What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-05-30 compared with 2023-05-25 · 573 added, 485 removed, 1953 unchanged (35% of the section changed)

18 unchanged sentences

Management based its assessment on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework).

On December 27, 2023, we acquired eOne and, as a result, we have begun integrating the processes, systems and controls relating to eOne into our existing system of internal control over financial reporting in accordance with our integration plans.

Our evaluation and conclusion on the effectiveness of internal control over financial reporting as of March 31, 2024 did not include the internal controls of eOne because of the timing of this acquisition.

eOne represented approximately $858.5 million of total assets and $319.7 million of

total net assets as of March 31, 2024, and $113.8 million of revenues and $4.9 million of loss before income taxes for the year then ended.

Based on this assessment, our management has concluded that, as of March 31, 2024, the Company maintained effective internal control over financial reporting.

6 unchanged sentences

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting during the fiscal fourth quarter ended March 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We acquired eOne on December 27, 2023, and the addition of eOne's financial systems and processes represent a change in our internal controls over financial reporting.

There were no other changes in internal control over financial reporting during the fiscal fourth quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

4 unchanged sentences

(the Company) maintained, in all material respects, effective internal control over financial reporting as of March 31, 2024, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended March 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated May 25, 2023 expressed an unqualified opinion thereon.

As indicated in the accompanying Management’s Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of the companies constituting the Entertainment One television and film (“eOne”) business, which is included in the 2024 consolidated financial statements of the Company and constituted $858.5 million and $319.7 million of total and net assets, respectively, as of March 31, 2024 and $113.8 million and $4.9 million of revenues and loss before income taxes, respectively, for the year then ended.

Our audit of internal control over financial reporting of the Company also did not include an evaluation of the internal control over financial reporting of eOne.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of March 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, equity (deficit) and cash flows for each of the three years in the period ended March 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) and our report dated May 30, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

54 unchanged sentences

Provision for doubtful accounts $ 9.2 $ 0.5 $ 1.3 (2)

$ ( 3.8 ) (4)

Deferred tax valuation allowance $ 455.7 $ 164.7 $ 187.9 (5)

9 unchanged sentences

(1) Charges for returns and allowances are charges against revenue.

(2) Opening balances due to the acquisition of eOne on December 27, 2023.

(3) Actual returns and fluctuations in foreign currency exchange rates.

(4) Uncollectible accounts written off and fluctuations in foreign currency exchange rates.

Includes $ 2.5 million related to accounts receivable previously reserved for bad debt from customers in Russia, related to Russia's invasion of Ukraine.

Amounts for the year ended March 31, 2023 include $ 2.5 million related to accounts receivable previously reserved for bad debt from customers in Russia, related to Russia's invasion of Ukraine.

(5) Valuation allowance adjustments recorded in other comprehensive income and primarily associated with hedging activity.

Amounts for the year ended March 31, 2024 also include an opening balance of $ 187.0 million due to the acquisition of eOne on December 27, 2023.

INDEX TO EXHIBITS

4 unchanged sentences

8-K 2.1 7/1/2016

2.2+ Equity Purchase Agreement, dated as of August 3, 2023, by and among Lions Gate Entertainment Corp., Lions Gate Entertainment Inc., Lions Gate International Motion Pictures S.à.r.l and Hasbro, Inc.

8-K 2.1 8/7/2023

2.3+ Business Combination Agreement, dated as of December 22, 2023, by and among Lions Gate Entertainment Corp., Screaming Eagle Acquisition Corp., SEAC II Corp., SEAC MergerCo, 1455941 B.C.

Unlimited Liability Company, LG Sirius Holdings ULC and LG Orion Holdings ULC

8-K 2.1 12/26/2023

2.3.1+ Amendment No.

1 to Business Combination Agreement, dated as of April 11, 2024, by and among Screaming Eagle Acquisition Corp., SEAC II Corp., SEAC MergerCo, 1455941 B.C.

Unlimited Liability Company, Lions Gate Entertainment Corp., LG Sirius Holdings ULC and LG Orion Holdings ULC

8-K 2.1 4/12/2024

2.3.2+ Amendment No.

2 to the Business Combination Agreement, dated as of May 9, 2024, by and among Lions Gate Entertainment Corp., Screaming Eagle Acquisition Corp., SEAC II Corp., SEAC MergerCo, 1455941 B.C.

Unlimited Liability Company, LG Sirius Holdings ULC and LG Orion Holdings ULC.

8-K 2.1 5/15/2024

8-K 3.1 12/8/2016

3.2 Notice of Articles

2 unchanged sentences

8-K 4.1 4/1/2021

4.1.1x Supplemental Indenture No.

1 dated as of June 29, 2021

4.1.2x Supplemental Indenture No.

2 dated as of October 31, 2021

4.1.3x Supplemental Indenture No.

3 dated as of March 15, 2022

4.1.4x Supplemental Indenture No.

4 dated as of July 21, 2022

4.1.5x Supplemental Indenture No.

5 dated as of January 12, 2023

4.1.6x Supplemental Indenture No.

6 dated as of June 21, 2023

4.1.7x Supplemental Indenture No.

7 dated as of February 23, 2024

4.1.8x Supplemental Indenture No.

8 dated as of March 29, 2024

4.1.9x Supplemental Indenture No.

9 dated as of April 23, 2024

4.1.10 Supplemental Indenture No.

10 dated as of May 8, 2024

8-K 4.1 5/8/2024

4.1.11x Supplemental Indenture No.

11 dated as of May 13, 2024

4.2 Indenture, dated as of May 8, 2024, among Lions Gate Capital Holdings 1, Inc., the guarantors party thereto, and U.S.

Bank Trust Company, National Association, as Trustee

8-K 4.2 5/8/2024

4.2.1x Supplemental Indenture No.

1 dated as of May 13, 2024

4.3 Description of Class A voting shares, no par value per share

14 unchanged sentences

8-K 10.1 2/11/2015

Exhibit Number Exhibit Description Incorporated by Reference

Form Exhibit Filing Date/

Period End Date

10.6 Investor Rights Agreement, dated as of November 10, 2015, by and among Lions Gate Entertainment Corp., Liberty Global plc, Discovery Communications, Inc., Liberty Global Incorporated Limited, Discovery Lightning Investments Ltd.

11 unchanged sentences

8-K 10.7 7/1/2016

10.7.2 Amendment to the Voting and Standstill Agreement, dated as of May 13, 2024, by and among Lions Gate Entertainment Corp., Lionsgate Studios Corp., Liberty Global plc, Discovery Communications, Inc., Liberty Global Incorporated Limited, Discovery Lightning Investments Ltd., Dr.

Malone and affiliates of MHR Fund Management, LLC.

8-K 10.4 5/15/2024

10.8 Registration Rights Agreement, dated as of November 10, 2015, by and among Lions Gate Entertainment Corp.

15 unchanged sentences

8-K 10.1 12/11/2017

Exhibit Number Exhibit Description Incorporated by Reference

Form Exhibit Filing Date/

Period End Date

10.12.2 Amendment No.

8 unchanged sentences

8-K 10.1 4/6/2021

10.13* Lions Gate Entertainment Corp.

2019 Performance Incentive Plan.

8-K 10.1 9/15/2021

10.13.1* Form of Restricted Share Unit Award Agreement

10-Q 10.39 11/7/2019

10.13.2* Form of Nonqualified Stock Option Agreement

10-Q 10.40 11/7/2019

10.13.3* Form of Share Appreciation Rights Award Agreement

10-Q 10.41 11/7/2019

10.12.5 Amendment No.

5, dated as of June 14, 2023, to the Credit and Guarantee Agreement dated as of December 8, 2016, among Lions Gate Entertainment Corp., as borrower, each guarantor party thereto, each lender party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other parties thereto

10-K/A 10.12.5 7/20/2023

Exhibit Number Exhibit Description Incorporated by Reference

Form Exhibit Filing Date/

Period End Date

10.13* Deferred Compensation Plan

10-Q 10.41 2/4/2021

10.15* Employment Agreement between Lions Gate Entertainment Corp.

Barge dated November 1, 2019

10-Q 10.38 11/7/2019

10.15.1* Amendment to Employment Agreement between Lions Gate Entertainment Corp.

Barge dated June 22, 2020

10-Q 10.35 8/6/2020

10.14* Employment Agreement among Jon Feltheimer and Lions Gate Entertainment Corp.

8 unchanged sentences

8-K 10.1 2/17/2023

10.19x* Employment Agreement between Lions Gate Entertainment Corp.

10.17* Employment Agreement between Lions Gate Entertainment Corp.

and Brian Goldsmith dated as of October 1, 2022

10.20x* Employment Agreement between Lions Gate Entertainment Corp.

10-K 10.19 5/25/2023

10.18* Employment Agreement between Lions Gate Entertainment Corp.

and Bruce Tobey dated as of March 27, 2023

10-K 10.20 5/25/2023

10.19* Lions Gate Entertainment Corp.

2023 Performance Incentive Plan

8-K 10.1 11/29/2023

10.19.1* Form of Restricted Share Unit Award Agreement

10-Q 10.22.1 2/8/2024

10.19.2* Form of Nonqualified Stock Option Agreement

10-Q 10.22.2 2/8/2024

10.19.3* Form of Share Appreciation Rights Award Agreement

10-Q 10.22.3 2/8/2024

10.20 Sponsor Support Agreement

8-K 10.1 12/26/2023

10.21 Form of Subscription Agreement

8-K 10.2 12/26/2023

10.22 Form of Warrantholder Support Agreement

8-K 10.3 12/26/2023

10.23 Form of Lock-Up Agreement

8-K 10.4 12/26/2023

10.24 Form of Sponsor Option Agreement

8-K 10.5 12/26/2023

10.25 Form of Amended and Restated Registration Rights Agreement

8-K 10.6 12/26/2023

10.26 Exchange Agreement by and among Lions Gate Entertainment Corp., Lions Gate Capital Holdings 1, Inc., Lions Gate Capital Holdings LLC, and the Noteholder Parties Party thereto, dated May 2, 2024

8-K 10.1 12/26/2023

10.27x* Employment Agreement between Lions Gate Entertainment Corp.

Barge dated as of March 21, 2024

19.1x Insider Trading Policy of the Company

21.1x Subsidiaries of the Company

4 unchanged sentences

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

97x Policy Regarding the Recoupment of Certain Compensation Payments, effective October 2, 2023

101x The following financial statements from the Company's Annual Report on Form 10-K for the year ended March 31, 2024, formatted in Inline XBRL:

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

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

104x The cover page from the Company’s Annual Report on Form 10-K for the year ended March 31, 2024 (formatted as Inline XBRL and contained in Exhibit 101).

3 unchanged sentences

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

+ Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5).

The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.

FORM 10-K SUMMARY.

3 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates so indicated.

Each person whose signature appears below authorizes each of Jon Feltheimer, Michael Burns, and James W.

Each person whose signature appears below authorizes each of Jon Feltheimer, Michael Burns, Bruce Tobey and James W.

Barge, severally and not jointly, to be his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in such person’s name, place and stead, in any and all capacities, to sign any amendments to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2024;

15 unchanged sentences

FRIES Director May 30, 2024

Director May 30, 2024

/s/ SUSAN MCCAW Director May 30, 2024

11 unchanged sentences

INDEX TO FINANCIAL STATEMENTS

Audited Financial Statements

Audited Consolidated Financial Statements

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

1 unchanged sentence

Consolidated Statements of Operations — Years Ended March 31, 2024, 2023 and 2022

Consolidated Statements of Comprehensive Income (Loss) — Years Ended March 31, 2023, 2022 and 2021

Consolidated Statements of Equity — Years Ended March 31, 2023, 2022 and 2021

Consolidated Statements of Comprehensive Loss — Years Ended March 31, 2024, 2023 and 2022

Consolidated Statements of Equity (Deficit) — Years Ended March 31, 2024, 2023 and 2022

Consolidated Statements of Cash Flows — Years Ended March 31, 2024, 2023 and 2022

4 unchanged sentences

We have audited the accompanying consolidated balance sheets of Lions Gate Entertainment Corp.

(the Company) as of March 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended March 31, 2023, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

(the Company) as of March 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, equity (deficit) and cash flows for each of the three years in the period ended March 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at March 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2024, in conformity with U.S.

15 unchanged sentences

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Pre-release Film Impairments

8 unchanged sentences

We also performed sensitivity analyses to evaluate the potential changes in the expected profitability of unreleased films resulting from reasonable changes in the assumptions.

Goodwill related to the Media Networks Reporting Unit

Description of the Matter As disclosed in Note 1 to the consolidated financial statements, goodwill is tested for impairment at least annually at the reporting unit level, and between 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 is less than its carrying value.

As disclosed in Note 6 to the consolidated financial statements, the Company recorded a goodwill impairment charge of $1.475 billion during the year ended March 31, 2023 related to the Media Networks reporting unit, and the remaining goodwill balance was $1.3 billion at March 31, 2023.

Auditing management’s evaluation of goodwill for impairment is complex and requires significant judgment due to the estimation required in determining the fair value of the reporting units.

These fair value estimates are affected by significant assumptions such as the discount rate, projected annual revenue growth rate and EBITA margin, terminal growth rate, and market multiples, which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment review process, including controls over management’s assessment of the significant assumptions used in the fair value measurements described above.

To test the estimated fair values of the Company’s reporting units, we performed audit procedures that included, among others, assessing the methodologies used and testing the significant assumptions discussed above and the underlying data used by the Company in its analyses.

