2 unchanged sentences
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
+Added: September 30,
2024 March 31,
42 unchanged sentences
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions, except per share amounts)
5 unchanged sentences
Restructuring and other 6.1 222.1 28.6 254.0
+Added: Goodwill and intangible asset impairment — 663.9 — 663.9
Total expenses 1,037.2 1,833.0 1,853.1 2,758.4
−Removed: Operating income (loss) 18.8 ( 16.8 )
+Added: Operating loss ( 88.6 ) ( 817.5 ) ( 69.8 ) ( 834.3 )
Interest expense ( 74.3 ) ( 63.8 ) ( 143.1 ) ( 125.8 )
2 unchanged sentences
Gain (loss) on extinguishment of debt ( 0.5 ) — ( 6.4 ) 21.2
+Added: Loss on investments, net — ( 1.6 ) — ( 1.7 )
Equity interests income (loss) ( 0.1 ) 1.8 0.8 1.5
Loss before income taxes ( 175.9 ) ( 889.9 ) ( 228.9 ) ( 951.6 )
−Removed: Income tax provision ( 10.1 ) ( 9.8 )
+Added: Income tax benefit (provision) ( 1.9 ) 2.0 ( 12.0 ) ( 7.8 )
Net loss ( 177.8 ) ( 887.9 ) ( 240.9 ) ( 959.4 )
12 unchanged sentences
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
15 unchanged sentences
(Amounts in millions)
+Added: Balance at June 30, 2024 83.6 $ 673.8 152.3 $ 2,490.4 $ ( 3,242.7 ) $ 93.1 $ 14.6 $ ( 63.6 ) $ ( 49.0 )
+Added: Exercise of stock options — — 0.1 0.3 — — 0.3 — 0.3
+Added: Share-based compensation, net of share cancellations for taxes — 0.2 4.0 ( 7.0 ) — — ( 6.8 ) — ( 6.8 )
+Added: Noncontrolling interest reclassification — — — — — 4.1 4.1 ( 5.2 ) ( 1.1 )
+Added: Net loss — — — — ( 163.3 ) — ( 163.3 ) ( 13.7 ) ( 177.0 )
+Added: Other comprehensive loss — — — — — ( 0.6 ) ( 0.6 ) — ( 0.6 )
+Added: Redeemable noncontrolling interests adjustments to redemption value — — — — 9.6 — 9.6 — 9.6
+Added: Balance at September 30, 2024 83.6 $ 674.0 156.4 $ 2,483.7 $ ( 3,396.4 ) $ 96.6 $ ( 142.1 ) $ ( 82.5 ) $ ( 224.6 )
+Added: Balance at June 30, 2023 83.5 $ 672.9 148.0 $ 2,431.2 $ ( 2,516.3 ) $ 138.6 $ 726.4 $ 1.8 $ 728.2
+Added: Exercise of stock options — — — 0.3 — — 0.3 — 0.3
+Added: Share-based compensation, net of share cancellations for taxes — 0.1 3.4 5.5 — — 5.6 — 5.6
+Added: Net loss — — — — ( 886.2 ) — ( 886.2 ) 0.5 ( 885.7 )
+Added: Other comprehensive loss — — — — — ( 2.2 ) ( 2.2 ) — ( 2.2 )
+Added: Redeemable noncontrolling interests adjustments to redemption value — — — — ( 65.0 ) — ( 65.0 ) — ( 65.0 )
+Added: Balance at September 30, 2023 83.5 $ 673.0 151.4 $ 2,437.0 $ ( 3,467.5 ) $ 136.4 $ ( 221.1 ) $ 2.3 $ ( 218.8 )
+Added: _____________________
+Added: (a) Excludes redeemable noncontrolling interests, which are reflected in temporary equity (see Note 9).
+Added: LIONS GATE ENTERTAINMENT CORP.
+Added: UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)
+Added: Six Months Ended
+Added: Class A Voting Class B Non-Voting Accumulated Deficit Accumulated Other Comprehensive Income Lions Gate Entertainment Corp.
+Added: Shareholders' Equity (Deficit) Noncontrolling Interests (a) Total Equity (Deficit)
+Added: Common Shares Common Shares
+Added: Number Amount Number Amount
+Added: (Amounts in millions)
Balance at March 31, 2024 83.6 $ 673.6 151.7 $ 2,474.4 $ ( 3,576.7 ) $ 116.0 $ ( 312.7 ) $ 2.2 $ ( 310.5 )
+Added: Exercise of stock options — — 0.1 0.3 — — 0.3 — 0.3
Share-based compensation, net of share cancellations for taxes — 0.4 4.6 9.0 — — 9.4 — 9.4
5 unchanged sentences
Redeemable noncontrolling interests adjustments to redemption value — — — — 9.3 — 9.3 — 9.3
−Removed: Balance at June 30, 2024 83.6 $ 673.8 152.3 $ 2,490.4 $ ( 3,242.7 ) $ 93.1 $ 14.6 $ ( 63.6 ) $ ( 49.0 )
+Added: Balance at September 30, 2024 83.6 $ 674.0 156.4 $ 2,483.7 $ ( 3,396.4 ) $ 96.6 $ ( 142.1 ) $ ( 82.5 ) $ ( 224.6 )
Balance at March 31, 2023 83.5 $ 672.3 145.9 $ 2,430.9 $ ( 2,439.6 ) $ 120.9 $ 784.5 $ 1.5 $ 786.0
+Added: Exercise of stock options — — — 0.3 — — 0.3 — 0.3
Share-based compensation, net of share cancellations for taxes — 0.4 5.5 5.5 — — 5.9 — 5.9
3 unchanged sentences
Redeemable noncontrolling interests adjustments to redemption value — — — — ( 71.0 ) — ( 71.0 ) — ( 71.0 )
−Removed: Balance at June 30, 2023 83.5 $ 672.9 148.0 $ 2,431.2 $ ( 2,516.3 ) $ 138.6 $ 726.4 $ 1.8 $ 728.2
+Added: Balance at September 30, 2023 83.5 $ 673.0 151.4 $ 2,437.0 $ ( 3,467.5 ) $ 136.4 $ ( 221.1 ) $ 2.3 $ ( 218.8 )
_____________________
3 unchanged sentences
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
−Removed: Three Months Ended
+Added: Six Months Ended
+Added: September 30,
(Amounts in millions)
7 unchanged sentences
Other amortization 32.1 23.8
+Added: Goodwill and intangible asset impairment — 663.9
Content and other impairments 16.3 239.5
(Gain) loss on extinguishment of debt 6.4 ( 21.2 )
−Removed: Equity interests (income) loss ( 0.9 ) 0.3
+Added: Equity interests income ( 0.8 ) ( 1.5 )
+Added: Loss on investments, net — 1.7
Deferred income taxes 11.3 ( 8.8 )
9 unchanged sentences
Investing Activities:
+Added: Net proceeds from purchase price adjustments for eOne acquisition (see Note 2) 12.0 —
+Added: Proceeds from the sale of other investments — 0.2
Investment in equity method investees and other ( 2.0 ) ( 11.3 )
14 unchanged sentences
Tax withholding required on equity awards ( 28.6 ) ( 30.7 )
−Removed: Net Cash Flows Provided By Financing Activities 75.9 60.5
+Added: Net Cash Flows Provided By (Used In) Financing Activities 199.7 ( 341.9 )
Net Change In Cash, Cash Equivalents and Restricted Cash ( 84.4 ) ( 43.1 )
15 unchanged sentences
In the opinion of the Company’s management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been reflected in these unaudited condensed consolidated financial statements.
−Removed: Operating results for the three months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2025.
+Added: Operating results for the three and six months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2025.
The balance sheet at March 31, 2024 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S.
26 unchanged sentences
The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures.
+Added: Income Statement:
+Added: In November 2024, the FASB issued guidance requiring public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.
+Added: This guidance is effective for fiscal years beginning after December 15, 2026, and therefore will be effective beginning with the Company’s financial statements issued for the fiscal year ending March 31, 2028 and interim reporting periods beginning in fiscal 2029, with early adoption permitted.
+Added: The disclosures required under the guidance can be applied either prospectively to financial statements issued for reporting periods after the effective date or retrospectively to any or all periods presented in the financial statements.
+Added: The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures.
Acquired Library
7 unchanged sentences
See Note 9 for the noncontrolling interest recorded related to CP LG.
−Removed: As of June 30, 2024, the unaudited condensed consolidated balance sheet included assets and liabilities of CP LG totaling $ 79.8 million (which is primarily comprised of investment in film and television programs) and $ 11.2 million, respectively.
+Added: As of September 30, 2024, the unaudited condensed consolidated balance sheet included assets and liabilities of CP LG totaling $ 85.1 million (which is primarily comprised of investment in film and television programs) and $ 16.6 million, respectively.
The assets and liabilities of CP LG primarily consist of accounts receivable, investment in film and television programs, and participations and residuals.
Business Combination Agreement
+Added: LIONS GATE ENTERTAINMENT CORP.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
On May 13, 2024, the Company consummated the business combination agreement (the “Business Combination Agreement”) with Screaming Eagle Acquisition Corp., a Cayman Islands exempted company (“SEAC”), SEAC II Corp., a Cayman Islands exempted company and a wholly-owned subsidiary of SEAC (“New SEAC”), LG Sirius Holdings ULC, a British Columbia unlimited liability company and a wholly-owned subsidiary of the Company (“Studio HoldCo”), LG Orion Holdings ULC, a British Columbia unlimited liability company and a wholly-owned subsidiary of the Company (“StudioCo”) and other affiliates of SEAC (the "Closing").
3 unchanged sentences
Lionsgate Studios became a separate publicly traded company and its common shares commenced trading on Nasdaq under the symbol “LION” on May 14, 2024.
−Removed: LIONS GATE ENTERTAINMENT CORP.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
In connection with and prior to the Business Combination, the Company and StudioCo entered into a separation agreement pursuant to which the assets and liabilities of the Studio Business were transferred to StudioCo such that StudioCo held, directly or indirectly, all of the assets and liabilities of the Studio Business (the “Separation”).
