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Item 7. Management’s Discussion and Analysis

2024-05-30 compared with 2023-05-25 · 375 added, 385 removed, 658 unchanged (54% of the section changed)

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A discussion and analysis of our financial condition and results of operation for the fiscal year ended March 31, 2022 and year-to-year comparisons between fiscal 2023 and fiscal 2022 can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2023 , and is herein incorporated by reference.

Lionsgate Entertainment Corp.

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

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

We classify our operations through three reporting segments:

Lions Gate Entertainment Corp.

(the “Company,” “Lionsgate,” "Lions Gate," “we,” “us” or “our”) encompasses world-class motion picture and television studio operations (collectively referred to as the "Studio Business") 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 more than 20,000-title library and a valuable collection of iconic film and television franchises.

We manage and report our operating results through three reportable business 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

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

Business Combination

On May 13, 2024, SEAC II Corp., a Cayman Islands exempted company (“New SEAC”), consummated a business combination among New SEAC, Screaming Eagle Acquisition Corp., a Cayman Islands exempted company and then parent of New SEAC (“SEAC”), and LG Orion Holdings ULC, a British Columbia unlimited liability company (“StudioCo”) and a wholly-owned subsidiary of the Company, pursuant to a Business Combination Agreement, dated as of December 22, 2023, by and among New SEAC, SEAC, the Company, LG Sirius Holdings ULC, a British Columbia unlimited liability company and a wholly-owned subsidiary of the Company (“Studio HoldCo”), StudioCo, SEAC MergerCo, a Cayman Islands exempted company and a wholly-owned subsidiary of New SEAC (“MergerCo”), and 1455941 B.C.

Unlimited Liability Company, a British Columbia unlimited liability company and a wholly-owned subsidiary of SEAC (“New BC Sub”).

In connection with the closing of the business combination, SEAC II Corp.

changed its name to “Lionsgate Studios Corp.” (referred to as “Lionsgate Studios”).

Lionsgate Studios has continued the existing business operations of StudioCo, which consists of the Studio Business of Lionsgate.

Lionsgate Studios became a separate publicly traded company and its common shares commenced trading on Nasdaq under the symbol “LION” on May 14, 2024.

The "Studio Business" consists of the businesses of Lionsgate's Motion Picture and Television Production segments, together with substantially all of Lionsgate's corporate general and administrative functions and costs.

In connection with the business combination, the Company and StudioCo entered into a separation agreement pursuant to which (i) the assets and liabilities of the Company’s Studio Business (including certain subsidiaries of the Company engaged in the Studio Business) were separated from the assets and liabilities of the Company’s Starz Business (meaning substantially all of the assets and liabilities constituting the Media Networks segment, and including certain subsidiaries of the Company engaged in the Company’s Starz Business) and transferred to StudioCo such that StudioCo holds, directly or indirectly, all of the assets and liabilities of the Studio Business, and (ii) all of the Company’s equity interests in StudioCo were transferred to Studio HoldCo.

As a result, approximately 87.2% of the total shares of Lionsgate Studios continue to be held by the Company, while former SEAC public shareholders and founders and common equity financing investors own approximately 12.8% of Lionsgate Studios.

In addition to establishing Lionsgate Studios as a standalone publicly-traded entity, the transaction resulted in approximately $350.0 million of gross proceeds to the Company, including $274.3 million in PIPE financing.

Of the total gross proceeds, approximately $330.0 million was received at or shortly after the closing of the Business Combination, with the remaining $20.0 million expected to be received shortly.

The net proceeds will be used to pay down amounts outstanding under the Term Loan A and Term Loan B pursuant to the Credit Agreement.

The Business Combination will be accounted for as a reverse recapitalization in accordance with U.S.

Under this method of accounting, Screaming Eagle will be treated as the acquired company and the Studio Business will be treated as the acquirer for financial reporting purposes.

Accordingly, for accounting purposes, the financial statements of New SEAC will represent a continuation of the financial statements of the Studio Business, with the Business Combination treated as the equivalent of the Studio Business issuing stock for the historical net assets of Screaming Eagle, accompanied by a

recapitalization.

The net assets of Screaming Eagle will be stated at fair value, which approximates historical cost, with no goodwill or other intangible assets recorded.

Operations prior to the Business Combination will be those of the Studio Business.

The Studio Business will continue to be a consolidated subsidiary of the Company.

See Note 2 and Note 21 to our consolidated financial statements.

Sloan, a member of the Company’s Board of Directors, is also the Chairman of Screaming Eagle, and owns, directly or indirectly, a material interest in Eagle Equity Partners V, LLC, a Delaware limited liability company, the Screaming Eagle sponsor.

Sloan recused himself from the decisions to approve the Business Combination made by both the board of directors of Screaming Eagle and Lionsgate.

Acquisition of eOne

On December 27, 2023, the Company, and its subsidiaries, Lions Gate Entertainment Inc., a Delaware corporation (“LGEI”), and Lions Gate International Motion Pictures S.à.r.l., a Luxembourg société à responsabilité limitée (“LGIMP” and, with the Company and LGEI, collectively the “Buyers”), completed the previously announced acquisition of all of the issued and outstanding equity interests of the companies constituting the Entertainment One television and film (“eOne”) business from Hasbro, Inc., a Rhode Island corporation (“Hasbro”), pursuant to that certain Equity Purchase Agreement (the “Purchase Agreement”) dated August 3, 2023.

The aggregate cash purchase price was approximately $385.1 million, inclusive of certain purchase price adjustments, including for cash, debt, and working capital.

The preliminary purchase price is subject to further adjustments based on the final determination of the purchase price adjustments.

The acquisition of eOne, a film and television production and distribution company, builds the Company's film and television library, strengthens the Company's scripted and unscripted television business, and continues to expand the Company's presence in Canada and the U.K.

The acquisition was accounted for under the acquisition method of accounting, with the financial results of eOne included in the Company's consolidated results from December 27, 2023.

Revenues and loss before income taxes from eOne for the period from December 27, 2023 through March 31, 2024 amounted to approximately $113.8 million and $4.9 million, respectively.

The Company incurred approximately $9.4 million of acquisition-related costs that were expensed in restructuring and other during the fiscal year ended March 31, 2024.

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

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 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:

Direct operating expense (1)

$ (11.6) $ (3.6) $ 50.6

Distribution and marketing expense — 0.2 16.9

Restructuring and other 0.1 1.1 3.0

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

(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.

In fiscal 2023, we began a plan to restructure our LIONSGATE+ business, which initially included exiting the business in seven international territories (France, Germany, Italy, Spain, Benelux, the Nordics and Japan), and identifying additional cost-saving initiatives.

This plan 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.

During the fiscal year ended March 31, 2024, the Company continued executing its restructuring plan, including its evaluation of the programming on Starz's domestic and international platforms.

In connection with this review, the Company cancelled certain ordered programming, and identified certain other programming with limited strategic purpose which was removed from the Starz platforms and abandoned by the Media Networks segment.

In addition, as a result of the continuing review of its international territories, the Company has made the strategic decision to shut down the LIONSGATE+ service in Latin America and the United Kingdom ("U.K.") with the only remaining international operations being in Canada and India, resulting in additional content impairment charges.

As a result of these restructuring initiatives, we recorded content impairment charges related to the Media Networks segment in the fiscal years ended March 31, 2024 and 2023 of $364.5 million and $379.3 million, respectively, which are included in restructuring and other in the consolidated statement of operations (see Note 15 to our consolidated financial statements).

We have incurred impairment charges from the inception of the plan through March 31, 2024 amounting to $743.8 million.

Under the current restructuring plan and ongoing strategic content review, the net future cash outlay is estimated to range from approximately $80 million to $90 million, which includes contractual commitments on content in territories being exited, and payments on the remaining amounts payable for content removed or that may be removed from its services.