As disclosed in Note 6 to the consolidated financial statements, the Company recorded a goodwill impairment charge of $493.9 million during the year ended March 31, 2024 related to the Media Networks reporting unit, resulting in no remaining goodwill balance for this reporting unit at March 31, 2024.

Auditing management’s evaluation of goodwill for impairment is complex and requires significant judgment due to the estimation required in determining the fair value of the Media Networks reporting unit.

The fair value estimate of this reporting unit is affected by significant assumptions such as projected annual revenue growth rate, EBITA margin, and market multiples, which are affected by expectations about future market or economic conditions.

To test the estimated fair value of the Company’s Media Networks reporting unit, we performed audit procedures that included, among others, assessing the methodologies used and testing the significant assumptions discussed above and the underlying data used by the Company in its analyses.

We compared the significant assumptions used by management to current industry and economic trends, changes to the Company’s business model, historical financial performance, and other relevant factors.

We assessed the historical accuracy of management’s forecasts and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in the assumptions.

In addition, we tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company.

We assessed the historical accuracy of management’s forecasts and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the reporting unit that would result from changes in the assumptions.

We also involved our specialists to evaluate the reasonableness of certain significant assumptions and the valuation methodologies used.

13 unchanged sentences

Investments 74.8 64.7

Intangible assets 1,300.1 1,440.2

Intangible assets, net 991.8 1,300.1

Goodwill 811.2 1,289.5

18 unchanged sentences

Redeemable noncontrolling interest 123.3 343.6

EQUITY (DEFICIT)

Class A voting common shares, no par value, 500.0 shares authorized, 83.6 shares issued (March 31, 2023 - 83.5 shares issued)

4 unchanged sentences

Total Lions Gate Entertainment Corp.

shareholders' equity 784.5 2,681.6

shareholders' equity (deficit) ( 312.7 ) 784.5

Noncontrolling interests 2.2 1.5

Total equity 786.0 2,683.4

Total liabilities, redeemable noncontrolling interest and equity $ 7,426.2 $ 8,991.2

Total equity (deficit) ( 310.5 ) 786.0

Total liabilities, redeemable noncontrolling interest and equity (deficit) $ 7,092.7 $ 7,426.2

See accompanying notes.

9 unchanged sentences

Restructuring and other 508.5 411.9 16.8

Goodwill impairment 1,475.0 — —

Gain on sale of Pantaya — — ( 44.1 )

Goodwill and intangible asset impairment 663.9 1,475.0 —

Total expenses 4,955.7 5,712.5 3,595.3

4 unchanged sentences

Gain (loss) on extinguishment of debt 19.9 57.4 ( 28.2 )

Gain on investments 44.0 1.3 0.5

Gain on investments, net 3.5 44.0 1.3

Equity interests income (loss) 8.7 0.5 ( 3.0 )

Loss before income taxes ( 1,181.3 ) ( 1,997.5 ) ( 177.0 )

Income tax provision ( 21.3 ) ( 28.4 ) ( 17.1 )

Income tax benefit (provision) 65.0 ( 21.3 ) ( 28.4 )

Net loss ( 1,116.3 ) ( 2,018.8 ) ( 205.4 )

11 unchanged sentences

LIONS GATE ENTERTAINMENT CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

2024 2023 2022

2 unchanged sentences

Foreign currency translation adjustments, net of tax ( 1.1 ) ( 1.9 ) ( 4.6 )

Net unrealized gain on cash flow hedges, net of tax 93.5 117.2 119.0

Comprehensive income (loss) ( 1,927.2 ) ( 92.8 ) 88.2

Net unrealized gain (loss) on cash flow hedges, net of tax ( 3.8 ) 93.5 117.2

Comprehensive loss ( 1,121.2 ) ( 1,927.2 ) ( 92.8 )

Comprehensive loss attributable to noncontrolling interest 13.4 8.6 17.2

Comprehensive income (loss) attributable to Lions Gate Entertainment Corp.

Comprehensive loss attributable to Lions Gate Entertainment Corp.

shareholders $ ( 1,107.8 ) $ ( 1,918.6 ) $ ( 75.6 )

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

Class A Voting

2 unchanged sentences

Comprehensive

Income (Loss) Total LGEC Shareholders' Equity Non-controlling Interests (a) Total Equity

Income (Loss) Total LGEC Shareholders' Equity (Deficit) Non-controlling Interests (a) Total Equity (Deficit)

Number Amount Number Amount

4 unchanged sentences

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

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

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

16 unchanged sentences

Net loss — — — — ( 1,102.9 ) — ( 1,102.9 ) 1.5 ( 1,101.4 )

Other comprehensive income — — — — — 91.6 91.6 — 91.6

Other comprehensive loss — — — — — ( 4.9 ) ( 4.9 ) — ( 4.9 )

Redeemable noncontrolling interests adjustments to redemption value — — — — ( 34.2 ) — ( 34.2 ) — ( 34.2 )

4 unchanged sentences

LIONS GATE ENTERTAINMENT CORP.

CONSOLIDATED STATEMENTS OF EQUITY

LIONS GATE ENTERTAINMENT CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

3 unchanged sentences

Net loss $ ( 1,116.3 ) $ ( 2,018.8 ) $ ( 205.4 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 192.2 180.3 177.9

3 unchanged sentences

Other amortization 53.4 69.2 92.5

Goodwill impairment 1,475.0 — —

Goodwill and intangible asset impairment 663.9 1,475.0 —

Non-cash charge from the modification of an equity award (see Note 11) 49.2 — —

Content and other impairments 377.3 385.2 —

Gain on sale of Pantaya — — ( 44.1 )

(Gain) loss on extinguishment of debt ( 19.9 ) ( 57.4 ) 28.2

Equity interests (income) loss ( 8.7 ) ( 0.5 ) 3.0

Gain on investments ( 44.0 ) ( 1.3 ) ( 0.5 )

Gain on investments, net ( 3.5 ) ( 44.0 ) ( 1.3 )

Deferred income taxes ( 18.5 ) ( 5.3 ) ( 1.7 )

8 unchanged sentences

Deferred revenue ( 0.8 ) ( 25.4 ) 1.3

Net Cash Flows Used In Operating Activities ( 114.3 ) ( 660.9 ) ( 0.5 )

Net Cash Flows Provided By (Used In) Operating Activities 396.8 ( 114.3 ) ( 660.9 )

Investing Activities:

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

Proceeds from the sale of Pantaya — — 123.6

12 unchanged sentences

Settlement of financing component of interest rate swaps — ( 134.5 ) ( 28.5 )

Repurchase of common shares — — ( 2.2 )

Purchase of noncontrolling interest ( 194.6 ) ( 36.5 ) —

8 unchanged sentences

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Description of Business, Basis of Presentation and Significant Accounting Policies

Description of Business

Lionsgate Entertainment Corp.

Lions Gate 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.

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.

Basis of Presentation

23 unchanged sentences

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

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

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

The Company's Media Networks segment generates revenue primarily from the distribution of the Company's STARZ premium subscription video services.

Revenue is recognized upon transfer of control of promised services or goods to customers in an amount that reflects the consideration the Company expects to receive in exchange for those services or goods.

2 unchanged sentences

The most common types of intersegment transactions include licensing motion pictures or television programming (including Starz original productions) from the Motion Picture and Television Production segments to the Media Networks segment.

While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues (and

While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues (and corresponding expenses, assets, or liabilities recognized by the segment that is the counterparty to the transaction) are eliminated in consolidation and, therefore, do not affect consolidated results.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

corresponding expenses, assets, or liabilities recognized by the segment that is the counterparty to the transaction) are eliminated in consolidation and, therefore, do not affect consolidated results.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Licensing Arrangements.

31 unchanged sentences

◦ Packaged Media.

Packaged media revenues represent the sale of motion pictures and television shows (produced or acquired) on physical discs (DVD’s, Blu-ray, 4K Ultra HD, referred to as "Packaged Media") in

Packaged media revenues represent the sale of motion pictures and television shows (produced or acquired) on physical discs (DVD’s, Blu-ray, 4K Ultra HD, referred to as "Packaged Media") in the retail market.

Revenues are recognized, net of an allowance for estimated returns and other allowances, on the later of receipt by the customer or “street date” (when it is available for sale by the customer).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

the retail market.

Revenues are recognized, net of an allowance for estimated returns and other allowances, on the later of receipt by the customer or “street date” (when it is available for sale by the customer).

• Television .

18 unchanged sentences

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

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

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

Pursuant to the Company’s distribution agreements, revenues are primarily based on a fee based on the number of subscribers who receive the Company's services or based on other factors (variable fee arrangements), or to a lesser extent, may be based on a monthly fixed fee or minimum guarantee, subject to nominal annual escalations.

2 unchanged sentences

Estimates of revenue generated, but not yet reported to the Company by its distribution partners, are made based on an estimated number of subscribers using historical trends and recent reporting.

Other fixed fee or minimum guarantee programming revenue is recognized over the contract term based on the continuous delivery of the content

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

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

to the distributor.

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

Deferred Revenue.

28 unchanged sentences

Costs of acquiring and producing films and television programs and of acquired libraries that are monetized individually are amortized using the individual-film-forecast method, whereby these costs are amortized and participations and residuals costs are accrued in the proportion that current year’s revenue bears to management’s estimate of ultimate revenue at the beginning of the current year expected to be recognized from the exploitation, exhibition or sale of the films or television programs.

For investment in films and television programs monetized as a group, see further discussion below under Licensed Program Rights for a description of amortization of costs monetized as a group.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For investment in films and television programs monetized as a group, see further discussion below under Licensed Program Rights for a description of amortization of costs monetized as a group.

Ultimate Revenue.

13 unchanged sentences

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 entertainment, 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 entertainment, 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 Platforms 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.

Amortization.

9 unchanged sentences

For content that is predominantly monetized individually (primarily investment in film and television programs related to the Motion Picture and Television Production segments), whenever events or changes in circumstances indicate that the fair value of the individual film may be less than its unamortized costs, the unamortized costs of the individual film are compared to the estimated fair value of the individual film.

The fair value is determined based on a

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

discounted cash flow analysis of the cash flows directly attributable to the title.

The fair value is determined based on a discounted cash flow analysis of the cash flows directly attributable to the title.

To the extent the unamortized costs exceed the fair value, an impairment charge is recorded for the excess.

Content Monetized as a Group.

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

costs of the group are compared to the present value of the discounted cash flows of the group using the lowest level for which identifiable cash flows are independent of other produced and licensed content.

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

27 unchanged sentences

Finance Leases.

Finance lease ROU assets are included in "Property and equipment, net" and finance lease liabilities are included in the “Debt - short-term portion” and “Debt - non-current” line items in the Company's consolidated balance sheets, when applicable.

For finance leases, the Company recognizes interest expense on lease liabilities using the effective interest method and amortization of ROU assets on a straight-line basis over the lease term.

The Company did not have any finance leases as of March 31, 2023 or 2022.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company did not have any finance leases during the years ended March 31, 2024, 2023 or 2022.

The present value of the lease payments is calculated using a rate implicit in the lease, when readily determinable.

3 unchanged sentences

Investments include investments accounted for under the equity method of accounting, and equity investments with and without readily determinable fair value.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Equity Method Investments:

1 unchanged sentence

Significant influence is generally presumed to exist when the Company owns between 20% and 50% of the voting interests in the investee, holds substantial management rights or holds an interest of less than 20% in an investee that is a limited liability partnership or limited liability corporation that is treated as a flow-through entity.

Under the equity method of accounting, the Company's share of the investee's earnings (losses) are included in the "equity interests income (loss)" line item in the consolidated statement of operations.

The Company records its share of the net income or loss of most equity method investments on a one quarter lag and, accordingly, during the years ended March 31, 2024, 2023, and 2022, the Company recorded its share of the income or loss generated by these entities for the years ended December 31, 2023, 2022 and 2021, respectively.

Dividends and other distributions from equity method investees are recorded as a reduction of the Company's investment.

Distributions received up to the Company's interest in the investee's retained earnings are considered returns on investments and are classified within cash flows from operating activities in the consolidated statement of cash flows.

Distributions from equity method investments in excess of the Company's interest in the investee's retained earnings are considered returns of investments and are classified within cash flows provided by investing activities in the statement of cash flows.

Other Equity Investments:

9 unchanged sentences

Goodwill and Indefinite-Lived Intangible Assets

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

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

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 the Company's indefinite-lived intangible assets in the second quarter of fiscal 2024, as further discussed below.

Through September 30, 2023, the Company's 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 the Company's reporting units, which are its operating segments or one level below its operating segments (component level).

1 unchanged sentence

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

Our reporting units for purposes of goodwill impairment testing at March 31,

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2023 were Motion Picture, Media Networks, and our Television and Talent Management businesses, both of which are part of our Television Production segment.

Our reporting units for purposes of goodwill impairment testing at March 31, 2024 were Motion Picture, Media Networks, and our Television and Talent Management 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.

2 unchanged sentences

An entity may perform a qualitative assessment of the likelihood of the existence of a goodwill or indefinite-lived intangible asset impairment.

The qualitative assessment is an evaluation, based on all identified events and circumstances which impact the fair value of the reporting unit or indefinite-lived intangible asset, of whether or not it is more-likely-than-not that the fair value is less than the carrying value of the reporting unit or indefinite-lived intangible asset.

The qualitative assessment is an evaluation, based on all identified events and

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

circumstances which impact the fair value of the reporting unit or indefinite-lived intangible asset, of whether or not it is more-likely-than-not that the fair value is less than the carrying value of the reporting unit or indefinite-lived intangible asset.