Following the transaction, approximately 87.8 % 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 12.2 % of Lionsgate Studios.
−Removed: In addition to establishing Lionsgate Studios as a standalone publicly-traded entity, the transaction resulted in approximately $ 330.0 million of gross proceeds to the Company, including $ 254.3 million in private investments in public equities ("PIPE") financing, which amount excludes an aggregate of approximately $ 20.0 million that remains due from a PIPE Investor that subscribed for common shares and which shares, as of June 30, 2024, are pending issuance subject to receipt of such amount.
+Added: In addition to establishing Lionsgate Studios as a standalone publicly-traded entity, the transaction resulted in approximately $ 330.0 million of gross proceeds to the Company, including $ 254.3 million in private investments in public equities ("PIPE") financing, which amount excludes an aggregate of approximately $ 20.0 million that remains due from a PIPE Investor that subscribed for common shares and which shares, as of September 30, 2024, are pending issuance subject to receipt of such amount.
The net proceeds were used to partially pay down amounts outstanding under the Term Loan A and Term Loan B pursuant to the Credit Agreement (see Note 6).
18 unchanged sentences
As of the Closing, no SEAC Public Warrants were outstanding.
+Added: LIONS GATE ENTERTAINMENT CORP.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company recorded a reduction of noncontrolling interest in shareholders' equity (deficit) of $ 100.8 million and a reduction of accumulated other comprehensive income of $ 11.3 million for the issuance of the Lionsgate Studios common shares, which was based upon the 12.2 % ownership interest in the carrying value of Lionsgate Studios.
4 unchanged sentences
The Company has recorded the Sponsor Options as part of the noncontrolling interest recorded.
−Removed: LIONS GATE ENTERTAINMENT CORP.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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 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.
−Removed: The aggregate cash purchase price was approximately $ 385.1 million, and was subject to further adjustment based on final determination of purchase price adjustments, including for cash, debt, and working capital.
−Removed: Subsequent to June 30, 2024, the final purchase price was determined, resulting in a $ 12.0 million reduction of the purchase price.
+Added: The aggregate cash purchase price was initially approximately $ 385.1 million and subsequently adjusted to $ 373.1 million upon the settlement of certain working capital items pursuant to the Purchase Agreement.
+Added: The final purchase price is subject to further adjustment based on the settlement of certain amounts held back pursuant to the Purchase Agreement.
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.
2 unchanged sentences
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.
−Removed: 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.
+Added: The Company is still evaluating the fair value of film and television programs and libraries, accounts receivable, 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.
−Removed: 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 5 for measurement period adjustments recorded through June 30, 2024).
+Added: 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 5 for measurement period adjustments recorded through September 30, 2024).
A change in the fair value of the net assets may change the amount recognized to goodwill.
4 unchanged sentences
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.
−Removed: The preliminary allocation of the purchase price to the assets acquired and liabilities assumed (including measurement period adjustments recorded through June 30, 2024, see Note 5), and a reconciliation to total consideration transferred is presented in the table below:
+Added: The preliminary allocation of the purchase price to the assets acquired and liabilities assumed (including measurement period adjustments recorded through September 30, 2024, see Note 5), and a reconciliation to total consideration transferred is presented in the table below:
LIONS GATE ENTERTAINMENT CORP.
14 unchanged sentences
Goodwill 10.9
−Removed: Preliminary purchase price consideration at June 30, 2024 (2)
+Added: Preliminary purchase price consideration at September 30, 2024
______________
(1) Includes current and non-current amounts.
−Removed: (2) The preliminary purchase price consideration excludes amounts related to the settlement of the final purchase price subsequent to June 30, 2024, as disclosed above.
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.
14 unchanged sentences
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
−Removed: statement of operations of eOne for the three months ended June 30, 2023 combined with the Company's statement of operations for the three months ended June 30, 2023.
−Removed: Three Months Ended
+Added: statement of operations of eOne for the three and six months ended September 30, 2023 combined with the Company's statement of operations for the three and six months ended September 30, 2023, respectively.
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
(Amounts in millions)
5 unchanged sentences
The unaudited pro forma condensed consolidated statement of operations information does not include adjustments related to integration activities, operating efficiencies or cost savings.
−Removed: In addition, the unaudited pro forma condensed consolidated financial information for the three months ended June 30, 2023 includes an impairment of goodwill and trade name of $ 296.2 million which was reflected in the statement of operations of eOne for the three months ended June 30, 2023.
+Added: In addition, the unaudited pro forma condensed consolidated financial information for the six months ended September 30, 2023 includes an impairment of goodwill and trade name of $ 296.2 million which was reflected in the statement of operations of eOne for the six months ended September 30, 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.
1 unchanged sentence
Total investment in films and television programs and licensed program rights by predominant monetization strategy is as follows:
+Added: September 30,
2024 March 31,
17 unchanged sentences
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
−Removed: At June 30, 2024, acquired film and television libraries have remaining unamortized costs of $ 266.4 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 13.0 years (March 31, 2024 - unamortized costs of $ 223.1 million).
+Added: At September 30, 2024, acquired film and television libraries have remaining unamortized costs of $ 258.3 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 13.6 years (March 31, 2024 - unamortized costs of $ 223.1 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 unaudited condensed consolidated statements of operations:
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
5 unchanged sentences
Investment in films and television programs and licensed program rights includes write-downs to fair value.
−Removed: The following table sets forth impairments by segment and the line item in our unaudited condensed consolidated statement of operations they are recorded in for the three months ended June 30, 2024 and 2023:
−Removed: Three Months Ended
+Added: The following table sets forth impairments by segment and the line item in our unaudited condensed consolidated statement of operations they are recorded in for the three and six months ended September 30, 2024 and 2023:
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
2 unchanged sentences
Motion Picture $ 18.3 $ 26.8 $ 18.5 $ 27.0
+Added: Television Production — 5.4 — 5.4
Impairments not included in segment operating results (2) :
1 unchanged sentence
$ 13.5 $ 243.8 $ 15.7 $ 271.9
+Added: ________________
(1) Impairments included in direct operating expense are included in the amortization expense amounts reflected in the table above which presents amortization of investment in film and television programs and licensed program rights by predominant monetization strategy.
−Removed: (2) Represents charges related to the Media Networks restructuring plan initiatives.
+Added: (2) Represents charges (net recoveries) primarily related to the Media Networks restructuring plan initiatives.
See Note 14 for further information.
The Company's investments consisted of the following:
+Added: September 30,
2024 March 31,
18 unchanged sentences
In addition to the equity method investments discussed above, the Company holds ownership interests in other immaterial equity method investees.
+Added: Goodwill and Intangible Assets
Changes in the carrying value of goodwill by reporting segment were as follows:
6 unchanged sentences
( 2.2 ) ( 2.5 ) — ( 4.7 )
−Removed: Balance as of June 30, 2024 (1)
+Added: Balance as of September 30, 2024 (1)
$ 396.4 $ 410.1 $ — $ 806.5
________________
−Removed: (1) As of June 30, 2024 and March 31, 2024, accumulated goodwill impairment losses totaled $ 1.969 billion related to the Media Networks reporting unit.
−Removed: (2) Measurement period adjustments for the acquisition of eOne reflect an increase to goodwill of $ 0.9 million resulting from a net decrease in estimated fair value of the net assets acquired.
−Removed: The decrease in the estimated fair value of the net assets acquired consisted of a net decrease to accounts receivable of $ 4.2 million, net increases to content related payables of $ 3.4 million, and other liabilities of $ 0.4 million, partially offset by a net increase to other assets of $ 3.7 million, and decreases to accrued liabilities of $ 1.1 million and participations and residuals of $ 2.3 million.
+Added: (1) As of September 30, 2024 and March 31, 2024, accumulated goodwill impairment losses totaled $ 1.969 billion related to the Media Networks reporting unit.
+Added: (2) Measurement period adjustments for the acquisition of eOne reflect a decrease to goodwill of $ 4.7 million resulting from an adjustment to the purchase price related to a settlement of certain working capital items of $ 12.0 million partially offset by a net decrease in the estimated fair value of the net assets acquired.
+Added: The decrease in the estimated fair value of the net assets acquired consisted of a net decrease to accounts receivable of $ 4.6 million, a net decrease in investment in films and television programs of $ 1.6 million, net increases to content related payables of $ 3.4 million, participations and residuals of $ 0.4 million, and accrued and other liabilities of $ 0.2 million, partially offset by a net increase to other assets of $ 2.9 million.
+Added: Fiscal 2024 Goodwill and Intangible Asset Impairments:
+Added: Goodwill Impairment.
+Added: During the second quarter ended September 30, 2023, 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 14, 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.
+Added: 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.
+Added: Based on its quantitative impairment assessment, the Company determined that the fair value of its Media Networks reporting unit was less than its
LIONS GATE ENTERTAINMENT CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
+Added: carrying value (after the impairment write-down of its indefinite-lived intangible assets discussed below).
+Added: The analysis resulted in a goodwill impairment charge of $ 493.9 million in the three months ended September 30, 2023, representing all of the then remaining Media Networks reporting unit goodwill, which is recorded in the "goodwill and intangible asset impairment" line item in the unaudited condensed consolidated statement of operations.
+Added: Intangible Asset Impairment.
+Added: During the three months ended September 30, 2023, due to the events and their impact discussed above related to the Media Networks reporting unit, the Company performed a quantitative impairment assessment of its indefinite-lived Starz trade names.
+Added: 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.
+Added: 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.
+Added: Based on the quantitative impairment assessment of the trade names, the Company recorded an impairment charge of $ 170.0 million in the three months ended September 30, 2023, related to the Company's Starz business, which is recorded in the "goodwill and intangible asset impairment" line item in the unaudited condensed consolidated statement of operations.