As the Company continues to evaluate the Media Networks business and its current restructuring plan in relation to the current micro and macroeconomic environment and the announced plan to separate the Company's Starz business (i.e., Media Networks segment) and Studio Business (i.e., Motion Picture and Television Production segments), including further strategic review of content performance and its strategy on a territory-by-territory basis, the Company may decide to expand its restructuring plan and exit additional territories or remove certain content off its platform in the future.

Accordingly, the Company may incur additional content impairment and other restructuring charges beyond the estimates above.

Industry Strikes

In May 2023, the Writers Guild of America (“WGA”) commenced an industry-wide strike following the expiration of its collective bargaining agreement with the Alliance of Motion Picture and Television Producers (“AMPTP”).

In July 2023, the Screen Actors Guild - American Federation of Television and Radio Artists (“SAG-AFTRA”) also commenced an industry-wide strike following the expiration of its collective bargaining agreement with the AMPTP.

The WGA strike ended in September 2023, and the SAG-AFTRA strike ended in November 2023, and collective bargaining agreements were subsequently reached between the AMPTP and the WGA and SAG-AFTRA.

These strikes resulted in temporary shutdowns of production on certain of our television and film programming, which resulted in less new content available for licensing and distribution, lower-than-expected spending for content and marketing costs in fiscal 2024, and reduced revenues in our talent management business due to the delays in productions across the industry.

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

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

Our revenues are derived from the U.S., Canada, the United Kingdom and other foreign countries.

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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").

multichannel video programming distributors (“MVPDs”) including cable operators, satellite television providers and telecommunications companies (collectively "Distributors") (in the aggregate, the "Starz Domestic Platform").

• LIONSGATE+.

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The application of the following accounting policies, which are important to our financial position and results of operations, requires significant judgments and estimates on the part of management.

As described more fully below, these estimates bear the risk of change due to the inherent uncertainty of the estimate.

As described more fully below, these estimates bear the risk of change due to the inherent uncertainty

of the estimate.

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

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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.

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.

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 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 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 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.

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

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).

As a result of the Media Networks restructuring initiatives discussed in Part II, Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview", we recorded content impairment charges related to the Media Networks segment in fiscal 2024 and fiscal 2023 of $364.5 million and $379.3 million, respectively, which are included in restructuring and other in the consolidated statement of operations (see Note 3 and Note 15 to our consolidated financial statements).

We have incurred impairment charges from the inception of the plan through March 31, 2024 amounting to $743.8 million.

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 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.

Our Media Networks segment generates revenue primarily from the distribution of our STARZ premium subscription video services.

Our content licensing arrangements include fixed fee and minimum guarantee arrangements, and sales or usage based royalties.

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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.

Goodwill and Indefinite-Lived Intangibles.

At March 31, 2023, the carrying value of goodwill and indefinite-lived intangible assets was $1.29 billion and $250.0 million, respectively.

Our indefinite-lived intangible assets consist of trade names primarily representing the estimated fair value of the Starz brand name determined in connection with the acquisition of Starz as of December 8, 2016.

Goodwill and Indefinite-Lived Intangible Assets.

At March 31, 2024, the carrying value of goodwill and indefinite-lived intangible assets was $811.2 million and nil, respectively, net of impairment charges recorded and reflecting the reassessment of the estimated useful life of our indefinite-lived intangible assets in the second quarter ended September 30, 2023, as further discussed below.

Through September 30, 2023, our indefinite-lived intangible assets consisted of trade names representing the estimated fair value of the Starz brand name determined in connection with the acquisition of Starz as of December 8, 2016 (see further discussion under Indefinite-Lived Intangibles Other Than Goodwill Impairment Assessment below).

Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (component level).

Reporting units are determined by the discrete financial information available for the component and whether that information is regularly reviewed by segment management.

Reporting units are determined by the discrete financial information available for the component and whether that

information is regularly reviewed by segment management.

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

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.

Our reporting units for purposes of goodwill impairment testing, along with their respective goodwill balances at March 31, 2024, were Motion Picture (goodwill of $399 million), Media Networks (no remaining goodwill balance subsequent to the impairment discussed below), and our Television (goodwill of $320 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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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.

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.

In the second quarter of fiscal 2024, due to the continuing difficult macro and microeconomic conditions, industry trends, and their impact on the performance and projected cash flows of the Media Networks segment, including its growth in subscribers and revenue worldwide, and the expanded restructuring activities discussed in Note 15 to the consolidated financial statements, along with recent market valuation multiples, we updated our quantitative impairment assessment for the Media Networks reporting unit goodwill 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 a weighted average perpetual nominal growth rate of 1.5%, at a weighted average cost of capital (discount rate) of 10.5%, 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, we determined that the fair value of our Media Networks reporting unit which was previously disclosed as a reporting unit "at risk" of impairment, was less than its carrying value (after the impairment write-down of its indefinite-lived intangible assets discussed below).

The analysis resulted in a goodwill impairment charge of $493.9 million in the second quarter of fiscal 2024, representing all of the remaining Media Networks reporting unit goodwill, which is recorded in the "goodwill and intangible asset impairment" line item in the consolidated statement of operations.

For our annual goodwill impairment test for fiscal 2024, we performed qualitative goodwill impairment assessments for all our other reporting units (Motion Picture, and our Television and Talent Management businesses, both of which are part of our Television Production segment).

Our qualitative assessment considered the market price of the Company’s common shares, the recent performance of these reporting units, and updated forecasts of performance and cash flows, as well as the current micro and macroeconomic environments in relation to the current and expected performance of these reporting units, and industry considerations, and determined that since the date of the most recent quantitative assessment performed over these reporting units, 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 for these reporting units.

See Note 6 to the consolidated financial statements for further information.

In the second quarter of fiscal 2023, 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.

The analysis resulted in a goodwill impairment charge of $1.475 billion in the second quarter of fiscal 2023, related to our Media Networks reporting unit goodwill.

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;

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;

consumer consumption levels of our content;

adverse macroeconomic conditions related to higher inflation and interest rates and currency rate fluctuations, and the impact on the global economy from wars, terrorism and multiple international conflicts, and future bank failures;

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

capital market transactions;

the duration and potential impact of strikes of unions on our ability to produce, acquire and distribute our content;

the commercial success of our television programming and motion pictures;

our continual contractual relationships with our customers;

including our affiliate agreements of our Media Networks business;

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

and changes in consumer behavior.

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 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.

This qualitative analysis considered the relative impact of market-specific and macroeconomic factors.

The market-specific factors considered included recent projections of revenues and growth in OTT subscribers, both domestic and internationally, associated with the STARZ brand name.

The Company also considered the macroeconomic impact including the uncertainty around the COVID-19 global pandemic, and the resulting uncertain long-term economic impact on discount rates and growth rates, as well as the impact from tax law changes inclusive of the reduction of the federal tax rate since the acquisition of Starz.

Through September 30, 2023, our indefinite-lived intangible assets consisted of trade names representing the estimated fair value of the Starz brand name determined in connection with the acquisition of Starz as of December 8, 2016, amounting to $250.0 million related to the Media Networks reporting unit before the impairment charge recorded in the second quarter of fiscal 2024 discussed below.

During the second quarter of fiscal 2024, 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.

The fair value of the Company's indefinite-lived trade names was estimated based on the present value of the hypothetical cost savings that could be realized by the owner of the trade names as a result of not having to pay a stream of royalty payments to another party.

These cost savings were calculated based on a DCF analysis of the hypothetical royalty payment that a licensee would be required to pay in exchange for use of the trade names, reduced by the tax effect realized by the licensee on the royalty payments.

Based on the quantitative impairment assessment of our trade names, we recorded an impairment charge of $170.0 million in the second quarter of fiscal 2024 related to the Company's Starz business, which was recorded in the "goodwill and intangible asset impairment" line item in the consolidated statement of operations.