If the Company believes that as a result of its qualitative assessment it is more likely than not that the fair value of a reporting unit or indefinite-lived intangible asset is greater than its carrying amount, a quantitative impairment test is not required but may be performed at the option of the Company.

3 unchanged sentences

Goodwill Impairment Assessments:

For the Company's 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, the Company performed a quantitative impairment assessment for all of its reporting units as of January 1, 2022.

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

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, the Company began implementing a plan to restructure its LIONSGATE+ business (formerly STARZPLAY International).

This restructuring includes exiting the business in seven international territories (France, Germany, Italy, Spain, Benelux, the Nordics and Japan).

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.

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 the Company's common shares had declined significantly through September 30, 2022.

Accordingly, for the second quarter ended September 30, 2022, the Company updated its quantitative impairment assessment for all of its 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 10.0 % to 14.0 %, 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 its quantitative impairment assessment, the Company determined that the fair value of its reporting units exceeded the carrying values for all of its 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 the Company's 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.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

For the Company's annual goodwill impairment test for fiscal 2023, the Company performed a qualitative goodwill impairment assessment for all its reporting units.

The Company's 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.

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, along with recent market valuation multiples, the Company updated its quantitative impairment assessment for its Media Networks reporting unit goodwill based on the most recent data and expected growth trends.

In performing its quantitative impairment assessment, the fair value of the Company's reporting units was estimated by using a combination of discounted cash flow ("DCF") analyses and market-based valuation methodologies.

Based on its quantitative impairment assessment, the Company 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 the Company's annual goodwill impairment test for fiscal 2024, the Company 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 for further information.

In the second quarter of fiscal 2023, the Company updated its quantitative impairment assessment for all of its reporting units using a combination of DCF analyses and market-based valuation methodologies to estimate the fair value of the Company's reporting units, and determined that the fair value of its reporting units exceeded the carrying values for all of its reporting units, except the Media Networks reporting unit which had been 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 of fiscal 2023, related to the Company's Media Networks reporting unit goodwill, which is recorded in the "goodwill and intangible asset impairment" line item in the consolidated statement of operations.

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

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

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

adverse macroeconomic conditions;

consumer consumption levels of the Company's 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 the Company's television programming and motion pictures;

the Company's continual contractual relationships with its customers;

including its affiliate agreements of its Media Networks business;

the Company's subscriber growth rates domestically and internationally across its traditional and OTT platforms and changes in consumer behavior.

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

and changes in consumer behavior.

While historical performance and current expectations

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Indefinite-Lived Intangibles Other Than Goodwill Impairment Assessment:

For fiscal 2023, during the second quarter ended September 30, 2022, due to the events and their impact discussed above related to the Company's Media Networks reporting unit, the Company performed a quantitative impairment assessment of its indefinite-lived trade names.

Based on the quantitative impairment assessment of its trade names, the Company concluded that the fair value of its trade names was more than its carrying amount, and therefore its trade names were not considered at risk of impairment.

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

Based on the qualitative impairment assessment of its trade names, the Company concluded that it is more-likely-than-not that the fair value of its trade names was more than its carrying amount, and therefore its trade names were not considered at risk of impairment.

Through September 30, 2023, the Company's 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 the Company's finite-lived intangible assets was approximately $ 1.05 billion.

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

The Company's 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 the Company's 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.

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.

7 unchanged sentences

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

For fiscal 2023 and fiscal 2024, due to changes in the industry related to the migration from linear to OTT and direct-to-

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

analysis of our amortizable intangible assets.

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.

10 unchanged sentences

The financial effect of changes in tax laws or rates is accounted for in the period of enactment.

From time to time, the Company engages in transactions in which the tax consequences may be subject to uncertainty.

Significant judgment is required in assessing and estimating the tax consequences of these transactions.

From time to time, the Company engages in transactions in which the tax consequences may be subject to uncertainty and judgment is required in assessing and estimating the tax consequences of these transactions.

In determining the Company’s tax provision for financial reporting purposes, the Company establishes a reserve for uncertain tax positions unless such positions are determined to be more likely than not of being sustained upon examination, based on their technical merits.

32 unchanged sentences

When the true sales criteria are met, the Company derecognizes the carrying value of the financial asset transferred and recognizes a net gain or loss on the sale.

The proceeds from these arrangements with third party purchasers are reflected as cash provided by operating activities in the combined statements of cash flows.

The proceeds from these arrangements with third party purchasers are reflected as cash provided by operating activities in the consolidated statements of cash flows.

If the sales criteria are not met, the transfer is considered a secured borrowing and the financial asset remains on the consolidated balance sheets with proceeds from the sale recognized as debt and recorded as cash flows from financing activities in the consolidated statements of cash flows.

9 unchanged sentences

shareholders $ ( 1,102.9 ) $ ( 2,010.2 ) $ ( 188.2 )

Accretion of redeemable noncontrolling interest ( 11.9 ) — —

Net loss attributable to Lions Gate Entertainment Corp.

shareholders after accretion of redeemable noncontrolling interest $ ( 1,114.8 ) $ ( 2,010.2 ) $ ( 188.2 )

Weighted average common shares outstanding 233.6 227.9 224.1

13 unchanged sentences

Recent Accounting Pronouncements

Accounting Guidance Adopted in Fiscal 2023

Government Assistance:

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

The Company adopted this guidance on April 1, 2022 and is applying its provisions prospectively, with no material impact to the Company's financial statements.

See Note 3 and Note 19 for information related to production tax credits.

Accounting Guidance Adopted in Fiscal 2022

Reference Rate Reform:

In March 2020, the FASB issued guidance which provides optional expedients and exceptions for applying U.S.

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

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

In December 2022, the FASB issued final guidance deferring the sunset date of the transition relief.

The guidance is applicable to contract modifications made between March 12, 2020 and December 31, 2024 and hedging relationships that exist as of the beginning of an interim period that includes March 12, 2020 and new eligible hedging relationships designated in subsequent periods.

The Company adopted this guidance on July 1, 2021 and is applying its provisions prospectively through December 31, 2024, with no material impact to the Company’s financial statements.

Segment Reporting:

In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance which expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and therefore will be effective beginning with the Company’s financial statements issued for the fiscal year ending March 31, 2025 and subsequent interim periods, with early adoption permitted.

The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures.

Income Taxes:

In December 2023, the FASB issued guidance which expands income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

Additionally, this guidance requires all entities disaggregate disclosures on the amount of income taxes paid (net of refunds received), income or loss from continuing operations before income tax expense (or benefit) and income tax expense (or benefit) from continuing operations.

This guidance is effective for fiscal years beginning after December 15, 2024, and therefore will be effective beginning with the Company’s financial statements issued for the fiscal year ending March 31, 2026, with early adoption permitted.

The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Acquisitions and Dispositions

eOne Acquisition

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.

Allocation of Purchase Consideration.

The Company has made a preliminary estimate of the allocation of the preliminary purchase price of eOne to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair value.

The Company is still evaluating the fair value of film and television programs and libraries, projects in development, intangible assets, participations and residuals liabilities, and income taxes, in addition to ensuring all other assets and liabilities have been identified and recorded.

The Company has estimated the preliminary fair value of assets acquired and liabilities assumed based on information currently available and will continue to adjust those estimates as additional information pertaining to events or circumstances present at December 27, 2023 becomes available and final appraisals and analysis are completed.

The Company will reflect measurement period adjustments, in the period in which the adjustments occur, and the Company will finalize its accounting for the acquisition within one year from December 27, 2023 (see Note 6 for measurement period adjustments recorded through March 31, 2024).

A change in the fair value of the net assets may change the amount recognized to goodwill.

If the final fair value estimates and tax adjustments related to the net assets acquired decrease from their preliminary estimates, the amount of goodwill will increase and if the final fair value estimates and tax adjustments related to the net assets acquired increase from their preliminary estimates, the amount of goodwill will decrease and may result in a gain on purchase.

In addition, the final fair value estimates related to the net assets acquired could impact the amount of amortization expense recorded associated with amounts allocated to film and television programs and other intangible assets.

The preliminary goodwill amount is reflected in the table below, and arises from the opportunity for strengthening our global distribution infrastructure and enhanced positioning for motion picture and television projects and selling opportunities.

The goodwill will not be amortized for financial reporting purposes, and will not be deductible for federal tax purposes.

The fair value measurements were primarily based on significant inputs that are not observable in the market, such as discounted cash flow (DCF) analyses, and thus represent Level 3 fair value measurements.

The preliminary allocation of the purchase price to the assets acquired and liabilities assumed, and a reconciliation to total consideration transferred is presented in the table below:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Amounts in millions)

Cash and cash equivalents $ 54.1

Accounts receivable 298.8

Investment in films and television programs 371.8

Property and equipment 14.0

Intangible assets 4.0

Other assets (1)

Accounts payable and accrued liabilities ( 67.8 )

Content related payable ( 35.4 )

Participations and residuals (1)

Film related obligations (1)

Other liabilities and deferred revenue (1)

Preliminary fair value of net assets acquired 369.5

Goodwill 15.6

Preliminary purchase price consideration $ 385.1

______________

(1) Includes current and non-current amounts.

Investment in films and television programs includes the preliminary fair value of completed films and television programs which have been produced by eOne or for which eOne has acquired distribution rights, as well as the preliminary fair value of films and television programs in production, pre-production and development.

For investment in films and television programs, the fair value was preliminarily estimated based on forecasted cash flows discounted to present value at a rate commensurate with the risk of the assets.

Titles that were released less than three years prior to the acquisition date (December 27, 2023) were valued individually and will be amortized using the individual film forecast method, based on the ratio of current period revenues to management’s estimated remaining total gross revenues to be earned ("ultimate revenue").

Titles released more than three years prior to the acquisition date were valued as part of a library and will be amortized on a straight-line basis over the estimated useful life of 5 years to 10 years.

The intangible assets acquired include trade names with a weighted average estimated useful life of 5 years.

The fair value of the trade names was preliminarily 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.

Other preliminary fair value adjustments were made to property and equipment and right-of-use lease assets to reflect the fair value of certain assets upon acquisition.

Deferred taxes, net of any required valuation allowance, were preliminarily adjusted to record the deferred tax impact of acquisition accounting adjustments primarily related to amounts allocated to film and television programs, other intangible assets, and certain property and equipment, right-of-use lease assets, and other liabilities.

The fair value of eOne's cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, participations and residuals, film related obligations and other liabilities were estimated to approximate their book values.

Pro Forma Statement of Operations Information.

The following unaudited pro forma condensed consolidated statement of operations information presented below illustrates the results of operations of the Company as if the acquisition of eOne as described above occurred on April 1, 2022.

The unaudited pro forma condensed consolidated financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisition had occurred on April 1, 2022, nor is it indicative of future results.

The statement of operations information below includes (i) the statement of operations of eOne for the nine months ended December 27, 2023 combined with the Company's statement of operations for the fiscal year ended March 31, 2024 (which includes the operations of eOne since the December 27, 2023

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

acquisition date), and (ii) the statement of operations of eOne for the fiscal year ended December 25, 2022 combined with the Company's statement of operations for the fiscal year ended March 31, 2023.

Revenues $ 4,410.5 $ 4,682.6

Net loss attributable to Lions Gate Entertainment Corp.

shareholders $ ( 1,385.9 ) $ ( 1,946.6 )

The unaudited pro forma condensed consolidated financial information includes, where applicable, adjustments for (i) reductions in amortization expense from the fair value adjustments to investment in films and television programs, (ii) reduction in amortization expense related to acquired intangible assets, (iii) reduction in depreciation expense from the fair value of property and equipment, (iv) transaction costs and other one-time non-recurring costs, (v) increase in interest expense resulting from financing the acquisition with borrowings under the Company's revolving credit facility, (vi) elimination of intercompany activity between eOne and the Company, and (vii) associated tax-related impacts of adjustments.

These pro forma adjustments are based on available information as of the date hereof and upon assumptions that the Company believes are reasonable to reflect the impact of the acquisition of eOne on the Company's historical financial information on a supplemental pro forma basis.

The unaudited pro forma condensed consolidated statement of operations information does not include adjustments related to integration activities, operating efficiencies or cost savings.

In addition, the unaudited pro forma condensed consolidated financial information for the year ended March 31, 2024 includes an impairment of goodwill and trade name of $ 296.2 million which was reflected in the statement of operations of eOne for the nine months ended December 27, 2023.

The results of operations of eOne were reflected beginning December 27, 2023, in the Motion Picture and Television Production reportable segments of the Company.

Business Combination Agreement

On December 22, 2023, the Company entered into a business combination agreement (the “Business Combination Agreement”), with Screaming Eagle Acquisition Corp., a Cayman Islands exempted company (“Screaming Eagle”), SEAC II Corp., a Cayman Islands exempted company and a wholly-owned subsidiary of Screaming Eagle (“New SEAC”), SEAC MergerCo, a Cayman Islands exempted company and a wholly-owned subsidiary of Screaming Eagle, 1455941 B.C.

Unlimited Liability Company, a British Columbia unlimited liability company and a wholly-owned subsidiary of Screaming Eagle, LG Sirius Holdings ULC, a British Columbia unlimited liability company and wholly-owned subsidiary of Lionsgate and LG Orion Holdings ULC, a British Columbia unlimited liability company and wholly-owned subsidiary of Lionsgate (“StudioCo”).