+Added: After performing its quantitative impairment assessment, the Company then reassessed the estimated useful life of its trade names with a remaining carrying value of $ 80.0 million at September 30, 2023 (net of the impairment charge discussed above), and beginning October 1, 2023, the trade names are being accounted for as finite-lived intangible assets and amortized over their estimated useful life.
Total debt of the Company, excluding film related obligations, was as follows:
+Added: September 30,
2024 March 31,
4 unchanged sentences
Term Loan B 250.0 819.2
−Removed: 5.5 % Senior Notes
+Added: 5.5 % Senior Notes and Exchange Notes
+Added: eOne IP Credit Facility 340.0 —
+Added: LG IP Credit Facility 455.0 —
Total corporate debt 2,495.9 2,508.5
5 unchanged sentences
Revolving Credit Facility Availability of Funds & Commitment Fee.
−Removed: The Revolving Credit Facility provides for borrowings and letters of credit up to an aggregate of $ 1.25 billion, and at June 30, 2024 there was $ 665.0 million available.
+Added: The Revolving Credit Facility provides for borrowings and letters of credit up to an aggregate of $ 1.25 billion, and at September 30, 2024 there was $ 828.5 million available.
However, borrowing levels are subject to certain financial covenants as discussed below.
−Removed: There were no letters of credit outstanding at June 30, 2024.
+Added: There were no letters of credit outstanding at September 30, 2024.
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.
2 unchanged sentences
April 6, 2026.
−Removed: 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.
−Removed: The Company expects to repay and/or 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:
March 24, 2025.
+Added: LIONS GATE ENTERTAINMENT CORP.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
• 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 SOFR plus 0.10 % plus 1.75 % margin (or an alternative base rate plus 0.75 %), with a SOFR floor of zero .
−Removed: The margin is subject to potential increases of up to 50 basis points ( two 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 7.18 % as of June 30, 2024, before the impact of interest rate swaps, see Note 17 for interest rate swaps).
+Added: The margin is subject to potential increases of up to 50 basis points ( two 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 6.70 % as of September 30, 2024, before the impact of interest rate swaps, see Note 17 for interest rate swaps).
• Term Loan B:
−Removed: 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 7.68 % as of June 30, 2024, before the impact of interest rate swaps).
+Added: 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 7.20 % as of September 30, 2024, before the impact of interest rate swaps).
Required Principal Payments:
3 unchanged sentences
Quarterly principal payments at a quarterly rate of 0.25 %, with the balance payable at maturity.
−Removed: LIONS GATE ENTERTAINMENT CORP.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Term Loan A and Term Loan B also require mandatory prepayments in connection with certain asset sales, subject to certain significant exceptions, and the Term Loan B is subject to additional mandatory repayment from specified percentages of excess cash flow, as defined in the Credit Agreement.
5 unchanged sentences
In addition, a net first lien leverage maintenance covenant and an interest coverage ratio maintenance covenant apply to the Revolving Credit Facility and the Term Loan A and are tested quarterly.
−Removed: As of June 30, 2024, the Company was in compliance with all applicable covenants.
+Added: As of September 30, 2024, the Company was in compliance with all applicable covenants.
Change in Control.
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.
−Removed: 5.5 % Senior Notes
+Added: LIONS GATE ENTERTAINMENT CORP.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
+Added: 5.5 % Senior Notes and Exchange Notes
Bears interest at 5.5 % annually (payable semi-annually in arrears on April 15 and October 15 of each year, commencing on October 15, 2021).
4 unchanged sentences
Optional Redemption:
−Removed: (i) On or after April 15, 2024, the Company may redeem the 5.5 % Senior Notes in whole at any time, or in part from time to time, at certain specified redemption prices, plus accrued and unpaid interest, if any, to, but not including, the redemption date.
+Added: (i) On or after April 15, 2024, the Company may redeem the 5.5 % Senior Notes and Exchange Notes in whole at any time, or in part from time to time, at certain specified redemption prices, plus accrued and unpaid interest, if any, to, but not including, the redemption date.
Such redemption prices are as follows (as a percentage of the principal amount redeemed):
3 unchanged sentences
See Changes Upon Separation of the Starz Business from the Studio Business below for further information.
−Removed: The 5.5 % Senior Notes are unsubordinated, unsecured obligations of the Company.
−Removed: The 5.5 % Senior Notes contain certain restrictions and covenants that, subject to certain exceptions, limit the Company’s ability to incur additional indebtedness, pay dividends or repurchase the Company’s common shares, make certain loans or investments, and sell or otherwise dispose of certain assets subject to certain conditions, among other limitations.
−Removed: As of June 30, 2024, the Company was in compliance with all applicable covenants.
+Added: The 5.5 % Senior Notes and Exchange Notes are unsubordinated, unsecured obligations of the Company.
+Added: The Exchange Notes contain certain restrictions and covenants that, subject to certain exceptions, limit the Company’s ability to incur additional indebtedness, pay dividends or repurchase the Company’s common shares, make certain loans or investments, and sell or otherwise dispose of certain assets subject to certain conditions, among other limitations.
+Added: As of September 30, 2024, the Company was in compliance with all applicable covenants.
Change in Control.
−Removed: The occurrence of a change of control will be a triggering event requiring the Company to offer to purchase from holders all of the 5.5 % Senior Notes, at a price equal to 101 % of the principal amount, plus accrued and unpaid interest, if any, to the date of purchase.
−Removed: In addition, certain asset dispositions will be triggering events that may require the Company to use the excess proceeds from such dispositions to make an offer to purchase the 5.5 % Senior Notes at 100 % of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.
−Removed: LIONS GATE ENTERTAINMENT CORP.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
+Added: The occurrence of a change of control will be a triggering event requiring the Company to offer to purchase from holders all of the Exchange Notes, at a price equal to 101 % of the principal amount, plus accrued and unpaid interest, if any, to the date of purchase.
+Added: In addition, certain asset dispositions will be triggering events that may require the Company to use the excess proceeds from such dispositions to make an offer to purchase the Exchange Notes at 100 % of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.
Changes Upon Separation of the Starz Business from the Studio Business.
−Removed: As described below in the 5.5 % Senior Notes Exchange disclosure, effective upon completion of the separation of the Starz Business from the Studio Business, the interest rate will increase to 6.0 % and the maturity date will extend to April 15, 2030 for a portion of the 5.5 % Senior Notes (the Exchange Notes, as defined below) which amounted to $ 389.9 million at June 30, 2024.
+Added: On May 8, 2024, an indirect, wholly-owned subsidiary of the Company issued $ 389.9 million aggregate principal amount of 5.5 % senior notes due 2029 (the "Exchange Notes") in exchange for an equivalent amount of the existing 5.5 % Senior Notes due 2029 (the "Existing Notes").
+Added: The Exchange Notes initially bear interest at 5.5 % annually and mature April 15, 2029, with the interest rate increasing to 6.0 % and the maturity date extending to April 15, 2030 effective upon completion of the separation of the Starz Business from the Studio Business, both of which are currently held in subsidiaries consolidated by the Company.
The "Starz Business" consists of the business of Lionsgate's Media Networks segment.
3 unchanged sentences
(ii) on or after the one-year anniversary of the Separation Closing Date until, but excluding the two-year anniversary thereof - 102.0 %;
−Removed: (iii) on or after the two-year anniversary of the Separation Closing Date until, but excluding the three-year anniversary thereof - 101.0 % (iv) on or after the three-year anniversary of the Separation Closing Date and thereafter - 100 %.
−Removed: The Exchange Notes will initially be guaranteed by all existing obligors under the Existing Notes (as defined below), and upon completion of the separation of the Studio Business and the Starz Business, the Exchange Notes will be guaranteed exclusively by entities which are part of the Studio Business.
+Added: (iii) on or after the two-year anniversary of the Separation Closing Date until, but excluding the three-year anniversary thereof - 101.0 %;
+Added: (iv) on or after the three-year anniversary of the Separation Closing Date and thereafter - 100 %.
+Added: The Exchange Notes will initially be guaranteed by all existing obligors under the Existing Notes, and upon completion of the separation of the Studio Business and the Starz Business, the Exchange Notes will be guaranteed exclusively by entities which are part of the Studio Business.
+Added: eOne IP Credit Facility.
+Added: In July 2024, certain subsidiaries of the Company entered into a senior secured amortizing term credit facility (the "eOne IP Credit Facility") based on and secured by the Company’s intellectual property rights primarily associated with certain titles acquired as part of the eOne acquisition.
+Added: The maximum principal amount of the eOne IP Credit Facility is $ 340.0 million, subject to the amount of collateral available, which is based on the valuation of unsold rights from the libraries.
+Added: The eOne IP Credit Facility is subject to quarterly required principal payments of $ 8.5 million, beginning November 14, 2024, with the balance payable at maturity.
+Added: Advances under the eOne IP Credit Facility bear interest at a rate equal to Term SOFR plus 2.25 % per annum (effective interest rate of 7.10 % as of September 30, 2024, before the impact of interest rate swaps, see Note 17 for interest rate swaps).
+Added: The eOne IP Credit Facility matures on July 3, 2029.
+Added: LIONS GATE ENTERTAINMENT CORP.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
+Added: LG IP Credit Facility.
+Added: In September 2024, certain subsidiaries of the Company entered into a senior secured amortizing term credit facility (the "LG IP Credit Facility") based on and secured by the Company’s intellectual property rights primarily associated with certain titles.
+Added: The maximum principal amount of the LG IP Credit Facility is $ 455.0 million, subject to the amount of collateral available, which is based on the valuation of unsold rights from the libraries.
+Added: The LG IP Credit Facility is subject to quarterly required principal payments of $ 11.375 million, beginning February 14, 2025, with the balance payable at maturity.
+Added: Advances under the LG IP Credit Facility bear interest at a rate equal to Term SOFR plus 2.25 % per annum (effective interest rate of 7.10 % as of September 30, 2024, before the impact of interest rate swaps, see Note 17 for interest rate swaps).
+Added: The LG IP Credit Facility matures on September 30, 2029.
+Added: See Note 19 - Subsequent Events for the November 2024 increase in maximum principal amount of the LG IP Credit Facility and subsequent borrowings.