After the Company performed its quantitative impairment assessment, during the second quarter ended September 30, 2023, the Company then reassessed the estimated useful life of the trade names with a remaining carrying value of $80.0 million, net of the impairment charge discussed above.

The Company concluded that based upon the most recent factors, including current macro and microeconomic conditions, market competition and historical Company and industry trends, the trade names now have a finite estimated remaining useful life of 10 years.

Accordingly, beginning October 1, 2023, the trade names are being accounted for as finite-lived intangible assets and amortized over their estimated remaining useful life.

This resulted in an increase to amortization expense of $4.0 million for the fiscal year ended March 31, 2024 with a corresponding reduction of income before income taxes, net loss, and net loss attributable to Lions Gate Entertainment Corp.

shareholders.

This resulted in an increase to basic and diluted net loss per share for the fiscal year ended March 31, 2024 by $0.02 per share.

There was no tax benefit from the change due to changes in the Company’s valuation allowance on deferred taxes.

As of March 31, 2024, the Company did not have any indefinite-lived intangible assets.

Finite-Lived Intangible Assets.

At March 31, 2023, the carrying value of our finite-lived intangible assets was approximately $1.05 billion.

At March 31, 2024, the carrying value of our finite-lived intangible assets was $991.8 million.

Our finite-lived intangible assets primarily relate to customer relationships associated with U.S.

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

MVPDs, including

cable operators, satellite television providers and telecommunications companies ("Traditional Affiliate"), which amounted to $909.1 million.

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

Beginning October 1, 2023, our finite-lived intangible assets also include the trade names previously accounted for as indefinite-lived intangible assets as discussed above.

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 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 Company monitors its finite-lived intangible assets and changes in the underlying circumstances each reporting period for indicators of possible impairments or a change in the useful life or method of amortization of our finite-lived intangible assets.

For fiscal 2022 and fiscal 2023, due to changes in the industry related to the migration from linear to OTT and direct-to-consumer consumption, and the economic uncertainty from the COVID-19 global pandemic, we performed an impairment analysis of our amortizable intangible assets.

For fiscal 2023 and fiscal 2024, due to changes in the industry related to the migration from linear to OTT and direct-to-consumer consumption, and continuing difficult macro and microeconomic conditions, we performed an impairment analysis of our amortizable intangible assets.

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

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and foreign deferred tax assets that may not be realized on a more likely than not basis.

Our effective tax rates differ from the federal statutory rate and are affected by many factors, including the overall level of pre-tax income (loss), the mix of our pre-tax income (loss) generated across the various jurisdictions in which we operate, any changes in tax laws and regulations in those jurisdictions, changes in uncertain tax positions, changes in valuation allowances against our deferred tax assets, tax planning strategies available to us and other discrete items.

Our income tax benefit (provision) differs from the U.S.

federal statutory income tax rate of 21% and is affected by many factors, including the overall level of income (loss) before taxes and its mix across the jurisdictions in which we conduct operations, changes in tax laws and regulations, changes in valuation allowances against our deferred tax assets, changes in unrecognized tax benefits, tax planning strategies available to us, and other discrete items.

Recent Accounting Pronouncements

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The following table sets forth our consolidated results of operations for the fiscal years ended March 31, 2024 and 2023.

March 31, Increase (Decrease)

Due to the acquisition of eOne, fiscal 2024 includes the results of operations of eOne from the acquisition date of December 27, 2023, see Note 2 to our consolidated financial statements for further details.

March 31, Change

2024 2023 Amount Percent

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Depreciation and amortization 192.2 180.3 11.9 6.6 %

Restructuring and other 411.9 16.8 395.1 nm

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

Restructuring and other 508.5 411.9 96.6 23.5 %

Goodwill and intangible asset impairment 663.9 1,475.0 (811.1) (55.0) %

Total expenses 4,955.7 5,712.5 (756.8) (13.2) %

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

Operating loss (938.8) (1,857.7) 918.9 (49.5) %

Interest expense (269.8) (221.2) (48.6) 22.0 %

Interest and other income 6.4 30.8 (24.4) nm

Interest and other income 22.1 6.4 15.7 245.3 %

Other expense (26.9) (26.9) — — %

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

Income tax provision (21.3) (28.4) 7.1 (25.0) %

Net loss (2,018.8) (205.4) (1,813.4) nm

Gain on extinguishment of debt 19.9 57.4 (37.5) (65.3) %

Gain on investments, net 3.5 44.0 (40.5) (92.0) %

Equity interests income 8.7 0.5 8.2 1,640.0 %

Loss before income taxes (1,181.3) (1,997.5) 816.2 (40.9) %

Income tax benefit (provision) 65.0 (21.3) 86.3 (405.2) %

Net loss (1,116.3) (2,018.8) 902.5 (44.7) %

Net loss attributable to noncontrolling interest 13.4 8.6 4.8 55.8 %

Net loss attributable to Lions Gate Entertainment Corp.

shareholders $ (2,010.2) $ (188.2) $ (1,822.0) nm

shareholders $ (1,102.9) $ (2,010.2) $ 907.3 (45.1) %

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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.

Consolidated revenues increased $162.1 million in fiscal 2024 reflecting an increase of $29.9 million from our Media Networks business, and a decrease of $97.4 million from our Studio Business, which was more than offset by lower intersegment eliminations of $229.6 million.

Studio Business revenues for fiscal 2024 included approximately $113.8 million of revenues from eOne from the acquisition date of December 27, 2023.

Intersegment eliminations relate to the licensing of product from our Studio Business to the Media Networks segment.

Motion Picture revenue increased $332.6 million in fiscal 2024 due to increased home entertainment revenue driven by John Wick:

Chapter 4 and The Hunger Games:

The Ballad of Songbirds & Snakes , increased theatrical and international revenue primarily from The Hunger Games:

The Ballad of Songbirds & Snakes , and higher television and other revenue.

Motion Picture revenues for fiscal 2024 included approximately $19.5 million of revenues from eOne from the acquisition date of December 27, 2023.

Motion Picture revenue included $128.2 million of revenue from licensing Motion Picture segment product to the Media Networks segment, representing an increase of $84.0 million from fiscal 2023.

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 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.

Television Production revenue decreased $430.0 million due to decreased domestic television revenue from lower intersegment revenues from the licensing of Starz original series and lower third-party domestic television revenue, and decreased international, other, and home entertainment revenue.

Television Production revenues for fiscal 2024 included approximately $94.3 million of revenues from eOne from the acquisition date of December 27, 2023.

Television Production revenue included $417.7 million of revenue from licensing Television Production segment product to our Media Networks segment, representing a decrease of $313.6 million from fiscal 2023.

The decrease in intersegment eliminations of $229.6 million is primarily associated with lower Television Production revenues of $313.6 million for licenses of original series to Starz Networks and LIONSGATE+, both in the Media Networks segment as discussed above, partially offset by higher Motion Picture revenues of $84.0 million reflecting the licensing of certain recent theatrical releases to Starz.

Media Networks revenue increased $29.9 million, and reflected increased revenue at LIONSGATE+ of $60.3 million, offset by a decrease of $30.4 million at Starz Networks.

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

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Year Ended March 31,

2023 2022 Increase (Decrease)

2024 2023 Change

Amount % of Segment Revenues Amount % of Segment Revenues Amount Percent

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COVID-19 related charges (benefit) (1.0) nm (11.6) nm 10.6 (91.4) %

Other 9.4 nm 44.4 nm (35.0) nm

Other 2.8 nm 9.4 nm (6.6) (70.2) %

Intersegment eliminations (494.2) nm (740.1) nm 245.9 (33.2) %

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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.

Direct operating expenses decreased in fiscal 2024, due to lower direct operating expenses of our Studio Business and the Media Networks segment, partially offset by lower intersegment eliminations.