Pursuant to the terms and conditions of the Business Combination Agreement, the Studio Business will be combined with Screaming Eagle through a series of transactions, including an amalgamation of StudioCo and New SEAC under a Canadian plan of arrangement (the “Business Combination”).

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.

On May 13, 2024, the Company closed the Business Combination Agreement.

See Note 21 for further information.

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

The Company also formed a strategic content partnership through an investment of a minority preferred equity interest in Spyglass.

The purchase price, including acquisition costs, of the Spyglass Library and preferred equity interest was $ 191.4 million, of which $ 171.4 million was paid at closing, $ 10.0 million was paid in July 2022, and the remaining $ 10.0 million is to be paid in July 2023.

The Spyglass Library was accounted for as an asset acquisition and is included in investment in film and television programs on the Company's consolidated balance sheet.

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

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

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

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

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

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Investment in Films and Television Programs and Licensed Program Rights

19 unchanged sentences

(1) At March 31, 2024, the unamortized balance related to completed and not released and in progress theatrical films was $ 532.5 million.

(2) Production tax credits reduced total investment in films and television programs by $ 181.2 million during the year ended March 31, 2023, which resulted in a reduction of direct operating expense related to the amortization of investment in films and television programs cost of approximately $ 84.3 million for the year ended March 31, 2023.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

At March 31, 2023, acquired film and television libraries have remaining unamortized costs of $ 132.8 million, which are monetized individually and are being amortized using the individual-film-forecast method over a remaining period of approximately 18.2 years (March 31, 2022 - unamortized costs of $ 149.9 million).

(2) Production tax credits reduced total investment in films and television programs by $ 112.2 million and $ 181.2 million during the years ended March 31, 2024 and 2023, respectively, which resulted in a reduction of direct operating expense related to the amortization of investment in films and television programs cost of approximately $ 70.6 million and $ 84.3 million for the years ended March 31, 2024 and 2023, respectively.

At March 31, 2024, acquired film and television libraries have remaining unamortized costs of $ 223.1 million, which are monetized individually and are being amortized on a straight-line basis or the individual-film-forecast method over a weighted average remaining period of approximately 12.8 years (March 31, 2023 - unamortized costs of $ 132.8 million).

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

2024 2023 2022

(Amounts in millions)

Amortization expense:

3 unchanged sentences

$ 1,577.9 $ 1,665.3 $ 1,567.7

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The table below summarizes estimated future amortization expense for the Company's investment in film and television programs and licensed program rights as of March 31, 2024:

9 unchanged sentences

Film group monetization $ 138.0 n/a n/a

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Investment in films and television programs and licensed program rights includes write-downs to fair value.

11 unchanged sentences

________________________

(1) Fiscal 2023:

Represents charges related to the Media Networks restructuring plan initiatives, including content impairment of programming in certain international territories associated with the restructuring of LIONSGATE+ (formerly STARPLAY International), and individual content charges pursuant to 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.

(1) Impairments included in direct operating expense are included in the amortization expense amounts reflected in the table further above which presents amortization of investment in film and television programs and licensed program rights by predominant monetization strategy.

(2) Fiscal 2024 and 2023:

Represents primarily charges related to the Media Networks restructuring plan initiatives, including content impairment of programming removed from its platforms and in certain international territories exited or to be exited.

Amounts in fiscal 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.

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

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

Of the impairments not included in segment operating results, none , none and $ 15.4 million for fiscal 2023, 2022 and 2021, respectively, related to motion picture titles.

See Note 15 and Note 16 for further information.

11 unchanged sentences

During the year ended March 31, 2024, depreciation expense amounted to $ 49.9 million (2023 - $ 40.1 million;

2021 - $ 44.0 million, and amounts in fiscal 2021 include the amortization of assets previously recorded under finance leases).

2022 - $ 43.0 million).

The Company's investments consisted of the following:

18 unchanged sentences

Atom Tickets is the first-of-its-kind theatrical mobile ticketing platform and app.

Great Point Opportunity Fund.

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

42 is a fully integrated management and production company, producing film, television and content, representing actors, writers, directors, comedians, presenters, producers, casting directors and media book rights;

1 unchanged sentence

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

Summarized Financial Information.

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

2023 March 31,

(Amounts in millions)

Current assets $ 189.0 $ 125.3

Non-current assets $ 203.0 $ 166.4

Current liabilities $ 215.5 $ 253.9

Non-current liabilities $ 65.0 $ 59.8

2023 2022 2021

(Amounts in millions)

Revenues $ 185.3 $ 86.0 $ 84.6

Gross profit $ 35.1 $ 26.5 $ 32.0

Net loss $ ( 39.0 ) $ ( 46.1 ) $ ( 62.6 )

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Goodwill and Intangible Assets

3 unchanged sentences

(Amounts in millions)

Balance as of March 31, 2021 and March 31, 2022 $ 393.7 $ 401.9 $ 1,968.9 $ 2,764.5

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

Impairment (1)

1 unchanged sentence

Balance as of March 31, 2023 $ 393.7 $ 401.9 $ 493.9 $ 1,289.5

Acquisition of eOne (see Note 2) 1.0 4.8 — 5.8

Impairment (1)

— — ( 493.9 ) ( 493.9 )

(1) See Note 1, Goodwill Impairment Assessments , for further information on the goodwill impairment recorded in fiscal 2023 related to the Media Networks segment.

Measurement period adjustments (2)

3.9 5.9 — 9.8

Balance as of March 31, 2024 $ 398.6 $ 412.6 $ — $ 811.2

_______________

(1) See Note 1, Goodwill Impairment Assessments , for further information on the goodwill impairments recorded in fiscal 2024 and 2023 related to the Media Networks segment.

As of March 31, 2024 and March 31, 2023, accumulated goodwill impairment losses totaled $ 1.969 billion and $ 1.475 billion, respectively, related to the Media Networks reporting unit.

(2) Measurement period adjustments for the acquisition of eOne reflect an increase to goodwill of $ 9.8 million resulting from a net decrease in estimated fair value of the net assets acquired.

The decrease in the estimated fair value of the net assets acquired consisted of net decreases to accounts receivable and other assets of $ 11.4 million and $ 12.4 million, respectively, partially offset by a net increase to investment in films and television programs of $ 4.0 million, and net decreases to content related payables of $ 1.9 million, accrued liabilities of $ 3.8 million, participations and residuals of $ 1.9 million, and deferred revenue of $ 2.4 million.

Intangible Assets

1 unchanged sentence

Finite-lived intangible assets consisted of the following:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

March 31, 2024 March 31, 2023

5 unchanged sentences

Trademarks and trade names (2)

87.6 7.1 80.5 3.6 2.6 1.0

Other 23.9 21.7 2.2 23.9 19.0 4.9

2 unchanged sentences

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

(2) Amounts as of March 31, 2024 include the Starz trade names previously accounted for as indefinite-lived intangible assets, see below and Note 1, Indefinite-Lived Intangibles Other Than Goodwill Impairment Assessment, for further information.

Amortization expense associated with the Company's intangible assets for the years ended March 31, 2024, 2023 and 2022 was approximately $ 142.3 million, $ 140.2 million, and $ 134.9 million, respectively.

Amortization expense remaining relating to intangible assets for each of the years ending March 31, 2025 through 2029 is estimated to be approximately $ 138.3 million, $ 127.6 million, $ 120.6 million, $ 115.6 million, and $ 110.1 million, respectively.

Indefinite-Lived Intangible Assets.

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

March 31, 2023 March 31, 2022

(Amounts in millions)

Indefinite-lived intangible assets not subject to amortization:

Tradenames (1)

$ 250.0 $ 250.0

_______________

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Indefinite-Lived Intangible Assets.

As of March 31, 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.

See Note 1, Indefinite-Lived Intangibles Other Than Goodwill Impairment Assessment, for further information on the trade name impairment charge of $ 170.0 million recorded in the second quarter of fiscal 2024 related to the Media Networks segment, and the reassessment of the estimated useful life of the trade names with a remaining carrying value of $ 80.0 million.

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

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

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

6 unchanged sentences

5.500 % Senior Notes

800.0 1,000.0

Total corporate debt 2,508.5 2,059.9

16 unchanged sentences

Revolving Credit Facility Availability of Funds & Commitment Fee.

The revolving credit facility provides for borrowings and letters of credit up to an aggregate of $ 1.25 billion, and at March 31, 2023 there was $ 1.25 billion available.

The revolving credit facility provides for borrowings and letters of credit up to an aggregate of $ 1.25 billion, and at March 31, 2024 there was $ 675.0 million available.

There were no letters of credit outstanding at March 31, 2024.

1 unchanged sentence

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Maturity Date:

1 unchanged sentence

April 6, 2026.

The outstanding amounts 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:

1 unchanged sentence

• Revolving Credit Facility & Term Loan A:

The Revolving Credit Facility and term loan A facility due April 2026 (the "Term Loan A") bear interest at a rate per annum equal to LIBOR plus 1.75 % (or an alternative base rate plus 0.75 %) margin, with a LIBOR floor of zero .

As amended on June 14, 2023, the Revolving Credit Facility and term loan A facility due April 2026 (the "Term Loan A") bear interest at a rate per annum equal to SOFR plus 0.10 % plus 1.75 % margin (or an alternative base rate plus 0.75 %) margin, with a SOFR floor of zero .

The margin is subject to potential increases of up to 50 basis points ( two ( 2 ) increases of 25 basis points each) upon certain increases to net first lien leverage ratios, as defined in the Credit Agreement (effective interest rate of 7.17 % as of March 31, 2024, before the impact of interest rate swaps).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

• Term Loan B:

The term loan B facility due March 2025 (the "Term Loan B") bears interest at a rate per annum equal to LIBOR plus 2.25 % margin, with a LIBOR floor of zero (or an alternative base rate plus 1.25 % margin) (effective interest rate of 7.11 % as of March 31, 2023, before the impact of interest rate swaps).

As amended on June 14, 2023, the term loan B facility due March 2025 (the "Term Loan B") bears interest at a rate per annum equal to SOFR plus 0.10 % plus 2.25 % margin, with a SOFR floor of zero (or an alternative base rate plus 1.25 % margin) (effective interest rate of 7.67 % as of March 31, 2024, before the impact of interest rate swaps).

Required Principal Payments:

13 unchanged sentences

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

Potential Impact of LIBOR Transition.

The Chief Executive of the U.K.

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

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

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

dollar LIBOR settings will no longer be representative.

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

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

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

The publication of SOFR began in April 2018, and, therefore, it has a very limited history and the effects of the phase out of LIBOR and the adoption of SOFR have not been fully determined.

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

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

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

LIONS GATE ENTERTAINMENT CORP.

22 unchanged sentences

Debt Transactions:

Term Loan A Prepayment.

In April 2022, the Company voluntarily prepaid the entire outstanding principal amount of the Term Loan A due March 22, 2023 of $ 193.6 million, together with accrued and unpaid interest.

See Note 21 for the 5.500 % Senior Notes exchanged in May 2024.

Senior Notes Repurchases.

In the fiscal year ended March 31, 2024, the Company repurchased $ 85.0 million principal amount of the 5.500 % Senior Notes for $ 61.4 million, together with accrued and unpaid interest.

In May 2023, the Company repurchased $ 85.0 million principal amount of the 5.500 % Senior Notes for $ 61.4 million, together with accrued and unpaid interest.

Senior Notes Repurchases.

In the fiscal year ended March 31, 2023, the Company repurchased $ 200.0 million principal amount of the 5.500 % Senior Notes for $ 135.0 million, together with accrued and unpaid interest.

Term Loan A Prepayment.

In April 2022, the Company voluntarily prepaid the entire outstanding principal amount of the Term Loan A due March 22, 2023 of $ 193.6 million, together with accrued and unpaid interest.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Term Loan B Repurchases.

During the year ended March 31, 2022, the Company completed a series of repurchases of the Term Loan B and, in aggregate, paid $ 95.3 million to repurchase $ 96.0 million principal amount of the Term Loan B.

Senior Notes Redemption and Issuance.

7 unchanged sentences

See the Accounting for the Fiscal 2022 Senior Notes Redemption and Issuance and Credit Agreement Amendment section further below.

Term Loan B Repurchases.

Gain (Loss) on Extinguishment of Debt

During the fiscal years ended March 31, 2024, 2023 and 2022, the Company recorded a gain (loss) on extinguishment of debt related to the transactions described above as summarized in the table below.

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

2024 2023 2022

(Amounts in millions)

Gain (Loss) on Extinguishment of Debt:

Term Loan A prepayment $ — $ ( 1.3 ) $ —

Senior Notes repurchases in fiscal 2023;

Senior Notes repurchases in fiscal 2024 and 2023;

Senior Notes redemption and issuance in fiscal 2022 (1)

3 unchanged sentences

Term Loan B repurchases and other — — ( 0.7 )

Production loan prepayment (2)

$ 19.9 $ 57.4 $ ( 28.2 )

1 unchanged sentence

(1) See Accounting for the Fiscal 2022 Senior Notes Redemption and Issuance and Credit Agreement Amendment section below.

(2) Represents issuance costs written off in connection with the early prepayment of certain production loans (see Note 8).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accounting for the Fiscal 2022 Senior Notes Redemption and Issuance and Credit Agreement Amendment:

4 unchanged sentences

All fees paid to creditors or third parties (i.e., new debt issuance costs) are being amortized over the term of the Revolving Credit Facility due in 2026.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Term Loan A Credit Agreement Amendment on April 6, 2021 and Senior Notes Redemption and Issuance on April 1, 2021.