Capacity to Pay Dividends
−Removed: At June 30, 2024, the capacity to pay dividends under the Senior Credit Facilities and the 5.5 % Senior Notes significantly exceeded the amount of the Company's accumulated deficit or net loss, and therefore the Company's net loss of $ 63.1 million and accumulated deficit of $ 3,242.7 million were deemed free of restrictions from paying dividends at June 30, 2024.
−Removed: Debt Transactions:
+Added: At September 30, 2024, the capacity to pay dividends under the Senior Credit Facilities and the 5.5 % Senior Notes and Exchange Notes significantly exceeded the amount of the Company's accumulated deficit or net loss, and therefore the Company's net loss of $ 240.9 million and accumulated deficit of $ 3,396.4 million were deemed free of restrictions from paying dividends at September 30, 2024.
+Added: Other Debt Transactions:
Term Loan A and Term Loan B Prepayment.
−Removed: In the quarter ended June 30, 2024, the Company used the proceeds from the Business Combination to prepay $ 84.9 million principal amount of the Term Loan A and $ 214.1 million of the Term Loan B, together with accrued and unpaid interest thereon.
−Removed: 5.5 % Senior Notes Exchange.
−Removed: On May 8, 2024, an indirect, wholly-owned subsidiary of the Company issued $ 389.9 million aggregate principal amount of 5.5 % senior notes due 2029 (the "Exchange Notes") in exchange for an equivalent amount of the existing 5.5 % Senior Notes due 2029 (the "Existing Notes").
−Removed: The Exchange Notes initially bear interest at 5.5 % annually and mature April 15, 2029, with the interest rate increasing to 6.0 % and the maturity date extending to April 15, 2030 effective upon completion of the separation of the Starz Business from the Studio Business, both of which are currently held in subsidiaries consolidated by the Company.
+Added: In May 2024, the Company used the proceeds from the Business Combination to prepay $ 84.9 million principal amount of the Term Loan A and $ 214.1 million of the Term Loan B, together with accrued and unpaid interest thereon.
+Added: In September 2024, the Company used the proceeds from the LG IP Credit Facility to prepay $ 355.1 million principal amount of the Term Loan B, together with accrued and unpaid interest thereon.
+Added: See Note 19 - Subsequent Events for the November 2024 repayment in full of the remaining principal amount of the Term Loan B.
Senior Notes Repurchases.
−Removed: In the three months ended June 30, 2023, the Company repurchased $ 85.0 million principal amount of the 5.5 % Senior Notes for $ 61.4 million, together with accrued and unpaid interest.
+Added: In the six months ended September 30, 2023, the Company repurchased $ 85.0 million principal amount of the 5.5 % Senior Notes for $ 61.4 million, together with accrued and unpaid interest ( none in the three months ended September 30, 2023).
Gain (Loss) on Extinguishment of Debt:
−Removed: During the three months ended June 30, 2024 and 2023, the Company recorded a gain (loss) on extinguishment of debt related to the transactions described above as summarized in the table below:
+Added: During the three and six months ended September 30, 2024 and 2023, the Company recorded a gain (loss) on extinguishment of debt related to the transactions described above as summarized in the table below:
Three Months Ended
+Added: September 30, Six Months Ended
+Added: September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
6 unchanged sentences
(1) The 5.5 % Senior Notes Exchange was considered a modification of terms since the present value of the cash flows after the amendment differed by less than a 10% change from the present value of the cash flows on a creditor-by-creditor basis prior to the amendment.
−Removed: Accordingly, the unamortized debt issuance costs are being amortized over the applicable term of the debt and the third-party costs of $ 4.9 million were expensed as a loss on extinguishment of debt.
+Added: Accordingly, the unamortized debt issuance costs are being amortized over the applicable term of the debt and the third-party costs of $ 4.9 million were expensed as a loss on extinguishment of debt in the six months ended September 30, 2024.
LIONS GATE ENTERTAINMENT CORP.
1 unchanged sentence
Film Related Obligations
+Added: September 30,
2024 March 31,
5 unchanged sentences
Backlog Facility and Other 273.2 287.3
−Removed: IP Credit Facility 100.6 109.9
+Added: Film Library Facility 94.2 109.9
Total film related obligations 1,940.1 1,949.4
12 unchanged sentences
Cash collections from the underlying collateral (tax credit receivables) are used to repay the Production Tax Credit Facility.
−Removed: As of June 30, 2024, tax credit receivables amounting to $ 336.8 million represented collateral related to the Production Tax Credit Facility.
−Removed: 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 6.93 % at June 30, 2024).
+Added: As of September 30, 2024, tax credit receivables amounting to $ 344.2 million represented collateral related to the Production Tax Credit Facility.
+Added: 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 6.45 % at September 30, 2024).
The Production Tax Credit Facility matures on January 27, 2025.
−Removed: As of June 30, 2024, there were no amounts available under the Production Tax Credit Facility.
+Added: As of September 30, 2024, there were no 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.
−Removed: The Company's programming notes have contractual repayment dates in August 2024, and incur SOFR-based interest at a weighted average rate of 8.73 %.
−Removed: IP Credit Facility.
−Removed: 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 acquired library titles.
−Removed: The maximum principal amount of the IP Credit Facility is $ 161.9 million, subject to the amount of collateral available, which is based on the valuation of cash flows from the libraries.
−Removed: The cash flows generated from the exploitation of the rights will be applied to repay the IP Credit Facility subject to cumulative minimum guaranteed payment amounts as set forth below:
+Added: The Company's programming notes have contractual repayment dates in November 2024, and incur SOFR-based interest at a weighted average rate of 7.89 %.
+Added: Film Library Facility.
+Added: In July 2021, as amended in September 2022, certain subsidiaries of the Company entered into a senior secured amortizing term credit facility (the "Film Library Facility") based on and secured by the collateral consisting solely of certain of the Company’s rights in certain acquired library titles.
+Added: The maximum principal amount of the Film Library Facility is $ 161.9 million, subject to the amount of collateral available, which is based on the valuation of cash flows from the libraries.
+Added: The cash flows generated from the exploitation of the rights will be applied to repay the Film Library Facility subject to cumulative minimum guaranteed payment amounts as set forth below:
LIONS GATE ENTERTAINMENT CORP.
8 unchanged sentences
July 30, 2027 $ 161.9 July 30, 2027
−Removed: Advances under the IP Credit Facility bear interest at a rate equal to, at the Company’s option, SOFR plus 0.11 % to 0.26 % depending on the SOFR term (i.e., one or three months) plus 2.25 % per annum (with a SOFR floor of 0.25 %) or the base rate plus 1.25 % per annum (effective interest rate of 7.77 % at June 30, 2024).
−Removed: The IP Credit Facility matures on July 30, 2027.
+Added: Advances under the Film Library Facility bear interest at a rate equal to, at the Company’s option, SOFR plus 0.11 % to 0.26 % depending on the SOFR term (i.e., one or three months) plus 2.25 % per annum (with a SOFR floor of 0.25 %) or the base rate plus 1.25 % per annum (effective interest rate of 7.17 % at September 30, 2024).
+Added: The Film Library Facility matures on July 30, 2027.
Backlog Facility and Other:
3 unchanged sentences
Advances under the Backlog Facility bear interest at a rate equal to Term SOFR plus 0.10 % to 0.25 % depending on the SOFR term (i.e., one, three or six months), plus an applicable margin amounting to 1.15 % per annum.
−Removed: The applicable margin is subject to a potential increase to either 1.25 % or 1.50 % based on the weighted average credit quality rating of the collateral contributed to the facility (effective interest rate of 6.58 % at June 30, 2024).
+Added: The applicable margin is subject to a potential increase to either 1.25 % or 1.50 % based on the weighted average credit quality rating of the collateral contributed to the facility (effective interest rate of 6.10 % at September 30, 2024).
The Backlog Facility revolving period ends on May 16, 2025, at which point cash collections from the underlying collateral is used to repay the facility.
The facility maturity date is up to 2 years, 90 days after the revolving period ends, currently August 14, 2027.
−Removed: As of June 30, 2024, there was $ 175.0 million outstanding under the Backlog Facility, and there were no amounts available under the Backlog Facility (March 31, 2024 - $ 175.0 million outstanding).
+Added: As of September 30, 2024, there was $ 160.2 million outstanding under the Backlog Facility, and there were no amounts available under the Backlog Facility (March 31, 2024 - $ 175.0 million outstanding).
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.
−Removed: As of June 30, 2024, there was $ 138.0 million outstanding (March 31, 2024 - $ 112.3 million outstanding) under the "other" loans, incurring SOFR-based interest at a weighted average rate of 6.84 %, of which $ 67.9 million has a contractual repayment date in July 2025 and $ 70.1 million has a contractual repayment date in April 2027.
−Removed: As of June 30, 2024, accounts receivable amounting to $ 84.8 million and contracted receivables not yet reflected as accounts receivable on the balance sheet at June 30, 2024 amounting to $ 81.1 million represented collateral related to the "other" loans.
+Added: As of September 30, 2024, there was $ 113.0 million outstanding (March 31, 2024 - $ 112.3 million outstanding) under the "other" loans, incurring SOFR-based interest at a weighted average rate of 6.18 %, of which $ 55.1 million has a contractual repayment date in July 2025 and $ 57.9 million has a contractual repayment date in April 2027.
+Added: As of September 30, 2024, accounts receivable amounting to $ 72.7 million and contracted receivables not yet reflected as accounts receivable on the balance sheet at September 30, 2024 amounting to $ 65.6 million represented collateral related to the "other" loans.
Fair Value Measurements
7 unchanged sentences
quoted prices in markets with insufficient volume or infrequent transactions (less active markets);
−Removed: 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.
+Added: or model-derived valuations
LIONS GATE ENTERTAINMENT CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
+Added: 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.
• Level 3 — Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.