The decrease at the Studio Business reflects lower direct operating expenses of the Television Production segment due to lower revenues from Television Production, partially offset by higher direct operating expenses of the Motion Picture segment due to higher Motion Picture revenues.

The decrease in Media Networks direct operating expense was driven by decreases at Starz Networks of $29.4 million due to lower programming cost amortization, and LIONSGATE+ of $21.9 million due to lower programming cost amortization from the territories exited, or to be exited, and a benefit from foreign exchange gains in fiscal 2024 as compared to foreign exchange losses in fiscal 2023 at LIONSGATE+.

The decrease in intersegment eliminations is due to lower Television Production 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 (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.

In fiscal 2024, direct operating expense included a benefit of $1.0 million, reflecting COVID related costs net of insurance recoveries of $1.2 million (fiscal 2023 - benefit of $11.6 million, net of insurance recoveries of $14.1 million).

Direct operating expenses related to the COVID-19 global pandemic have been declining and are expected to continue to decline as the severity of the COVID-19 global pandemic continues to lessen.

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 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.

Other direct operating expense includes share-based compensation, and in fiscal 2023, other direct operating expenses also 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.

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.

Distribution and marketing expenses by segment were as follows for the fiscal years ended March 31, 2024 and 2023:

Year Ended March 31, Increase (Decrease)

Year Ended March 31, Change

2024 2023 Amount Percent

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Media Networks 451.1 496.5 (45.4) (9.1) %

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

Other 0.8 0.7 0.1 14.3 %

Intersegment eliminations 0.3 — 0.3 n/a

Intersegment eliminations (2.8) 0.3 (3.1) nm

$ 911.4 $ 801.7 $ 109.7 13.7 %

theatrical P&A and Premium VOD expense included in Motion Picture distribution and marketing expense $ 277.7 $ 149.8 $ 127.9 85.4 %

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.

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Distribution and marketing expenses increased in fiscal 2024 due to higher Studio Business distribution and marketing expense, partially offset by lower Media Networks distribution and marketing expense.

The increase at the Studio Business primarily reflects greater Motion Picture theatrical P&A and Premium VOD expense associated with the theatrical slate releases in fiscal 2024.

The decrease in Media Networks distribution and marketing expense was due to a decrease at LIONSGATE+ of $48.1 million primarily due to a decrease in distribution and advertising expenses from the territories exited, or to be exited, partially offset by a slight increase at Starz Networks of $2.7 million.

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

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General and administrative expenses by segment were as follows for the fiscal years ended March 31, 2024 and 2023:

March 31, Increase (Decrease)

March 31, Change

2024 % of Revenues 2023 % of Revenues Amount Percent

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Total general and administrative expenses $ 490.5 12.2% $ 531.1 13.8% $ (40.6) (7.6) %

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.

General and administrative expenses decreased in fiscal 2024, resulting from decreased purchase accounting and related adjustments, share-based compensation expense and Media Networks general and administrative expenses, partially offset by increased Studio Business and corporate general and administrative expenses.

Studio Business general and administrative expenses for fiscal 2024 included approximately $7.5 million from eOne from the acquisition date of December 27, 2023.

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

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.

Corporate general and administrative expenses increased $13.2 million, or 10.7%, primarily due to an increase in incentive based compensation and approximately $4.0 million allocated corporate general and administrative expenses from eOne from the acquisition date of December 27, 2023.

The decrease in share-based compensation expense included in general and administrative expense in fiscal 2024, as compared to fiscal 2023 is primarily due to a decrease in the number of share-based payment awards incurring expense in fiscal 2024 as compared to fiscal 2023.

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 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).

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

The noncontrolling equity interests 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 $43.1 million, or 78.8%, primarily due to lower noncontrolling equity interests in the distributable earnings related to 3 Arts Entertainment of $23.5 million associated with decreased earnings of 3 Arts Entertainment in fiscal 2024 due to production delays as a result of the industry strikes, and a lower noncontrolling interest ownership percentage a result of our acquisition of an additional interest in 3 Arts Entertainment (see Note 11 to our consolidated financial statements).

In addition, purchase accounting and related adjustments decreased due to lower noncontrolling interest discount amortization of $13.2 million, and decreased amortization of the recoupable portion of the purchase price of 3 Arts Entertainment of $6.4 million, due to the amortization periods ending in November 2022 and May 2023, respectively.

Depreciation and Amortization Expense.

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

Depreciation and amortization of $192.2 million for fiscal 2024 increased $11.9 million from $180.3 million in fiscal 2023 due to increased depreciation expense related to software in fiscal 2024 and increased amortization expense of $4.0 million associated with the change in estimated useful life of the Starz trade names, as described in Part II, Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies", Goodwill and Indefinite-Lived Intangible Assets .

Restructuring and Other.

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Restructuring and other:

Content and other impairment (1)

$ 385.2 $ — $ 385.2 n/a

Content and other impairments (1)

$ 377.3 $ 385.2 $ (7.9) (2.1) %

Severance (2)

Cash 37.2 $ 18.0 19.2 106.7 %

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

Accelerated vesting on equity awards (see Note 13 to our consolidated financial statements) 9.4 4.2 5.2 123.8 %

Total severance costs 46.6 22.2 24.4 109.9 %

COVID-19 related charges — 0.1 (0.1) (100.0) %

0.1 1.1 (1.0) (90.9) %

Transaction and other costs (3)

4.4 11.1 (6.7) (60.4) %

84.6 4.4 80.2 nm

$ 508.5 $ 411.9 $ 96.6 23.5 %

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(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.

(1) Media Networks Restructuring:

As a result of the Media Networks restructuring initiatives discussed in Part II, Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview" , the Company recorded content impairment charges related to the Media Networks segment in the fiscal year ended March 31, 2024 of $364.5 million (fiscal year ended March 31, 2023 - $379.3 million).

See Note 15 to our consolidated financial statements.

Other Impairments:

Amounts in the fiscal year ended March 31, 2024 also include $12.8 million of development costs written off in connection with changes in strategy in the Television Production segment as a result of the acquisition of eOne.

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.

(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.

(2) Severance costs were primarily related to restructuring activities and other cost-saving initiatives.

In the fiscal year ended March 31, 2024, amounts were due to restructuring activities including integration of the acquisition of eOne, LIONSGATE+ international restructuring and our Motion Picture and Television Production segments.

(3) Amounts in the fiscal years ended March 31, 2024 and 2023 reflect transaction, integration and legal costs associated with certain strategic transactions, and restructuring activities and also include costs and benefits associated with legal and other matters.

In fiscal 2024, these amounts include $49.2 million associated with the acquisition of additional interest in 3 Arts Entertainment.

Due to the new arrangement representing a modification of terms of the compensation element under the previous arrangement which resulted in the reclassification of the equity award to a liability award, the Company recognized incremental compensation expense of $49.2 million, representing the excess of the fair value of the modified award over amounts previously expensed.

See Note 11 to our consolidated financial statements for further information.

In addition, transaction and other costs in fiscal 2024 includes approximately $16.6 million of a loss associated with a theft at a production of a 51% owned consolidated entity.

The Company expects to recover a

portion of this amount under its insurance coverage and from the noncontrolling interest holders of this entity.

Transaction and other costs in fiscal 2024 also include a benefit of $5.4 million associated with an arrangement to migrate subscribers in some of the exited territories to a third-party in connection with the LIONSGATE+ international restructuring.

The remaining amounts in fiscal 2024 primarily represent acquisition and integration costs related to the acquisition of eOne, and costs associated with the separation of the Starz Business from the Studio Business.

In fiscal 2023, transaction and other costs include a benefit of $11.0 million for a settlement of a legal matter related to the Media Networks segment.

Goodwill and Intangible Asset Impairment.