28 unchanged sentences

Total film related obligations 1,949.4 2,035.1

Unamortized debt issuance costs ( 11.5 ) ( 8.4 )

Unamortized issuance costs ( 11.4 ) ( 11.5 )

Total film related obligations, net 1,938.0 2,023.6

8 unchanged sentences

260.0 — — — — — 260.0

Programming Notes 83.6 — — — — — 83.6

Backlog Facility and Other (1)

3 unchanged sentences

$ 1,393.1 $ 393.1 $ 18.8 $ 144.4 $ — $ — $ 1,949.4

Less unamortized debt issuance costs ( 11.5 )

Less unamortized issuance costs ( 11.4 )

________________________

4 unchanged sentences

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

The majority of the Company's production loans have contractual repayment dates either at or near the expected completion or release dates, with the exception of certain loans containing repayment dates on a longer term basis, and incur primarily SOFR and LIBOR-based interest at a weighted average rate of 6.74 % (before the impact of interest rate swaps, see Note 18 for interest rate swaps).

The majority of the Company's production loans have contractual repayment dates either at or near the expected completion or release dates, with the exception of certain loans containing repayment dates on a longer term basis, and incur primarily SOFR-based interest at a weighted average rate of 6.96 % (before the impact of interest rate swaps, see Note 18 for interest rate swaps).

Production loans amounting to $ 1,028.9 million are secured by collateral which consists of the underlying rights related to the intellectual property (i.e.

3 unchanged sentences

Production Tax Credit Facility.

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

In January 2021, as amended in March 2024, the Company entered into a non-recourse senior secured revolving credit facility (the "Production Tax Credit Facility") based on and secured by collateral consisting solely of certain of the Company’s tax credit receivables.

The maximum principal amount of the Production Tax Credit Facility is $ 260.0 million, subject to the amount of collateral available, which is based on specified percentages of amounts payable to the Company by governmental authorities pursuant to the tax incentive laws of certain eligible jurisdictions that arise from the production or exploitation of motion pictures and television programming in such jurisdiction.

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

Advances under the Production Tax Credit Facility bear interest at a rate equal to SOFR plus 0.10 % to 0.25 % depending on the SOFR term (i.e., one, three or six months), plus 1.50 % per annum or the base rate plus 0.50 % per annum (effective interest rate of 6.92 % at March 31, 2024).

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

As of March 31, 2023, there was $ 3.2 million available under the Production Tax Credit Facility.

As of March 31, 2024, there were no material amounts available under the Production Tax Credit Facility.

Programming Notes .

Programming notes represent individual unsecured loans for the licensing of film and television programs that the Company licenses, related to the Company's Media Networks business.

The Company's programming notes had contractual repayment dates in April and May 2023, and incur SOFR and LIBOR-based interest at a weighted average rate of 8.14 %.

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

IP Credit Facility.

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

The maximum principal amount of the IP Credit Facility is $ 161.9 million, subject to the amount of collateral available, which is based on the valuation of cash flows from the libraries.

18 unchanged sentences

The facility maturity date is up to 2 years, 90 days after the revolving period ends, currently August 14, 2027.

As of March 31, 2023, there was $ 175.0 million outstanding under the Backlog Facility, and there were no amounts available under the Backlog Facility (March 31, 2022 - no amounts outstanding).

In June 2022, the Company borrowed $ 118.6 million under a loan agreement which was secured by contracted receivables which are not yet recognized as revenue under certain licensing agreements (the "June 2022 Distribution Loan"), which was fully repaid in the second and third quarter of fiscal 2023.

As of March 31, 2024, there was $ 175.0 million outstanding under the Backlog Facility, and there were no amounts available under the Backlog Facility (March 31, 2023 - $ 175.0 million outstanding).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In September 2022, the Company borrowed $ 43.4 million under a loan agreement which matures on March 28, 2026 (the "September 2022 Distribution Loan") and bears interest at a rate equal to Term SOFR plus 0.11 %, plus an applicable margin amounting to 1.50 % per annum (effective interest rate of 6.42 % at March 31, 2023).

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"), and bears interest at a rate equal to Term SOFR plus 0.11 %, plus an applicable margin amounting to 2.10 % per annum (effective interest rate of 7.02 % at March 31, 2023).

The December 2022 Distribution Loan provides for total borrowings up to an aggregate of $ 18.7 million.

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, incurring SOFR-based interest at a weighted average rate of 6.89 %, 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.

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

5 unchanged sentences

$ 61.4 $ 48.4 $ 54.9

Finance lease cost

Amortization of right-of-use assets — — 2.6

Interest on lease liabilities — — 1.6

Total finance lease cost — — 4.2

Short-term lease cost (2)

15 unchanged sentences

$ 438.5 206.6

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2024 March 31,

3 unchanged sentences

Operating leases 5.24 % 3.81 %

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The expected future payments relating to the Company's lease liabilities at March 31, 2024 are as follows:

5 unchanged sentences

Total $ 438.5

As of March 31, 2023, the Company has entered into certain leases that have not yet commenced primarily related to studio facilities, certain of which are owned by an equity-method investee, for which construction related to those leases has not yet been completed.

As of March 31, 2024, the Company has entered into certain leases that have not yet commenced primarily related to studio facilities, for which construction related to those leases has not yet been completed.

The leases are for terms up to 12.25 years, commencing upon completion of construction (currently expected to be ranging from calendar years 2025 to 2026).

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

The leases include an option to extend the initial term for an additional 10 years to 12 years.

The total minimum lease payments under these leases in aggregate are approximately $ 250.9 million.

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

Fair Value Measurements

8 unchanged sentences

or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

• Level 3 — Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

The following table sets forth the assets and liabilities required to be carried at fair value on a recurring basis as of March 31, 2024 and 2023:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

March 31, 2024 March 31, 2023

1 unchanged sentence

(Amounts in millions)

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

Forward exchange contracts (see Note 18) $ — $ — $ — $ — $ 2.9 $ 2.9

Interest rate swaps (see Note 18) — 35.6 35.6 — 41.1 41.1

— 41.1 41.1 — 120.1 120.1

Forward exchange contracts (see Note 18) — ( 2.8 ) ( 2.8 ) — ( 0.1 ) ( 0.1 )

Interest rate swaps (see Note 18) — — — — 28.6 28.6

________________

(1) Amounts at March 31, 2022 exclude $ 88.1 million of financing component of interest rate swaps presented in the table below ( none at March 31, 2023).

The following table sets forth the carrying values and fair values of the Company’s outstanding debt, film related obligations, and interest rate swaps at March 31, 2024 and 2023:

13 unchanged sentences

IP Credit Facility 107.6 109.9 140.8 143.8

Financing component of interest rate swaps (2)

________________

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

(2) Amounts at March 31, 2022 include $ 88.1 million recorded as a reduction of assets under master netting arrangements ( none at March 31, 2023).

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

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

4 unchanged sentences

Redeemable Noncontrolling Interests

Redeemable noncontrolling interests (included in temporary equity on the consolidated balance sheets) primarily relate to 3 Arts Entertainment and Pilgrim Media Group, as further described below.

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

The amount of the redemption value in excess of the historical values of the noncontrolling interest, if any, is recognized as an increase to redeemable noncontrolling interest and a charge to retained earnings or accumulated deficit.

The table below presents the reconciliation of changes in redeemable noncontrolling interests:

5 unchanged sentences

Adjustments to redemption value 83.4 78.4 98.6

Other 1.7 — —

( 93.2 ) 1.7 —

Cash distributions ( 1.0 ) ( 6.6 ) ( 1.5 )

1 unchanged sentence

Ending balance $ 123.3 $ 343.6 $ 321.2

Redeemable noncontrolling interests (included in temporary equity on the consolidated balance sheets) relate to the November 12, 2015 acquisition of a controlling interest in Pilgrim Media Group and the May 29, 2018 acquisition of a controlling interest in 3 Arts Entertainment.

_______________

(1) In fiscal 2024, amounts represent the reclassification of a portion of the 3 Arts Entertainment redeemable noncontrolling interest from mezzanine equity to a liability, as further described below.

3 Arts Entertainment:

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

The noncontrolling interest holders have a right to put the noncontrolling interest of 3 Arts Entertainment, at fair value, exercisable 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.

The put and call options have been determined to be embedded in the noncontrolling interest, and because the put rights are outside the control of the Company, the noncontrolling interest holder's interest is presented as redeemable noncontrolling interest outside of shareholders' equity on the Company's consolidated balance sheets.

In addition, the noncontrolling interest holders have continued as employees of 3 Arts Entertainment.

Pursuant to the various 3 Arts Entertainment acquisition and related agreements, a portion of the noncontrolling interest holders' participation in the put and call proceeds is based on the noncontrolling interest holders' performance during the period.

Further, if the employment of a noncontrolling interest holder is terminated, under certain circumstances, their participations in distributions cease and the put and call value is discounted from the fair value of their equity ownership percentage.

Accordingly, earned distributions are accounted for as compensation and are being expensed within general and administrative expense as incurred.

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

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

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

Accounting Prior to Acquisition of Additional Interest on January 2, 2024.

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 year ended March 31, 2024.

The put and call options were determined to be embedded in the noncontrolling interest, and because the put rights were outside the control of the Company, the noncontrolling interest holder's interest prior to the modification discussed below was included in redeemable noncontrolling interest outside of shareholders' equity on the Company's consolidated balance sheets.

The noncontrolling interest holders are employees of 3 Arts Entertainment.

Pursuant to the various 3 Arts Entertainment acquisition and related agreements, a portion of the noncontrolling interest holders' participation in the put and call proceeds was based on the noncontrolling interest holders' performance during the period.

Further, if the employment of a noncontrolling interest holder is terminated, under certain circumstances, their participation in distributions cease and the put and call value was discounted from the fair value of their equity ownership percentage.

Accordingly, earned distributions were accounted for as compensation and were being expensed within general and administrative expense as incurred.

Additionally, the amount of the put and call proceeds subject to the discount was accounted for as compensation, and amortized over the vesting period within general and administrative expense and reflected as an addition to redeemable noncontrolling interest over the vesting period which ended in November 2022.

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accordingly, $ 38.3 million was initially recorded as a deferred compensation arrangement within other current and non-current assets and was amortized in general and administrative expenses over the five-year period ended May 29, 2023.

Acquisition of Additional Interest.

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 $ 194.1 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.

The purchase of the additional 25 % interest in 3 Arts Entertainment for $ 194.1 million was recorded as a reduction of noncontrolling interest which had previously been adjusted to its redemption value, which equaled fair value.

At the completion of the purchase, a portion of the noncontrolling interest continued to be considered compensatory, as it was subject to forfeiture provisions upon termination of employment under certain circumstances, and the remaining portion represented the noncontrolling interest holders' fully vested equity interest.

Under the new arrangement, the holders' right to sell their interest to the Company, and the Company's right to purchase the noncontrolling interest, are based on a formula-based amount (i.e., a fixed EBITDA multiple), subject to a minimum purchase price, rather than being based on fair value.

Since the redemption features described above were based on a formula using a fixed multiple, the compensatory portion of the noncontrolling interest is now considered a liability award, and as a result, approximately $ 93.2 million was reclassified from mezzanine equity to a liability, and is reflected in "other liabilities - non-current" in the consolidated balance sheet at March 31, 2024.

In addition, because the new arrangement represented 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 in the quarter ended March 31, 2024, representing the excess of the fair value of the modified award over amounts previously expensed.

This incremental expense was reflected in "restructuring and other" in the consolidated statement of operations, and as a reduction of accumulated deficit in shareholders' equity, reflected in the "redeemable noncontrolling interests adjustments to redemption value" line item in the consolidated statements of equity (deficit).

As of March 31, 2024, the Company had a remaining redeemable noncontrolling interest balance related to 3 Arts Entertainment of $ 93.2 million, reflecting the fully vested equity portion of the noncontrolling interest, which remains classified as redeemable noncontrolling interest outside of shareholders' equity on the Company's consolidated balance sheets due to the purchase and sale rights beginning in 2027 which were determined to be embedded in the noncontrolling interest, and are outside the control of the Company.

The redeemable noncontrolling interest will be adjusted to its redemption value through accumulated deficit through the sale or purchase right date in January 2027.

Subsequent to the January 2024 transactions noted above, changes in the carrying value of the redeemable noncontrolling interest are reflected in the calculation of basic and diluted net income or loss per common share attributable to Lions Gate Entertainment Corp.

shareholders, if dilutive, or to the extent the adjustments represent recoveries of amounts previously reflected in the computation of basic and diluted net income or loss per common share attributable to Lions Gate Entertainment Corp.

shareholders (see Note 1).

The liability component of the noncontrolling interest, amounting to $ 93.2 million at March 31, 2024, will be reflected at its estimated redemption value, with any changes in estimated redemption value recognized as a charge or benefit in general and administrative expense in the consolidated statement of operations over the vesting period (i.e., the period from January 2, 2024 to the sale or purchase right date in January 2027).

Earned distributions continue to be accounted for as compensation since such amounts are allocated based on performance, and are being expensed within general and administrative expense as incurred.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Pilgrim Media Group:

5 unchanged sentences

The put and call options have been determined to be embedded in the noncontrolling interest, and because the put rights are outside the control of the Company and require partial cash settlement, the noncontrolling interest holder's interest is presented as redeemable noncontrolling interest outside of shareholders' equity on the Company's consolidated balance sheets.