−Removed: The following table sets forth the assets and liabilities required to be carried at fair value on a recurring basis as of June 30, 2024 and March 31, 2024:
−Removed: June 30, 2024 March 31, 2024
+Added: The following table sets forth the assets and liabilities required to be carried at fair value on a recurring basis as of September 30, 2024 and March 31, 2024:
+Added: September 30, 2024 March 31, 2024
Level 1 Level 2 Total Level 1 Level 2 Total
4 unchanged sentences
— ( 0.6 ) ( 0.6 ) — ( 2.8 ) ( 2.8 )
−Removed: The following table sets forth the carrying values and fair values of the Company’s outstanding debt and film related obligations at June 30, 2024 and March 31, 2024:
−Removed: June 30, 2024 March 31, 2024
+Added: Interest rate swaps (see Note 17)
+Added: — ( 1.7 ) ( 1.7 ) — — —
+Added: The following table sets forth the carrying values and fair values of the Company’s outstanding debt and film related obligations at September 30, 2024 and March 31, 2024:
+Added: September 30, 2024 March 31, 2024
(Amounts in millions)
2 unchanged sentences
(Level 2) (Level 2)
+Added: Revolving Credit Facility $ 417.6 $ 421.5 $ 569.9 $ 575.0
Term Loan A 312.9 312.9 396.6 397.3
2 unchanged sentences
698.2 581.4 696.6 536.2
+Added: eOne IP Credit Facility 334.0 340.0 — —
+Added: LG IP Credit Facility 447.9 455.0 — —
Production Loans 1,239.4 1,244.8 1,286.2 1,292.2
2 unchanged sentences
Backlog Facility and Other 271.9 273.2 285.4 287.3
−Removed: IP Credit Facility 98.5 100.6 107.6 109.9
+Added: Film Library Facility 92.3 94.2 107.6 109.9
________________
(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).
−Removed: 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.
−Removed: The carrying values of these financial instruments approximated the fair values at June 30, 2024 and March 31, 2024.
+Added: The Company’s financial instruments also include cash and cash equivalents, accounts receivable, accounts payable, content related payables, other accrued liabilities, and other liabilities.
+Added: The carrying values of these financial instruments approximated the fair values at September 30, 2024 and March 31, 2024.
LIONS GATE ENTERTAINMENT CORP.
6 unchanged sentences
The table below presents the reconciliation of changes in redeemable noncontrolling interests:
−Removed: Three Months Ended
+Added: Six Months Ended
+Added: September 30,
(Amounts in millions)
10 unchanged sentences
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.
−Removed: 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, during the fourth quarter of fiscal 2024, 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 and June 30, 2024.
+Added: 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, during the fourth quarter of fiscal 2024, 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 and September 30, 2024.
The redeemable noncontrolling interest balance related to 3 Arts Entertainment reflects 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.
8 unchanged sentences
Pilgrim Media Group.
−Removed: As of June 30, 2024, the Company had a remaining redeemable noncontrolling interest representing 12.5 % of Pilgrim Media Group.
−Removed: As of June 30, 2024, the noncontrolling interest holder had a right to put and the Company had a right to call the noncontrolling interest at fair value, subject to a cap, exercisable for thirty ( 30 ) days beginning November 12, 2024, as amended.
−Removed: 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 is presented as redeemable noncontrolling interest outside of shareholders' equity on the Company's consolidated balance sheets.
+Added: In July 2024, the Company acquired the noncontrolling interest holder's remaining 12.5 % of Pilgrim Media Group for approximately $ 13.5 million, and recorded a reduction to redeemable noncontrolling interest of $ 23.4 million, representing the carrying value of the noncontrolling interest purchased, with the difference between the carrying value of the noncontrolling interest purchased and the cash paid for the remaining interest recorded as a reduction to accumulated deficit of $ 9.9 million.
+Added: Prior to the Company's acquisition of the remaining interest, the noncontrolling interest was presented as a redeemable noncontrolling interest outside of shareholders' equity on the Company's consolidated balance sheets, due to put and call options which were determined to be embedded in the noncontrolling interest, and because the put rights were outside the control of the Company.
The Company has other immaterial redeemable noncontrolling interests.
11 unchanged sentences
Revenue by Segment, Market or Product Line
−Removed: The table below presents revenues by segment, market or product line for the three months ended June 30, 2024 and 2023.
+Added: The table below presents revenues by segment, market or product line for the three and six months ended September 30, 2024 and 2023.
The Motion Picture and Television Production segments include the revenues of eOne from the acquisition date of December 27, 2023 (see Note 2).
1 unchanged sentence
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
20 unchanged sentences
Media Networks - Programming Revenues
+Added: 343.0 344.0 688.2 685.6
International 3.9 72.5 8.8 112.0
+Added: 346.9 416.5 697.0 797.6
Intersegment eliminations ( 222.0 ) ( 190.8 ) ( 325.7 ) ( 288.4 )
1 unchanged sentence
(1) During the quarter ended June 30, 2024, the Company changed the presentation of Media Networks programming revenues to reflect revenues from Canada in the "Domestic" line item above in order to be consistent with how management is now reviewing the Media Networks segment.
−Removed: Revenues from Canada of $ 4.2 million for the three months ended June 30, 2023 were reclassified to "Domestic" from "International" in the table above to conform to the current period presentation.
+Added: Revenues from Canada of $ 4.2 million and $ 8.4 million, respectively, for the three and six months ended September 30, 2023 were reclassified to "Domestic" from "International" in the table above to conform to the current period presentation.
Remaining performance obligations represent deferred revenue on the balance sheet plus fixed fee or minimum guarantee contracts where the revenue will be recognized and the cash received in the future (i.e., backlog).
−Removed: Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at June 30, 2024 are as follows:
+Added: Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at September 30, 2024 are as follows:
Rest of Year Ending March 31, 2025 Year Ending March 31,
6 unchanged sentences
The revenues included in the above table include all fixed fee contracts regardless of duration.
−Removed: Revenues of $ 89.3 million including variable and fixed fee arrangements, were recognized during the three months ended June 30, 2024 from performance obligations satisfied prior to March 31, 2024.
+Added: Revenues of $ 68.6 million and $ 157.9 million, respectively, including variable and fixed fee arrangements, were recognized during the three and six months ended September 30, 2024 from performance obligations satisfied prior to March 31, 2024.
These revenues were primarily associated with the distribution of television and theatrical product in electronic sell-through and video-on-demand formats, and to a lesser extent, the distribution of theatrical product in the domestic and international markets related to films initially released in prior periods.
1 unchanged sentence
The timing of revenue recognition, billings and cash collections affects the recognition of accounts receivable, contract assets and deferred revenue.
−Removed: See the unaudited condensed consolidated balance sheets or Note 18 for accounts receivable, contract assets and deferred revenue balances at June 30, 2024 and March 31, 2024.
+Added: See the unaudited condensed consolidated balance sheets or Note 18 for accounts receivable, contract assets and deferred revenue balances at September 30, 2024 and March 31, 2024.
Accounts Receivable.
6 unchanged sentences
March 31, 2024 (Benefit) provision for doubtful accounts Other (1)
−Removed: Uncollectible accounts written-off June 30, 2024
+Added: Uncollectible accounts written-off September 30, 2024
(Amounts in millions)
5 unchanged sentences
Amounts relate primarily to contractual payment holdbacks in cases in which the Company is required to deliver additional episodes or seasons of television content in order to receive payment, complete certain administrative activities, such as guild filings, or allow the Company's customers' audit rights to expire.
−Removed: See Note 18 for contract assets at June 30, 2024 and March 31, 2024.
+Added: See Note 18 for contract assets at September 30, 2024 and March 31, 2024.
Deferred Revenue.
Deferred revenue relates primarily to customer cash advances or deposits received prior to when the Company satisfies the corresponding performance obligation.
−Removed: Revenues of $ 97.1 million were recognized during the three months ended June 30, 2024 related to the balance of deferred revenue at March 31, 2024.
+Added: Revenues of $ 38.7 million and $ 135.8 million, respectively, were recognized during the three and six months ended September 30, 2024 related to the balance of deferred revenue at March 31, 2024.
LIONS GATE ENTERTAINMENT CORP.
2 unchanged sentences
Basic net loss per share is calculated based on the weighted average common shares outstanding for the period.
−Removed: Basic and diluted net loss per share for the three months ended June 30, 2024 and 2023 is presented below:
−Removed: Three Months Ended
+Added: Basic and diluted net loss per share for the three and six months ended September 30, 2024 and 2023 is presented below:
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions, except per share amounts)
7 unchanged sentences
Basic and diluted net loss per common share $ ( 0.68 ) $ ( 3.79 ) $ ( 0.94 ) $ ( 4.12 )
−Removed: As a result of the net loss in the three months ended June 30, 2024 and 2023, the dilutive effect of the share purchase options, RSUs and restricted stock, and contingently issuable shares were considered anti-dilutive and, therefore, excluded from diluted net loss per share.
−Removed: The weighted average anti-dilutive shares excluded from the calculation due to the net loss for the three months ended June 30, 2024 and 2023 totaled 4.8 million and 5.6 million, respectively.
−Removed: Additionally, for the three months ended June 30, 2024 and 2023, the outstanding common shares issuable presented below were excluded from diluted net loss per common share because their inclusion would have had an anti-dilutive effect regardless of net income or loss in the period.
−Removed: Three Months Ended
+Added: As a result of the net loss in the three and six months ended September 30, 2024 and 2023, the dilutive effect of the share purchase options, RSUs and restricted stock, and contingently issuable shares were considered anti-dilutive and, therefore, excluded from diluted net loss per share.
+Added: The weighted average anti-dilutive shares excluded from the calculation due to the net loss for the three and six months ended September 30, 2024 totaled 1.7 million and 3.2 million, respectively, (three and six months ended September 30, 2023 - 1.0 million and 3.3 million, respectively).
+Added: Additionally, for the three and six months ended September 30, 2024 and 2023, the outstanding common shares issuable presented below were excluded from diluted net loss per common share because their inclusion would have had an anti-dilutive effect regardless of net income or loss in the period.