Goodwill and intangible asset impairment of $663.9 million for the fiscal year ended March 31, 2024 included goodwill impairment of $493.9 million and impairment of our indefinite-lived trade names of $170.0 million related to the Media Networks reporting unit, as compared to goodwill impairment of $1.475 billion for the fiscal year ended March 31, 2023 related to the Media Networks reporting unit.

See Part II, Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates", Goodwill and Indefinite-Lived Intangible Assets and Note 6 to our consolidated financial statements).

Interest Expense.

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).

Interest expense of $269.8 million in fiscal 2024 increased $48.6 million from fiscal 2023 due to higher average interest rates and balances on variable rate corporate debt and film related obligations, partially offset by a larger benefit from the interest rate swaps and lower expense from the Senior Notes due to repurchases in fiscal 2024.

The following table sets forth the components of interest expense for the fiscal years ended March 31, 2024 and 2023:

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______________________

(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).

(1) Other interest expense includes 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), and payments and receipts associated with the Company's interest rate swaps (Note 18 to our consolidated financial statements).

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

Interest and Other Income.

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).

Interest and other income of $22.1 million for the fiscal year ended March 31, 2024 increased as compared to interest and other income of $6.4 million for the fiscal year ended March 31, 2023, due to certain insurance recoveries in fiscal 2024.

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).

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.

Other expense of $26.9 million for fiscal 2024 was comparable to other expense of $26.9 million for fiscal 2023, and represented the loss recorded related to our monetization of accounts receivable programs (see Note 19 to our consolidated financial statements).

Gain on Extinguishment of Debt.

Gain on extinguishment of debt of $19.9 million for fiscal 2024 represented a gain of $21.2 million associated with the repurchase of $85.0 million principal amount of 5.500% Senior Notes at a discount, partially offset by a loss of $1.3 million due to the write-off of issuance costs associated with the early prepayment of certain production loans.

In fiscal 2023, the gain on extinguishment of debt of $57.4 million 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.

See Note 7 to our consolidated financial statements.

Gain on Investments.

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.

We had an income tax provision of $21.3 million in fiscal 2023, compared to an income tax provision of $28.4 million in fiscal 2022.

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 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.

Gain on Investments, net.

Gain on investments, net was $3.5 million for fiscal 2024, as compared to gain on investments, net of $44.0 million for fiscal 2023, which primarily represented a gain associated with the sale of a portion of our ownership interest in STARZPLAY Arabia.

Equity Interests Income.

Equity interests income of $8.7 million in fiscal 2024 increased from equity interests income of $0.5 million in fiscal 2023 due to higher income generated by our equity method investees.

Income Tax Benefit (Provision).

We had an income tax benefit of $65.0 million in fiscal 2024, compared to an income tax provision of $(21.3) million in fiscal 2023.

Our income tax benefit (provision) differs from the U.S.

federal statutory income tax rate of 21% multiplied by income (loss) before taxes due to the mix of our earnings across the various jurisdictions in which our operations are conducted, changes in valuation allowances against our deferred tax assets, and certain minimum income and foreign withholding taxes.

Additionally, our income tax benefit (provision) for fiscal 2024 was impacted by the settlement of a previously ongoing refund claim, which resulted in a tax benefit of $70.0 million.

At March 31, 2024, we had U.S.

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.

net operating loss carryforwards of approximately $1,330.6 million available to reduce future federal income taxes, certain of which expire beginning in 2037 through 2042, state net operating loss carryforwards of approximately $1,203.9 million available to reduce future state income taxes which expire in varying amounts beginning 2025, Canadian loss carryforwards of $361.6 million which will expire beginning in 2030, Luxembourg loss carryforwards of $504.3 million which will expire beginning in 2036, Spanish loss carryforwards of $96.1 million which will expire beginning in 2036, U.K.

loss carryforwards of $95.1 million with no expiration, and other foreign jurisdiction loss carryforwards of $24.6 million which will expire beginning in 2028.

In addition, at March 31, 2024, we had U.S.

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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.

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.

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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)

March 31, Change

2024 2023 Amount Percent

(Amounts in millions)

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

Operating loss $ (938.8) $ (1,857.7) $ 918.9 (49.5) %

Corporate general and administrative expenses 136.1 122.9 13.2 10.7 %

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

Goodwill and intangible asset impairment 663.9 1,475.0 (811.1) (55.0) %

Adjusted depreciation and amortization 50.1 40.2 9.9 24.6 %

40.2 43.0 (2.8) (6.5) %

Restructuring and other 411.9 16.8 395.1 nm

Restructuring and other 508.5 411.9 96.6 23.5 %

COVID-19 related charges (benefit) (1.0) (11.6) 10.6 (91.4) %

(11.6) (3.4) (8.2) 241.2 %

Programming and content charges — 7.0 (7.0) (100.0) %

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 81.2 97.8 (16.6) (17.0) %

97.8 100.0 (2.2) (2.2) %

Purchase accounting and related adjustments 153.7 195.5 (41.8) (21.4) %

195.5 194.0 1.5 0.8 %

Total segment profit $ 653.7 $ 481.0 $ 172.7 35.9 %

_______________________

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

See Note 16 to our consolidated financial statements for further information on the reconciling line items above, and for reconciliations of depreciation and amortization and share-based compensation expense as presented on our consolidated statements of operations to adjusted depreciation and amortization and adjusted share-based compensation expense, respectively, as presented in the line items above.

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)

March 31, Change

2024 2023 Amount Percent

13 unchanged sentences

Media Networks 236.4 106.8 129.6 121.3 %

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

Intersegment eliminations (48.9) (35.7) (13.2) 37.0 %

Total Segment Profit $ 653.7 $ 481.0 $ 172.7 35.9 %

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The table below sets forth Motion Picture gross contribution and segment profit for the fiscal years ended March 31, 2024 and 2023:

March 31, Increase (Decrease)

March 31, Change

2024 2023 Amount Percent

11 unchanged sentences

The table below sets forth Motion Picture revenue by media and product category for the fiscal years ended March 31, 2024 and 2023.

Motion Picture revenues for fiscal 2024 included approximately $19.5 million of revenues from eOne from the acquisition date of December 27, 2023.

Year Ended March 31,

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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 $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.

Theatrical revenue increased $105.8 million in fiscal 2024, as compared to fiscal 2023, due to an increase of $106.8 million from Lionsgate Original Releases driven by the performance of our fiscal 2024 theatrical slate, and in particular, The Hunger Games:

The Ballad of Songbirds & Snakes, and to a lesser extent, Saw X .

The increase was also, to a lesser extent, due to a greater number of theatrical slate releases in fiscal 2024 as compared to fiscal 2023.

Home entertainment revenue increased $138.3 million, or 23.1%, in fiscal 2024, as compared to fiscal 2023, due to higher digital media revenue of $124.8 million.

The increase in digital media revenue was due to an increase from Lionsgate Original Releases of $105.0 million due to revenues from John Wick:

Chapter 4 (fiscal 2023 theatrical slate title) , The Hunger Games:

The Ballad of Songbirds & Snakes and previous Hunger Games titles, and to a lesser extent, from a greater number of fiscal 2024 theatrical slate titles released on home entertainment digital media in fiscal 2024 as compared to fiscal 2023.

The increase in digital media revenue was also due to an increase from Other Film of $19.8 million from our acquired library titles.

Television revenue increased $56.6 million, or 26.0%, in fiscal 2024, as compared to fiscal 2023, due to an increase from Lionsgate Original Releases of $66.7 million due to a greater number of television windows opening from our fiscal 2024 and fiscal 2023 theatrical slates than from our fiscal 2023 and fiscal 2022 theatrical slates in the prior fiscal year, and higher revenue recognized for those titles, and in particular, John Wick:

Chapter 4, partially offset by a decrease from Other Film of $10.1 million primarily from our acquired library titles.

