note 1 to our consolidated financial statements for further information.

COVID-19 Global Pandemic

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, have affected our business in a number of ways.

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).

Although film and television production have generally resumed, we continue to see disruption of production activities depending on local circumstances.

We also cannot predict whether productions that have resumed will be paused again, or the impact of incremental costs required to adhere to health and safety protocols.

Additionally, although the lifting of the quarantines have enabled many theaters to reopen, we are unable to predict how shifting government mandates or guidance regarding COVID-19 restrictions will impact patronage and theater capacity.

In turn, production delays (and fewer theatrical releases) have limited the availability of film content to be sold in distribution windows subsequent to the theatrical release, and have resulted in delays of release of new television content, including on our STARZ platform.

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 currently unknowable duration and severity of the impacts of COVID-19 and its variants, and among other things, the impact of governmental actions imposed in response to COVID-19 and individuals’ and companies’ responses regarding health matters going forward.

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.

Risk Factors for further details.

Since fiscal 2020, the economic, social and regulatory impacts associated with the COVID-19 global pandemic (including its variants), measures to prevent its spread, and the resulting economic uncertainty, affected our business in a number of ways.

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).

Although film and television production have generally resumed in full, disruption of production activities could occur again, depending on local circumstances.

Additionally, although theaters have generally reopened, we are not able to accurately predict if and at what level consumers will return to movie theaters.

We have incurred and may incur additional costs to address any government regulations and the safety of our employees and talent.

To the extent that the costs are related to implementing production safety protocols, or other such costs that add value to the film or television program, the costs are capitalized as part of the cost of the film or television program.

Incremental direct operating costs associated with the pausing and restarting of productions, including paying/hiring certain cast and crew, maintaining idle facilities and equipment costs, contractual marketing spends for film releases and events that have been canceled or delayed that will provide no economic benefit, and 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, are expensed as incurred.

In fiscal 2022 and 2023, these costs have decreased due to the lessening severity of the COVID-19 global pandemic, and we expect these costs to continue to decrease if the severity of the COVID-19 global pandemic continues to decline.

We have received some insurance recovery and are in the process of seeking additional insurance recovery for some of the costs incurred.

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

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.

The following table presents certain incremental costs incurred and expensed, net of insurance recoveries, and the line item in our consolidated statements of operations such amounts are included in, due to the disruptions associated with the COVID-19 global pandemic:

2023 2022 2021

(Amounts in millions)

COVID-19 related charges (benefit) included in:

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Total COVID-19 related charges (benefit) $ (11.5) $ (2.3) $ 70.5

(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.

In fiscal 2021 and 2020, these amounts also included film impairment due to changes in

performance expectations resulting from circumstances associated with the COVID-19 global pandemic.

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

(2) Amounts reflected in distribution and marketing expense primarily consist of contractual marketing spends for film releases and events that have been canceled or delayed and will provide no economic benefit.

(3) 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.

We expect to incur additional incremental costs related to the COVID-19 global pandemic in future periods, especially if there is a continued spread of recent and new variants.

We are in the process of seeking additional insurance recovery for some of the costs already incurred and expect to seek insurance recovery for any additional incremental costs.

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

(1) In the fiscal years ended March 31, 2023 and 2022, insurance recoveries exceeded the incremental costs expensed in the year, resulting in a net benefit included in direct operating expense (insurance recoveries in fiscal 2023, 2022 and 2021 amounted to $14.1 million, $22.1 million and immaterial amounts, respectively).

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

See further discussion in the Results of Operations section below.

The economic impact of the COVID-19 global pandemic and resulting societal changes will depend on numerous evolving factors that cannot be predicted with certainty.

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.

These impacts include the incremental costs and losses presented in the table above, lower revenues from the closure or reopenings of movie theaters and postponement of theatrical releases, partially offset by lower theatrical production and marketing costs, or lower box office revenues from pre-pandemic levels due to shifts in viewing;

increased expenses associated with new health and safety protocols on motion picture and television productions;

changes in the timing of revenues for motion pictures and television productions associated with delays in production, delivery and/or release;

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.

We expect that the ultimate impact of these disruptions, including the extent of any adverse impact on our business, results of operations and financial condition, will depend on, among other things, the duration and spread of the pandemic (including recent and new variants), the impact of governmental regulations that have been, and may continue to be, imposed in response to the pandemic, the effectiveness of actions taken to contain or mitigate the outbreak (including the availability, effectiveness and/or public acceptance of any U.S.

Food and Drug Administration ("FDA")-approved COVID-19 vaccines), and global economic conditions related to the COVID-19 global pandemic.

All of these impacts could place limitations on our ability to execute on our business plan and materially and adversely affect our business, financial condition and results of operations.

We have implemented policies, procedures and protocols to address the situation and expect to continue to adjust our current policies and procedures as more information and guidance become available.

In addition, resurgences of COVID-19, and the discovery and spread of recent and new variants of the virus, may result in the re-imposition of certain restrictions and may lead to more restrictions being implemented again to reduce the spread of COVID-19.

These measures could result in further interruptions to our operations.

Due to the evolving and uncertain nature of this situation, we are not able to estimate the full extent of the impact on our operating results, cash flows and financial position, particularly over the near to medium term.

Our revenues are derived from the Motion Picture, Television Production and Media Networks segments, as described below.

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• Home Entertainment.

packaged media and through digital media platforms (including pay-per-view and video-on-demand platforms, electronic sell through, and digital rental).

Home entertainment revenues are derived from the sale or rental of our film productions and acquired or licensed films and certain television programs (including theatrical and direct-to-video releases) on packaged media and through digital media platforms (including pay-per-view and video-on-demand platforms, electronic sell through, and digital rental).

In addition, we have revenue sharing arrangements with certain digital media platforms which generally provide that, in exchange for a nominal or no upfront sales price, we share in the rental or sales revenues generated by the platform on a title-by-title basis.

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• Starz Networks.

Starz Networks’ revenues are derived from the domestic distribution of our STARZ branded premium subscription video services through over-the-top ("OTT") platforms and U.S.

multichannel video programming distributors (“MVPDs”) including cable operators, satellite television providers and telecommunications companies (collectively, “Distributors”) and on a direct-to-consumer basis through the Starz App.

• STARZPLAY International.

STARZPLAY International revenues are primarily derived from OTT distribution of the Company's STARZ branded premium subscription video services outside of the U.S.

Through March 31, 2021, our Media Networks segment also included revenues derived from Other Streaming Services, which represented revenues derived primarily from our formerly majority owned premium Spanish language streaming services business, Pantaya, which included subscriber based streaming revenue and other distribution revenue.

We sold our interest in Pantaya on March 31, 2021, for approximately $123.6 million in cash.

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

See Note 2 to our consolidated financial statements for further information.

Starz Networks’ revenues are derived from the domestic distribution of our STARZ branded premium subscription video services through over-the-top ("OTT") streaming platforms and distributors, on a direct-to-consumer basis through the Starz App, and through U.S.

multichannel video programming distributors (“MVPDs”)

including cable operators, satellite television providers and telecommunications companies (collectively "Distributors") (in the aggregate, the "Starz Domestic Platform").

• LIONSGATE+.

LIONSGATE+ revenues are primarily derived from OTT distribution of the STARZ branded premium subscription video services outside of the U.S.

The Starz Domestic Platform together with the LIONSGATE+ platforms are referred to as the "Starz Platforms".

Our primary operating expenses include direct operating expenses, distribution and marketing expenses and general and administration expenses.

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General and administration expenses include salaries and other overhead.

Corporate general and administrative expenses include certain corporate executive expense (such as salaries and wages for the office of the Chief Executive Officer, Chief Financial Officer, General Counsel and other corporate officers), investor relations costs, costs of maintaining corporate facilities, and other unallocated common administrative support functions, including corporate accounting, finance and financial reporting, internal and external audit and tax costs, corporate and other legal support functions, and certain information technology and human resources expense.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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In some cases, changes in the accounting estimates are reasonably likely to occur from period to period.

In addition, the evolving and uncertain nature of the COVID-19 global pandemic could materially impact our estimates, particularly those that require consideration of forecasted financial information, in the near to medium term.

Accordingly, actual results could differ materially from our estimates.

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For an episodic television series, the period over which ultimate revenues are estimated cannot exceed ten years following the date of delivery of the first episode, or, if still in production, five years from the date of delivery of the most recent episode, if later.

The initial estimate of ultimate revenue may include estimates of revenues outside of the initial license window (i.e., international, home entertainment and other distribution platforms) and are based on historical experience for similar programs (genre, duration, etc.) based on the estimated number of seasons.

The most sensitive factors affecting our estimate of ultimate revenues for a television series is whether the series will be ordered for a subsequent season and estimates of revenue in secondary markets other than the initial license fee, which may depend on a number of factors, including, among others, the ratings or viewership the program achieves on the customers' platforms.

Ultimates of revenue beyond the initial license fee are generally higher for programs that have been or are expected to be ordered for multiple seasons.

We regularly monitor the performance of each season, and evaluate whether impairment indicators are present (i.e., low ratings, cancellations or the season is not reordered), and based upon our review, we revise our estimates as needed and perform an impairment assessment if impairment indicators are present (see below).

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For films with multiple windows, the license fee is allocated between the windows based upon the proportionate estimated fair value of each window which generally results in the majority of the cost allocated to the first window on newer releases.

Certain license agreements and productions may include additional ancillary rights in addition to the pay television rights.

The cost of the Media Networks’ third-party licensed content and produced content is allocated between the pay television market distributed by the Media Networks’ segment and the ancillary revenue markets (e.g., home video, digital platforms, international television, etc.) based on the estimated relative fair values of these markets.

Our estimates of fair value for the pay television and ancillary markets and windows of exploitation involve uncertainty and management judgment.

Programming costs vary due to the number of airings and cost of our original series, the number of films licensed and the cost per film paid under our output and library programming agreements.

The cost of program rights for films and television programs (including original series) exhibited by the Media Networks segment are generally amortized on an accelerated or straight-line basis based on the historical viewership patterns, anticipated number of exhibitions expected or the license period on a title-by-title or episode-by-episode basis.

While not significant through March 31, 2023, certain license agreements and productions may include additional ancillary rights in addition to the rights for exploitation on the Starz Platforms.

A portion of the cost of these licenses and in some cases the cost of produced content, is allocated between the programming rights for exploitation on the Starz Platforms and investment in film and television programs for exploitation outside of the Starz Platforms in ancillary markets (e.g., home video, digital platforms, television, etc.) based on the relative fair value of those markets.

The estimates of fair value for the allocation between windows of exploitation on the Starz Platform and ancillary markets is based on historical experience of the values of similar titles licensed in subsequent windows and estimates of future revenues in ancillary markets.

Management believes these are reasonably reliable estimates of these values, however, these estimates involve uncertainty and management judgment.

The cost of licensed program rights for films and television programs (including original series) exhibited by the Media Networks segment are generally amortized on a title-by-title or episode-by-episode basis using on an accelerated or straight-line method based on the expected and historical viewership patterns or the current and anticipated number of exhibitions over the license period or estimated life for owned or produced programs.

The number of exhibitions is estimated based on the number of exhibitions allowed in the agreement (if specified) and the expected usage of the content.

Participations and residuals are expensed in line with the amortization of production costs.

Changes in management’s estimate of the anticipated exhibitions and viewership patterns of films and original series on our networks could result in the earlier recognition of our programming costs than anticipated.

Conversely, scheduled exhibitions and expected viewership patterns may not capture the appropriate usage of the program rights in current periods which would lead to the write-off of additional program rights in future periods and may have a significant impact on our future results of operations and our financial position.

Changes in management’s estimate of the anticipated exhibitions and viewership patterns of films and original series on our platforms could result in the earlier recognition of our programming costs than anticipated.

Impairment Assessment.

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Estimate of Fair Value.

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.

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.

For motion pictures intended for theatrical release, the discounted cash flow analysis used in the impairment evaluation prior to theatrical release is subjective and the key inputs include estimates of future anticipated revenues, estimates of box office performance, which may differ from future actual results.