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
8 unchanged sentences
(a) Common Shares
−Removed: The Company had 500 million authorized Class A voting shares and 500 million authorized Class B non-voting shares at June 30, 2024 and March 31, 2024.
+Added: The Company had 500 million authorized Class A voting shares and 500 million authorized Class B non-voting shares at September 30, 2024 and March 31, 2024.
The table below outlines common shares reserved for future issuance:
+Added: September 30,
2024 March 31,
5 unchanged sentences
(b) Share-based Compensation
−Removed: The Company recognized the following share-based compensation expense during the three months ended June 30, 2024 and 2023:
−Removed: Three Months Ended
+Added: The Company recognized the following share-based compensation expense during the three and six months ended September 30, 2024 and 2023:
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
3 unchanged sentences
Share appreciation rights 0.2 0.5 0.3 1.2
+Added: 17.6 26.0 35.7 41.9
Impact of accelerated vesting on equity awards (1)
+Added: 4.9 1.1 4.9 1.6
Total share-based compensation expense $ 22.5 $ 27.1 $ 40.6 $ 43.5
2 unchanged sentences
Share-based compensation expense, by expense category, consisted of the following:
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
7 unchanged sentences
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
−Removed: The following table sets forth the stock option, SARs, restricted stock and restricted share unit activity during the three months ended June 30, 2024:
+Added: The following table sets forth the stock option, SARs, restricted stock and restricted share unit activity during the six months ended September 30, 2024:
Stock Options and SARs Restricted Stock and Restricted Share Units
7 unchanged sentences
Forfeited or expired ( 0.1 ) $ 20.26 ( 2.1 ) $ 14.82 — — ( 0.3 ) $ 9.02
−Removed: $ 11.71 ( 2.0 ) $ 14.55 — — ( 0.1 ) $ 8.46
−Removed: Outstanding at June 30, 2024 2.4 $ 23.00 16.3 $ 13.64 0.1 $ 9.27 12.6 $ 8.68
+Added: Outstanding at September 30, 2024 2.3 $ 23.09 16.1 $ 13.61 0.1 $ 8.98 15.1 $ 8.20
__________________
1 unchanged sentence
(c) Share Repurchases
−Removed: During the three months ended June 30, 2024 and 2023, the Company did not repurchase any common shares.
+Added: During the three and six months ended September 30, 2024 and 2023, 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.
−Removed: The income tax provision for the three months ended June 30, 2024 and 2023 is calculated by estimating the Company's annual effective tax rate (estimated annual tax provision divided by estimated annual income before income taxes), and then applying the effective tax rate to income (loss) before income taxes for the period, plus or minus the tax effects of items that relate discretely to the period, if any.
+Added: The income tax provision for the three and six months ended September 30, 2024 and 2023 is calculated by estimating the Company's annual effective tax rate (estimated annual tax provision divided by estimated annual income before income taxes), and then applying the effective tax rate to income (loss) before income taxes for the period, plus or minus the tax effects of items that relate discretely to the period, if any.
The Company's income tax provision differs from the 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.
−Removed: The Company's income tax provision for the three months ended June 30, 2024 and 2023 was impacted by changes in the valuation allowances against certain U.S.
+Added: The Company's income tax provision for the three and six months ended September 30, 2024 and 2023 was impacted by changes in the valuation allowances against certain U.S.
and foreign deferred tax assets, certain minimum taxes and foreign withholding taxes.
−Removed: The Company's income tax provision for the three months ended June 30, 2024 and 2023 also benefited from the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
−Removed: The Company's income tax provision for the three months ended June 30, 2024 was also impacted by additional deferred tax expense as a result of the Separation that occurred during the quarter.
+Added: The Company's income tax provision for the three and six months ended September 30, 2024 and 2023 was also impacted by charges for interest on uncertain tax benefits, and benefited from the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.
+Added: The Company's income tax provision for the three and six months ended September 30, 2024 was also impacted by additional deferred tax expense as a result of the Separation that occurred during the quarter ended June 30, 2024.
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.
2 unchanged sentences
Restructuring and Other
−Removed: Restructuring and other includes restructuring and severance costs, certain transaction and other costs, and certain unusual items, when applicable.
−Removed: During the three months ended June 30, 2024 and 2023, the Company also incurred certain other unusual charges or benefits, which are included in direct operating expense in the consolidated statements of operations and are described below.
−Removed: 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 three months ended June 30, 2024 and 2023:
−Removed: Three Months Ended
+Added: Restructuring and other includes restructuring and severance costs and certain transaction and other costs, when applicable.
+Added: During the three and six months ended September 30, 2024 and 2023, the Company also incurred certain other unusual charges or benefits, which are included in direct operating expense in the consolidated statements of operations and are described below.
+Added: 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 three and six months ended September 30, 2024 and 2023:
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
3 unchanged sentences
Severance (2)
−Removed: Accelerated vesting on equity awards (see Note 12)
−Removed: Total severance costs 3.1 4.8
+Added: 1.8 5.8 5.0 10.6
Transaction and other costs (benefits) (3)
3 unchanged sentences
COVID-19 related charges (benefit) included in direct operating expense (4)
+Added: — ( 0.6 ) ( 3.1 ) ( 0.4 )
Unallocated rent cost included in direct operating expense (5)
3 unchanged sentences
During fiscal 2024, the Company continued executing its restructuring plan, which included exiting all international territories except for Canada and India, and included an evaluation of the programming on Starz's domestic and international platforms.
−Removed: As a result of these restructuring initiatives, the Company recorded content impairment charges related to the Media Networks segment in the three months ended June 30, 2024 and 2023 of $ 1.9 million and $ 28.0 million, respectively.
−Removed: The Company has incurred impairment charges from the inception of the plan through June 30, 2024 amounting to $ 745.7 million.
−Removed: Under the current restructuring plan and ongoing strategic content review, the net future cash outlay is estimated to range from approximately $ 50 million to $ 55 million, which includes contractual commitments on content in 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.
−Removed: 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.
+Added: The Company has incurred impairment charges from the inception of the plan through September 30, 2024 amounting to $ 741.4 million.
+Added: During the three and six months ended September 30, 2024, the Company recorded net recoveries of content impairment charges related to the Media Networks segment of $ 4.3 million and $ 2.4 million, respectively (three and six months ended September 30, 2023 - content impairment charges of $ 211.6 million and $ 239.5 million, respectively).
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.
−Removed: Accordingly, the Company may incur additional content impairment and other restructuring charges beyond the estimates above.
+Added: Accordingly, the Company may incur additional content impairment and other restructuring charges.
Other Impairments:
−Removed: Amounts in the three months ended June 30, 2024 also include impairments of certain operating lease right-of-use and leasehold improvement assets related to the Television Production segment amounting to $ 18.0 million associated with facility leases that will no longer be utilized by the Company, primarily related to the integration of eOne.
+Added: Amounts in the three and six months ended September 30, 2024 also include impairments of certain operating lease right-of-use and leasehold improvement assets related to the Television Production segment associated with facility leases that will no longer be utilized by the Company, primarily related to the integration of eOne.
LIONS GATE ENTERTAINMENT CORP.
1 unchanged sentence
(2) Severance costs were primarily related to restructuring, acquisition integration activities and other cost-saving initiatives.
−Removed: (3) Transaction and other costs in the three months ended June 30, 2024 and 2023 reflect transaction, integration and legal costs associated with certain strategic transactions, and restructuring activities and also include costs and benefits associated with legal and other matters.
−Removed: In the three months ended June 30, 2024 and 2023, transaction and other costs also includes a benefit of $ 7.1 million and $ 3.8 million, respectively, associated with an arrangement to migrate subscribers in some of the exited territories to a third-party in connection with the Starz international restructuring.
−Removed: (4) Amounts include incremental costs incurred, if any, due to circumstances associated with the COVID-19 global pandemic, net of insurance recoveries of $ 3.2 million in the three months ended June 30, 2024 (three months ended June 30, 2023 - immaterial insurance recoveries).
−Removed: In the three months ended June 30, 2024, insurance recoveries exceeded the incremental costs expensed in the period, resulting in a net benefit included in direct operating expense.
+Added: (3) Transaction and other costs in the three and six months ended September 30, 2024 and 2023 reflect transaction, integration and legal costs associated with certain strategic transactions, and restructuring activities and also include costs and benefits associated with legal and other matters.
+Added: In the six months ended September 30, 2024 and 2023, transaction and other costs also includes a benefit of $ 7.1 million and $ 3.8 million, respectively, associated with an arrangement to migrate subscribers in some of the exited territories to a third-party in connection with the Starz international restructuring.
+Added: (4) Amounts include incremental costs incurred, if any, due to circumstances associated with the COVID-19 global pandemic, net of insurance recoveries of nil and $ 3.1 million in the three and six months ended September 30, 2024, respectively (three and six months ended September 30, 2023 - insurance recoveries of $ 0.6 million).
+Added: In the six months ended September 30, 2024 and the three and six months ended September 30, 2023, insurance recoveries exceeded the incremental costs expensed in the period, resulting in a net benefit included in direct operating expense.
(5) Amounts represent rent cost for production facilities that were unutilized as a result of the industry strikes, and therefore such amounts are not allocated to the segments.
−Removed: Changes in the restructuring and other severance liability were as follows for the three months ended June 30, 2024 and 2023:
−Removed: Three Months Ended
+Added: Changes in the restructuring and other severance liability were as follows for the six months ended September 30, 2024 and 2023:
+Added: Six Months Ended
+Added: September 30,
(Amounts in millions)
1 unchanged sentence
Beginning balance $ 23.6 $ 8.7
−Removed: Accruals 3.1 4.3
Severance payments ( 15.5 ) ( 9.7 )
1 unchanged sentence
_______________________
−Removed: (1) As of June 30, 2024, the remaining severance liability of approximately $ 16.7 million is expected to be paid in the next 12 months.
+Added: (1) As of September 30, 2024, the remaining severance liability of approximately $ 8.2 million is expected to be paid in the next 12 months.
+Added: (2) Excludes $ 4.9 million and $ 1.6 million in the six months ended September 30, 2024 and 2023, respectively, of accelerated vesting on equity awards.
Segment Information
8 unchanged sentences
Television Production consists of the development, production and worldwide distribution of television productions including television series, television movies and mini-series, and non-fiction programming.
−Removed: Television Production includes the licensing of Starz original series productions to Starz Networks and LIONSGATE+, and the ancillary market distribution of Starz original productions and licensed product.
+Added: Television Production includes the licensing of Starz original series productions to Starz Networks and to Starz platforms outside of the U.S.
+Added: and Canada, and the ancillary market distribution of Starz original productions and licensed product.
Additionally, the Television Production segment includes the results of operations of 3 Arts Entertainment.
5 unchanged sentences
and Canada multichannel video programming distributors ("MVPDs") including cable operators, satellite television providers and telecommunication companies (collectively, "Distributors");
−Removed: and (ii) Other, which represents revenues primarily from the OTT distribution of the Company's STARZ branded premium subscription video services outside of the U.S.
+Added: and (ii) Other, which represents revenues primarily from the OTT distribution of the Company's Starz subscription video services outside of the U.S.
In the ordinary course of business, the Company's reportable segments enter into transactions with one another.
5 unchanged sentences
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).
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
44 unchanged sentences
The reconciliation of total segment profit to the Company’s loss before income taxes is as follows:
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
5 unchanged sentences
Restructuring and other ( 6.1 ) ( 222.1 ) ( 28.6 ) ( 254.0 )
+Added: Goodwill and intangible asset impairment — ( 663.9 ) — ( 663.9 )
COVID-19 related benefit (charges) included in direct operating expense (3)
+Added: — 0.6 3.1 0.4
Unallocated rent cost included in direct operating expense (4)
+Added: ( 5.2 ) — ( 10.5 ) —
Adjusted share-based compensation expense (5)
2 unchanged sentences
( 39.0 ) ( 36.9 ) ( 78.7 ) ( 81.3 )
−Removed: Operating income (loss) 18.8 ( 16.8 )
+Added: Operating loss ( 88.6 ) ( 817.5 ) ( 69.8 ) ( 834.3 )
Interest expense ( 74.3 ) ( 63.8 ) ( 143.1 ) ( 125.8 )
2 unchanged sentences
Gain (loss) on extinguishment of debt ( 0.5 ) — ( 6.4 ) 21.2
+Added: Loss on investments, net — ( 1.6 ) — ( 1.7 )
Equity interests income (loss) ( 0.1 ) 1.8 0.8 1.5
3 unchanged sentences
(2) Adjusted depreciation and amortization represents depreciation and amortization as presented on our unaudited condensed 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:
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
2 unchanged sentences
Adjusted depreciation and amortization $ 8.2 $ 9.9 $ 16.7 $ 19.9
+Added: LIONS GATE ENTERTAINMENT CORP.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(3) Amounts represent the incremental costs, if any, included in direct operating expense resulting from circumstances associated with the COVID-19 global pandemic, net of insurance recoveries (see Note 14).
1 unchanged sentence
(4) Amounts represent rent cost for production facilities that were unutilized as a result of the industry strikes, and therefore such amounts are not allocated to the segments.
−Removed: LIONS GATE ENTERTAINMENT CORP.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(5) The following table reconciles total share-based compensation expense to adjusted share-based compensation expense:
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
1 unchanged sentence
Amount included in restructuring and other (i)
+Added: ( 4.9 ) ( 1.1 ) ( 4.9 ) ( 1.6 )
Adjusted share-based compensation $ 17.6 $ 26.0 $ 35.7 $ 41.9
2 unchanged sentences
The following sets forth the amounts included in each line item in the financial statements:
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
1 unchanged sentence
General and administrative expense (i)
+Added: $ 1.7 2.2 $ 3.8 $ 12.2
Depreciation and amortization 37.3 34.7 74.9 69.1
$ 39.0 $ 36.9 $ 78.7 $ 81.3
−Removed: (i) These adjustments include the expense associated with the noncontrolling equity interests in the distributable earnings related to 3 Arts Entertainment, 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.
−Removed: The noncontrolling equity interest in the distributable earnings of 3 Arts Entertainment are reflected as an expense rather than noncontrolling interest in the unaudited condensed consolidated statement of operations due to the relationship to continued employment.
−Removed: Three Months Ended
−Removed: (Amounts in millions)
−Removed: Amortization of recoupable portion of the purchase price $ — $ 1.3
−Removed: Noncontrolling equity interest in distributable earnings 2.1 8.7
−Removed: See Note 10 for revenues by media or product line as broken down by segment for the three months ended June 30, 2024 and 2023.
+Added: (i) These adjustments include the expense associated with the noncontrolling equity interests in the distributable earnings related to 3 Arts Entertainment, and the amortization of the recoupable portion of the purchase price ($ 1.3 million through May 2023) related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense.
+Added: The noncontrolling equity interest in the distributable earnings of 3 Arts Entertainment are reflected as an expense rather than noncontrolling interest in the unaudited condensed consolidated statements of operations due to the relationship to continued employment.
+Added: See Note 10 for revenues by media or product line as broken down by segment for the three and six months ended September 30, 2024 and 2023.
The following table reconciles segment general and administration expense to the Company's total consolidated general and administration expense:
1 unchanged sentence
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
−Removed: Three Months Ended
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
6 unchanged sentences
The reconciliation of total segment assets to the Company’s total consolidated assets is as follows:
+Added: September 30,
2024 March 31,
12 unchanged sentences
The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters.
−Removed: As of June 30, 2024, the Company is not a party to any material pending claims or legal proceeding and is not aware of any other claims that it believes could, individually or in the aggregate, have a material adverse effect on the Company's financial position, results of operations or cash flows.
+Added: As of September 30, 2024, the Company is not a party to any material pending claims or legal proceeding and is not aware of any other claims that it believes could, individually or in the aggregate, have a material adverse effect on the Company's financial position, results of operations or cash flows.
+Added: LIONS GATE ENTERTAINMENT CORP.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Derivative Instruments and Hedging Activities
5 unchanged sentences
Gains and losses realized upon settlement of the foreign exchange contracts that are designated as hedges are amortized to direct operating expense on the same basis as the production expenses being hedged.
−Removed: LIONS GATE ENTERTAINMENT CORP.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
−Removed: As of June 30, 2024, the Company had the following outstanding forward foreign exchange contracts (all outstanding contracts have maturities of less than 22 months from June 30, 2024):
−Removed: June 30, 2024
+Added: As of September 30, 2024, the Company had the following outstanding forward foreign exchange contracts (all outstanding contracts have maturities of less than 19 months from September 30, 2024):
+Added: September 30, 2024
Foreign Currency Foreign Currency Amount US Dollar Amount Weighted Average Exchange Rate Per $1 USD
(Amounts in millions) (Amounts in millions)
−Removed: British Pound Sterling 2.2 GBP in exchange for $ 2.9 0.78 GBP
Czech Koruna 180.0 CZK in exchange for $ 7.7 23.29 CZK
12 unchanged sentences
Cash settlements related to interest rate contracts are generally classified as operating activities on the consolidated statements of cash flows.
+Added: LIONS GATE ENTERTAINMENT CORP.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Designated Cash Flow Hedges.
−Removed: As of June 30, 2024 and March 31, 2024, 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 6 and Note 7):
−Removed: Effective Date Notional Amount Fixed Rate Paid Maturity Date
+Added: As of September 30, 2024 and March 31, 2024, 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 6 and Note 7).
+Added: Effective Date
+Added: Notional Amount Fixed Rate Paid Maturity Date
(in millions)
6 unchanged sentences
December 24, 2018 $ 50.0 2.728 % March 23, 2025
+Added: August 15, 2024 (1)
+Added: $ 65.0 4.045 % September 15, 2026
+Added: August 15, 2024 (1)
+Added: $ 77.5 3.803 % August 15, 2026
+Added: August 15, 2024 (1)
+Added: $ 77.5 3.810 % September 15, 2026
Total $ 1,920.0
−Removed: LIONS GATE ENTERTAINMENT CORP.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
+Added: ___________________
+Added: (1) Entered into during the three months ended September 30, 2024.
Financial Statement Effect of Derivatives
Unaudited condensed consolidated statements of operations and comprehensive loss:
−Removed: The following table presents the pre-tax effect of the Company's derivatives on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended June 30, 2024 and 2023:
−Removed: Three Months Ended
+Added: The following table presents the pre-tax effect of the Company's derivatives on the accompanying unaudited condensed consolidated statements of operations and comprehensive loss for the three and six months ended September 30, 2024 and 2023:
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
4 unchanged sentences
Interest rate swaps
−Removed: Gain recognized in accumulated other comprehensive income (loss) $ 3.5 $ 27.1
−Removed: Gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense $ 10.9 $ 9.1
+Added: Gain (loss) recognized in accumulated other comprehensive income (loss) $ ( 6.3 ) $ 9.3 $ ( 2.8 ) $ 36.4
+Added: Gain reclassified from accumulated other comprehensive income (loss) into interest expense $ 11.4 $ 10.9 $ 22.3 $ 20.1
Derivatives not designated as cash flow hedges:
3 unchanged sentences
Total interest expense on consolidated statements of operations $ 74.3 $ 63.8 $ 143.1 $ 125.8
+Added: LIONS GATE ENTERTAINMENT CORP.
+Added: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Unaudited condensed consolidated balance sheets:
1 unchanged sentence
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 unaudited condensed consolidated balance sheets.
−Removed: As of June 30, 2024 and March 31, 2024, there were no swaps outstanding that were subject to a master netting arrangement.
−Removed: LIONS GATE ENTERTAINMENT CORP.
−Removed: NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
−Removed: As of June 30, 2024 and March 31, 2024, the Company had the following amounts recorded in the accompanying unaudited condensed consolidated balance sheets related to the Company's use of derivatives:
−Removed: June 30, 2024
−Removed: Other Current Assets Other Accrued Liabilities
+Added: As of September 30, 2024 and March 31, 2024, there were no swaps outstanding that were subject to a master netting arrangement.
+Added: As of September 30, 2024 and March 31, 2024, the Company had the following amounts recorded in the accompanying unaudited condensed consolidated balance sheets related to the Company's use of derivatives:
+Added: September 30, 2024
+Added: Other Current Assets Other Accrued Liabilities (current) Other Liabilities (non-current)
(Amounts in millions)
4 unchanged sentences
March 31, 2024
−Removed: Other Current Assets Other Accrued Liabilities
+Added: Other Current Assets Other Accrued Liabilities (current)
(Amounts in millions)
3 unchanged sentences
Fair value of derivatives $ 35.6 $ 2.8
−Removed: As of June 30, 2024, based on the current release schedule, the Company estimates approximately $ 4.1 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 June 30, 2025.
−Removed: As of June 30, 2024, the Company estimates approximately $ 31.1 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 June 30, 2025.
+Added: As of September 30, 2024, based on the current release schedule, the Company estimates approximately $ 1.2 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 September 30, 2025.
+Added: As of September 30, 2024, the Company estimates approximately $ 23.4 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 September 30, 2025.
Additional Financial Information
1 unchanged sentence
Cash, Cash Equivalents and Restricted Cash
−Removed: The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the unaudited condensed consolidated balance sheets to the total amounts reported in the unaudited condensed consolidated statements of cash flows at June 30, 2024 and March 31, 2024.
−Removed: At June 30, 2024 and March 31, 2024, 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.
+Added: The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the unaudited condensed consolidated balance sheets to the total amounts reported in the unaudited condensed consolidated statements of cash flows at September 30, 2024 and March 31, 2024.
+Added: At September 30, 2024 and March 31, 2024, restricted cash represents primarily amounts related to required cash reserves for interest payments associated with certain corporate debt and film related obligations.
LIONS GATE ENTERTAINMENT CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
+Added: September 30,
2024 March 31,
4 unchanged sentences
Total cash, cash equivalents and restricted cash $ 289.3 $ 371.4
−Removed: The composition of the Company’s other assets is as follows as of June 30, 2024 and March 31, 2024:
+Added: The composition of the Company’s other assets is as follows as of September 30, 2024 and March 31, 2024:
+Added: September 30,
2024 March 31,
21 unchanged sentences
The loss is reflected in the "other expense" line item on the unaudited condensed consolidated statements of operations.
−Removed: The Company receives fees for servicing the accounts receivable for the purchasers, which represent the fair value of the services and were immaterial for the three months ended June 30, 2024 and 2023.
+Added: The Company receives fees for servicing the accounts receivable for the purchasers, which represent the fair value of the services and were immaterial for the three and six months ended September 30, 2024 and 2023.
LIONS GATE ENTERTAINMENT CORP.
3 unchanged sentences
The third-party purchasers have no recourse to other assets of the Company in the event of non-payment by the customers.
−Removed: The following table sets forth a summary of the receivables transferred under individual agreements or purchases during the three months ended June 30, 2024 and 2023:
−Removed: Three Months Ended
+Added: The following table sets forth a summary of the receivables transferred under individual agreements or purchases during the three and six months ended September 30, 2024 and 2023:
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
+Added: 2024 2023 2024 2023
(Amounts in millions)
2 unchanged sentences
Loss recorded related to transfers of receivables 6.8 10.4 11.7 15.1
−Removed: At June 30, 2024, the outstanding amount of receivables derecognized from the Company's unaudited condensed consolidated balance sheets, but which the Company continues to service, related to the Company's individual agreements to monetize trade accounts receivable was $ 557.4 million (March 31, 2024 - $ 613.4 million).
+Added: At September 30, 2024, the outstanding amount of receivables derecognized from the Company's unaudited condensed consolidated balance sheets, but which the Company continues to service, related to the Company's individual agreements to monetize trade accounts receivable was $ 626.8 million (March 31, 2024 - $ 613.4 million).
Pooled Monetization Agreement.
3 unchanged sentences
The third-party purchasers had no recourse to other assets of the Company in the event of non-payment by the customers.
−Removed: The following table sets forth a summary of the receivables transferred under the pooled monetization agreement during the three months ended June 30, 2023:
−Removed: Three Months Ended
+Added: The following table sets forth a summary of the receivables transferred under the pooled monetization agreement during the three and six months ended September 30, 2023:
+Added: Three Months Ended Six Months Ended
+Added: September 30, September 30,
(Amounts in millions)
5 unchanged sentences
Carrying value of receivables transferred and derecognized (1)
+Added: $ 16.3 $ 22.1
Obligations recorded $ 1.0 $ 2.1
2 unchanged sentences
(1) Receivables net of unamortized discounts on long-term, non-interest bearing receivables.
−Removed: At June 30, 2024 and March 31, 2024, there were no outstanding receivables derecognized from the Company's unaudited condensed consolidated balance sheet, for which the Company continues to service, related to the pooled monetization agreement.
+Added: At September 30, 2024 and March 31, 2024, there were no outstanding receivables derecognized from the Company's unaudited condensed consolidated balance sheet, for which the Company continues to service, related to the pooled monetization agreement.
Content related payables
Content related payables include minimum guarantees and accrued licensed program rights obligations, which represent amounts payable for film or television rights that the Company has acquired or licensed.
−Removed: Other Accrued Liabilities
LIONS GATE ENTERTAINMENT CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
−Removed: Other accrued liabilities include employee related liabilities (such as accrued bonuses and salaries and wages) of $ 139.6 million and $ 147.4 million at June 30, 2024 and March 31, 2024, respectively.
+Added: Other Accrued Liabilities
+Added: Other accrued liabilities include employee related liabilities (such as accrued bonuses and salaries and wages) of $ 37.8 million and $ 147.4 million at September 30, 2024 and March 31, 2024, respectively.
Accumulated Other Comprehensive Income
The following table summarizes the changes in the components of accumulated other comprehensive income, net of tax.
−Removed: During the three months ended June 30, 2024 and 2023, there was no income tax expense or benefit reflected in other comprehensive income due to the income tax impact being offset by changes in the Company’s deferred tax valuation allowance.
+Added: During the six months ended September 30, 2024 and 2023, there was no income tax expense or benefit reflected in other comprehensive income due to the income tax impact being offset by changes in the Company’s deferred tax valuation allowance.
Foreign currency translation adjustments Net unrealized gain (loss) on cash flow hedges Total
6 unchanged sentences
5.2 ( 16.5 ) ( 11.3 )
−Removed: June 30, 2024 $ ( 22.0 ) $ 115.1 $ 93.1
+Added: September 30, 2024 $ ( 5.8 ) $ 102.4 $ 96.6
March 31, 2023 $ ( 21.6 ) $ 142.5 $ 120.9
2 unchanged sentences
— ( 16.4 ) ( 16.4 )
−Removed: June 30, 2023 $ ( 20.8 ) $ 159.4 $ 138.6
+Added: September 30, 2023 $ ( 23.0 ) $ 159.4 $ 136.4
___________________
−Removed: (1) Represents a loss of $ 1.0 million included in direct operating expense and a gain of $ 9.3 million included in interest expense on the unaudited condensed consolidated statement of operations in the three months ended June 30, 2024 (three months ended June 30, 2023 - gain of $ 0.4 million included in direct operating expense and a gain of $ 7.2 million included in interest expense) (see Note 17).
+Added: (1) Represents a loss of $ 1.2 million included in direct operating expense and a gain of $ 19.2 million included in interest expense on the unaudited condensed consolidated statement of operations in the six months ended September 30, 2024 (six months ended September 30, 2023 - gain of $ 0.1 million included in direct operating expense and a gain of $ 16.3 million included in interest expense) (see Note 17).
(2) Represents amounts reclassified in connection with the noncontrolling interest recorded for the proportionate ownership interest in the carrying value of Lionsgate Studios (see Note 2).
Supplemental Cash Flow Information
−Removed: Significant non-cash transactions during the three months ended June 30, 2024 and 2023 include certain interest rate swap agreements, which are discussed in Note 17, "Derivative Instruments and Hedging Activities".
−Removed: There were no significant non-cash financing or investing activities for the three months ended June 30, 2024 and 2023.
+Added: Significant non-cash transactions during the six months ended September 30, 2024 and 2023 include certain interest rate swap agreements, which are discussed in Note 17, "Derivative Instruments and Hedging Activities".
+Added: There were no significant non-cash financing or investing activities for the six months ended September 30, 2024 and 2023.
Subsequent Events
−Removed: eOne IP Credit Facility.
−Removed: In July 2024, certain subsidiaries of the Company entered into a senior secured amortizing term credit facility (the "eOne IP Credit Facility") based on and secured by the Company’s intellectual property rights primarily associated with certain titles acquired as part of the eOne acquisition.
−Removed: The maximum principal amount of the eOne IP Credit Facility is $ 340.0 million, subject to the amount of collateral available, which is based on the valuation of unsold rights from the libraries.
−Removed: The Company borrowed $ 340.0 million under the eOne IP Credit Facility.
−Removed: The cash flows generated from the rights will be applied to repay the eOne IP Credit Facility subject to quarterly required principal payments of $ 8.5 million, beginning September 30, 2024, with the balance payable at maturity.
−Removed: Advances under the eOne IP Credit Facility bear interest at a rate equal to Term SOFR plus 2.25 % per annum.
−Removed: The eOne IP Credit Facility matures on July 3, 2029.
+Added: On November 6, 2024, the Company closed an amendment to its LG IP Credit Facility which increased the maximum principal amount of the LG IP Credit Facility to $ 720.0 million.
+Added: The Company borrowed $ 265.0 million under the LG IP Credit Facility, and used the net proceeds to pay in full the remaining $ 250.0 million principal amount of the Term Loan B, together with accrued and unpaid interest thereon.
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.