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

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

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

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

The Company has other immaterial redeemable noncontrolling interests.

5 unchanged sentences

The table below presents revenues by segment, market or product line for the fiscal years ended March 31, 2024, 2023 and 2022.

The Motion Picture and Television Production segments include the revenues of eOne from the acquisition date of December 27, 2023 (see Note 2).

2024 2023 2022

21 unchanged sentences

Media Networks - Programming Revenues

1,395.8 1,428.9 1,497.2

Domestic 1,365.4 1,395.8 1,428.9

International 211.0 150.7 107.3

2 unchanged sentences

Total revenues $ 4,016.9 $ 3,854.8 $ 3,604.3

__________________

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

Remaining Performance Obligations

21 unchanged sentences

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

March 31, 2022 (Benefit) provision for doubtful accounts (1)

March 31, 2023 (Benefit) provision for doubtful accounts Other (1)

Uncollectible accounts written-off (2)

2 unchanged sentences

_______________________

(1) Represents a provision for doubtful accounts offset by collections on accounts receivable previously reserved.

(2) Includes $ 2.5 million related to accounts receivable previously reserved for bad debt from customers in Russia, related to Russia's invasion of Ukraine.

(1) Represents the provision for doubtful accounts acquired in the acquisition of eOne (see Note 2).

(2) Represents primarily accounts receivable previously reserved for bad debt from customers in Russia, related to Russia's invasion of Ukraine.

Contract Assets.

4 unchanged sentences

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

At March 31, 2024, the current portion of deferred revenue includes $ 65.6 million from the acquisition of eOne (see Note 2).

Revenues of $ 134.7 million were recognized during the year ended March 31, 2024, related to the balance of deferred revenue at March 31, 2023.

7 unchanged sentences

(Amounts in millions)

Stock options and Share Appreciation Rights outstanding 24.8 27.6

Stock options and share appreciation rights (SARs) outstanding 20.7 24.8

Restricted share units and restricted stock — unvested 13.4 14.0

3 unchanged sentences

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

During the fiscal years ended March 31, 2023 and March 31, 2022, the Company did not repurchase any common shares.

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

During the fiscal years ended March 31, 2024, 2023 and 2022, the Company did not repurchase any common shares.

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

9 unchanged sentences

As share-based compensation expense recognized in the Company’s consolidated financial statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures.

Exchange Program.

On January 10, 2020, the Company’s Board of Directors authorized, and on April 2, 2020, the Company’s shareholders approved, a stock option and share appreciation rights exchange program (the “Exchange Program”) that permitted certain current employees to exchange certain outstanding stock options and share appreciation rights with exercise prices substantially above the current market price of the Company’s Class A voting shares and the Company’s Class B non-voting shares for a lesser number of stock options and share appreciation rights that have a fair value that is lower than the fair value of the “out of the money” stock options and share appreciation rights.

The program began on April 9, 2020 and was completed on May 7, 2020.

As a result of this program 1.1 million outstanding eligible stock options and share appreciation rights of Class A voting shares were exchanged for 0.1 million new stock options and share appreciation rights at an exercise price of $ 7.70 per share and 4.3 million outstanding eligible stock options and share appreciation rights of Class B

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

non-voting shares were exchanged for 0.8 million new stock options and share appreciation rights at an exercise price of $ 7.13 .

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

Share-Based Compensation Expense.

79 unchanged sentences

— ( 0.8 ) $ 8.55

$ 30.56 ( 0.4 ) $ 10.26

Outstanding at March 31, 2024 0.1 $ 9.27 13.3 $ 8.71

__________________

(1) Represents less than 0.1 million shares.

10 unchanged sentences

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

The Company recognized excess tax deficiencies of $ 11.3 million associated with its equity awards in its tax provision for the year ended March 31, 2023 (2022 — benefits of $ 14.9 million, 2021 — deficiencies of $ 12.1 million).

The Company recognized excess tax deficiencies of $ 12.0 million associated with its equity awards in its tax provision for the year ended March 31, 2024 (2023 — deficiencies of $ 11.3 million, 2022 — benefits of $ 14.9 million).

Other Share-Based Compensation

28 unchanged sentences

Total deferred provision (benefit) ( 18.5 ) ( 5.3 ) ( 1.7 )

Total provision for income taxes $ 21.3 $ 28.4 $ 17.1

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

The Company's income tax provision for the fiscal years ended March 31, 2023, March 31, 2022 and March 31, 2021 was impacted by changes in the valuation allowances against certain U.S.

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

The Company's income tax provision for fiscal 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 audits, and benefited from the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.

The Company's income tax provision for fiscal 2021 included a benefit from the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations and additional settlements with tax authorities.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Total provision (benefit) for income taxes $ ( 65.0 ) $ 21.3 $ 28.4

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

As a result, the Company believes it is more appropriate to use the U.S.

Federal statutory rate in its reconciliation of the statutory rate to its reported income tax rate.

federal statutory income tax rate of 21% in its reconciliation of the statutory rate to its reported income tax provision (benefit).

The Company's income tax provision (benefit) differs from the 21% U.S.

federal statutory income tax rate applied to income (loss) before taxes due to the mix of earnings generated across the various jurisdictions in which operations are conducted, in addition to the tax deductions generated through the Company's capital structure.

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The differences between income taxes expected at U.S.

8 unchanged sentences

Nondeductible goodwill impairment 101.9 304.3 —

Gain on sale of Pantaya — — 13.8

Remeasurements of originating deferred tax assets and liabilities ( 78.3 ) 13.6 ( 1.3 )

3 unchanged sentences

Non-controlling interest in partnerships 18.6 1.8 3.7

Nondeductible interest expense — — 3.5

Uncertain tax benefits ( 70.0 ) 5.3 3.6

2 unchanged sentences

Total provision for income taxes $ ( 65.0 ) $ 21.3 $ 28.4

For the fiscal years ended March 31, 2023, 2022 and 2021, our total provision for income taxes includes certain foreign affiliate dividends that can be received in our Canadian jurisdiction without being subject to tax under local tax law.

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

For the fiscal years ended March 31, 2024, 2023 and 2022, our income tax provision (benefit) includes certain foreign affiliate dividends that can be received in our Canadian jurisdiction without being subject to income tax under local law.

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

LIONS GATE ENTERTAINMENT CORP.

22 unchanged sentences

The Company has recorded valuation allowances for certain deferred tax assets, which are primarily related to U.S.

and foreign net operating loss carryforwards and U.S.

foreign tax credit carryforwards as sufficient uncertainty exists regarding the future realization of these assets.

and foreign net operating loss carryforwards, U.S.

foreign tax credit carryforwards, and carryforwards of U.S.

interest expenses limited in their deduction under the Internal Revenue Code and similar state and local statutes.

In its assessment, the Company has concluded there to be sufficient uncertainty regarding the future realization of these deferred tax assets.

At March 31, 2024, the Company had U.S.

2 unchanged sentences

At March 31, 2024, the Company had Canadian loss carryforwards of $ 361.6 million which will expire beginning in 2030.

At March 31, 2023, the Company had Luxembourg loss carryforwards of $ 235.1 million which will expire beginning in 2036.

At March 31, 2024, the Company had Luxembourg loss carryforwards of $ 504.3 million which will expire beginning in 2036, U.K.

loss carryforwards of $ 95.1 million with no expiration, and Spanish loss carryforwards of $ 96.1 million which will expire beginning in 2036.

At March 31, 2024, the Company had other foreign jurisdiction loss carryforwards of $ 24.6 million which will expire beginning in 2028.

3 unchanged sentences

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes the changes to the gross unrecognized tax benefits, exclusive of interest and penalties, for the years ended March 31, 2023, 2022, and 2021:

The unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year are classified as "other liabilities" in the consolidated balance sheets.

As of March 31, 2024 and 2023, the total amount of gross unrecognized tax benefits, exclusive of interest and penalties, was $ 12.1 million and $ 64.9 million, respectively, which, if recognized, would favorably impact the Company's effective tax rate.

The aggregate changes in the Company's gross amount of unrecognized tax benefits, exclusive of interest and penalties, are summarized as follows:

Gross unrecognized tax benefits at March 31, 2021 (liability as of March 31, 2021) $ 68.0

17 unchanged sentences

Gross unrecognized tax benefits at March 31, 2024 (liability as of March 31, 2024) $ 12.1

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

For the years ended March 31, 2023, 2022, and 2021, the Company recognized as a charge or (benefit) to the tax provision net interest and penalties related to uncertain tax positions of $ 5.0 million, $ 6.0 million, and $ 1.2 million, respectively.

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

For the years ended March 31, 2024, 2023, and 2022, the Company recognized as a charge or (benefit) to the tax provision (benefit) for interest and penalties related to uncertain tax positions of $( 8.9 ) million, $ 5.0 million, and $ 6.0 million, respectively.

The liability for accrued interest amounted to $ 7.0 million and $ 16.7 million as of March 31, 2024 and 2023, respectively.

The total amount of unrecognized tax benefits as of March 31, 2023 that, if recognized, would benefit the Company's tax provision are $ 81.6 million.

The Company estimates that it is reasonably possible that the liability for unrecognized tax benefits will decrease in the next twelve months by $ 79.7 million as a result of projected audit settlements in certain jurisdictions.

During the year ended March 31, 2024, the Company settled a prior year refund claim and recognized a corresponding income tax benefit of $ 70 million, which was inclusive of accrued interest and penalties of approximately $ 10 million.

The Company estimates that it is reasonably possible that the liability for unrecognized tax benefits will further decrease in the next twelve months by $ 8.1 million, inclusive of interest and penalties, as a result of projected audit settlements in certain jurisdictions.

The Company is subject to taxation in the U.S.

4 unchanged sentences

The Company's Canadian tax returns are also under examination for the years ended March 31, 2018 through March 31, 2019.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restructuring and Other

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

During the years ended March 31, 2023, 2022 and 2021, the Company also incurred certain other unusual charges, which are included in direct operating expense and distribution and marketing expense in the consolidated statements of operations and are described below.

During the years ended March 31, 2024, 2023 and 2022, the Company also incurred certain other unusual charges or benefits, which are included in direct operating expense and distribution and marketing expense in the consolidated statements of operations and are described below.

The following table sets forth restructuring and other and these other unusual charges or benefits and the statement of operations line items they are included in for the years ended March 31, 2024, 2023 and 2022:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2024 2023 2022

8 unchanged sentences

COVID-19 related charges included in restructuring and other — 0.1 1.1

Transaction and related costs (benefits) (4)

Transaction and other costs (benefits) (3)

84.6 4.4 11.1

Total Restructuring and Other 508.5 411.9 16.8

8 unchanged sentences

_______________________

(1) Media Networks Goodwill Impairment and Restructuring:

For the second quarter ended September 30, 2022, due to the macro and microeconomic conditions, including the competitive environment, continued inflationary trends and recessionary economies worldwide and its impact on the Company's growth in subscribers worldwide, the Company began a plan to restructure its LIONSGATE+ business (formerly STARZPLAY International).

This restructuring includes exiting the business in seven international territories (France, Germany, Italy, Spain, Benelux, the Nordics and Japan).

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 segment in the second quarter ended September 30, 2022, as discussed in Note 1.

During the third quarter ended December 31, 2022, due to the continuing macro and microeconomic conditions which led to the LIONSGATE+ restructuring, the Company expanded its 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, the Company recorded content impairment charges associated with impairment of programming related to the territories being exited and individual content abandonment upon removal of certain titles from the Starz platforms related to the Media Networks segment in the fiscal year ended March 31, 2023 of $ 379.3 million.

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

(1) Media Networks Restructuring:

In fiscal 2023, the Company began a plan to restructure its 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, the Company 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.

The Company has 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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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 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 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.

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

territories being exited or to be exited, and payments on the remaining amounts payable for content removed or that may be removed from its services.

The amounts above will depend on the results of its strategic content review and amounts recoverable from alternative distribution strategies, if any, on content in domestic and foreign markets.

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.

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, 2022 and 2021 were primarily related to the 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, 2022 and 2021 reflect transaction, integration and legal costs associated with certain strategic transactions, and restructuring activities and also include costs and benefits associated with legal matters.

In the fiscal year ended March 31, 2023, these amounts include a benefit of $ 11.0 million for a settlement of a legal matter related to the Media Networks segment.

(2) Severance costs in the fiscal years ended March 31, 2024, 2023 and 2022 were primarily related to restructuring activities and other cost-saving initiatives.

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

(3) Amounts in the fiscal years ended March 31, 2024, 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 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 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.

(4) Amounts represent certain unusual programming and content charges.

2 unchanged sentences

These charges are excluded from segment results and included in amortization of investment in film and television programs in direct operating expense on the consolidated statement of operations.

(6) Amounts reflected in direct operating expense include incremental costs associated with the pausing and restarting of productions including paying/hiring certain cast and crew, maintaining idle facilities and equipment costs resulting from circumstances associated with the COVID-19 global pandemic, net of insurance recoveries of $ 14.1 million, $ 22.1 million and immaterial amounts in fiscal 2023, 2022 and 2021, respectively.

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

(5) Amounts reflected in direct operating expense include incremental costs associated with the pausing and restarting of productions including paying/hiring certain cast and crew, maintaining idle facilities and equipment costs resulting from circumstances associated with the COVID-19 global pandemic, net of insurance recoveries of $ 1.2 million, $ 14.1 million and $ 22.1 million in fiscal 2024, 2023 and 2022, respectively.