These estimates are based in part on the historical performance of similar films, test audience results when available, information regarding competing film releases, and critic reviews.

As disclosed in Note 3 to the consolidated financial statements, the unamortized balance related to completed and not released and in progress theatrical films was $561.5 million at March 31, 2023.

For television programs, the discounted cash flow analysis used in the impairment evaluation includes key inputs such as estimates of future anticipated revenue, as discussed above.

See further discussion of Valuation Assumptions below.

For content that is predominantly monetized as a group (primarily licensed program rights in the Media Networks segment and internally produced programming, as discussed above), the fair value is determined based on the present value of the discounted cash flows of the group using the lowest level for which identifiable cash flows are independent of other produced and licensed content.

The Company's film groups are generally aligned along the Company's networks and digital content offerings domestically (i.e., Starz Networks and, through March 31, 2021, Other Streaming Services) and by territory or groups of territories internationally, wherein content assets are shared across the various territories and therefore, the territory or group of territories is the film group.

The Company's film groups are generally aligned with the Company's networks and digital content offerings domestically (i.e., Starz Networks) and internationally by territory or groups of territories, where content assets are shared across the various territories.

Content removed from the service and abandoned is written down to its fair value, if any, determined using a discounted cash flow approach.

In fiscal 2023, 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).

As a result of these restructuring initiatives, we recorded content impairment charges related to the Media Networks segment in fiscal 2023 of $379.3 million.

These charges are included in restructuring and other in the consolidated statement of operations (see Note 3 and Note 15 to our 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 10 to our consolidated financial statements).

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

The 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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Our Motion Picture and Television Production segments generate revenue principally from the licensing of content in domestic theatrical exhibition, home entertainment (e.g., digital media and packaged media), television, and international market places.

Our Media Networks segment generates revenue primarily from the distribution of our STARZ branded premium subscription video services and, through March 31, 2021, from our formerly majority owned premium Spanish language streaming services business, Pantaya, which includes subscriber based streaming revenue and other distribution revenue.

Our Media Networks segment generates revenue primarily from the distribution of our STARZ premium subscription video services and, through March 31, 2021, from our formerly majority owned premium Spanish language streaming services business, Pantaya, which includes subscriber based streaming revenue and other distribution revenue.

We sold our interest in Pantaya on March 31, 2021, see Note 2 to our consolidated financial statements for further information.

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Revenue from the sale of physical discs (DVDs, Blu-ray or 4K Ultra HD), referred to as "Packaged Media", in the retail market, net of an allowance for estimated returns and other allowances, is recognized on the later of receipt by the customer or “street date” (when it is available for sale by the customer).

We estimate reserves for Packaged Media returns based on previous returns experience, point-of-sale data available from certain retailers, current economic trends, and projected future sales of the title to the consumer based on the actual performance of similar titles on a title-by-title basis in each of the Packaged Media businesses.

Factors affecting actual returns include, among other factors, limited retail shelf space at various times of the year, success of advertising or other sales promotions, and the near term release of competing titles.

We believe that our estimates have been materially accurate in the past;

however, due to the judgment involved in establishing reserves, we may have adjustments to our historical estimates in the future.

Our estimate of future returns affects reported revenue and operating income.

If we underestimate the impact of future returns in a particular period, then we may record less revenue in later periods when returns exceed the estimated amounts.

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.

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 $1.7 million, $2.0 million and $3.6 million on our total revenue in the fiscal years ended March 31, 2022, 2021, and 2020, respectively.

Revenue from commissions are recognized as such services are provided.

Media Networks revenues may be based on a fixed fee, subject to nominal annual escalations, or a variable fee (i.e., a fee based on number of subscribers who receive our networks or other factors).

Media Networks programming revenue is recognized over the contract term based on the continuous delivery of the content to the distributor.

The variable distribution fee arrangements represent sales or usage based royalties and are recognized over the period of such sales or usage by the Company's distributor, which is the same period that the content is provided to the distributor.

Media Networks revenues may be based on a variable fee (i.e., a fee based on number of subscribers who receive our networks or other subscriber based factors) or to a lesser extent, may be based on a monthly fixed fee or minimum guarantee, subject to nominal annual escalations.

Media Networks revenue is also generated through the distribution of our SVOD service directly to consumer through the Starz App.

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.

Media Networks fixed fee or minimum guarantee programming revenue is recognized over the contract term based on the continuous delivery of the content to the distributor.

Subscribers through the Starz App are billed in advance of the start of their monthly or annual membership and revenues are recognized ratably over each applicable membership period.

Payments to distributors for marketing support costs for which Starz receives a discrete benefit are recorded as distribution and marketing costs, and payments to distributors for which Starz receives no discrete benefit are recorded as a reduction of revenue.

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Components are aggregated into a single reporting unit if they share similar economic characteristics.

Our reporting units for purposes of goodwill impairment testing, along with their respective goodwill balances at March 31, 2022, were Motion Picture (goodwill of $394 million), Media Networks (goodwill of $1.97 billion), and our Television (goodwill of $309 million) and Talent Management (goodwill of $93 million) businesses, both of which are part of our Television Production segment.

Our reporting units for purposes of goodwill impairment testing, along with their respective goodwill balances at March 31, 2023, 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 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 results of these valuation methodologies are weighted as to their relative importance and a single fair value is determined.

The fair value of our reporting units is reconciled to the market value of our equity, determined based on

the average prices of our common shares just prior to the period end.

The fair value of our reporting units is reconciled to the market value of our equity, determined based on the average prices of our common shares just prior to the period end.

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors.

As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual or interim goodwill impairment tests will prove to be an accurate prediction of the future.

Goodwill Impairment Assessment:

For our annual goodwill impairment test for fiscal 2021, due to the increase in the market price of our common shares since our most recent previous quantitative impairment assessment at March 31, 2020, the performance of the Television and Media Networks reporting units in fiscal 2021, and the improvement of overall economic conditions associated with the COVID-19 pandemic as compared to fiscal 2020, we performed a qualitative assessment for all reporting units.

This assessment included consideration of, but not limited to, the results of our most recent quantitative impairment test, consideration of macroeconomic conditions, industry and market conditions, performance and current and projected cash flows of our reporting units, and changes in our share price.

Based upon our qualitative assessment, we concluded that it was more-likely-than-not that the fair value of our reporting units was greater than their carrying value.

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

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

Goodwill Impairment Assessments:

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

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

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

We evaluated the sensitivity of our most critical assumptions used in the fair value analysis of our Media Networks reporting unit, including the discount rate, perpetual nominal growth rate and annual revenue growth rates.

For our Media Networks reporting unit, we determined that an increase in the discount rate of up to 0.7% or a reduction of the perpetual nominal growth rate of up to 1.4% would not have impacted the test results, assuming no changes to other factors.

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

In fiscal 2023, 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.

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.

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.

The analysis resulted in a goodwill impairment charge of $1.475 billion in 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 consolidated statement of operations (see Note 6 to the consolidated financial statements).

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.

For our annual goodwill impairment test for fiscal 2023, we performed a qualitative goodwill impairment assessment for all our reporting units.

Our qualitative assessment considered the increase in the market price of the Company’s common shares from September 30, 2022, the recent performance of the Company’s reporting units, and updated forecasts of performance and cash flows, as well as the continuing micro and macroeconomic environment, and industry considerations, and determined that since the quantitative assessment performed in the quarter ended September 30, 2022, 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;

therefore, a quantitative goodwill impairment analysis was not required.

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.

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

Examples of events or circumstances that could result in changes to the underlying key assumptions and judgments used in our goodwill impairment tests, and ultimately impact the estimated fair value of our reporting units may include the duration of the COVID-19 global pandemic, its impact on the global economy and the creation and consumption of our content;

adverse macroeconomic conditions;

continued and increasingly adverse macroeconomic conditions related to higher inflation and interest rates and currency rate fluctuations, and the impact on the global economy from Russia's invasion of Ukraine;

volatility in the equity and debt markets which could result in higher weighted-average cost of capital;

capital market transactions;

the commercial success of our television programming and motion pictures;

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our subscriber growth rates domestically and internationally across our traditional and OTT platforms and changes in consumer behavior.

While historical performance and current expectations have resulted in fair values of our reporting units in excess of carrying values, if our assumptions are not realized, it is possible that an impairment charge may need to be recorded in the future.

If our assumptions are not realized, it is possible that additional impairment charges may need to be recorded in the future.

Indefinite-Lived Intangibles Other Than Goodwill Impairment Assessment:

For fiscal 2022, we performed a qualitative impairment assessment of our indefinite-lived trade names.

For fiscal 2023, 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 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.

During the fourth quarter ended March 31, 2023, for our annual impairment assessment, since the indefinite-lived intangible asset was not considered at risk for impairment when quantitatively tested at September 30, 2022, we performed a qualitative impairment assessment of our indefinite-lived trade names.

Based on the qualitative impairment assessment of our trade names, we concluded that it is more-likely-than-not 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.

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MVPDs, including cable operators, satellite television providers and telecommunications companies ("Traditional Affiliate"), which amounted to $1.04 billion.

The amount of our customer relationship asset related to these Traditional Affiliate

relationships reflects the estimated fair value of these customer relationships determined in connection with the acquisition of Starz on December 8, 2016, net of amortization recorded since the date of the Starz acquisition.

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

The amount of our customer relationship asset related to these Traditional Affiliate relationships reflects the estimated fair value of these customer relationships determined in connection with the acquisition of Starz on December 8, 2016, net of amortization recorded since the date of the Starz acquisition.

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

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.

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The following table sets forth our consolidated results of operations for the fiscal years ended March 31, 2023 and 2022.

The Media Networks segment results of operations for the fiscal year ended March 31, 2021 included our formerly majority owned premium Spanish language streaming services business, Pantaya (representing substantially all of Other Streaming Services).

We sold our interest in Pantaya on March 31, 2021.

See Note 2 to our consolidated financial statements for further information.

March 31, Increase (Decrease)

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Depreciation and amortization 180.3 177.9 2.4 1.3 %

Restructuring and other 16.8 24.7 (7.9) (32.0) %

Gain on sale of Pantaya — (44.1) 44.1 n/a

Restructuring and other 411.9 16.8 395.1 nm

Goodwill impairment 1,475.0 — 1,475.0 n/a

Total expenses 5,712.5 3,595.3 2,117.2 58.9 %

Operating income 9.0 170.6 (161.6) (94.7) %

Operating income (loss) (1,857.7) 9.0 (1,866.7) nm

Interest expense (221.2) (176.0) (45.2) 25.7 %

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Other expense (26.9) (10.9) (16.0) 146.8 %

Loss on extinguishment of debt (28.2) — (28.2) n/a

Gain on investments 1.3 0.5 0.8 160.0 %

Equity interests loss (3.0) (6.1) 3.1 (50.8) %

Gain (loss) on extinguishment of debt 57.4 (28.2) 85.6 n/a

Gain on investments 44.0 1.3 42.7 nm

Equity interests income (loss) 0.5 (3.0) 3.5 (116.7) %

Loss before income taxes (1,997.5) (177.0) (1,820.5) nm

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nm - Percentage not meaningful.

Consolidated revenues increased $332.8 million in fiscal 2022 reflecting an increase of $803.4 million from our Studio Business, offset by a decrease of $26.5 million from our Media Networks 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.

Motion Picture revenue increased $104.2 million in fiscal 2022 due to a greater number of theatrical and international releases as theaters have reopened, increased television revenue, and increased digital media home entertainment revenue.

These increases were offset partially by lower packaged media home entertainment revenue and other revenue.

Consolidated revenues increased $250.5 million in fiscal 2023 reflecting an increase of $367.5 million from our Studio Business, offset by increased intersegment eliminations of $127.3 million.

Intersegment eliminations relate to the licensing of product from our Studio Business (primarily our Television Production segment) to the Media Networks segment.