International revenue increased $26.0 million, or 7.1%, in fiscal 2024, as compared to fiscal 2023 due to an increase from Lionsgate Original Releases of $34.2 million driven by higher revenue generated from our fiscal 2024 and fiscal 2023 theatrical slate titles, and in particular, The Hunger Games:

The Ballad of Songbirds & Snakes , as compared to the revenue generated from our fiscal 2023 and fiscal 2022 theatrical slate titles in the prior fiscal year, partially offset by a lower revenue from direct-to-platform and multi-platform releases.

The increase in Lionsgate Original Releases was partially offset by a decrease from Other Film of $8.0 million from our acquired library titles.

Direct Operating Expense.

The increase in direct operating expenses is due to higher motion picture revenue in fiscal 2024.

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.

Direct operating expenses as a percentage of motion picture revenue decreased slightly and is driven by the change in the mix of titles and product categories generating revenue in fiscal 2024 as compared to fiscal 2023, in particular the lower amortization rate of our fiscal 2024 theatrical slate as compared to our fiscal 2023 theatrical slate.

Investment in film write-downs included in Motion Picture segment direct operating expense in fiscal 2024 were $34.6 million, as compared to $6.2 million in fiscal 2023.

Distribution and Marketing Expense.

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.

The increase in distribution and marketing expense in fiscal 2024 is due primarily to higher theatrical P&A and Premium VOD expense associated with the theatrical slate releases in fiscal 2024.

In the fiscal year ended March 31, 2024 approximately $26.2 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $23.2 million in the fiscal year ended March 31, 2023.

We expect Motion Picture distribution and marketing expense in fiscal 2025 to decrease as compared to fiscal 2024.

Gross Contribution.

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.

Gross contribution of the Motion Picture segment for fiscal 2024 increased $47.0 million, or 12.2%, as compared to fiscal 2023 due to higher Motion Picture revenue, partially offset by higher distribution and marketing expense and direct operating expense.

General and Administrative Expense.

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

General and administrative expenses of the Motion Picture segment increased $4.1 million, or 3.7%, primarily due to an increase in incentive based compensation.

Television Production

The table below sets forth Television Production gross contribution and segment profit for the fiscal years ended March 31, 2024 and 2023:

March 31, Increase (Decrease)

March 31, Change

2024 2023 Amount Percent

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The table below sets forth Television Production revenue and changes in revenue by media for the fiscal years ended March 31, 2024 and 2023.

March 31, Increase (Decrease)

Television Production revenues for fiscal 2024 included approximately $94.3 million of revenues from eOne from the acquisition date of December 27, 2023.

March 31, Change

2024 2023 Amount Percent

9 unchanged sentences

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

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.

Domestic television revenue decreased $355.8 million, or 31.1% in fiscal 2024 as compared to fiscal 2023, due to a decrease of $243.4 million from intersegment revenues from the licensing of fewer Starz original series to Starz Networks , and lower third-party revenue from fewer television episodes delivered, which were unfavorably impacted by the WGA and SAG-AFTRA strikes.

These decreases in domestic television revenue were partially offset by an increase of approximately $83.2 million for revenues from eOne from the acquisition date of December 27, 2023.

International revenue in fiscal 2024 decreased $48.9 million, or 17.6%, as compared to fiscal 2023 , due to a decrease of $90.6 million from intersegment revenues from the licensing of fewer Starz original series to LIONSGATE+, partially offset by an increase from third-party revenue, which included significant revenue from The Continental - Season 1, and an increase of approximately $7.7 million for revenues from eOne from the acquisition date of December 27, 2023.

Home entertainment revenue in fiscal 2024 was comparable to fiscal 2023.

Other revenue in fiscal 2024 decreased $22.9 million, or 24.6% as compared to fiscal 2023, and primarily reflects lower revenue of 3 Arts Entertainment, which is generated from commissions and executive producer fees earned related to talent management and was unfavorably impacted by the WGA and SAG-AFTRA strikes.

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 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.

Direct operating expense of the Television Production segment in fiscal 2024 decreased $451.4 million, or 29.3%, due to the decrease in Television Production revenues.

Direct operating expenses as a percentage of

television production revenue decreased as compared to fiscal 2023, primarily due to the mix of titles generating revenue in fiscal 2024 as compared to fiscal 2023, and in particular, fiscal 2024 included significant revenue from The Continental which has a lower amortization rate as compared to the titles generating revenue in fiscal 2023.

Investment in film and television programs write-downs included in Television Production segment direct operating expense in fiscal 2024 were $8.4 million as compared to $4.6 million in fiscal 2023.

Gross Contribution.

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.

Gross contribution of the Television Production segment for fiscal 2024 increased by $19.4 million as compared to fiscal 2023 due to lower television production revenue, which was more than offset by lower direct operating expenses as a percentage of television production revenue.

General and Administrative Expense.

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.

General and administrative expenses of the Television Production segment increased $6.0 million, or 11.6%.

Television Production general and administrative expenses for fiscal 2024 included $6.0 million from eOne from the acquisition date of December 27, 2023.

Media Networks

The table below sets forth Media Networks gross contribution and segment profit for the fiscal years ended March 31, 2024 and 2023:

March 31, Increase (Decrease)

March 31, Change

2024 2023 Amount Percent

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The table below sets forth, for the periods presented, subscriptions to our Media Networks and STARZPLAY Arabia services.

March 31, March 31,

Actual Pro Forma (1)

March 31, March 31, March 31, March 31,

2024 2023 2024 2023

(Amounts in millions)

Starz Domestic

Linear Subscribers 8.0 9.5

OTT Subscribers 12.59 12.25 12.59 12.25

Total 20.3 21.0

Linear Subscribers 6.76 8.02 6.76 8.02

OTT Subscribers (1)

Total 19.35 20.27 19.35 20.27

OTT Subscribers (1)

3.87 5.65 3.31 3.47

Linear Subscribers 1.67 1.80 1.66 1.81

Total 5.54 7.45 4.97 5.28

OTT Subscribers (1)

16.46 17.90 15.90 15.72

Linear Subscribers 8.43 9.82 8.42 9.83

Total Starz 24.89 27.72 24.32 25.55

STARZPLAY Arabia (2)

3.22 2.55 3.22 2.55

Total Domestic and International Subscribers (1)

28.11 30.27 27.54 28.10

Subscribers by Platform:

Linear Subscribers 9.9 11.3

OTT Subscribers (1)(3)

19.68 20.45 19.12 18.27

Linear Subscribers 8.43 9.82 8.42 9.83

Total Global Subscribers (1)

28.11 30.27 27.54 28.10

(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.

Supplemental Subscriber Information:

Starz North America (4)

OTT Subscribers 13.38 12.95 13.38 12.95

Linear Subscribers 8.42 9.83 8.42 9.83

Total 21.80 22.78 21.80 22.78

___________________

(1) Pro forma amounts exclude OTT subscribers for the international territories exited or to be exited in Australia, Continental Europe, Japan, Latin America and the U.K.

amounting to 0.57 million and 2.17 million at March 31, 2024 and 2023, respectively.

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

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

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.

(4) Starz North America subscribers include subscribers in the U.S.

(as presented in the "Starz Domestic" line item) and Canada (included in the LIONSGATE+ subscriber amounts in the table above).

Media Networks revenue increased $29.9 million and reflected increased revenue at LIONSGATE+ of $60.3 million, partially offset by a decrease of $30.4 million at Starz Networks.

Starz Networks' revenue decreased $30.4 million primarily because of declines in revenue of $81.0 million from traditional linear services, which were offset by higher OTT revenue of $52.4 million resulting from a price increase initiated at the end of June 2023 and fully implemented during the quarter ended September 30, 2023, and growth in OTT subscribers of 0.34 million since March 31, 2023.

The LIONSGATE+ revenue of $211.0 million for fiscal 2024 includes $166.4 million from the LIONSGATE+ territories exited, or to be exited in Australia, Continental Europe, Japan, Latin America and the U.K.

(the "Exiting Territories").

The increase in revenue at LIONSGATE+, was primarily due to an increase in revenue from the Exiting Territories of approximately $44.4 million, which was primarily the result of a modification to shorten a long-term distribution contract in Latin America resulting from the decision to exit the Latin American markets.

In addition, the increase was due to revenue from the distribution of certain Starz Originals and licensed content to third-party distributors outside of the Starz Platforms in ancillary markets of approximately $15.6 million.

During fiscal 2024 and fiscal 2023, the following original series premiered on STARZ:

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First Quarter:

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

Blindspotting Season 2 April 14, 2023 Gaslit April 24, 2022

Run the World Season 2

May 26, 2023 P-Valley Season 2

Outlander Season 7A

June 16, 2023 Becoming Elizabeth Season 1

June 12, 2022

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Second Quarter:

Power Book III:

Raising Kanan Season 2

August 14, 2022 Power Book III:

Minx Season 2

July 21, 2023 Power Book III:

Raising Kanan Season 2

July 18, 2021

Serpent Queen Season 1

September 11, 2022 Heels Season 1

August 14, 2022

BMF - Black Mafia Family Season 1

Heels Season 2

July 28, 2023 Serpent Queen Season 1

September 11, 2022

Third Quarter:

Men in Kilts Season 2

August 11, 2023

Power Book IV:

Force Season 2

July 28, 2023 Third Quarter:

Third Quarter:

Step Up Season 3

October 16, 2022 Hightown Season 2

October 16, 2022

Dangerous Liaisons Season 1

November 6, 2022 Power Book II:

Ghost Season 2

Shining Value Season 2

October 13, 2023 Dangerous Liaisons Season 1

November 6, 2022

Power Book III:

Raising Kanan Season 3

December 1, 2023

Fourth Quarter:

Hightown Season 3

January 26, 2024 BMF - Black Mafia Family Season 2

January 6, 2023

BMF - Black Mafia Family Season 3

January 6, 2023 Power Book IV:

Force Season 1

March 1, 2024 Party Down Season 3

February 24, 2023

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 17, 2023

___________________

(1) In addition, BMF - Black Mafia Family Season 1 premiered on September 26, 2021, with the majority of episodes airing during the three months ended December 31, 2021.

Direct Operating and Distribution and Marketing Expenses .

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 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.

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.

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

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.

In addition, the shutdown, and planned shutdown, of the LIONSGATE+ international service in the Exiting Territories will result in a decrease in expenses going forward.

The decrease in Media Networks direct operating expenses is due to decreases at Starz Networks of $29.4 million and LIONSGATE+ of $21.9 million in fiscal 2024.

The decrease in Starz Networks direct operating expense was due primarily to lower programming cost amortization of $27.8 million related to library content, $16.3 million related to theatrical releases under our programming output agreements, partially offset by an increase of $9.7 million related to our Starz Originals, and a benefit in fiscal 2023 of $10.0 million associated with the modification of a content licensing arrangement.

Direct operating expenses at LIONSGATE+ decreased in the Exiting Territories as a result of lower programming cost amortization and operating costs of approximately $31.9 million and lower expense of approximately $6.1 million related to foreign exchange gains in fiscal 2024 compared to foreign exchange losses in fiscal 2023, partially offset by higher amortization of investment in films and television programs of $11.5 million associated with the distribution of Starz Originals and licensed content to third-party distributors outside of the Starz Platforms in ancillary markets.

The LIONSGATE+ direct operating expense of $129.4 million for fiscal 2024 includes $92.8 million from the Exiting Territories.

The decrease in Media Networks distribution and marketing expense is due to a decrease of $48.1 million at LIONSGATE+ primarily due to a decrease in distribution and advertising expenses from the Exiting Territories, partially offset by an increase of $2.7 million at Starz Networks.

The LIONSGATE+ distribution and marketing expense of $36.0 million for fiscal 2024 includes $27.4 million from the Exiting Territories.

Gross Contribution.

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.

The increase in gross contribution compared to the fiscal year ended March 31, 2023 was due to increased gross contribution at LIONSGATE+ of $130.3 million, partially offset by a decrease at Starz Networks of $3.7 million.

The increased gross contribution was driven by higher revenue, primarily the result of a modification to shorten a long-term distribution contract in Latin America, and lower direct operating expense and distribution and marketing expense at LIONSGATE+, as described above.

The positive gross contribution related to the Exiting Territories was approximately $46.0 million for fiscal 2024.

General and Administrative Expense.

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+.

General and administrative expenses in the fiscal year ended March 31, 2024 decreased from fiscal 2023, due to decreases of $11.5 million at LIONSGATE+, partially offset by increases of $8.5 million at Starz Networks.

Liquidity and Capital Resources

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As of March 31, 2024, we had cash and cash equivalents of $314.0 million.

As discussed under Part II, Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview", on May 13, 2024, the Company closed the Business Combination Agreement, and Lionsgate Studios became a separate publicly traded company and its common shares commenced trading on Nasdaq under the symbol "LION" on May 14, 2024.

Of the total gross proceeds, approximately $330.0 million was received at or shortly after the closing of the Business Combination, with the remaining $20.0 million expected to be received shortly.

The net proceeds will be used to pay down amounts outstanding under the Term Loan A and Term Loan B pursuant to the Credit Agreement.

Corporate Debt

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◦ Revolving Credit Facility.

We have a $1.25 billion revolving credit facility (with no amounts outstanding at March 31, 2023) due April 2026 (the "Revolving Credit Facility").

We have a $1.25 billion revolving credit facility (with $575.0 million outstanding at March 31, 2024) due April 2026 (the "Revolving Credit Facility").

We maintain significant availability under our Revolving Credit Facility, which is currently used to meet our short-term liquidity requirements, and could also be used for longer term liquidity requirements.

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We have a term loan A facility due April 2026 (the "Term Loan A"), with $399.3 million outstanding at March 31, 2024.

The outstanding amounts under the Revolving Credit Facility and Term Loan A may become due on December 23, 2024 (i.e.

91 days prior to March 24, 2025) prior to its maturity on April 6, 2026 in the event that the aggregate principal amount of outstanding Term Loan B in excess of $250 million has not been repaid, refinanced or extended to have a maturity date on or after July 6, 2026.

The Company expects to refinance and extend the maturity date of the Term Loan B prior to December 23, 2024 such that the maturity of the revolving credit facility and Term Loan A are not accelerated.

◦ Term Loan B.

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We have $715.0 million outstanding of 5.500% senior notes due 2029 (the "5.500% Senior Notes") at March 31, 2024.

See Note 21 to our consolidated financial statements for the 5.500% Senior Notes exchange transaction completed in May 2024.

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

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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.

The Company's programming notes outstanding were fully repaid in fiscal 2024.

• Production Tax Credit Facility:

We have a $260.0 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").

As of March 31, 2024, tax credit receivables amounting to $341.4 million represented collateral related to the Production Tax Credit Facility.

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

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• 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.

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 acquired 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.

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As of March 31, 2024, 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.

The Company has other loans, which are secured by accounts receivable and contracted receivables which are not yet recognized as revenue under certain licensing agreements.

Outstanding loan balances under these "other" 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, 2024, there was $112.3 million outstanding under the "other" loans, of which $24.1 million has a contractual repayment date in July 2025 and $88.2 million has a contractual repayment date in April 2027.

As of March 31, 2024, accounts receivable amounting to $47.8 million and contracted receivables not yet reflected as accounts receivable on the balance sheet at March 31, 2024 amounting to $84.5 million represented collateral related to the "other" 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.

Our accounts receivable monetization programs include individual agreements to monetize certain of our trade accounts receivable directly with third-party purchasers, and previously have included 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.

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• 3 Arts Entertainment.

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

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

As of March 31, 2023, the Company had a redeemable noncontrolling interest representing 49% of 3 Arts Entertainment.

The noncontrolling interest was subject to put and call options at fair value that were exercisable during the quarter ended December 31, 2023.

On January 2, 2024, the Company closed on the acquisition of an additional 25% of 3 Arts Entertainment representing approximately half of the noncontrolling interest for approximately $194 million.

In addition, the Company purchased certain profit interests held by certain managers and entered into certain option rights agreements, which replaced the put and call rights discussed above by providing noncontrolling interest holders the right to sell to the Company and the Company the right to purchase their remaining (24%) interest beginning in January 2027.

• 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 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.

The Company has a remaining redeemable noncontrolling interest representing 12.5% of Pilgrim Media Group.

The noncontrolling interest holder has a right to put and the Company has a right to call the 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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The nature of our business is such that significant initial expenditures are required to produce, acquire, distribute and market films and television programs, while revenues from these films and television programs are earned over an extended period of time after their completion or acquisition.

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

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.

In addition to the cash requirements of any potential future redemption of our noncontrolling interests as discussed above, which we may fund with a combination of cash on hand, borrowings under our line of credit and/or new financing arrangements, we have other anticipated cash requirements outside of our normal operations.

Under the current Media Networks business restructuring plan and ongoing strategic review previously discussed under Part II, Item 7.

"Management's Discussion and Analysis of Financial Condition and Results of Operations - Overview", the net future cash outlay is estimated to range from approximately $80 million to $90 million, which includes contractual commitments on content in territories being exited, and payments on the remaining amounts payable for content removed or that may be removed from its services.

As we continue to evaluate the Media Networks business and its current restructuring plan in relation to the current micro and macroeconomic environment and the announced plan to separate the Company's Starz business (i.e., Media Networks segment) and Studio Business (i.e., Motion Picture and Television Production segments), including further strategic review of content performance and its strategy on a territory-by-territory basis, we may decide to expand our restructuring plan and exit additional territories or remove certain content off its platform in the future.

We may incur additional content impairment and other restructuring charges beyond the estimates above.

In the short-term, we currently expect that our cash requirements for productions will increase and our marketing spend will decrease in fiscal 2025 as compared to fiscal 2024.

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, available production, license or intellectual property financing, and proceeds from equity financing (see Note 21 to our audited consolidated financial statements), will be adequate to meet known operational cash and debt service (i.e.

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 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.

In addition, we 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 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.

Additionally, circumstances related to 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.

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Revolving credit facility (2)

$ 575.0 $ — $ 575.0

Term Loan A (2)

2 unchanged sentences

5.500% Senior Notes (3)

715.0 — 715.0

Film related obligations (4)

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619.6 452.8 166.8

Interest payments on corporate debt (6)

Interest payments (8)

380.4 165.6 214.8

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

(2) The outstanding amounts under the Revolving Credit Facility and Term Loan A may become due on December 23, 2024 (i.e.

(3) See Note 21 to our consolidated financial statements for further information on our 5.500% Senior Notes exchanged.

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

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See Note 17 to our consolidated financial statements for further information.

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

(8) Includes cash interest payments on our corporate debt, and film related obligations, based on the applicable SOFR interest rates at March 31, 2024, net of payments and receipts from the Company's interest rate swaps, and excluding the interest payments on the revolving credit facility as future amounts are not fixed or determinable due to fluctuating balances and interest rates.

(9) Not included in the amounts above are $123.3 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).

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Discussion of Operating, Investing, Financing Cash Flows

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.

Cash, cash equivalents and restricted cash increased by $59.6 million for the fiscal year ended March 31, 2024 and decreased by $68.8 million for the fiscal year ended March 31, 2023, before foreign exchange effects on cash.

Components of these changes are discussed below in more detail.

Operating Activities.

Cash flows used in operating activities for the fiscal years ended March 31, 2023 and 2022 were as follows:

Cash flows provided by (used in) operating activities for the fiscal years ended March 31, 2024 and 2023 were as follows:

Year Ended March 31,

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(Amounts in millions)

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 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).

Net Cash Flows Provided By (Used In) Operating Activities $ 396.8 $ (114.3) $ 511.1

Cash flows provided by operating activities for the fiscal year ended March 31, 2024 were $396.8 million compared to cash flows used in operating activities of $114.3 million for the fiscal year ended March 31, 2023.

The increase in cash provided by operating activities is due to greater cash provided by changes in operating assets and liabilities of $421.9 million.

The greater cash provided by changes in operating assets and liabilities was driven by lower cash used for investment in film and television programs and program rights, and greater proceeds from decreases in accounts receivable, net, partially offset by greater decreases in accounts payable and accrued liabilities and lower increases in participations and residuals.

Fiscal 2023 also included proceeds from the termination of interest rate swaps (see further discussion below for interest rate swap transactions in fiscal 2023).

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).

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.

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Investing Activities:

Proceeds from the sale of Pantaya $ — $ 123.6

Purchase of eOne, net of cash acquired (see Note 2) $ (331.1) $ —

Proceeds from the sale of equity method and other investments 5.2 46.3

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Distributions from equity method investees and other 0.8 1.9

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

Increase in loans receivable (3.7) —

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Net Cash Flows Used In Investing Activities $ (376.8) $ (18.3)

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.

Cash flows used in investing activities of $376.8 million for the fiscal year ended March 31, 2024 compared to cash flows used in investing activities of $18.3 million for the fiscal year ended March 31, 2023, primarily due to cash used for the purchase of eOne, net of cash acquired, in fiscal 2024 and lower proceeds from the sale of equity method and other investments due to the sale of a portion of our ownership interest in STARZPLAY Arabia in fiscal 2023, partially offset by lower cash used for capital expenditures and investment in equity method investees and other.

Financing Activities.

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(Amounts in millions)

Debt - borrowings, net of debt issuance and redemption costs $ 1,523.0 $ 2,448.4

Debt - borrowings $ 3,145.0 $ 1,523.0

Debt - repurchases and repayments (2,672.8) (1,880.8)

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

Net proceeds from (repayments and repurchases of) debt 472.2 (357.8)

Film related obligations - borrowings 2,010.6 1,688.6

Film related obligations - repayments (2,215.4) (1,073.0)

Net proceeds from film related obligations 615.6 905.8

Net proceeds from (repayments of) film related obligations (204.8) 615.6

Other financing activities (227.8) (194.0)

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Cash flows provided by financing activities of $39.6 million for the fiscal year ended March 31, 2024 compared to cash flows provided by financing activities of $63.8 million for the fiscal year ended March 31, 2023.

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.

Cash flows provided by financing activities for fiscal 2024 primarily reflects net proceeds from debt of $472.2 million in fiscal 2024, which included net borrowings under our revolving credit facility of $575.0 million (of which $375.0 million was used to fund the purchase of eOne and approximately $194 million was used to fund the acquisition of an additional interest in 3 Arts Entertainment), which were offset by cash paid of $61.4 million for the repurchase of $85.0 million principal amount of the 5.500% Senior Notes, and required repayments on our term loans.

These net proceeds were partially offset by net film related obligations repayments of $204.8 million due to net repayments under production loans and the Production Tax Credit Facility of $229.1 million and net borrowings under the Backlog Facility, IP Credit Facility and other of $24.2 million, and cash used for other financing activities of $227.8 million representing primarily the purchase of an additional interest in 3 Arts Entertainment of approximately $194 million and tax withholding required on equity awards of $32.0 million.

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 other 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:

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• 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.

• 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.

• On April 6, 2021, we amended our Credit Agreement to, among other things, extend the maturity of a portion of our revolving credit commitments, amounting to $1.25 billion, and a portion of our outstanding term A loans, amounting to $444.9 million to April 6, 2026.

• 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.

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 a financing component on a portion of our interest rate swaps (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.

Remaining Performance Obligations and Backlog

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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