In the fiscal years ended March 31, 2024, 2023 and 2022, insurance recoveries exceeded the incremental costs expensed in the year, resulting in a net benefit included in direct operating expense.

The costs included in distribution and marketing expense primarily consist of contractual marketing spends for film releases and events that have been canceled or delayed and will provide no economic benefit.

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

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

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

Changes in the restructuring and other severance liability were as follows for the years ended March 31, 2023, 2022 and 2021:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Changes in the restructuring and other severance liability were as follows for the years ended March 31, 2024, 2023 and 2022:

2024 2023 2022

23 unchanged sentences

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

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

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

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

4 unchanged sentences

Segment information is presented in the table below.

The Motion Picture and Television Production segments include the results of operations of eOne from the acquisition date of December 27, 2023 (see Note 2).

2024 2023 2022

39 unchanged sentences

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

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

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

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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

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

5 unchanged sentences

( 136.1 ) ( 122.9 ) ( 97.1 )

Gain on sale of Pantaya — — 44.1

Adjusted depreciation and amortization (2)

1 unchanged sentence

Restructuring and other ( 508.5 ) ( 411.9 ) ( 16.8 )

Goodwill impairment ( 1,475.0 ) — —

Goodwill and intangible asset impairment ( 663.9 ) ( 1,475.0 ) —

COVID-19 related benefit (charges) included in direct operating expense and distribution and marketing expense (3)

11.6 3.4 ( 67.5 )

Programming and content charges (4)

10 unchanged sentences

Gain (loss) on extinguishment of debt 19.9 57.4 ( 28.2 )

Gain on investments 44.0 1.3 0.5

Gain on investments, net 3.5 44.0 1.3

Equity interests income (loss) 8.7 0.5 ( 3.0 )

1 unchanged sentence

___________________

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

(2) 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:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

(2) 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 acquisitions which are included in the purchase accounting and related adjustments line item above, as shown in the table below:

2024 2023 2022

3 unchanged sentences

Adjusted depreciation and amortization $ 50.1 $ 40.2 $ 43.0

(3) Amounts 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.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(3) Amounts represent the incremental costs, if any, included in direct operating expense and distribution and marketing expense resulting from circumstances associated with the COVID-19 global pandemic, net of insurance recoveries.

During the fiscal years ended March 31, 2024, 2023 and 2022, the Company has incurred a net benefit in direct operating expense due to insurance recoveries in excess of the incremental costs expensed in the period (see Note 15).

These charges (benefits) are excluded from segment operating results.

These benefits (charges) are excluded from segment operating results.

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

8 unchanged sentences

(i) 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.

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

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

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

7 unchanged sentences

$ 153.7 $ 195.5 $ 194.0

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(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.

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.

(i) These 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 related to Pilgrim Media Group (through June 2021) and 3 Arts Entertainment (through November 2022), and the amortization of the recoupable portion of the purchase price (through May 2023) 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.

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.

2024 2023 2022

(Amounts in millions)

Amortization of recoupable portion of the purchase price $ 1.3 $ 7.7 $ 7.7

2 unchanged sentences

$ 11.6 $ 54.7 $ 58.7

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

See Note 12 for revenues by media or product line as broken down by segment for the fiscal years ended March 31, 2024, 2023, and 2022.

61 unchanged sentences

2022 - revenue from one individual customer which represented greater than 10 % of consolidated revenues, amounting to $ 639.2 million, primarily related to the Company's Media Networks and Motion Picture segments).

As of March 31, 2023 and 2022, the Company did not have any accounts receivable due from customers which individually represented greater than 10% of total consolidated accounts receivable.

As of March 31, 2024, the Company had accounts receivable due from one customer which individually represented greater than 10% of combined accounts receivable, and amounted to 11.6 % of total combined accounts receivable (current and non-current) at March 31, 2024, or gross accounts receivable of approximately $ 100.9 million.

As of March 31, 2023, the Company did not have any accounts receivable due from customers which individually represented greater than 10% of total consolidated accounts receivable.

Commitments and Contingencies

6 unchanged sentences

$ 452.8 $ 125.8 $ 34.1 $ 6.9 $ — $ — $ 619.6

Interest payments on corporate debt (2)

Interest payments (2)

165.6 78.9 49.2 42.5 39.3 4.9 380.4

9 unchanged sentences

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

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

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

Future payments

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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

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

(2) Includes cash interest payments on the Company's 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.

(3) 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).

12 unchanged sentences

Total contributions made by the Company to multiemployer pension and other benefit plans for the years ended March 31, 2024, 2023 and 2022 were $ 59.9 million, $ 102.0 million, and $ 98.3 million, respectively.

If the Company ceases to be obligated to make contributions or otherwise withdraws from participation in any of these plans, applicable law requires the Company to fund its allocable share of the unfunded vested benefits, which is known as a withdrawal liability.

In addition, actions taken by other participating employers may lead to adverse changes in the financial condition of one of these plans, which could result in an increase in the Company's withdrawal liability.

Contingencies

28 unchanged sentences

Canadian Dollar 21.4 CAD in exchange for $ 15.9 1.34 CAD

Polish Zloty 8.0 PLN in exchange for $ 1.8 4.33 PLN

Mexican Peso 56.7 MXN in exchange for $ 3.0 18.95 MXN

Hungarian Forint 1,450.0 HUF in exchange for $ 4.0 360.17 HUF

New Zealand Dollar $ 73.9 NZD in exchange for $ 45.3 1.64 NZD

Interest Rate Swaps

6 unchanged sentences

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

However, due to a financing component (debt host) on a portion of our previously outstanding interest rate swaps (see Designated Cash Flow Hedges at March 31, 2022 table below), the cash flows related to these contracts were classified as financing activities through the date of termination.

Outstanding at March 31, 2022.

As of March 31, 2022, the Company had the following designated cash flow hedge pay-fixed interest rate swaps outstanding, and the following not designated pay-fixed receive-variable and offsetting pay-variable receive-fixed interest rate swaps outstanding (related to the Company's LIBOR-based debt, see Note 7 and Note 8).

However, due to a financing component (debt host) on a portion of our previously outstanding interest rate swaps, the cash flows related to these contracts are classified as financing activities through the date of termination.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Designated Cash Flow Hedges at March 31, 2022:

Designated Cash Flow Hedges.

As of March 31, 2024 and March 31, 2023, the Company had the following pay-fixed interest rate swaps, which have been designated as cash flow hedges outstanding (all related to the Company's SOFR-based debt, see Note 7 and Note 8):

Effective Date Notional Amount Fixed Rate Paid Maturity Date

2 unchanged sentences

May 23, 2018 $ 700.0 2.915 % March 24, 2025 (1)

May 19, 2020 $ 350.0 2.531 % March 23, 2027 (2)(3)

June 25, 2018 $ 200.0 2.723 % March 23, 2025 (1)

August 14, 2020 $ 200.0 1.840 % March 23, 2030 (2)(3)

July 31, 2018 $ 300.0 2.885 % March 23, 2025 (1)

December 24, 2018 $ 50.0 2.744 % March 23, 2025 (1)

December 24, 2018 $ 100.0 2.808 % March 23, 2025 (1)

December 24, 2018 $ 50.0 2.728 % March 23, 2025 (1)

Total $ 1,700.0

__________________

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

(2) These pay-fixed interest rate swaps were considered hybrid instruments with a financing component (debt host) and an embedded at-market derivative that was designated as a cash flow hedge.

(3) Terminated in May 2022, see May 2022 Transactions description below.

Not Designated Cash Flow Hedges at March 31, 2022:

Pay-Fixed Receive-Variable (1)

Offsetting Pay-Variable Receive-Fixed (1)

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

(in millions) (in millions)

May 23, 2018 $ 700.0 2.915 % (3)

May 19, 2020 $ 700.0 2.915 % (2)

March 24, 2025

June 25, 2018 $ 200.0 2.723 % (3)

August 14, 2020 $ 200.0 2.723 % (2)

March 23, 2025

July 31, 2018 $ 300.0 2.885 % (3)

May 19, 2020 $ 300.0 2.885 % (2)

March 23, 2025

December 24, 2018 $ 50.0 2.744 % (3)

May 19, 2020 $ 50.0 2.744 % (2)

March 23, 2025

December 24, 2018 $ 100.0 2.808 % (3)

June 15, 2020 $ 100.0 2.808 % (2)

March 23, 2025

December 24, 2018 $ 50.0 2.728 % (3)

June 15, 2020 $ 50.0 2.728 % (2)

March 23, 2025

Total $ 1,400.0 Total $ 1,400.0

__________________

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

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

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

The $ 1.4 billion of pay-fixed receive-variable interest rate swaps de-designated as cash flow hedges and the $ 1.4 billion of offsetting pay-variable receive-fixed swaps were marked to market with changes in fair value recognized, along with the fixed and variable payments on these swaps, in interest expense, which netted to an immaterial amount

(2) Terminated in May 2022, see May 2022 Transactions description below.

(3) Re-designated in May 2022, see May 2022 Transactions description below.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) Represents the re-designated swaps as described in the May 2022 Transactions section below that were previously not designated cash flow hedges at March 31, 2022.

May 2022 Transactions :

In May 2022, the Company terminated certain of its interest rate swap contracts with effective dates of May 19, 2020, June 15, 2020 and August 14, 2020, (the "Terminated Swaps"), as presented in the tables above.

In May 2022, the Company terminated certain of its previous interest rate swap contracts (the "Terminated Swaps").

As a result of the terminations, the Company received approximately $ 56.4 million.

Simultaneously with the termination of the Terminated Swaps, the Company re-designated all other swaps previously not designated (i.e., swaps with effective dates of May 23, 2018, June 25, 2018, July 31, 2018 and December 24, 2018 (the "Re-designated Swaps")) as cash flow hedges of variable rate debt with an aggregate notional amount of $ 1.4 billion.

In addition to the $ 1.4 billion Re-designated Swaps, the Company also has $ 300.0 million of other interest rate swaps designated as cash flow hedges as of March 31, 2023.

Accordingly, at March 31, 2023, the Company has a total of $ 1.7 billion of interest rate swaps designated as cash flow hedges (see Designated Cash Flow Hedges at March 31, 2023 table below).

Simultaneously with the termination of the Terminated Swaps, the Company re-designated all other swaps previously not designated as cash flow hedges of variable rate debt.

The receipt of approximately $ 56.4 million as a result of the termination was recorded as a reduction of the asset values of the derivatives amounting to $ 188.7 million and a reduction of the financing component (debt host) of the Terminated Swaps amounting to $ 131.3 million.

1 unchanged sentence

This amount will be amortized as a reduction of interest expense through the remaining term of the swaps unless it becomes probable that the cash flows originally hedged will not occur, in which case the proportionate amount of the gain will be recorded as a reduction to interest expense at that time.

In addition, the liability amount of $ 6.8 million for the Re-designated Swaps (see Designated Cash Flow Hedges at March 31, 2023 table below) at the re-designation date will be amortized as a reduction of interest expense throughout the remaining term of the Re-designated Swaps, unless it becomes probable that the cash flows originally hedged will not occur, in which case the proportionate amount of the loss will be recorded to interest expense at that time.

In addition, the liability amount of $ 6.8 million for the Re-designated Swaps at the re-designation date will be amortized as a reduction of interest expense throughout the remaining term of the Re-designated Swaps, unless it becomes probable that the cash flows originally hedged will not occur, in which case the proportionate amount of the loss will be recorded to interest expense at that time.

The receipt of approximately $ 56.4 million 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 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).

Outstanding at March 31, 2023.

As of March 31, 2023, the Company had the following pay-fixed interest rate swaps which have been designated as cash flow hedges outstanding (all related to the Company's LIBOR-based debt, see Note 7 and Note 8):

Designated Cash Flow Hedges at March 31, 2023:

Effective Date Notional Amount Fixed Rate Paid Maturity Date

(in millions)

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

May 23, 2018 $ 700.0 2.915 % March 24, 2025 (1)

June 25, 2018 $ 200.0 2.723 % March 23, 2025 (1)

July 31, 2018 $ 300.0 2.885 % March 23, 2025 (1)

December 24, 2018 $ 50.0 2.744 % March 23, 2025 (1)

December 24, 2018 $ 100.0 2.808 % March 23, 2025 (1)

December 24, 2018 $ 50.0 2.728 % March 23, 2025 (1)

Total $ 1,700.0

__________________

(1) Represents the Re-designated Swaps as described in the May 2022 Transactions section above that were previously not designated cash flow hedges at March 31, 2022.

Financial Statement Effect of Derivatives

13 unchanged sentences

Derivatives not designated as cash flow hedges:

Forward exchange contracts

Gain recognized in direct operating expense $ — $ — $ 0.3

Interest rate swaps

4 unchanged sentences

The Company classifies its forward foreign exchange contracts and interest rate swap agreements within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments (see Note 10).

The portion of the swaps reflecting the financing component (debt host) of the hybrid instrument discussed above is recorded at amortized cost and reduced over time based on payments.

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

As of March 31, 2023, there were no swaps outstanding that were subject to a master netting arrangement.

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

As of March 31, 2024 and 2023, there were no swaps outstanding that were subject to a master netting arrangement.