Motion Picture revenue increased $138.4 million in fiscal 2023 due to higher international, theatrical, digital media home entertainment, and other revenue, partially offset by lower packaged media home entertainment and television revenue.

Motion Picture revenue included $44.2 million of revenue from licensing Motion Picture segment product to the Media Networks segment, representing an increase of $6.2 million from fiscal 2022.

Television Production revenue increased $699.2 million due to increased intersegment revenues from the licensing of Starz original series, and a greater number of television episodes delivered to third-parties as compared to fiscal 2021, which was negatively impacted by the pausing of productions associated with the COVID-19 global pandemic.

Television Production revenue increased $229.1 million due to increased digital home entertainment revenue, increased domestic television revenue from greater intersegment revenues from the licensing of Starz original series, and increased international and other revenue.

Television Production revenue included $731.3 million of revenue from licensing Television Production segment product to our Media Networks segment, representing an increase of $121.1 million from fiscal 2022.

The increases in Television Production and Motion Picture revenue were partially offset by increased intersegment eliminations primarily associated with higher Television Production revenues for licenses of original series to Starz Networks and STARZPLAY International, both in the Media Networks segment.

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.

Media Networks revenue increased $10.3 million reflecting increased revenue at LIONSGATE+ of $43.4 million, partially offset by a decrease of $33.1 million at Starz Networks.

See further discussion in the Segment Results of Operations section below.

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Media Networks 846.8 54.8 747.9 48.7 98.9 13.2 %

COVID-19 related charges (3.6) nm 50.6 nm (54.2) n/a

COVID-19 related charges (benefit) (11.6) nm (3.6) nm (8.0) 222.2 %

Other 9.4 nm 44.4 nm (35.0) nm

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nm - Percentage not meaningful.

Direct operating expenses increased in fiscal 2022, due to higher Television Production and Motion Picture revenue, and higher Media Networks direct operating expense and other direct operating expense (as further described below), partially offset by lower COVID-19 related charges (as further described below).

The increase in Television Production direct operating expense was partially offset by the increase in intersegment eliminations, which primarily relate to Television Production direct operating expense associated with licenses of original series to Starz Networks and STARZPLAY International, both in the Media Networks segment.

The increase in Media Networks direct operating expense was driven by increases at STARZPLAY International of $52.1 million and at Starz Networks of $30.1 million.

Direct operating expenses increased in fiscal 2023, due to higher direct operating expenses of our Studio Business and the Media Networks segment, partially offset by higher intersegment eliminations and lower other direct operating expense and a slight increase in COVID-19 related benefit resulting from insurance recoveries, as described below.

The increase at the Studio Business reflects higher direct operating expenses of the Television Production segment and Motion Picture segment due to higher revenues of the Television Production and Motion Picture segments, respectively.

The increase in Media Networks direct operating expense was driven by increases at Starz Networks of $88.7 million and LIONSGATE+ of $10.2 million due to higher programming cost amortization, and foreign exchange losses 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.

See further discussion in the Segment Results of Operations section below.

COVID-19 Related Charges.

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 and included in consolidated direct operating expense and excluded from segment direct operating expense.

In fiscal 2022, direct operating expense included a benefit of $3.6 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.

In fiscal 2021, the charges of $50.6 million include incremental costs associated with film impairment due to changes in performance expectations, 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.

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 recent and new variants.

We are in the process of seeking additional insurance recovery for some of the costs already incurred and expect to seek insurance recovery for any additional incremental costs.

COVID-19 Related Charges (Benefit).

As discussed previously, we incurred certain incremental costs associated with the COVID-19 global pandemic.

In fiscal 2023, direct operating expense included a benefit of $11.6 million representing insurance recoveries of $14.1 million which exceeded the 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 (fiscal 2022 - benefit of $3.6 million, net of insurance recoveries of $22.1 million).

We may incur additional incremental costs for direct operating expenses related to the COVID-19 global pandemic in future periods, however, such costs are declining and are expected to decline if the severity of the COVID-19

global pandemic continues to decline.

We are in the process of seeking additional insurance recovery for some of the costs incurred.

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

In the fourth quarter of the fiscal year ended March 31, 2022, we performed a strategic review of original programming on the STARZ platform, which identified certain titles with limited viewership or strategic purpose which were removed from the STARZ service and abandoned by the Media Networks segment.

As a result, we recorded certain programming and content charges of $36.9 million in fiscal 2022, which 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.

Other direct operating expenses in the table above also includes $5.9 million representing charges related to Russia's invasion of Ukraine, primarily related to bad debt reserves for accounts receivable from customers in Russia, which are excluded from segment operating results but included in direct operating expense in the consolidated statements of operations.

In addition, the remaining amounts of "other" direct operating expenses in the table above consists of 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.

In fiscal 2023, other direct operating expenses includes approximately $7.2 million in development costs written off in connection with certain management changes and changes in the theatrical marketplace in the Motion Picture segment, as a result of changes in strategy across its theatrical slate.

In fiscal 2022, other direct operating expenses includes certain programming and content charges of $36.9 million, as a result of a strategic review of original programming on the STARZ platform, which identified certain titles with limited viewership or strategic purpose which were removed from the STARZ service and abandoned by the Media Networks segment.

Other direct operating expenses in fiscal 2022 also includes $5.9 million representing charges related to Russia's invasion of Ukraine, primarily related to bad debt reserves for accounts receivable from customers in Russia.

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.

In addition, the remaining amounts of "other" direct operating expense in the table above consists of 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.

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Media Networks 496.5 545.1 (48.6) (8.9) %

COVID-19 related charges 0.2 16.9 (16.7) n/a

COVID-19 related charges — 0.2 (0.2) (100.0) %

Other 0.7 0.5 0.2 40.0 %

Intersegment eliminations 0.3 — 0.3 n/a

$ 801.7 $ 861.0 $ (59.3) (6.9) %

theatrical P&A and Premium VOD expense included in Motion Picture distribution and marketing expense $ 149.8 $ 153.3 $ (3.5) (2.3) %

Distribution and marketing expenses increased in fiscal 2022 due to increased Motion Picture and Media Networks distribution and marketing expense.

The increase in Motion Picture distribution and marketing expense is due to increased theatrical P&A related to more theatrical releases in fiscal 2022 as compared to fiscal 2021 due to the opening of theaters and completion of productions.

The increase in Media Networks distribution and marketing expense was due to an increase at Starz Networks of $74.1 million due to increased spend on our Starz Originals and to drive growth in subscriptions and an increase in operating expense related to continued growth in the OTT service, and to a lesser extent, an increase at STARZPLAY International of $9.0 million, partially offset by a decrease of $39.8 million due to the sale of Pantaya on March 31, 2021.

Distribution and marketing expenses decreased in fiscal 2023 due to lower Media Networks and Studio Business distribution and marketing expense.

The decrease at the Studio Business reflects lower Motion Picture home entertainment distribution and marketing expense and slightly lower Motion Picture theatrical P&A and Premium VOD expense.

The decrease in Media Networks distribution and marketing expense was due to a decrease at Starz Networks of $25.5 million due to lower overall spend for advertising purchased in fiscal 2023 and lower media spend for our Starz Originals' premieres, and a decrease at LIONSGATE+ of $23.1 million primarily due to a decrease in direct response advertising in connection with the exited territories.

See further discussion in the Segment Results of Operations section below.

In connection with the disruptions associated with the COVID-19 global pandemic and measures to prevent its spread and mitigate its effects both domestically and internationally, and the related economic disruption, during fiscal 2022 and 2021, we incurred $0.2 million and $16.9 million, respectively, in costs primarily related to contractual marketing spends for film releases and events that have been canceled or delayed and thus will provide no economic benefit.

These charges are excluded from segment operating results.

We may incur additional incremental costs for distribution and marketing expenses in future periods, depending on if there is a continued spread of recent and new variants.

General and Administrative Expenses.

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Corporate 122.9 97.1 25.8 26.6 %

318.4 8.8% 356.5 10.9% (38.1) (10.7) %

Share-based compensation expense 95.4 98.3 (2.9) (3.0) %

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Total general and administrative expenses $ 531.1 13.8% $ 475.4 13.2% $ 55.7 11.7 %

General and administrative expenses decreased in fiscal 2022, resulting from decreased Corporate, Motion Picture, Television Production and Media Networks general and administrative expenses, partially offset by increases in share-based compensation expense and purchase accounting and related adjustments.

General and administrative expenses increased in fiscal 2023, resulting from increases in corporate, Studio Business and Media Networks general and administrative expenses, partially offset by decreased share-based compensation expense and purchase accounting and related adjustments.

See further discussion in the Segment Results of Operations section below.

Corporate general and administrative expenses decreased $16.6 million, or 14.6%, primarily due to a decrease in incentive based compensation.

The increase in share-based compensation expense included in general and administrative expense in the fiscal year ended March 31, 2022, as compared to the fiscal year ended March 31, 2021 is primarily due to an increase in the number of share-based payment awards incurring expense in fiscal 2022 as compared to fiscal 2021.

Corporate general and administrative expenses increased $25.8 million, or 26.6%, primarily due to an increase in incentive based compensation.

Share-based compensation expense included in general and administrative expense in the fiscal year ended March 31, 2023 was comparable to the fiscal year ended March 31, 2022.

The following table presents share-based compensation expense by financial statement line item:

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(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.

Purchase accounting and related adjustments increased $11.5 million, or 24.4%, primarily due to the expense associated with the earned distributions related to 3 Arts Entertainment.

(1) Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of vesting schedules for equity awards pursuant to certain severance arrangements.

Purchase accounting and related adjustments include the non-cash charge for the accretion of the noncontrolling interest discount related to Pilgrim Media Group and 3 Arts Entertainment, the non-cash charge for the amortization of the recoupable portion of the purchase price and the expense associated with the noncontrolling equity interests in the distributable earnings related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense.

The noncontrolling equity interest in the distributable earnings of 3 Arts Entertainment are reflected as an expense rather than noncontrolling interest in the consolidated statement of operations due to the relationship to continued employment.

Purchase accounting and related adjustments decreased $4.0 million, or 6.8%, due to lower noncontrolling interest discount amortization of $9.4 million, partially offset by increased noncontrolling equity interest in the distributable earnings of 3 Arts Entertainment of $5.4 million (see further detail in the reconciliation of operating income (loss) to total segment profit further below).

Depreciation and Amortization Expense.

Depreciation and amortization of $177.9 million for fiscal 2022 decreased $10.6 million from $188.5 million in fiscal 2021 due to lower amortization expense related to our customer relationship intangible assets.

Depreciation and amortization of $180.3 million for fiscal 2023 increased $2.4 million from $177.9 million in fiscal 2022.

Restructuring and Other.

Restructuring and other decreased $7.9 million in fiscal 2022 as compared to fiscal 2021, and includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable.

Restructuring and other costs were as follows for the fiscal year ended March 31, 2022 and 2021 (see Note 15 to our consolidated financial statements):

Restructuring and other increased $395.1 million in fiscal 2023 as compared to fiscal 2022, and includes restructuring and severance costs, certain transaction and other costs, and certain unusual items, when applicable.

Restructuring and other costs were as follows for the fiscal years ended March 31, 2023 and 2022 (see Note 15 to our consolidated financial statements):

Year Ended March 31, Increase (Decrease)

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Restructuring and other:

Content and other impairment (1)

$ 385.2 $ — $ 385.2 n/a

Severance (2)

Cash 18.0 $ 4.6 13.4 291.3 %

Accelerated vesting on equity awards (see Note 13 to our consolidated financial statements) — 3.5 (3.5) nm

Accelerated vesting on equity awards (see Note 13 to our consolidated financial statements) 4.2 — 4.2 n/a

Total severance costs 22.2 4.6 17.6 382.6 %

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0.1 1.1 (1.0) (90.9) %

Transaction and related costs (3)

11.1 3.4 7.7 226.5 %

Transaction and other costs (4)

4.4 11.1 (6.7) (60.4) %

$ 411.9 $ 16.8 $ 395.1 nm

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nm - Percentage not meaningful.

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

(1) Media Networks Goodwill Impairment and Restructuring:

As previously discussed in the "Overview" section above, in fiscal 2023, in 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).

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.

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 1 to our consolidated financial statements.

During 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.

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 fiscal 2023 of $379.3 million.

We are substantially complete with executing our LIONSGATE+ restructuring plan including exiting the territories discussed above, negotiating certain content related contractual commitments and performing our strategic review of content performance for consideration of removal from our various platforms.

As of March 31, 2023, a portion of the territories had been exited, with the remaining territories fully exited in May 2023.

We estimate we will incur additional charges ranging from approximately $20 million to $50 million related to certain contractual content commitments or programming content impairment charges, among other items, as we fully implement the plan.

Of the content impairment charges recorded in fiscal 2023, approximately $90 million reflects the future cash to be paid for the remaining amounts payable for this content.

As we continue to fully implement the plan, including further strategic review of content performance, we may incur additional content impairment charges beyond these estimates.

We expect the restructuring plan to be substantially completed by June 30, 2023, however, certain settlements of contractual commitments could extend beyond that date.

Other Impairments:

Amounts in the fiscal year ended March 31, 2023 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.

(2) Severance costs in the fiscal years ended March 31, 2023 and 2022 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.

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

Gain on Sale of Pantaya.

Gain on sale of Pantaya of $44.1 million for fiscal 2021 represents the gain before income taxes on the sale of the Company's former 75% majority interest in Pantaya on March 31, 2021.

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

Pantaya was previously reflected in the Company's Media Networks segment (see the Segment Results of Operations section below).

See Note 2 to our consolidated financial statements.

(4) Transaction and other costs in the fiscal years ended March 31, 2023 and 2022 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.

In fiscal 2023, these amounts include a benefit of $11.0 million for a settlement of a legal matter related to the Media Networks segment.

Goodwill Impairment.

Goodwill impairment of $1.475 billion for the fiscal year ended March 31, 2023 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 6 to our consolidated financial statements).

There was no comparable charge in the fiscal year ended March 31, 2022.

Interest Expense.

Interest expense of $176.0 million in fiscal 2022 decreased $5.5 million from fiscal 2021 due to a lower average interest rate on the Senior Notes in fiscal 2022, and lower average balances on the term loans due to repurchases of the Term Loan B in fiscal 2022 and required repayments.

These decreases were partially offset by an increase in other non-cash interest due to the amortization of unrealized losses in accumulated other comprehensive loss related to de-designated interest rate swaps which are being amortized to interest expense (see Note 18 to our consolidated financial statements).

Interest expense of $221.2 million in fiscal 2023 increased $45.2 million from fiscal 2022 due to higher average interest rates and balances on the revolving credit facility, higher average interest rates on the term loans, and higher average balances and interest rates associated with film related obligations in fiscal 2023.

These increases were partially offset by a decrease due to the amortization of unrealized gains in accumulated other comprehensive income (loss) related to the termination of certain of our interest rate swaps on May 20, 2022 (see Note 18 to our consolidated financial statements).

The following table sets forth the components of interest expense for the fiscal years ended March 31, 2023 and 2022:

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Senior Notes 51.8 54.8

Amortization of financing costs and other non-cash interest (2)

Amortization of debt issuance costs and other non-cash interest (2)

Total interest expense $ 221.2 $ 176.0

______________________

(1) Amounts include payments associated with the Company's interest rate swaps (see Note 18 to our consolidated financial statements).

(1) Amounts include payments and receipts associated with the Company's interest rate swaps (see Note 18 to our consolidated financial statements) and interest payments associated with certain film related obligations (Production Tax Credit Facility, IP Credit Facility, Backlog Facility and other, see Note 8 to our consolidated financial statements).

The increase in other interest expense primarily reflects an increase of $55.0 million related to film related obligations, partially offset by a $19.4 million benefit related to the Company's interest rate swaps.

(2) Amounts include the amortization of unrealized losses in accumulated other comprehensive loss related to de-designated interest rate swaps which are being amortized to interest expense (see Note 18 to our consolidated financial statements).

Interest and Other Income.

Interest and other income of $30.8 million for the fiscal year ended March 31, 2022 compared to interest and other income of $5.8 million for the fiscal year ended March 31, 2021, due to insurance recoveries on prior shareholder litigation of $22.7 million in fiscal 2022 and other gains (see Note 17 to our consolidated financial statements).

Interest and other income of $6.4 million for the fiscal year ended March 31, 2023 compared to interest and other income of $30.8 million for the fiscal year ended March 31, 2022, due to insurance recoveries on prior shareholder litigation of $22.7 million in fiscal 2022 (see Note 17 to our consolidated financial statements).

Other Expense.

Other expense of $26.9 million for fiscal 2023 compared to other expense of $10.9 million for fiscal 2022, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 19 to our consolidated financial statements).

Loss on Extinguishment of Debt.

Loss on extinguishment of debt of $28.2 million for fiscal 2022 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.

There was no comparable loss in fiscal 2021.

Gain (Loss) on Extinguishment of Debt.

Gain on extinguishment of debt of $57.4 million for fiscal 2023 represented a gain associated with the repurchase of $200.0 million principal amount of 5.500% Senior Notes at a discount, 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 repurchases of the 5.500% Senior Notes.

In fiscal 2022, the loss on extinguishment of debt of $28.2 million was 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 7 to our consolidated financial statements.

Gain on Investments.

Gain on investments of $1.3 million for fiscal 2022 compared to a gain on investments of $0.5 million for fiscal 2021.

Equity Interests Loss.

Equity interests loss of $3.0 million in fiscal 2022 compared to equity interests loss of $6.1 million in fiscal 2021 due to lower losses from our equity method investees.

Gain on investments of $44.0 million for fiscal 2023 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 $1.3 million for fiscal 2022.

Equity Interests Income (Loss).

Equity interests income of $0.5 million in fiscal 2023 compared to equity interests loss of $3.0 million in fiscal 2022.

Income Tax Provision.

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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.

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

Our income tax provision for fiscal 2021 was also impacted by an interest accrual on uncertain tax benefits, and release of uncertain tax benefits due to the expiration of statutory limitations and settlements with tax authorities.

Our income tax provision for fiscal 2023 and fiscal 2022 was also impacted by charges for interest on uncertain tax benefits and additional uncertain tax benefits related to state income taxes identified during state tax audits, and benefited from the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.

At March 31, 2023, we had U.S.

net operating loss carryforwards of approximately $1,602.2 million available to reduce future federal income taxes which expire beginning in 2029 through 2042, state net operating loss carryforwards of approximately $910.6 million available to reduce future state income taxes which expire in varying amounts beginning 2023, Canadian loss carryforwards of $3.9 million which will expire beginning in 2028, Luxembourg loss carryforwards of $413.0 million which will expire beginning in 2036, and other foreign jurisdiction loss carryforwards of $12.8 million which will expire beginning in 2028.

net operating loss carryforwards of approximately $1,561.5 million available to reduce future federal income taxes, certain of which expire beginning in 2037 through 2042, state net operating loss carryforwards of approximately $988.2 million available to reduce future state income taxes which expire in varying amounts beginning 2024, Canadian loss carryforwards of $2.5 million which will expire beginning in 2030, Luxembourg loss carryforwards of $235.1 million which will expire beginning in 2036, and other foreign jurisdiction loss carryforwards of $18.1 million which will expire beginning in 2028.

In addition, at March 31, 2023, we had U.S.

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This compares to net loss attributable to our shareholders for the fiscal year ended March 31, 2022 of $188.2 million, or basic and diluted net loss per common share of $0.84 on 224.1 million weighted average common shares outstanding.

Segment Results of Operations

The segment results of operations presented below do not include the elimination of intersegment transactions which are eliminated when presenting consolidated results, and exclude items separately identified in the restructuring and other line item in the consolidated statements of operations.

Segment Results of Operations and Non-GAAP Measures

The Company's primary measure of segment performance is segment profit.

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

Segment profit excludes, when applicable, corporate general and administrative expense, restructuring and other costs, share-based compensation, certain programming and content charges as a result of changes in management and/or programming and content strategy, certain charges related to the COVID-19 global pandemic, charges resulting from Russia's invasion of Ukraine, and purchase accounting and related adjustments.

The Company believes the presentation of segment profit is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by the Company's management and enables them to understand the fundamental performance of the Company's businesses.

The reconciliation of segment profit to the Company's consolidated loss before income taxes is presented in Note 16 to the consolidated financial statements.

Segment Presentation

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

The table below sets forth the revenues, gross contribution and segment profit of our collective Studio Business and Media Networks segment.

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

Total segment profit represents the sum of segment profit for our individual segments, net of eliminations for intersegment transactions.

Segment profit and total segment profit excludes, when applicable, corporate general and administrative expense, restructuring and other costs, share-based compensation, certain programming and content charges as a result of changes in management and/or programming and content strategy, certain charges related to the COVID-19 global pandemic, charges resulting from Russia's invasion of Ukraine, and purchase accounting and related adjustments.

Segment profit is a GAAP financial measure and is disclosed in Note 16 to our consolidated financial statements.

We also present below our total segment profit for all of our segments and the sum of our Motion Picture and Television Production segment profit as our "Studio Business" segment profit.

Total segment profit and Studio Business segment profit,

when presented outside of the segment information and reconciliations included in Note 16 to our consolidated financial statements, is considered a non-GAAP financial measure, and should be considered in addition to, not as a substitute for, or superior to, measures of financial performance prepared in accordance with United States GAAP.

We use this non-GAAP measure, among other measures, to evaluate the aggregate operating performance of our business.

The Company believes the presentation of total segment profit and Studio Business segment profit is relevant and useful for investors because it allows investors to view total segment performance in a manner similar to the primary method used by the Company's management and enables them to understand the fundamental performance of the Company's businesses before non-operating items.

Total segment profit and Studio Business segment profit is considered an important measure of the Company’s performance because it reflects the aggregate profit contribution from the Company's segments, both in total and for the Studio Business and represents a measure, consistent with our segment profit, that eliminates amounts that, in management’s opinion, do not necessarily reflect the fundamental performance of the Company’s businesses, are infrequent in occurrence, and in some cases are non-cash expenses.

Not all companies calculate segment profit or total segment profit in the same manner, and segment profit and total segment profit as defined by the Company may not be comparable to similarly titled measures presented by other companies due to differences in the methods of calculation and excluded items.

The following table reconciles the GAAP measure, operating income (loss), to the non-GAAP measure, total segment profit, for the fiscal years ended March 31, 2023 and 2022.

In addition, each of segment direct operating expense, distribution and marketing expense and general and administrative expense is reconciled to the respective line items presented in the GAAP-based statement of operations in the preceding section of the Management's Discussion and Analysis of Financial Condition and Results of Operations which discusses consolidated results of operations.

March 31, Increase (Decrease)

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(Amounts in millions)

Studio Business

Motion Picture $ 1,185.3 $ 1,081.1 $ 104.2 9.6 %

Television Production 1,531.0 831.8 699.2 84.1 %

Total Studio Business $ 2,716.3 $ 1,912.9 $ 803.4 42.0 %

Media Networks 1,536.2 1,562.7 (26.5) (1.7) %

Intersegment eliminations (648.2) (204.1) (444.1) 217.6 %

Operating income (loss) $ (1,857.7) $ 9.0 $ (1,866.7) nm

Corporate general and administrative expenses 122.9 97.1 25.8 26.6 %

Goodwill impairment 1,475.0 — 1,475.0 n/a

Adjusted depreciation and amortization (1)

40.2 43.0 (2.8) (6.5) %

Gross Contribution

Restructuring and other 411.9 16.8 395.1 nm

COVID-19 related charges (benefit) (2)

(11.6) (3.4) (8.2) 241.2 %

Programming and content charges (2)

7.0 36.9 (29.9) (81.0) %

Charges related to Russia's invasion of Ukraine (3)

— 5.9 (5.9) (100.0) %

Adjusted share-based compensation expense (4)

97.8 100.0 (2.2) (2.2) %

Purchase accounting and related adjustments (5)

195.5 194.0 1.5 0.8 %

Total segment profit $ 481.0 $ 499.3 $ (18.3) (3.7) %

_______________________

nm - Percentage not meaningful.

(1) Adjusted depreciation and amortization represents depreciation and amortization as presented on our consolidated statements of operations less the depreciation and amortization related to the non-cash fair value adjustments to property and equipment and intangible assets acquired in recent acquisitions which are included in the purchase accounting and related adjustments line item above, as shown in the table below:

(Amounts in millions)

Depreciation and amortization $ 180.3 $ 177.9

Amount included in purchase accounting and related adjustments (140.1) (134.9)

Adjusted depreciation and amortization $ 40.2 $ 43.0

(2) COVID-19 related charges (benefit) represent the incremental costs included in direct operating expense and distribution and marketing expense resulting from circumstances associated with the COVID-19 global pandemic, net of insurance recoveries.

Programming and content charges represent certain charges included in direct operating expense in the

consolidated statements of operations, and excluded from segment operating results (see Note 3 and Note 15 to our consolidated financial statements for further information).

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

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

(Amounts in millions)

Total share-based compensation expense $ 102.0 $ 100.0

Amount included in restructuring and other (i)

Adjusted share-based compensation $ 97.8 $ 100.0

(i) 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.

(5) Purchase accounting and related adjustments primarily represent the amortization of non-cash fair value adjustments to certain assets acquired in recent acquisitions.

The following sets forth the amounts included in each line item in the financial statements:

(Amounts in millions)

Purchase accounting and related adjustments:

Direct operating $ 0.7 $ 0.4

General and administrative expense (i)

Depreciation and amortization 140.1 134.9

$ 195.5 $ 194.0

(i) These adjustments include the non-cash charge for the accretion of the noncontrolling interest discount related to Pilgrim Media Group and 3 Arts Entertainment, the non-cash charge for the amortization of the recoupable portion of the purchase price and the expense associated with the noncontrolling equity interests in the distributable earnings related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense, as presented in the table below.

(Amounts in millions)

Amortization of recoupable portion of the purchase price $ 7.7 $ 7.7

Noncontrolling interest discount amortization 13.2 22.7

Noncontrolling equity interest in distributable earnings 33.8 28.3

$ 54.7 $ 58.7

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

The table below sets forth the revenues and segment profit of our collective Studio Business and Media Networks segment.

March 31, Increase (Decrease)

2023 2022 Amount Percent

(Amounts in millions)

Studio Business

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Media Networks 106.8 155.2 (48.4) (31.2) %

Intersegment eliminations (2.7) (14.1) 11.4 (80.9) %

Intersegment eliminations (35.7) (2.7) (33.0) nm

Total Segment Profit $ 481.0 $ 499.3 $ (18.3) (3.7) %

_______________________

nm - Percentage not meaningful.

See the following discussion for further detail of our individual segments.

The segment results of operations presented below do not include the elimination of intersegment transactions which are eliminated when presenting consolidated results.

Motion Picture

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Year Ended March 31,

2022 2021 (1)

2023 2022 Total Increase (Decrease)

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____________________

(1) During the quarter ended March 31, 2022, we changed the presentation of the categories in the table above to "Lionsgate Original Releases" and "Other Film", and changed the definitions of these categories as described further below, in order to be consistent with how management is now reviewing the Motion Picture segment.

Through December 31, 2021, we had previously presented a "Feature Film" and "Other Film" category.

Accordingly, amounts presented in the table above for fiscal 2021 have been conformed to the current fiscal year presentation.

(1) Lionsgate Original Releases:

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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.

Theatrical revenue increased $53.3 million in fiscal 2022, as compared to fiscal 2021, due to an increase of $45.5 million from Lionsgate Original Releases driven by a greater number of theatrical slate releases ( The Hitman's Wife's Bodyguard, American Underdog, Spiral and Moonfall, among others) , as theaters have reopened.

In fiscal 2021, theaters were mostly closed due to circumstances associated with the COVID-19 global pandemic.

Home entertainment revenue increased $11.1 million, or 1.8%, in fiscal 2022, as compared to fiscal 2021, due to higher digital media revenue of $35.6 million, offset by lower packaged media revenue of $24.5 million.

The increase in digital media revenue primarily related to a Lionsgate Original Release direct-to-platform (i.e., SVOD) motion picture licensing agreement in fiscal 2022.

Television revenue increased $27.7 million, or 12.0%, in fiscal 2022, as compared to fiscal 2021, due to an increase from Lionsgate Original Releases of $17.4 million due to a greater number of television windows opening for our theatrical slate titles (and revenue recognized) than in fiscal 2021.

In addition, Other Film increased $10.3 million due to higher revenue from our acquired library titles.

International revenue increased $17.4 million, or 8.0%, in fiscal 2022, as compared to fiscal 2021 due to an increase from Lionsgate Original Releases of $21.4 million, offset by a decrease in Other Film of $4.0 million.

The increase in Lionsgate Original Releases related to higher revenue in fiscal 2022 from our fiscal 2021 and 2020 theatrical slates, as compared to fiscal 2021, which had limited new significant theatrical releases due to circumstances associated with the COVID-19 global pandemic.

If the adverse economic impact and disruptions associated with the COVID-19 global pandemic improve, we currently expect that Motion Picture segment revenues will increase in fiscal 2023 as compared to fiscal 2022.

The extent of the increase, if any, to Motion Picture segment revenues, will depend on, among other things, the duration and spread of the pandemic (including recent and new variants), the impact of governmental regulations that have been, and may continue to be, imposed in response to the pandemic, the continued effectiveness of actions taken to contain or mitigate the outbreak (including the availability, effectiveness and/or public acceptance of any FDA-approved COVID-19 vaccines), potential resurgences of COVID-19, and the discovery and spread of recent and new variants of the virus which could result in the re-imposition of certain restrictions and may lead to more restrictions being implemented again to reduce the spread of COVID-19, general global economic conditions, the rate at which theaters are able to re-open at scale, the rate of consumers' return to the theaters, and the impact of a potentially crowded marketplace from movies which are awaiting theatrical release in the market.

The evolving and uncertain nature of the situation could result in further interruptions to our operations, including continued delays in domestic and international theatrical distribution and production and the pausing of productions, which could impact Motion Picture segment revenues.

Theatrical revenue increased $55.4 million in fiscal 2023, as compared to fiscal 2022, due to an increase of $60.8 million from Lionsgate Original Releases driven by the performance of our fiscal 2023 theatrical slate releases, and in particular, John Wick:

Chapter 4, Jesus Revolution and Plane (all released in the fourth quarter of fiscal 2023).

Chapter 4 was theatrically released on March 24, 2023, therefore fiscal 2023 reflects revenue from seven days of the title's theatrical release.

This increase was offset partially by a decrease of $5.4 million from Other Film due to lower revenue from our acquired library titles.

Home entertainment revenue decreased $14.1 million, or 2.3%, in fiscal 2023, as compared to fiscal 2022, due to lower packaged media revenue of $44.5 million, partially offset by higher digital media revenue of $30.4 million.

The decrease in packaged media revenue was due to a decrease of $28.9 million from Lionsgate Original Releases due to fewer theatrical slate titles released on packaged media in fiscal 2023 as compared to fiscal 2022, resulting from the timing of our fiscal 2023 theatrical slate releases, and a decrease of $15.6 million from Other Film due to lower revenue from our acquired library and licensed library titles.

The increase in digital media revenue was due to an increase of $29.2 million from Lionsgate Original Releases driven by the license of Shotgun Wedding to a direct-to-streaming platform in fiscal 2023, and revenue in fiscal 2023 from the fiscal 2022 theatrical slate release, Moonfall , partially offset by lower revenue from our direct-to-platform (i.e., SVOD) and multi-platform releases.

Television revenue decreased $40.1 million, or 15.5%, in fiscal 2023, as compared to fiscal 2022, due to a decrease from Lionsgate Original Releases of $39.3 million due to fewer television windows opening for our theatrical slate titles than in fiscal 2022 resulting from the timing of our fiscal 2023 theatrical slate releases.

In particular, fiscal 2023 included revenue from the fiscal 2023 theatrical release, The Unbearable Weight of Massive Talent , and the fiscal 2022 theatrical releases, American Underdog and Moonfall.

These compared to revenue in fiscal 2022 from the fiscal 2022 theatrical releases, Spiral, The Hitman's Wife's Bodyguard and Voyager , and the fiscal 2021 theatrical releases, Chaos Walking, Barb and Star Go to Vista Del Mar and Fatale .

International revenue increased $130.6 million, or 55.7%, in fiscal 2023, as compared to fiscal 2022 due to an increase from Lionsgate Original Releases of $120.3 million due to higher revenue generated in fiscal 2023 from our fiscal 2023 theatrical slate titles as compared to the revenue in fiscal 2022 from our fiscal 2022 theatrical slate titles, and higher revenue from direct-to-platform (i.e., SVOD) and multi-platform releases.

In particular, fiscal 2023 included significant international revenue from the fiscal 2023 theatrical slate titles John Wick:

Chapter 4, Shotgun Wedding, and The Unbearable Weight of Massive Talent .

In addition, the increase in international revenue reflected an increase of $10.3 million from Other Film due to higher revenue in fiscal 2023 from our acquired library titles.

Direct Operating Expense.

The increase in direct operating expenses is due to higher Motion Picture revenue.

The slight decrease in direct operating expenses as a percentage of motion picture revenue was driven by the change in the mix of titles and product categories generating revenue in the current fiscal year as compared to the prior fiscal year.

In particular, the decrease was due to the lower amortization rate of the fiscal 2022 theatrical slate titles generating revenue in the current fiscal year, as compared to the amortization rate of the fiscal 2021 theatrical slate titles in the prior fiscal year, which reflected higher investment in film write-downs.

The increase in direct operating expenses is due to higher motion picture revenue in fiscal 2023.

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 fiscal 2023 as compared to fiscal 2022, including the higher amortization rate of the fiscal 2023 theatrical slate titles as compared to the fiscal 2022 theatrical slate titles.

In addition, fiscal 2023 included an increase in development write-offs of $19.1 million on Lionsgate Original Releases, and an increase of $4.9 million related to foreign exchange losses.

Investment in film write-downs included in Motion Picture segment direct operating expense in fiscal 2023 were $6.2 million, as compared to $1.2 million in fiscal 2022.

Distribution and Marketing Expense.

The increase in distribution and marketing expense in fiscal 2022 is due to increased theatrical P&A and Premium VOD expense related to more theatrical releases in fiscal 2022 and P&A incurred in advance for films to be released in subsequent quarters, as compared to fiscal 2021, which was impacted by the closure of theaters as a result of circumstances associated with the COVID-19 global pandemic.

In fiscal 2022, approximately $14.1 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters ( The Unbearable Weight of Massive Talent, The Unbreakable Boy, The Devil's Light, Borderlands ), compared to approximately $7.2 million in fiscal 2021 in the Motion Picture segment.

The decrease in distribution and marketing expense in fiscal 2023 is due to lower home entertainment distribution and marketing expense and slightly lower theatrical P&A and Premium VOD expense for Lionsgate Original Releases.

Theatrical P&A and Premium VOD expense decreased due to lower expense associated with the fiscal 2023 theatrical slate releases, partially offset by higher expense for films to be released in subsequent quarters.

In fiscal 2023, approximately $23.2 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters ( Are You There God?

It's Me, Margaret, White Bird:

A Wonder Story and The Ballad of Songbirds and Snakes) , compared to approximately $14.1 million in fiscal 2022.

We expect Motion Picture distribution and marketing expense in fiscal 2024 to increase as compared to fiscal 2023, due to our larger expected fiscal 2024 theatrical slate and related theatrical P&A expense.

Gross Contribution.

Gross contribution of the Motion Picture segment for fiscal 2022 decreased $45.8 million, or 11.4%, as compared to fiscal 2021 due to higher Motion Picture distribution and marketing expense as a percentage of Motion Picture revenue, partially offset by higher Motion Picture revenue and slightly lower direct operating expense as a percentage of Motion Picture revenue.

Gross contribution of the Motion Picture segment for fiscal 2023 increased $30.3 million, or 8.5%, as compared to fiscal 2022 due to higher Motion Picture revenue and lower distribution and marketing expense, partially offset by higher direct operating expense.

General and Administrative Expense.

General and administrative expenses of the Motion Picture segment decreased $13.1 million, or 12.3%, due to a decrease in incentive based compensation.

General and administrative expenses of the Motion Picture segment increased $16.7 million, or 17.9%, due to an increase in incentive based compensation.

Television Production

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International 277.7 256.5 21.2 8.3 %

Home Entertainment Revenue

Home Entertainment

Digital 241.7 85.1 156.6 184.0 %

Packaged Media 3.3 6.9 (3.6) (52.2) %

Total Home Entertainment Revenue 92.0 132.8 (40.8) (30.7) %

Total Home Entertainment 245.0 92.0 153.0 166.3 %

Other 93.1 88.0 5.1 5.8 %

1 unchanged sentence

The primary component of Television Production revenue is domestic television revenue.

Domestic television revenue increased in fiscal 2022 as compared to fiscal 2021, due to an increase of $369.7 million from intersegment revenues from the licensing of Starz original series (Power Book III:

Raising Kanan, Power Book IV:

Force, High Town, Heels Season 1 , BMF Season 1 , Step Up:

Highwater Season 3 , among others) to Starz Networks, and an increase from a greater number of television episodes delivered to third-parties ( Minx Season 1, Home Economics Season 2, Love Life Season 2, Acapulco Season 1, Dear White People Season 4 , and Welcome to Flatch Season 1 among others).

Fiscal 2021 was negatively impacted by disruptions associated with the COVID-19 global pandemic and the associated pausing of productions which resulted in the delay of television episodes delivered in fiscal 2021.

International revenue in fiscal 2022 increased $92.0 million, or 55.9%, as compared to fiscal 2021 , due to an increase of of $41.0 million from intersegment revenues from the licensing of Starz original series ( Power Book III:

Raising Kanan Season 1, Heels Season 1, Power Book IV:

Forc e Season 1) to STARZPLAY International, and revenue from third-parties in fiscal 2022 for Pam & Tommy Season 1, Dear White People Season 4, and Acapulco Season 1.

Home entertainment revenue in fiscal 2022 decreased $40.8 million, or 30.7%, as compared to fiscal 2021 , due to digital media revenue in fiscal 2021 for the second syndication license of Mad Men Seasons 1 to 7 and digital media revenue for Power Season 6, which compared to digital media revenue in fiscal 2022 from Weeds Seasons 1 to 8 and Welcome to Flatch Season 1.

Other revenue increased in fiscal 2022 as compared to fiscal 2021, primarily due to revenue of 3 Arts Entertainment, which was negatively impacted in fiscal 2021 as a result of the COVID-19 global pandemic related disruptions.

While television production has resumed, the extent of the future impact on other revenue of the COVID-19 global pandemic is uncertain and will depend on film and television productions and releases fully returning to and remaining at pre COVID-19 levels.

If the adverse economic impact and disruptions associated with the COVID-19 global pandemic improve, we currently expect that Television Production segment revenues will increase in fiscal 2023 as compared to fiscal 2022.

The extent of the increase to Television Production segment revenues, will depend on, among other things, the duration and spread of the pandemic (including recent and new variants), the impact of governmental regulations that have been, and may continue to be, imposed in response to the pandemic, the continued effectiveness of actions taken to contain or mitigate the outbreak (including the availability, effectiveness and/or public acceptance of any FDA-approved COVID-19 vaccines), potential resurgences of COVID-19, and the discovery and spread of recent and new variants of the virus which could result in the re-imposition of certain restrictions and may lead to more restrictions being implemented again to reduce the spread of COVID-19, and general global economic conditions.

The evolving and uncertain nature of the situation could result in further interruptions to our operations, including continued delays in domestic and international distribution and production throughout the U.S., Canada and worldwide, and the pausing of productions, which could impact Television Production segment revenues.

Domestic television revenue increased in fiscal 2023 as compared to fiscal 2022, due to an increase of $62.6 million from intersegment revenues from the licensing of Starz original series Power Book II:

Ghost Season 3 , Power Book IV:

Force Season 2, Heels Season 2, P-Valley Season 2 , BMF Season 2, and Power Book III:

Raising Kanan Seasons 2 and 3 , among others) to Starz Networks, partially offset by a decrease from fewer television episodes delivered to third-parties.

International revenue in fiscal 2023 increased $21.2 million, or 8.3%, as compared to fiscal 2022 , due to revenue in fiscal 2023 from Mythic Quest Season 3, The First Lady Season 1 and Acapulco Season 2, as compared to revenue in fiscal 2022 from Pam & Tommy Season 1, Dear White People Season 4 and Acapulco Season 1.

In addition, the increase reflects an increase of $8.5 million from intersegment revenues from the licensing of Starz original series to LIONSGATE+.

Home entertainment revenue in fiscal 2023 increased $153.0 million, or 166.3%, as compared to fiscal 2022 , due to digital media revenue in fiscal 2023 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 fiscal 2022 for Weeds Seasons 1 to 8 and Welcome to Flatch Season 1.

In addition, the increase reflects higher digital media intersegment revenues of $49.6 million from the licensing of Starz original series to Starz Networks.

Other revenue increased in fiscal 2023 as compared to fiscal 2022, 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.

Direct operating expense of the Television Production segment in fiscal 2023 increased $167.6 million, or 12.2%, due to the increase in Television Production revenues.

Direct operating expenses as a percentage of television production revenue increased primarily due to the mix of titles generating revenue in fiscal 2022 as compared to fiscal 2021, and in particular, fiscal 2022 included a greater number of newer shows in which direct operating expense is typically higher as a percentage of revenue.

Due to the increase in cost associated with production and changes in season orders,

fiscal 2022 also included increased write-downs to fair value of investment in film and television programs amounting to $34.9 million in aggregate, as compared to $10.3 million in fiscal 2021.

This compared to lower direct operating expenses as a percentage of television revenue in fiscal 2021, which included significant revenue from Mad Men, which has a lower amortization rate relative to the amortization rate of the Television Production segment, and fiscal 2021 included fewer deliveries of newer shows primarily associated with the pausing of productions due to the COVID-19 global pandemic related disruptions.

Direct operating expenses as a percentage of television production revenue decreased slightly as compared to fiscal 2022, primarily due to the mix of titles generating revenue in fiscal 2023 as compared to fiscal 2022.

In addition, fiscal 2023 included lower write-downs to fair value of investment in film and television programs, amounting to $4.6 million in aggregate, as compared to $34.9 million in fiscal 2022.

Gross Contribution.

Gross contribution of the Television Production segment for fiscal 2022 decreased slightly by $2.2 million as compared to fiscal 2021 on significantly higher revenue which was offset by higher direct operating expenses as a percentage of television production revenue.

Gross contribution of the Television Production segment for fiscal 2023 increased by $61.2 million as compared to fiscal 2022 due to increased television production revenue, partially offset by higher direct operating expenses.

General and Administrative Expense.

General and administrative expenses of the Television Production segment decreased $2.5 million, or 5.9%, due to a decrease in incentive based compensation.

General and administrative expenses of the Television Production segment increased $11.7 million, or 29.1%, due to increases in salaries and related expenses and incentive based compensation.

Media Networks

The table below sets forth Media Networks gross contribution and segment profit for the fiscal years ended March 31, 2023 and 2022:

The Media Networks segment results of operations for fiscal 2021 included our formerly majority owned premium Spanish language streaming services business, Pantaya (representing substantially all of our former Other Streaming Services product line).

We sold our interest in Pantaya on March 31, 2021.

See Note 2 to our consolidated financial statements for further information.

March 31, Increase (Decrease)

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March 31, 2023 March 31, 2022

Starz Networks STARZPLAY International Total Media Networks Starz Networks STARZPLAY International Other Streaming Services Total Media Networks

Starz Networks LIONSGATE+ Total Media Networks Starz Networks LIONSGATE+ Total Media Networks

(Amounts in millions)

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Total 20.3 21.0

STARZPLAY International

Linear Subscribers 1.9 1.8

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___________________

(1) March 31, 2023 includes OTT subscribers totaling 0.6 million in the international territories still to be exited, and reflects a decrease from March 31, 2022 of 6.5 million for the international territories already exited as of March 31, 2023.

March 31, 2022 includes OTT subscribers totaling 7.1 million for the international territories exited or being exited.

(2) Represents subscribers of STARZPLAY Arabia, a non-consolidated equity method investee.

(2) Due to the March 31, 2021 sale of Pantaya, total domestic and international subscribers, OTT subscribers and total global subscribers amounts exclude Pantaya as of March 31, 2022 and 2021.

(3) OTT subscribers includes subscribers of STARZPLAY Arabia, as presented above.

Media Networks revenue decreased $26.5 million reflecting a decrease of $50.3 million due to the sale of Pantaya on March 31, 2021, and a decrease of $18.0 million at Starz Networks, partially offset by increased revenue at STARZPLAY International of $41.8 million as a result of subscriber and revenue growth in the international territories previously launched, and additional territories launched since March 31, 2021.

Starz Networks' revenue decreased as a result of declines in revenue of $131.8 million from traditional linear services, which were mostly offset by higher OTT revenue of $111.9 million resulting from increased subscriptions.

Media Networks revenue increased $10.3 million reflecting increased revenue at LIONSGATE+ of $43.4 million, mostly offset by a decrease of $33.1 million at Starz Networks.

Revenue for the international territories exited or to be exited was approximately $40.6 million in fiscal 2023 and accounted for approximately $6.8 million of the $43.4 million increase in LIONSGATE+ revenue mentioned above.

Starz Networks' revenue decreased primarily as a result of declines in revenue of $132.0 million from traditional linear services, which were offset by higher OTT revenue of $94.1 million resulting from increased subscriptions.

During fiscal 2023 and fiscal 2022, the following original series premiered on STARZ:

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First Quarter:

The Girlfriend Experience Season 3

May 2, 2021 Vida Season 3

April 26, 2020

Run the World Season 1

May 16, 2021 Hightown Season 1

Blindspotting Season 1

Gaslit April 24, 2022 The Girlfriend Experience Season 3

P-Valley Season 2

June 3, 2022 Run the World Season 1

Becoming Elizabeth Season 1

June 12, 2022 Blindspotting Season 1

June 13, 2021

Who is Ghislaine Maxwell June 26, 2022

Second Quarter:

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Raising Kanan Season 2

July 18, 2021 P-Valley Season 1

August 14, 2022 Power Book III:

Raising Kanan Season 1

July 18, 2021

Heels Season 1

August 15, 2021 Power Book II:

Ghost September 6, 2020

Serpent Queen Season 1

September 11, 2022 Heels Season 1

August 15, 2021

BMF - Black Mafia Family Season 1

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Third Quarter:

Hightown Season 2

October 17, 2021 The Spanish Princess Season 2

Step Up Season 3

October 16, 2022 Hightown Season 2

October 17, 2021

Power Book II:

Dangerous Liaisons Season 1

November 6, 2022 Power Book II:

Ghost Season 2

November 21, 2021 Seduced:

Inside the NXIVM Cult October 18, 2020

November 21, 2021

Fourth Quarter:

Power Book IV:

BMF - Black Mafia Family Season 2

January 6, 2023 Power Book IV:

Force Season 1

February 6, 2022 American Gods Season 3

January 10, 2021

Outlander Season 6

March 6, 2022 Men in Kilts February 14, 2021

Shining Vale Season 1

March 6, 2022 The Gloaming March 21, 2021

February 6, 2022

Party Down Season 3

February 24, 2023 Outlander Season 6

March 6, 2022

Power Book II:

Ghost Season 3

March 17, 2023 Shining Vale Season 1

March 6, 2022

___________________

(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.

(2) In addition, while Power Book II:

Ghost Season 1 premiered in the three months ended September 30, 2020, the series returned with a mid-season premiere in December 2020.

Direct Operating and Distribution and Marketing Expenses .

Direct operating and distribution and marketing expenses primarily represent programming cost amortization and advertising and marketing costs, respectively.

The level of programming cost amortization and advertising and marketing costs and thus the gross contribution margin for the Media Networks' segment can fluctuate from period to period depending on the number of new original series and first-run output theatrical movies premiering on the network during the period.

The level of programming cost amortization and advertising and marketing costs and thus the segment profit margin for the Media Networks' segment can fluctuate from period to period depending on the number of new original series and first-run output theatrical movies premiering on the network during the period.

Programming cost amortization and advertising and marketing costs generally increase in periods where new original series premiere.

In addition, the launch of the STARZPLAY international service has and will continue to result in an increase in expenses as the service continues to expand.

The increase in Media Networks direct operating expenses is due to increases at STARZPLAY International of $52.1 million, and at Starz Networks of $30.1 million in fiscal 2022.

These increases were partially offset by a decrease of $11.8 million due to the sale of Pantaya on March 31, 2021.

Direct operating expenses at STARZPLAY International increased as a result of the continued expansion of STARZPLAY International.

The increase in Starz Networks direct operating expense was primarily due to higher programming cost amortization related to our Starz Originals of $123.3 million due to a higher number of, and more expensive, series premieres, partially offset by lower programming amortization of $91.6 million related to theatrical releases under our programming output agreements.

The increase in Media Networks distribution and marketing expense is due to an increase of $74.1 million at Starz Networks due to increased spend on our Starz Originals and increased spend to drive growth in our subscriptions and an increase in operating expense related to continued growth in the OTT service, and an increase of $9.0 million at STARZPLAY International due primarily to increased advertising and marketing to drive growth in subscribers.

These increases were partially offset by a decrease of $39.8 million due to the sale of Pantaya on March 31, 2021.

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.

The increase in Media Networks direct operating expenses is due to increases at Starz Networks of $88.7 million and LIONSGATE+ of $10.2 million in the fiscal year ended March 31, 2023.

The increase in Starz Networks direct operating expense was primarily due to higher programming cost amortization related to our Starz Originals of $89.2 million primarily related to higher cost original series premieres, higher programming cost amortization of $3.6 million related to library content, and other increases in direct operating expense, partially offset by lower programming amortization of $4.1 million related to theatrical releases under our programming output agreements, and a benefit in fiscal 2023 of $10.0 million associated with the modification of a content licensing arrangement.

Direct operating expenses at LIONSGATE+ increased as a result of higher programming cost amortization of approximately $1.7 million and foreign exchange losses of approximately $6.1 million related to the strengthening U.S.

The decrease in Media Networks distribution and marketing expense is due to a decrease of $25.5 million at Starz Networks due to lower overall spend for advertising purchased in fiscal 2023 and lower media spend for our Starz Originals' premieres, and a decrease of $23.1 million at LIONSGATE+ primarily due to a decrease in direct response advertising in connection with the exited territories.

Gross Contribution.

The decrease in gross contribution compared to fiscal 2021 was due to decreases at Starz Networks of $122.2 million and STARZPLAY International of $19.3 million, driven by higher direct operating expense and distribution and marketing expense, partially offset by higher STARZPLAY International revenue, all as described above.

The decrease in gross contribution compared to the fiscal year ended March 31, 2022 was due to a decrease in gross contribution at Starz Networks of $96.3 million, partially offset by lower negative gross contribution at LIONSGATE+ of $56.3 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.

The negative gross contribution related to the exited territories was approximately $34.8 million for fiscal 2023.

General and Administrative Expense.

General and administrative expenses of the Media Networks segment in fiscal 2022 decreased from fiscal 2021, driven by decreases of $7.6 million due to the sale of Pantaya on March 31, 2021, and $4.3 million at Starz Networks, offset by an increase of $6.0 million at STARZPLAY International.

General and administrative expenses in the fiscal year ended March 31, 2023 increased from fiscal 2022, due to increases of $5.9 million at Starz Networks, and $2.5 million at LIONSGATE+.

Liquidity and Capital Resources

Sources of Cash

Our liquidity and capital requirements in fiscal 2022 were provided principally through cash generated from operations, corporate debt, our production and related loans, IP Credit Facility and other financing obligations (as further discussed below), and the monetization of trade accounts receivable.

Our liquidity and capital requirements in fiscal 2023 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.

As of March 31, 2023, we had cash and cash equivalents of $272.1 million.

Corporate Debt

Our corporate debt at March 31, 2022, excluding production and related loans and the IP Credit Facility discussed further below, consisted of the following:

Our corporate debt at March 31, 2023, excluding film related obligations discussed further below, consisted of the following:

• Senior Credit Facilities:

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◦ Term Loan A.

We have a term loan A facility, of which a portion of its outstanding loans, amounting to $444.9 million at March 31, 2022 is due April 2026 (the "2026 Term Loan A") and a portion of its outstanding loans, amounting to $193.6 million at March 31, 2022 was due March 2023 (the "2023 Term Loan A" and together with the 2026 Term Loan A, the "Term Loan A").

In April 2022, the Company voluntarily prepaid the entire outstanding principal amount of the 2023 Term Loan A of $193.6 million (see Note 21 to our consolidated financial statements for subsequent events).

We have a term loan A facility due April 2026 (the "Term Loan A"), with $428.2 million outstanding at March 31, 2023.

◦ Term Loan B.

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• Senior Notes:

We have $1.0 billion outstanding of 5.500% senior notes due 2029 (the "5.500% Senior Notes") at March 31, 2022.

We have $800.0 million outstanding of 5.500% senior notes due 2029 (the "5.500% Senior Notes") at March 31, 2023.

See Note 7 to our consolidated financial statements for a discussion of our corporate debt.

Production and Related Loans, IP Credit Facility and Other Financing Obligations

We utilize our production and related loans, IP Credit Facility and other financing obligations to fund our film and television productions or licenses.

Our production and related loans, IP Credit Facility and other financing obligations at March 31, 2022 include the following:

• Production and Related Loans:

Production and related loans include individual loans for the production or license of film and television programs that we produce or license and amounts outstanding under our $235.0 million non-recourse senior secured revolving credit facility due January 2025 based on collateral consisting of certain of the Company’s tax credit receivables (the "Production Tax Credit Facility").

At March 31, 2022, there was $1,286.7 million outstanding of production and related loans.

• IP Credit Facility and Other Financing Obligations:

In July 2021, as amended on September 30, 2021, certain of our subsidiaries entered into a senior secured amortizing term credit facility due July 2026 (the "IP Credit Facility") based on the collateral consisting solely of certain of our rights in certain library titles, including the Spyglass and other recently acquired libraries.

Film Related Obligations

We utilize our film related obligations to fund our film and television productions or licenses.

Our film related obligations at March 31, 2023 include the following:

• Production Loans:

Production loans represent individual and multi-title loans for the production of film and television programs that we produce or license.

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.

At March 31, 2023, there was $1,349.9 million outstanding of production loans.

• Programming Notes:

Programming notes represent individual loans for the licensing of film and television programs that we license, related to our Media Networks business.

The Company's programming notes had contractual repayment dates in April and May 2023.

At March 31, 2023, there was $83.6 million outstanding of programming notes.

• Production Tax Credit Facility:

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").

Cash collections from the underlying collateral (tax credit receivables) are used to repay the Production Tax Credit Facility.

At March 31, 2023, there was $231.8 million outstanding under the Production Tax Credit Facility.

• IP Credit Facility:

In July 2021, as amended in September 2022, certain of our subsidiaries entered into a senior secured amortizing term credit facility due July 2027 (the "IP Credit Facility") based on the collateral consisting solely of certain of our rights in certain library titles, including the Spyglass and other recently acquired libraries.

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.

At March 31, 2022, there was $123.5 million outstanding under our IP Credit Facility.

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

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

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

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

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

See Note 21 to our consolidated financial statements for Subsequent Events.

See Note 8 to our consolidated financial statements for a discussion of our production and related loans, IP Credit Facility and other financing obligations.

At March 31, 2023, there was $143.8 million outstanding under the IP Credit Facility.

• Backlog Facility and Other:

◦ Backlog Facility.

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.

The maximum principal amount of the Backlog Facility is $175.0 million, subject to the amount of eligible collateral contributed to the facility.

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 two years and 90 days after the revolving period ends, currently August 14, 2027.

As of March 31, 2023, there was $175.0 million outstanding under the Backlog Facility.

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").

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, the "Distribution Loans").

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.

As of March 31, 2023, $51.0 million remains outstanding under the Distribution Loans.

See Note 8 to our consolidated financial statements for a discussion of our film related obligations.

Accounts Receivable Monetization and Governmental Incentives

Our accounts receivable monetization programs include individual agreements to monetize certain of our trade accounts receivable directly with third-party purchasers and a revolving agreement to monetize designated pools of trade accounts receivable with various financial institutions.

In addition, we utilize governmental incentives, programs and other structures from states and foreign countries (e.g., sales tax refunds, transferable tax credits, refundable tax credits, low interest loans, direct subsidies or cash rebates, calculated based on the amount of money spent in the particular jurisdiction in connection with the production) to fund our film and television productions and reduce financial risk.

See Note 19 to our consolidated financial statements for our accounts receivable monetization programs and our tax credit receivables.

Our principal uses of cash in operations include the funding of film and television productions, film and programming rights acquisitions, the distribution and marketing of films and television programs, and general and administrative expenses.

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Redeemable Noncontrolling Interests.

In addition, the Company has a redeemable noncontrolling interest balance of $321.2 million as of March 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 11 to our consolidated financial statements).

In addition, the Company has a redeemable noncontrolling interest balance of $343.6 million as of March 31, 2023 related to its acquisition of a controlling interest, consisting of a limited liability company interest, in each of 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 11 to our consolidated financial statements).

• 3 Arts Entertainment.

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• Pilgrim Media Group.

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.

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.

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.

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.

In February 2023, the Company paid $36.5 million as settlement of the exercised put option.

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.

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We expect to continue to increase our investments in film and television programs and film and programming rights acquisitions.

In addition, the launch of the Company's STARZPLAY international service has and will require capital investment as the service expands to other international territories.

In the short-term, we currently expect that our cash requirements for productions and marketing spends will increase in fiscal 2023 as compared to fiscal 2022, due to the expected increase in film and television programs, productions or acquisitions in fiscal 2023.

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 IGR 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 addition, the LIONSGATE+ international service, in its remaining territories, has and will require capital investment as the service continues to expand.

We are in the process of executing our LIONSGATE+ restructuring plan previously discussed under "Item 2.

Management's Discussion and Analysis of Results of Operations and Financial Condition - Overview", including exiting certain territories, negotiating certain content related contractual commitments and performing our strategic review of content performance for consideration of removal from our various platforms.

Of these total estimated future charges, the net future cash outlay is estimated to range from approximately $20 million to $50 million, which is inclusive of the amounts payable for the content, as well as the incremental cost related to the restructuring.

Of the content impairment charges recorded in the fiscal year ended March 31, 2023, approximately $90 million reflects the future cash to be paid for the remaining amounts payable for this content.

As we continue to fully implement the plan, including further strategic review of content performance, we may incur additional content impairment charges beyond these estimates.

We expect the restructuring plan to be substantially completed by June 30, 2023, however, certain settlements of contractual commitments could extend beyond that date.

In the short-term, we currently expect that our cash requirements for productions and marketing spend will increase in fiscal 2024 as compared to fiscal 2023.

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 12 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.

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 and related loans, government incentive programs, film funds, the monetization of trade accounts receivable, our Production Tax Credit Facility, our IP Credit Facility, our IGR Facility, and other financing obligations.

In addition, we continue to expand our STARZPLAY international service and may acquire businesses or assets, including individual films or libraries that are complementary to our business.

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 invest in 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.

Any such transaction could be financed through our cash flow from operations, credit facilities, equity or debt financing.

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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.

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.

Additionally, circumstances related to the COVID-19 global pandemic, inflation and rising interest rates and bank failures 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.

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.

Material Cash Requirements from Known Contractual and Other Obligations.

Our material cash requirements from known contractual and other obligations primarily relate to our corporate debt and film related and other obligations.

Our material cash requirements from known contractual and other obligations primarily relate to our corporate debt and film related obligations.

The following table sets forth our significant contractual and other obligations as of March 31, 2023 and the estimated timing of payment:

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5.500% Senior Notes 800.0 — 800.0

Film related and other obligations (2)

Film related obligations (2)

2,035.1 1,007.2 1,027.9

Content related payables (3)

243.5 184.1 59.4

Operating lease obligations (4)

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(1) See Note 7 to our consolidated financial statements for further information on our corporate debt.

In April 2022, the Company voluntarily prepaid the entire outstanding principal amount of the 2023 Term Loan A of $193.6 million, together with accrued and unpaid interest (see Note 21 to our consolidated financial statements for subsequent events).

(2) Film related and other obligations include program rights and film obligations, production and related loans, and our IP Credit Facility, included on the consolidated balance sheets.

See Note 8 to our consolidated financial statements for further information.

On April 1, 2022, the Company received $125.0 million under the IGR Facility, due beyond 12 months, not reflected in the amounts above (see Note 21 to our consolidated financial statements for subsequent events).

(2) See Note 8 to our consolidated financial statements for further information on our film related obligations.

(3) Content related payables include minimum guarantees and accrued licensed program rights obligations included on our consolidated balance sheet, which represent amounts payable for film or television rights that we have acquired or licensed.

(4) See Note 9 to our consolidated financial statements for further information on leases.

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(7) Not included in the amounts above are $343.6 million of redeemable noncontrolling interest, as future amounts and timing are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimations of future payments (see Note 11 to our consolidated financial statements).

We are obligated to pay programming fees for all qualifying films that are released theatrically in the U.S.

by Sony’s Columbia Pictures, Screen Gems, Sony Pictures Classics and TriStar labels through 2021.

We do not license films produced by Sony Pictures Animation.

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

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

We have an exclusive multiyear post pay-one output licensing agreement with Universal for live-action films theatrically released in the U.S.

starting January 1, 2022.

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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.

In addition, as of March 31, 2022, we had gross unrecognized tax benefits of $70.2 million.

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.

However, we estimate the liability for unrecognized tax benefits will decrease in the next twelve months by $79.9 million as a result of projected audit settlements in certain jurisdictions.

For additional details of commitments and contingencies, see Note 17 to our consolidated financial statements.

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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.

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

Capacity to Pay Dividends.

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Discussion of Operating, Investing, Financing Cash Flows

Cash, cash equivalents and restricted cash decreased by $142.0 million for the fiscal year ended March 31, 2022 and increased by $206.3 million for the fiscal year ended March 31, 2021, before foreign exchange effects on cash.

Cash, cash equivalents and restricted cash decreased by $68.8 million for the fiscal year ended March 31, 2023 and decreased by $142.0 million for the fiscal year ended March 31, 2022, before foreign exchange effects on cash.

Components of these changes are discussed below in more detail.

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(Amounts in millions)

Operating Activities:

Operating income $ 9.0 $ 170.6 $ (161.6)

Depreciation and amortization 177.9 188.5 (10.6)

Amortization of films and television programs and program rights 1,567.7 1,189.8 377.9

Non-cash share-based compensation 100.0 89.0 11.0

Gain on sale of Pantaya — (44.1) 44.1

Cash interest (125.5) (136.7) 11.2

Interest and other income and expense, net 19.9 (0.9) 20.8

Current income tax provision (30.1) (13.7) (16.4)

Other amortization 92.5 73.2 19.3

Cash flows from operations before changes in operating assets and liabilities 1,811.4 1,515.7 295.7

Changes in operating assets and liabilities:

Accounts receivable, net and other assets (256.9) 133.9 (390.8)

Investment in films and television programs and program rights (2,211.7) (1,616.7) (595.0)

Accounts payable and accrued liabilities 1.4 32.7 (31.3)

Other changes in operating assets and liabilities (5.1) (66.1) 61.0

Changes in operating assets and liabilities (2,472.3) (1,516.2) (956.1)

Net Cash Flows Used In Operating Activities $ (114.3) $ (660.9) $ 546.6

Cash flows used in operating activities for the fiscal year ended March 31, 2023 were $114.3 million compared to cash flows used in operating activities of $660.9 million for the fiscal year ended March 31, 2022.

The increase in cash used in operating activities is due to greater cash used from changes in operating assets and liabilities as shown above, partially offset by increased cash flows from operations before changes in operating assets and liabilities, which includes the receipt of $22.7 million from insurance recoveries on prior shareholder litigation reflected in the interest and other income and expense, net line item above.

The greater use of cash from changes in operating assets and liabilities was driven by increased cash used for investment in films and television programs and program rights due to increased production activity in fiscal 2022 as compared to fiscal 2021, which was impacted by the pausing of productions associated with the COVID-19 global pandemic, and increases in accounts receivable, net and other assets.

In addition, cash flows used in operating activities for the fiscal year ended March 31, 2022 included a net use of cash of approximately $151.4 million from the monetization of accounts receivables programs, as compared to a net benefit of approximately $46.4 million for the year ended March 31, 2021 (see Note 19 to our consolidated financial statements).

The lower cash used in operating activities is due to lower cash used from changes in operating assets and liabilities of $581.3 million driven by lower cash used for investment in films and television programs and program rights, proceeds from the termination of interest rate swaps (see further discussion below for interest rate swap transactions in fiscal 2023), and higher cash from other changes in operating assets and liabilities, partially offset by higher increases in accounts receivable, net, and higher decreases in accounts payable and accrued liabilities.

The lower cash used from changes in operating assets and liabilities was partially offset by higher use of cash related to higher interest associated with higher interest rates and film related obligations balances.

In addition, cash flows used in operating activities for the fiscal year ended March 31, 2023 included a net benefit of approximately $11.6 million from the monetization of accounts receivables programs, as compared to a net use of cash of approximately $151.4 million for the fiscal year ended March 31, 2022 (see Note 19 to our consolidated financial statements).

During the fiscal year ended March 31, 2023, 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.

The $56.4 million received was classified in the 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 on the consolidated statement of cash flows), 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 termination date amounting to $3.2 million) (see Financing Activities below).

See Note 18 to our consolidated financial statements.

Investing Activities.

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Proceeds from the sale of Pantaya $ — $ 123.6

Proceeds from the sale of other investments 1.5 4.1

Proceeds from the sale of equity method and other investments 46.3 1.5

Investment in equity method investees and other (17.5) (14.0)

Distributions from equity method investees 7.2 —

Distributions from equity method investees and other 1.9 7.2

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

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Net Cash Flows Used In Investing Activities $ (18.3) $ (80.5)

Cash flows used in investing activities of $80.5 million for the fiscal year ended March 31, 2022 compared to cash flows used in investing activities of $31.1 million for the fiscal year ended March 31, 2021, primarily due to cash used for the acquisition of a film library and related assets and investment in equity method investees and other as reflected above, offset by proceeds from the sale of Pantaya (see Note 2 to our consolidated financial statements) during the fiscal year ended March 31, 2022.

Cash flows used in investing activities of $18.3 million for the fiscal year ended March 31, 2023 reflects cash used for capital expenditures and investment in equity method investees and other, offset by proceeds from the sale of a portion of our ownership interest in STARZPLAY Arabia in the fiscal year ended March 31, 2023, compared to cash used for the acquisition of a film library and related assets offset by the receipt of proceeds during the fiscal year ended March 31, 2022 from the sale of Pantaya.

Financing Activities.

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Net repayments and repurchases of debt (357.8) (245.5)

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

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

Net proceeds from production and related loans 787.1 339.5

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

IP Credit Facility and other financing repayments (91.5) —

Net proceeds from IP Credit Facility and other financing 118.7 —

Repurchase of common shares — (2.2)

Film related obligations - borrowings 1,688.6 1,253.4

Film related obligations - repayments (1,073.0) (347.6)

Net proceeds from film related obligations 615.6 905.8

Other financing activities (194.0) (60.9)

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Cash flows provided by financing activities of $63.8 million for the fiscal year ended March 31, 2023 compared to cash flows provided by financing activities of $599.4 million for the fiscal year ended March 31, 2022.

Cash flows provided by financing activities for fiscal 2022 primarily reflects net production and related loan borrowings of $787.1 million as production activity increased in fiscal 2022, and the net IP Credit Facility and other financing advances of $118.7 million, offset by net debt repayments and repurchases of $245.5 million (discussed below).

Cash flows provided by financing activities for fiscal 2023 primarily reflects net film related obligations borrowings of $615.6 million due to net borrowings under production loans and the Production Tax Credit Facility of $372.8 million and net borrowings under the Backlog Facility, IP Credit Facility and Distribution Loans of $242.5 million, offset by net debt repayments and repurchases of $357.8 million.

Net debt repayments and repurchases of $357.8 million in fiscal 2023 included the below transactions, along with required repayments on our term loans:

• In April 2022, we voluntarily prepaid the entire outstanding principal amount of the Term Loan A due March 22, 2023 of $193.6 million.

• During fiscal 2023, we repurchased $200.0 million principal amount of the 5.500% Senior Notes for $135.0 million.

In addition, other financing activities in the fiscal year ended March 31, 2023 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 fiscal 2023 (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 18 to our consolidated financial statements).

Other financing activities also

includes tax withholding required on equity awards of $19.2 million and the purchase of noncontrolling interest of $36.5 million representing the settlement of the exercised Pilgrim Media Group put option.

Cash flows provided by financing activities for fiscal 2022 primarily reflects net film related obligations borrowings of $905.8 million as production activity increased in fiscal 2022, offset by net debt repayments and repurchases of $245.5 million (discussed below).

In addition, other financing activities in fiscal 2022 includes $28.5 million for interest rate swap settlement payments due to an other-than-insignificant financing element on a portion of our interest rate swaps (see Note 18 to our consolidated financial statements), and $35.1 million for tax withholding required on equity awards.

Net debt repayments and repurchases of $245.5 million in fiscal 2022 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.

• On April 1, 2021, in connection with the redemption of the 5.875% Senior Notes and the 6.375% Senior Notes, we issued $1.0 billion aggregate principal amount of 5.500% Senior Notes.

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• During fiscal 2022, the Company also 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.

Cash flows provided by financing activities for fiscal 2021 primarily reflects net production and related loan borrowings of $339.5 million as production activity increased in the third and fourth quarters of fiscal 2021, and net debt repayments of $67.6 million.

In addition, other financing activities in fiscal 2021 includes $22.3 million for interest rate swap settlement payments due to an other-than-insignificant financing element on a portion of our interest rate swaps (see Note 18 to our consolidated financial statements), $7.7 million for tax withholding required on equity awards, and cash used for the repurchase of common shares of $2.2 million.

Remaining Performance Obligations and Backlog

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As disclosed in Note 12 to our consolidated financial statements, remaining performance obligations were $1.9 billion at March 31, 2023 (March 31, 2022 - $1.8 billion).

The backlog portion of remaining performance obligations (excluding deferred revenue) related to our Motion Picture and Television Production segments was $1.3 billion at March 31, 2022 (March 31, 2021 - $1.2 billion), respectively.

The backlog portion of remaining performance obligations (excluding deferred revenue) related to our Motion Picture and Television Production segments was $1.5 billion at March 31, 2023 (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.

What changed 10-K

Item 7. Management’s Discussion and Analysis