As of March 31, 2024 and 2023, the Company had the following amounts recorded in the accompanying consolidated balance sheets related to the Company's use of derivatives:

2 unchanged sentences

March 31, 2024

Other Current Assets Other Non-Current Assets Other Accrued Liabilities Other Non-Current Liabilities

Other Current Assets Other Non-Current Assets Other Accrued Liabilities

(Amounts in millions)

4 unchanged sentences

March 31, 2023

Other Current Assets Other Non-Current Assets Other Accrued Liabilities Other Non-Current Liabilities

Other Current Assets Other Non-Current Assets Other Accrued Liabilities

(Amounts in millions)

2 unchanged sentences

Interest rate swaps — 41.1 —

Derivatives not designated as cash flow hedges:

Interest rate swaps (1)

— ( 77.1 ) — 56.8

Fair value of derivatives $ 2.9 $ 41.1 $ 0.1

________________

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

As of March 31, 2023, based on the current release schedule, the Company estimates approximately $ 2.9 million of gains associated with forward foreign exchange contract cash flow hedges in accumulated other comprehensive income (loss) will be reclassified into earnings during the one-year period ending March 31, 2024.

As of March 31, 2024, based on the current release schedule, the Company estimates approximately $ 1.5 million of losses associated with forward foreign exchange contract cash flow hedges in accumulated other comprehensive income (loss) will be reclassified into earnings during the one-year period ending March 31, 2025.

As of March 31, 2024, the Company estimates approximately $ 30.4 million of gains recorded in accumulated other comprehensive income (loss) associated with interest rate swap agreement cash flow hedges will be reclassified into interest expense during the one-year period ending March 31, 2025.

6 unchanged sentences

The Company monitors concentrations of credit risk with respect to cash and cash equivalents by placing such balances with higher quality financial institutions or investing such amounts in liquid, short-term, highly-rated instruments or investment funds holding similar instruments.

As of March 31, 2023, the majority of the Company’s cash and cash equivalents were held in bank depository accounts.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheet to the total amounts reported in the consolidated statement of cash flows at March 31, 2023.

At March 31, 2023,

As of March 31, 2024, the Company’s cash and cash equivalents were held in bank depository accounts.

At March 31, 2024 and 2023, restricted cash represents primarily amounts related to required cash reserves for interest payments associated with the Production Tax Credit Facility, IP Credit Facility, and Backlog Facility.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

restricted cash included in other current assets represents primarily amounts related to required cash reserves for interest payments associated with the Production Tax Credit Facility, IP Credit Facility and Backlog Facility.

2024 March 31,

22 unchanged sentences

Pooled Monetization Agreement.

In December 2019, the Company entered into a revolving agreement, as amended in September 2022, to transfer up to $ 150.0 million of certain receivables to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred, which expires July 31, 2023.

As customers pay their balances, the Company transfers additional receivables into the program.

The transferred receivables are fully guaranteed by a bankruptcy-remote wholly-owned subsidiary of the Company, which holds additional receivables in the amount of $ 61.8 million as of March 31, 2023 that are pledged as collateral under this agreement.

The third-party purchasers have no recourse to other assets of the Company in the event of non-payment by the customers.

In December 2019, the Company entered into a revolving agreement, as amended in July 2023, to transfer up to $ 100.0 million of certain receivables to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred, which matured on October 1, 2023.

As customers paid their balances, the Company would transfer additional receivables into the program.

The transferred receivables were fully guaranteed by a bankruptcy-remote wholly-owned subsidiary of the Company.

The third-party purchasers had no recourse to other assets of the Company in the event of non-payment by the customers.

The following table sets forth a summary of the receivables transferred under the pooled monetization agreement during the years ended March 31, 2024, 2023 and 2022:

14 unchanged sentences

___________________

(1) During the year ended March 31, 2024, the Company voluntarily repurchased $ 46.0 million of receivables previously transferred.

In addition, during the years ended March 31, 2023 and 2022, the Company repurchased $ 27.4 million and $ 25.5 million, respectively, of receivables previously transferred, as separately agreed upon with the third-party purchasers, in order to monetize such receivables under the individual monetization program discussed above without being subject to the collateral requirements under the pooled monetization program.

(2) Receivables net of unamortized discounts on long-term, non-interest bearing receivables.

At March 31, 2023, the outstanding amount of receivables derecognized from the Company's consolidated balance sheet, but which the Company continues to service, related to the pooled monetization agreement was approximately $ 52.3 million (March 31, 2022 - $ 79.5 million).

At March 31, 2024, there were no outstanding receivables derecognized from the Company's consolidated balance sheet, for which the Company continues to service, related to the pooled monetization agreement (March 31, 2023 - $ 52.3 million).

The composition of the Company’s other assets is as follows as of March 31, 2024 and March 31, 2023:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2024 March 31,

5 unchanged sentences

Contract assets (2)

Interest rate swap assets 35.6 —

Tax credits receivable 199.1 129.5

12 unchanged sentences

Costs of Packaged Media sales, including shipping and handling costs, are included in distribution and marketing expenses.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(2) Unamortized discounts on long-term, non-interest bearing receivables were $ 3.5 million and $ 1.8 million at March 31, 2023 and 2022, respectively, and unamortized discounts on contract assets were $ 0.5 million and $ 0.5 million at March 31, 2023 and 2022.

(2) At March 31, 2024, the current portion of contract assets includes $ 14.9 million from the acquisition of eOne (see Note 2).

(3) Unamortized discounts on long-term, non-interest bearing receivables were $ 6.2 million and $ 3.5 million at March 31, 2024 and 2023, respectively, and unamortized discounts on contract assets were $ 0.3 million and $ 0.5 million at March 31, 2024 and 2023, respectively.

Content related payables

2 unchanged sentences

Other accrued liabilities include employee related liabilities (such as accrued bonuses and salaries and wages) of $ 147.4 million and $ 128.7 million at March 31, 2024 and 2023, respectively.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accumulated Other Comprehensive Income (Loss)

12 unchanged sentences

Reclassifications to net loss (1)

— ( 34.3 ) ( 34.3 )

March 31, 2024 $ ( 22.7 ) $ 138.7 $ 116.0

___________________

(1) Represents a loss of $ 0.3 million included in direct operating expense and a loss of $ 10.4 million included in interest expense on the consolidated statement of operations in the year ended March 31, 2023 (2022 - loss of $ 0.2 million included in direct operating expense and loss of $ 48.8 million included in interest expense;

2021 - gain of $ 0.2 million included in direct operating expense and loss of $ 48.3 million included in interest expense) (see Note 18).

(1) Represents a loss of $ 0.3 million included in direct operating expense and a gain of $ 34.6 million included in interest expense on the consolidated statement of operations in the year ended March 31, 2024 (2023 - loss of $ 0.3 million included in direct operating expense and loss of $ 10.4 million included in interest expense;

2022 - loss of $ 0.2 million included in direct operating expense and loss of $ 48.8 million included in interest expense) (see Note 18).

Supplemental Cash Flow Information

1 unchanged sentence

2022 — $ 135.0 million).

Income taxes paid (refunded) during the fiscal year ended March 31, 2023 amounted to net tax paid of $ 29.1 million (2022 — net tax paid of $ 16.9 million;

2021 — net tax refunds received of $ 54.0 million).

Income taxes paid during the fiscal year ended March 31, 2024 amounted to net tax paid of $ 25.8 million (2023 — net tax paid of $ 29.1 million;

2022 — net tax paid of $ 16.9 million).

Significant non-cash transactions during the fiscal years ended March 31, 2024, 2023 and 2022 include certain interest rate swap agreements, which are discussed in Note 18, "Financial Instruments".

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The supplemental schedule of non-cash investing and financing activities is presented below:

The supplemental schedule of non-cash investing activities is presented below.

There were no significant non-cash financing activities for the fiscal years ended March 31, 2024, 2023 and 2022.

Year Ended March 31,

3 unchanged sentences

Accrued equity method investment $ — $ — $ 19.0

Cash consideration receivable for sale of Pantaya (see Note 2) $ — $ — $ 123.6

Decrease in finance lease right-of-use asset due to a reassessment event (1)

n/a n/a $ ( 42.0 )

Non-cash financing activities:

Decrease in finance lease liability due to a reassessment event (1)

n/a n/a $ ( 48.6 )

______________

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

Supplemental cash flow information related to leases was as follows:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2024 2023 2022

2 unchanged sentences

Operating cash flows for operating leases $ 55.5 $ 42.3 $ 57.0

Operating cash flows for finance leases $ — $ — $ 1.6

Financing cash flows for finance leases $ — $ — $ 2.6

Right-of-use assets obtained in exchange for new lease obligations:

6 unchanged sentences

Michael Burns, the Vice Chair and a director of the Company, owns a 65.45 % interest in Ignite, and Hardwick Simmons, a director of the Company, owns a 24.24 % interest in Ignite.

During the year ended March 31, 2023, $ 0.4 million was paid to Ignite under these agreements.

In the year ended March 31, 2021, the Company paid less than $ 0.1 million to MLC Strategies, LLC (“MLC Strategies”) for certain consulting services.

No amounts were paid in the years ended March 31, 2023 and 2022.

Mignon Clyburn, a director of the Company, is the President of MLC Strategies.

During the year ended March 31, 2024, $ 0.3 million was paid to Ignite under these agreements (2023 - $ 0.4 million).

Business Combination

See Note 2 and Note 21 for a description of the Business Combination Agreement with Screaming Eagle.

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.

Voting and Standstill Agreement

As previously disclosed, on November 10, 2015, the Company entered into a voting and standstill agreement with Liberty Global plc (“Liberty Global”), Discovery Communications, Inc.

(“Discovery”), Liberty Global Incorporated Limited, Discovery Lightning Investments Ltd.

(“Discovery Lightning”), Dr.

Malone and affiliates of MHR Fund Management, LLC (“MHR Fund Management”) (as amended from time to time, the “Voting and Standstill Agreement”).

In connection with the business combination described in Note 2 and Note 21, on the closing date, the Company, Lionsgate Studios, MHR Fund Management, Liberty Global Ventures Limited (f/k/a Liberty Global Incorporated Limited), Liberty Global Ventures Limited (f/k/a Liberty Global Incorporated Limited), Discovery Lightning Investments Ltd., Warner Bros.

Discovery, Inc.

and funds affiliated with MHR Fund Management entered into an amendment to the Voting and Standstill Agreement (the “Amendment to the Voting and Standstill Agreement”) to add Lionsgate Studios as a party thereto such that, among other items, certain provisions of the Voting and Standstill Agreement apply to Lionsgate Studios as if it were the Company.

Additionally, under the Amendment to the Voting and Standstill Agreement, the Company agreed to vote its common shares in favor of designees of Liberty Global, Discovery and MHR Fund Management to the board of directors of Lionsgate Studios.

LIONS GATE ENTERTAINMENT CORP.

3 unchanged sentences

In the ordinary course of business, we are involved in related party transactions with equity method investees.

These related party transactions primarily relate to the licensing and distribution of the Company's films and television programs and the lease of a studio facility owned by an equity-method investee, for which the impact on the Company's consolidated balance sheets and consolidated statements of operations is as follows (see Note 1 and Note 5):

These related party transactions primarily relate to the licensing and distribution of the Company's films and television programs and the lease of a studio facility owned by a former equity-method investee, for which the impact on the Company's consolidated balance sheets and consolidated statements of operations is as follows (see Note 1 and Note 5):

(Amounts in millions)

9 unchanged sentences

Participations and residuals, noncurrent 1.3 2.0

Deferred revenue, current 0.1 —

Other liabilities (1)

9 unchanged sentences

__________________________________

(1) During the year ended March 31, 2022, the Company entered into certain operating leases related to a studio facility owned by an equity-method investee.

Amounts related to these leases are included in investment in films and television programs, other assets - noncurrent, other accrued liabilities and other liabilities in the consolidated balance sheets at March 31, 2023 and 2022.

(2) During the years ended March 31, 2022, and 2021, the Company made loans (including accrued interest) of $ 3.0 million and $ 2.9 million, respectively, to certain of its equity method investees (2023 - none ).

As of March 31, 2023 and 2022, no amounts are included in other assets, noncurrent in the Company's consolidated balance sheets related to these loans (net of equity interests losses applied against such loans).

(1) As of March 31, 2023, the Company had certain operating leases related to a studio facility owned by an equity-method investee which was sold during the year ended March 31, 2024.

Amounts related to these leases as of March 31, 2023 are included in the table above in investment in films and television programs, other assets - noncurrent, other accrued liabilities and other liabilities.

(2) Amounts primarily represent production related advances due to certain of its equity method investees.

In addition, as of March 31, 2023, the Company has entered into certain leases that have not yet commenced primarily related to studio facilities owned by an equity-method investee, for which construction has not yet been completed.

See Note 9 for further information.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Subsequent Events

5.500 % Senior Notes Exchange.

On May 8, 2024, an indirect, wholly-owned subsidiary of the Company issued $ 389.9 million aggregate principal amount of new 5.500 % senior notes due 2029 (the "New 5.500 % Senior Notes").

The New 5.500 % Senior Notes were exchanged by the Company for $ 389.9 million of the existing 5.500 % Senior Notes.

The New 5.500 % Senior Notes initially bear interest at 5.500 % annually and mature April 15, 2029, with the interest rate increasing to 6.000 % and the maturity date extending to April 15, 2030 effective upon completion of the separation of the Starz Business from the Studio Business.

The Company may redeem the New 5.500 % Senior Notes, in whole at any time, or in part from time to time, prior to or on and after the Separation Closing Date, as defined in the indenture to the New 5.500 % Senior Notes, at certain specified redemption prices set forth in the indenture to the New 5.500 % Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the redemption date.

Business Combination Agreement.

On May 13, 2024, the Company consummated the Business Combination referred to in Note 2.

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.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures