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Item 1. Financial Statements

2025-08-14 compared with 2025-02-10 · 598 added, 1125 removed, 214 unchanged (89% of the section changed)

FINANCIAL STATEMENTS

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

3 unchanged sentences

Accounts receivable, net 55.7 52.7

Other current assets 310.4 396.5

Due from LG Studios Business (Note 15) — 81.6

Prepaid expenses and other 15.9 18.4

Total current assets 123.2 170.5

Investment in films and television programs and program rights, net 3,376.3 2,762.2

Programming content, net 1,092.7 1,096.3

Property and equipment, net 50.4 48.6

Investments 79.4 74.8

Intangible assets, net 772.3 816.0

Goodwill 808.5 811.2

Other assets 53.0 41.8

1 unchanged sentence

Accounts payable $ 78.1 $ 64.5

Content related payables 147.2 190.0

Programming related payables 378.1 101.8

Other accrued liabilities 63.6 64.5

Participations and residuals 642.2 678.4

Film related obligations 1,497.0 1,393.1

Debt - short term portion 119.0 860.3

Residuals 29.3 29.5

Programming related obligations 88.2 90.7

Deferred revenue 39.8 39.4

Due to LG Studios Business (Note 15) — 232.1

Total current liabilities 677.1 622.5

Debt 611.7 699.9

Participations and residuals 388.8 435.1

Film related obligations 443.2 544.9

Other liabilities 82.2 75.9

Deferred revenue 121.3 118.4

Deferred tax liabilities 8.3 8.5

Total liabilities 1,379.3 1,406.8

Commitments and contingencies (Note 16)

Redeemable noncontrolling interests 99.7 123.3

EQUITY (DEFICIT)

Class A voting common shares, no par value, 500.0 shares authorized, 83.7 shares issued (March 31, 2024 - 83.6 shares issued)

Class B non-voting common shares, no par value, 500.0 shares authorized, 156.6 shares issued (March 31, 2024 - 151.7 shares issued)

2,503.5 2,474.4

Accumulated deficit ( 3,422.7 ) ( 3,576.7 )

Contingencies (Note 16)

Common stock, no par value, unlimited authorized, 16.7 shares issued (March 31, 2025 – nil )

Accumulated other comprehensive income 19.2 19.2

Total Lions Gate Entertainment Corp.

shareholders' equity (deficit) ( 168.3 ) ( 312.7 )

Noncontrolling interests ( 87.8 ) 2.2

Total equity (deficit) ( 256.1 ) ( 310.5 )

Total liabilities, redeemable noncontrolling interests and equity (deficit) $ 7,167.3 $ 7,092.7

Parent net investment — 747.2

Accumulated deficit ( 35.2 ) —

Total equity 712.3 766.4

Total liabilities and equity $ 2,091.6 $ 2,173.2

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

STARZ ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(Amounts in millions, except per share amounts)

Revenues $ 970.5 $ 975.1 $ 2,753.8 $ 2,899.1

Direct operating 567.3 510.8 1,639.7 1,549.1

Distribution and marketing 174.4 220.0 606.0 686.0

General and administration 105.9 121.0 334.9 368.1

Three Months Ended

(Amounts in millions)

OTT revenue $ 221.1 $ 234.4

Linear and other revenue 98.6 113.2

Total revenue 319.7 347.6

Operating expenses:

Programming amortization 162.5 147.9

Other operating 36.5 39.3

Advertising and marketing 63.4 82.7

General and administrative 29.1 26.6

Depreciation and amortization 48.7 41.6

Restructuring and other 6.4 ( 0.6 )

Goodwill and intangible asset impairment — — — 663.9

Total expenses 346.6 337.5

Operating income (loss) 35.8 ( 43.5 ) ( 34.1 ) ( 877.9 )

Operating (loss) income ( 26.9 ) 10.1

Interest expense ( 13.2 ) ( 10.8 )

Interest and other income — 0.8

Other gains (losses), net 8.4 ( 2.5 ) ( 10.6 ) ( 19.6 )

Gain (loss) on extinguishment of debt ( 0.3 ) — ( 6.7 ) 21.2

Gain on investments, net — 4.4 — 2.7

Equity interests income 7.6 4.2 8.5 5.7

Loss before income taxes ( 14.5 ) ( 102.7 ) ( 243.5 ) ( 1,054.3 )

Income tax provision ( 4.0 ) ( 4.7 ) ( 16.0 ) ( 12.5 )

Net loss ( 18.5 ) ( 107.4 ) ( 259.5 ) ( 1,066.8 )

Net loss (income) attributable to noncontrolling interests ( 3.4 ) 0.8 14.8 3.3

Net loss attributable to Lions Gate Entertainment Corp.

shareholders $ ( 21.9 ) $ ( 106.6 ) $ ( 244.7 ) $ ( 1,063.5 )

Per share information attributable to Lions Gate Entertainment Corp.

Other expense ( 2.5 ) ( 1.7 )

Loss on extinguishment of debt — ( 4.9 )

Loss from continuing operations before income taxes ( 42.6 ) ( 6.5 )

Income tax benefit 0.1 7.6

Net (loss) income from continuing operations ( 42.5 ) 1.1

Net income from discontinued operations, net of income taxes — 3.1

Net (loss) income $ ( 42.5 ) $ 4.2

Per share information attributable to Starz Entertainment Corp.

shareholders:

Basic net loss per common share $ ( 0.09 ) $ ( 0.45 ) $ ( 1.03 ) $ ( 4.56 )

Diluted net loss per common share $ ( 0.09 ) $ ( 0.45 ) $ ( 1.03 ) $ ( 4.56 )

Basic and diluted net (loss) income per common share - continuing operations $ ( 2.54 ) $ 0.07

Basic and diluted net income per common share - discontinued operations — 0.19

Basic and diluted net (loss) income per common share $ ( 2.54 ) $ 0.26

Weighted average number of common shares outstanding:

2 unchanged sentences

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(Amounts in millions)

Net loss $ ( 18.5 ) $ ( 107.4 ) $ ( 259.5 ) $ ( 1,066.8 )

Foreign currency translation adjustments, net of tax ( 24.4 ) 3.0 ( 12.7 ) 1.6

Net unrealized gain (loss) on cash flow hedges, net of tax 0.7 ( 23.0 ) ( 19.1 ) ( 6.1 )

Comprehensive loss ( 42.2 ) ( 127.4 ) ( 291.3 ) ( 1,071.3 )

Comprehensive loss attributable to noncontrolling interests 0.1 0.8 18.3 3.3

Comprehensive loss attributable to Lions Gate Entertainment Corp.

shareholders $ ( 42.1 ) $ ( 126.6 ) $ ( 273.0 ) $ ( 1,068.0 )

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

STARZ ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

Three Months Ended

Class A Voting Class B Non-Voting Accumulated Deficit Accumulated Other Comprehensive Income Lions Gate Entertainment Corp.

Shareholders' Equity (Deficit) Noncontrolling Interests (a) Total Equity (Deficit)

Common Shares Common Shares

Number Amount Number Amount

(Amounts in millions)

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 )

Exercise of stock options — — — 0.4 — — 0.4 — 0.4

Share-based compensation, net of share cancellations for taxes 0.1 0.3 0.2 19.2 — — 19.5 — 19.5

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

Sale of noncontrolling interest in Lionsgate Studios Corp.

(see Note 2) — — — — ( 4.0 ) — ( 4.0 ) 0.6 ( 3.4 )

Distributions to noncontrolling interests — — — — — — — ( 6.1 ) ( 6.1 )

Net loss — — — — ( 21.9 ) — ( 21.9 ) 3.7 ( 18.2 )

Other comprehensive loss — — — — — ( 20.2 ) ( 20.2 ) ( 3.5 ) ( 23.7 )

Redeemable noncontrolling interests adjustments — — — — ( 0.4 ) — ( 0.4 ) — ( 0.4 )

Balance at December 31, 2024 83.7 $ 674.5 156.6 $ 2,503.5 $ ( 3,422.7 ) $ 76.4 $ ( 168.3 ) $ ( 87.8 ) $ ( 256.1 )

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 )

Exercise of stock options — — — 0.2 — — 0.2 — 0.2

Share-based compensation, net of share cancellations for taxes — 0.2 0.1 21.9 — — 22.1 — 22.1

Issuance of common shares 0.1 0.2 — 0.2 — — 0.4 — 0.4

Distributions to noncontrolling interests — — — — — — — ( 0.8 ) ( 0.8 )

Net loss — — — — ( 106.6 ) — ( 106.6 ) 0.3 ( 106.3 )

Other comprehensive loss — — — — — ( 20.0 ) ( 20.0 ) — ( 20.0 )

Redeemable noncontrolling interests adjustments — — — — ( 0.5 ) — ( 0.5 ) — ( 0.5 )

Balance at December 31, 2023 83.6 $ 673.4 151.5 $ 2,459.3 $ ( 3,574.6 ) $ 116.4 $ ( 325.5 ) $ 1.8 $ ( 323.7 )

_____________________

(a) Excludes redeemable noncontrolling interests, which are reflected in temporary equity (see Note 9).

LIONS GATE ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

Nine Months Ended

Class A Voting Class B Non-Voting Accumulated Deficit Accumulated Other Comprehensive Income Lions Gate Entertainment Corp.

Shareholders' Equity (Deficit) Noncontrolling Interests (a) Total Equity (Deficit)

Common Shares Common Shares

Number Amount Number Amount

Net (loss) income $ ( 42.5 ) $ 1.1

Comprehensive (loss) income from continuing operations, net of tax ( 42.5 ) 1.1

Net income from discontinued operations — 3.1

Comprehensive (loss) income $ ( 42.5 ) $ 4.2

See accompanying notes.

STARZ ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Starz Common Shares Accumulated Deficit Parent Net Investment Accumulated

Comprehensive

Income Total Equity

Number Amount

(Amounts in millions)

Balance at March 31, 2025 — $ — $ — $ 747.2 $ 19.2 $ 766.4

Exercise of stock options — — 0.1 0.7 — — 0.7 — 0.7

Share-based compensation, net of share cancellations for taxes 0.1 0.7 4.8 28.2 — — 28.9 — 28.9

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

Sale of noncontrolling interest in Lionsgate Studios Corp.

(see Note 2) — — — — 389.7 ( 11.3 ) 378.4 ( 100.2 ) 278.2

Noncontrolling interests (see Note 9) — — — — — — — 33.6 33.6

Distributions to noncontrolling interests — — — — — — — ( 6.7 ) ( 6.7 )

Net loss — — — — ( 244.7 ) — ( 244.7 ) ( 13.2 ) ( 257.9 )

Other comprehensive loss — — — — — ( 28.3 ) ( 28.3 ) ( 3.5 ) ( 31.8 )

Redeemable noncontrolling interests adjustments — — — — 9.0 — 9.0 — 9.0

Balance at December 31, 2024 83.7 $ 674.5 156.6 $ 2,503.5 $ ( 3,422.7 ) $ 76.4 $ ( 168.3 ) $ ( 87.8 ) $ ( 256.1 )

Distribution to Lionsgate upon Separation — — — 0.1 0.1

Net loss prior to Separation — — — ( 7.3 ) — ( 7.3 )

Issuance of Starz common shares to holders of Old Lionsgate Class A Voting and Class B Non-Voting Common Shares and Separation from Old Lionsgate 16.7 740.0 — ( 740.0 ) — —

Net loss after Separation — — ( 35.2 ) — — ( 35.2 )

Stock-based compensation after Separation — 5.9 — — — 5.9

Share-based liability for modified July Vesting awards — ( 17.6 ) — — — ( 17.6 )

Balance at June 30, 2025 $ 16.7 $ 728.3 $ ( 35.2 ) $ — $ 19.2 $ 712.3

Balance at March 31, 2024 $ 900.0 $ 19.2 $ 919.2

Exercise of stock options — — — 0.5 — — 0.5 — 0.5

Share-based compensation, net of share cancellations for taxes — 0.6 5.6 27.4 — — 28.0 — 28.0

Issuance of common shares 0.1 0.5 — 0.5 — — 1.0 — 1.0

Distributions to noncontrolling interests — — — — — — — ( 0.8 ) ( 0.8 )

Net loss 4.2 — 4.2

Other comprehensive income — — — — — ( 4.5 ) ( 4.5 ) — ( 4.5 )

Redeemable noncontrolling interests adjustments — — — — ( 71.5 ) — ( 71.5 ) — ( 71.5 )

Balance at December 31, 2023 83.6 $ 673.4 151.5 $ 2,459.3 $ ( 3,574.6 ) $ 116.4 $ ( 325.5 ) $ 1.8 $ ( 323.7 )

_____________________

(a) Excludes redeemable noncontrolling interests, which are reflected in temporary equity (see Note 9).

Net transfers from Parent 49.7 — 49.7

Balance at June 30, 2024 $ 953.9 $ 19.2 $ 973.1

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

STARZ ENTERTAINMENT CORP.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

Three Months Ended

(Amounts in millions)

Operating Activities:

Net loss $ ( 259.5 ) $ ( 1,066.8 )

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

Net (loss) income $ ( 42.5 ) $ 4.2

net income from discontinued operations, net of tax — 3.1

Net (loss) income from continuing operations, net of tax ( 42.5 ) 1.1

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

Depreciation and amortization 48.7 41.6

Amortization of films and television programs and program rights 1,205.9 1,138.7

Programming amortization 162.5 149.0

Amortization of debt financing costs and other non-cash interest 0.9 0.8

Non-cash share-based compensation 7.4 5.2

Other non-cash items 31.1 35.0

Goodwill and intangible asset impairment — 663.9

Content and other impairments 17.1 317.4

(Gain) loss on extinguishment of debt 6.7 ( 21.2 )

Equity interests income ( 8.5 ) ( 5.7 )

Gain on investments, net — ( 2.7 )

Other amortization 1.7 1.8

Net content impairment recoveries ( 0.3 ) ( 0.6 )

Loss on extinguishment of debt — 4.9

Deferred income taxes — ( 0.5 )

1 unchanged sentence

Accounts receivable, net 27.4 ( 15.4 )

Investment in films and television programs and program rights, net ( 1,776.2 ) ( 926.2 )

Programming content payments ( 160.2 ) ( 232.7 )

Programming related payables 11.9 ( 10.6 )

Other assets 0.7 0.6

Accounts payable and accrued liabilities 5.8 ( 13.0 )

Participations and residuals ( 85.2 ) 10.4

Content related payables ( 53.5 ) 57.3

Residuals — ( 1.0 )

Deferred revenue 1.4 ( 0.8 )

Net Cash Flows Provided By (Used In) Operating Activities ( 359.7 ) 401.4

Due to LG Studios Business — 42.8

Net cash provided by (used in) operating activities – continuing operations 65.4 ( 26.8 )

Net cash used in operating activities – discontinued operations — ( 6.7 )

Net cash provided by (used in) operating activities 65.4 ( 33.5 )

Investing activities:

Net proceeds from purchase price adjustments for eOne acquisition (see Note 2) 12.0 —

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

Proceeds from the sale of other investments 1.5 5.2

Investment in equity method investees and other ( 2.0 ) ( 11.3 )

Acquisition of assets (film library and related assets) ( 35.0 ) —

Increase in loans receivable — ( 3.6 )

Repayment of loans receivable 0.8 —

New Lionsgate revolving credit facility – increases 151.8 —

New Lionsgate revolving credit facility – decreases ( 70.2 ) ( 66.7 )

Capital expenditures ( 6.9 ) ( 4.9 )

Net Cash Flows Used In Investing Activities ( 46.3 ) ( 365.5 )

Deferred purchase price of receivables sold 0.5 —

Net cash provided by (used in) investing activities – continuing operations 75.2 ( 71.6 )

Financing activities:

Distribution to New Lionsgate upon Separation ( 389.9 ) —

Debt – borrowings, net of debt issuance and redemption costs 291.8 14.3

Debt – repurchases and repayments — ( 54.0 )

Film related obligations - borrowings 1,692.0 1,262.6

Film related obligations - repayments ( 1,703.9 ) ( 1,530.3 )

Sale of noncontrolling interest in Lionsgate Studios Corp.

(see Note 2) 281.7 —

Purchase of noncontrolling interest ( 7.4 ) ( 0.6 )

Distributions to noncontrolling interest ( 6.7 ) ( 1.7 )

Exercise of stock options 0.7 0.5

Tax withholding required on equity awards ( 28.7 ) ( 31.0 )

Net Cash Flows Provided By (Used In) Financing Activities 292.4 ( 17.4 )

Net Change In Cash, Cash Equivalents and Restricted Cash ( 113.6 ) 18.5

Foreign Exchange Effects on Cash, Cash Equivalents and Restricted Cash ( 3.7 ) 1.7

Cash, Cash Equivalents and Restricted Cash - Beginning Of Period 371.4 313.0

Cash, Cash Equivalents and Restricted Cash - End Of Period $ 254.1 $ 333.2

Programming related obligations – borrowings 177.3 53.8

Programming related obligations – repayments ( 180.4 ) —

Parent net investment ( 5.6 ) 76.5

Net cash (used in) provided by financing activities – continuing operations ( 106.8 ) 90.6

Net cash provided by financing activities – discontinued operations — 2.7

Net cash (used in) provided by financing activities ( 106.8 ) 93.3

Net change in cash and cash equivalents 33.8 ( 11.8 )

Cash and cash equivalents – beginning of period 17.8 37.0

Cash and cash equivalents – end of period $ 51.6 $ 25.2

__________________________________

(1) Programming content payments prior to the Separation for the quarter ended June 30, 2024 includes $ 141.0 million, respectively, from the licensing of program rights from the LG Studios Business (see Note 15).

See accompanying notes.

LIONS GATE ENTERTAINMENT CORP.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nature of Operations

Lions Gate Entertainment Corp.

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

The Company’s film, television, subscription and location-based entertainment businesses are backed by a more than 20,000 -title library and a valuable collection of iconic film and television franchises.

Description of Business, Basis of Presentation and Significant Accounting Policies

Description of Business

Starz Entertainment Corp.

(the "Company", 'Starz", "we", "us", or "our") operates primarily in the U.S.

and Canada and distributes the STARZ branded premium subscription video services on a direct-to-consumer over-the-top (“OTT”) basis through the Starz App and through wholesale OTT and multichannel video programming distributors (“MVPDs”), including cable operators, satellite television providers and telecommunications companies (in the aggregate the “Starz Platform ”).

Prior to the Separation, as defined and further discussed below, the business of Starz Entertainment Corp.

(the “Starz Business”) substantially consisted of Lions Gate Entertainment Corp’s (“Old Lionsgate” or “Parent”) Media Networks segment consisting of (i) Starz Networks, which includes the distribution of the Starz Platform, and (ii) International, which at that time primarily consisted of the OTT distribution of subscription video services outside the U.S.

and Canada ("Lionsgate+").

Old Lionsgate also had a subsidiary Lionsgate Studios Corp.

(formerly trading on the Nasdaq Stock Market under the ticker symbol LION) (“Legacy Lionsgate Studios”) that included the company’s motion picture and television studio operations (collectively referred to as the “LG Studios Business”).

On May 6, 2025, Old Lionsgate, through a series of transactions contemplated by an arrangement agreement dated as of January 29, 2025, as amended by an agreement, dated as of March 12, 2025 (as amended, the “Arrangement Agreement”), completed the separation of the LG Studios Business of Old Lionsgate from the Starz Business.

As a result of the Arrangement Agreement, the pre-transaction shareholders of Old Lionsgate own shares in two separately traded public companies:

(1) Old Lionsgate, which was renamed “Starz Entertainment Corp.” and holds, directly and through subsidiaries, the Starz Business previously held by Old Lionsgate, and (2) Lionsgate Studios Holding Corp.

(“New Lionsgate”), which was renamed “Lionsgate Studios Corp.” and holds, directly and through subsidiaries, the LG Studios Business previously held by Old Lionsgate, and is owned by Old Lionsgate shareholders and Legacy Lionsgate Studios shareholders.

To complete the Separation, pre-transaction shareholders of Old Lionsgate’s Class A common shares received one and twelve one-hundredths ( 1.12 ) New Lionsgate common shares and one and twelve one-hundredths ( 1.12 ) Starz Entertainment Corp.

common shares while Old Lionsgate’s Class B common shares received one share of New Lionsgate common shares and one share of Starz Entertainment Corp.’s common shares.

As a result of the steps described above, each of New Lionsgate and Starz have a single class of “ one share, one vote” common shares.

Starz Entertainment Corp.’s common shares were then consolidated on a 15-to-1 basis, such that every fifteen (15) Starz common shares were consolidated into one (1) Starz common share (the “Reverse Stock Split”).

See Note 8 Capital Stock , for further details.

Notwithstanding the legal form of the Separation, for accounting and financial reporting purposes, in accordance with U.S.

GAAP, due to the relative significance of the LG Studios Business as compared to the Starz Business and the continued involvement of Old Lionsgate’s senior management with New Lionsgate following the completion of the Separation, New Lionsgate (which holds the LG Studios Business) is considered the accounting spinnor or divesting entity and Starz Entertainment Corp.

(which holds the Starz Business) is considered the accounting spinnee or divested entity.

As a result, Old Lionsgate was determined to be the accounting predecessor to New Lionsgate and the Starz Business's pre-Separation financial information has been prepared on a carve-out basis and are derived from Old Lionsgate’s consolidated financial statements and accounting records.

See Basis of Presentation below.

Starz Networks Restructuring

In 2022 and 2023, in connection with its ongoing restructuring activities, Starz performed a strategic review of content performance across the Starz Platform, resulting in certain programming being removed from those platforms and written down to fair value.

During 2024 and 2025, Starz continued its evaluation of the programming on the Starz Platform and cancelled certain ordered programming, and identified certain other programming with limited strategic purpose, which was removed from the Starz Platform and abandoned by the Company.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As a result of these restructuring initiatives, we have incurred impairment charges from the inception of the plan through June 30, 2025 of $ 456.7 million.

Recovery of certain content costs previously impaired were recorded during the quarters ended June 30, 2025 and June 30, 2024.

As the Company continues to evaluate its current restructuring plan in relation to the current micro and macroeconomic environment, including further review of content and performance and its strategy, we may decide to expand the restructuring plan and remove certain content off the Starz Platform in the future.

Accordingly, the Company may incur additional content impairment charges in the future.

International Restructuring

In 2023 and 2024, Old Lionsgate began a plan to restructure and shut down its international LIONSGATE+ business.

During the quarters ended June 30, 2025 and June 30, 2024, Old Lionsgate continued executing the restructuring plan, which included exiting all international territories except Canada (included in the Starz Networks segment) and India and Southeast Asia (included in the International segment), which was completed in May 2024.

The historical results of operations of international territories that were shut down are presented as discontinued operations in these financial statements for all periods presented.

See Note 2, Discontinued Operations for further details.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements include the accounts of Lionsgate and all of its majority-owned and controlled subsidiaries.

The unaudited condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to quarterly report on Form 10-Q under the Securities Exchange Act of 1934, as amended, and Article 10 of Regulation S-X.

From and after the effective date of the Separation, the Company’s financial statements are presented on a consolidated basis.

The unaudited financial statements for all periods presented, including the historical results of the Company prior to the Separation, are now referred to as the “condensed consolidated financial statements”.

For periods prior to the Separation, the Starz Business operated as a segment of Old Lionsgate and not as a separate entity.

The Company’s financial statements prior to the Separation were prepared on a carve-out basis and were derived from Old Lionsgate’s consolidated financial statements and accounting records and reflect Starz Business’s combined historical financial position, results of operations and cash flows in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”).

Prior to the Separation, a management approach was applied to determine the carve-out basis of presentation.

In using the management approach, considerations over how the business operates were utilized to identify historical operations that should be presented within the carve-out financial statements.

For periods subsequent to the Separation, the accompanying unaudited condensed consolidated financial statements include the accounts of Starz Entertainment Corp.

and all of its majority-owned and controlled subsidiaries.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S.GAAP for interim financial information and the instructions to quarterly report on Form 10-Q under the Securities Exchange Act of 1934, as amended, and Article 10 of Regulation S-X.

Accordingly, they do not include all of the information and footnotes required by U.S.

GAAP for complete financial statements.

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.

Operating results for the three and nine months ended December 31, 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.

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 condensed unaudited consolidated financial statements.

The balance sheet as of March 31, 2025 has been derived from the audited combined financial statements at that date, but does not include all the information and footnotes required by U.S.

GAAP for complete financial statements.

The accompanying unaudited condensed consolidated financial statements should be read together with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2024.

The accompanying unaudited condensed consolidated financial statements should be read together with the Company’s audited combined financial statements and related notes for the fiscal year ended March 31, 2025 as filed on June 26, 2025 with the U.S.

Securities and Exchange Commission (“SEC”).

Certain amounts presented in prior periods have been reclassified to conform to the current period presentation.

All revenue and costs, as well as assets and liabilities directly associated with the business activity of the Starz Business are included in the accompanying financial statements.

Revenue and costs associated with the Starz Business are specifically identifiable in the accounting records maintained by Old Lionsgate and primarily represent the revenue and costs used for the determination of segment profit of the Media Networks segment of Old Lionsgate.

In addition, these costs include an allocation of corporate general and administrative expense (inclusive of share-based compensation) which has been allocated to the Company as further discussed below.

In May 2024, Old Lionsgate consummated a series of transactions, by which the LG Studios Business became a separate publicly traded company (the “Studio Separation”).

The LG Studios Business is substantially reflective of Old Lionsgate's Motion Pictures and Television Production segments together with a substantial portion of Old Lionsgate’s corporate general and administrative expenses.

In May 2024, Starz entered into an intercompany revolving credit facility with Lionsgate Studios Corp.

which was used to settle intercompany transactions prior to Separation.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Prior to the Studio Separation, Old Lionsgate utilized a centralized approach to cash management.

Cash generated by the Starz Business was managed by Old Lionsgate’s centralized treasury function and cash was routinely transferred to the Starz Business or to the LG Studios Business to fund operating activities when needed.

Cash and cash equivalents of the Company are reflected in the accompanying balance sheets.

Payables to and receivables from Old Lionsgate related to the Starz Business, were often settled through movement to the intercompany accounts between Old Lionsgate, the Starz Business and the LG Studios Business.

Other than certain specific balances related to unsettled payables or receivables, the intercompany balances between the Starz Business and LG Studios Business were accounted for as parent net investment.

See Note 15, Due To/From LG Studios Business , for further details.

Management believes the assumptions underlying our financial statements, including the assumptions regarding the allocation of general and administrative expenses from Old Lionsgate are reasonable.

However, the allocations may not include all the actual expenses that would have been incurred by Starz had we been a standalone company during the periods presented.

It is not practicable to estimate actual costs that would have been incurred had we been a standalone company and operated as an unaffiliated entity during the periods presented.

Actual costs that might have been incurred had we been a standalone company would depend on a number of factors, including the organizational structure, what corporate functions we might have performed directly or outsourced and strategic decisions we might have made in areas such as executive management, legal and other professional services, and certain corporate overhead functions.

See Note 15, Due To/From LG Studios Business , for further details of the allocations included in the accompanying financial statements.

The issuer of the Old Lionsgate's 5.5 % senior notes due April 15, 2029 (the “ 5.5 % Senior Notes”) was Starz Capital Holdings, LLC (previously known as Lions Gate Capital Holdings LLC), a Starz entity.

The 5.5 % Senior Notes were generally used as a method of financing Old Lionsgate's operations in totality and were not specifically identifiable to the LG Studios Business or the Starz Business.

It is not practical to determine what the capital structure would have been historically for the Starz Business or the LG Studios Business prior to the Studio Separation as standalone companies;

however, the 5.5 % Senior Notes were issued by a subsidiary of Starz and are representative of the overall debt levels, that were expected for the Company following the completion of the Separation.

In May 2024, the Starz Business issued $ 389.9 million aggregate principal amount of new 5.5 % exchange notes due 2029 (the “Exchange Notes”) in exchange for $ 389.9 million of the existing 5.5 % Senior Notes (the "Exchange Transaction").

As a result of the Exchange Transaction, the principal amount of the 5.5% Senior Notes outstanding was reduced to $ 325.1 million and total aggregate debt outstanding, including $ 300.0 million outstanding per Term Loan A, was $625.1 million.

See Note 4, Debt , for further details.

Upon completion of the Separation, the Exchange Notes became obligations solely of New Lionsgate.

The remaining 5.5 % Senior Notes remained with the Company upon completion of the Separation.

A portion of Old Lionsgate's corporate debt, (the revolving credit facility, term loan A and term loan B, together referred to as the “Old Lionsgate Senior Credit Facilities”) had been assumed by the LG Studios Business under an intercompany note and accordingly, the Old Lionsgate Senior Credit Facilities and related interest expense are not reflected in the Company’s financial statements.

In connection with the Separation, the Company entered into a new credit agreement (the "Starz Credit Agreement") which provides for a $ 300.0 million senior secured term loan credit facility and a $ 150.0 million senior secured revolving credit facility.

See Note 4, Debt , for further details.

Additional indebtedness directly related to the Company, including programming notes, are reflected in the Company's consolidated financial statements.

Old Lionsgate’s corporate general and administrative functions and costs, which were retained within New Lionsgate, have historically been provided to both the Starz Business and the LG Studios Business.

These functions and costs include, but are not limited to, salaries and wages for certain executives and other corporate officers related to executive oversight, investor relations, maintenance of corporate facilities, and other common administrative support functions, including corporate accounting, finance and financial reporting, audit and tax, corporate and other legal support functions, and certain information technology and human resources support functions.

Accordingly, for periods prior to the Studio Separation, the accompanying financial statements of the Company include allocations of certain general and administrative expenses (inclusive of share-based compensation) from Old Lionsgate related to these corporate and shared service functions historically provided by Old Lionsgate.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Prior to the Studio Separation, Old Lionsgate established a shared services and overhead sharing agreement (the “Shared Services Agreement”).

The Shared Services Agreement facilitates the allocation to the LG Studios Business of all corporate general and administrative expenses of Old Lionsgate, except for an amount of $ 10.0 million charged annually to the Starz Business.

The $ 10.0 million charge of Old Lionsgate’s corporate general and administrative expenses to the Starz Business pursuant to the Shared Services Agreement is designed to reflect the portion of corporate expenses reflective of the level of effort and costs incurred related to management oversight and services provided to the Starz Business following the Studio Separation.

Prior to the Studio Separation, these expenses were allocated to the Starz Business on the basis of direct usage when identifiable, with the remainder allocated on a pro rata basis of consolidated Old Lionsgate revenue, payroll expense or other measures considered to be a reasonable reflection of the historical utilization levels of these services.

Old Lionsgate also paid certain expenses on behalf of the Starz Business prior to the Separation such as certain rent expense, employee benefits, insurance and other administrative operating costs which are reflected in the accompanying financial statements.

The Starz Business also paid certain expenses on behalf of Old Lionsgate such as legal expenses, software development costs and severance.

The settlement of reimbursable expenses between the Starz Business and the LG Studios Business have been accounted for as parent net investment.

See Note 15, Due To/From LG Studios Business, for further detail of parent net investment included in the accompanying financial statements.

Change in Fiscal Year End

On May 8, 2025, the Company's Board of Directors approved a change in Starz’s fiscal year end from March 31 to December 31.

The date of Starz’s next fiscal year end will be December 31, 2025.

As a result of the change, the Company will file a Transition Report on Form 10-K for the nine-month transition period from April 1, 2025 to December 31, 2025.

Generally Accepted Accounting Principles

These financial statements have been prepared in accordance with U.S.

Use of Estimates

1 unchanged sentence

GAAP requires management to make estimates and assumptions, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.

The most significant estimates made by management in the preparation of the financial statements relate to ultimate revenue and costs used for the amortization of investment in films and television programs;

estimates of future viewership used for the amortization of licensed program rights;

estimates related to the revenue recognition of sales or usage-based royalties;

fair value of equity-based compensation;

fair value of assets and liabilities for allocation of the purchase price of companies and assets acquired;

The most significant estimates made by management in the preparation of the accompanying financial statements relate to the intangible asset associated with the customer relationships with U.S.

MVPDs ("Starz Traditional Affiliates"), which is amortized in the proportion that current period revenue bears to management’s estimate of future revenue over the remaining estimated useful life of the asset;

estimates of future viewership used for the amortization of programming content;

the allocation of costs to the Starz Business for certain corporate and shared service functions prior to Studio Separation;

income taxes including the assessment of valuation allowances for deferred tax assets;

accruals for contingent liabilities;

and impairment assessments for investment in films and television programs and licensed program rights, goodwill and intangible assets.

and impairment assessments for licensed program rights and intangible assets.

Actual results could differ from such estimates.

Recent Accounting Pronouncements

Segment Reporting:

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

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

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

LIONS GATE ENTERTAINMENT CORP.

Following the Separation, Starz manages and reports its operating results through one reportable segment, Starz Networks, which includes our consolidated operations.

The continuing operations outside the U.S.

and Canada, which primarily consist of our operations in India and Southeast Asia, are reported as International .

Effective April 1, 2025, we transferred our operations in India and Southeast Asia to New Lionsgate.

Given that Starz and New Lionsgate were under common control at the time of the transfer, no gain or loss was recorded related to the transfer.

Significant Accounting Policies

There have been no material changes to our significant accounting policies as described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2025.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Recent Accounting Pronouncements

Income Taxes:

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

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

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

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

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

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

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

Income Statement:

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.

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.

In November 2024, the FASB issued guidance requiring public business entities to disclose additional information about specific expense categories in the notes to financial statements for interim and annual reporting periods.

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 December 31, 2027 and interim reporting periods beginning in fiscal 2029, with early adoption permitted.

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.

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

Acquired Library

On June 5, 2024, the Company invested approximately $ 35.0 million for a 51 % members' interest in a newly formed limited liability company, CP LG Library Holdings, LLC (“CP LG”), with the Company designated as the managing member of CP LG.

CP LG used the funds received from the Company, along with funds invested by the 49 % member, to acquire a library of 46 films for approximately $ 68.6 million.

Also on June 5, 2024, the Company entered into a distribution agreement with CP LG to distribute the titles in the acquired library.

The purchase included the film library (of which $ 48.3 million of the purchase price was allocated to investment in film and television programs for the film library), accounts receivable and certain liabilities associated with the film library, most notably participations and residuals liabilities.

The Company determined that CP LG is a variable interest entity (“VIE”) for which it is the primary beneficiary and is consolidated under the applicable accounting guidance as the Company has the power to direct the significant activities and the right to receive benefits and obligation to absorb losses of CP LG.

The Company concluded that the acquired library and related assets and liabilities was not a business and therefore, accounted for the acquisition as an initial consolidation of a VIE that is not a business under the applicable accounting guidance.

There was no gain or loss recognized upon initial consolidation of the VIE as the sum of the fair value of the consideration paid and noncontrolling interest equaled the fair value of the net assets on the acquisition date.

See Note 9 for the noncontrolling interest recorded related to CP LG.

As of December 31, 2024, the unaudited condensed consolidated balance sheet included assets and liabilities of CP LG totaling $ 72.6 million (which is primarily comprised of investment in film and television programs) and $ 12.3 million, respectively.

The assets and liabilities of CP LG primarily consist of accounts receivable, investment in film and television programs, and participations and residuals.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Business Combination Agreement

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").

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

In connection with the closing of the Business Combination, New SEAC changed its name to “Lionsgate Studios Corp.” (referred to as “Lionsgate Studios”) and continues the existing business operations of StudioCo, which consists of the Studio Business of Lionsgate.

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

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

In connection with 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.

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 December 31, 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).

The Business Combination has been accounted for as a reverse recapitalization in accordance with U.S.

Under this method of accounting, SEAC was treated as the acquired company and the Studio Business was treated as the acquirer for financial reporting purposes.

Accordingly, for accounting purposes, the financial statements of Lionsgate Studios will represent a continuation of the financial statements of the Studio Business, with the Business Combination treated as the equivalent of the Studio Business issuing stock for the historical net assets of SEAC, substantially consisting of cash held in the trust account, accompanied by a recapitalization of the Studio Business equity.

The historical net assets of SEAC were stated at fair value, which approximates historical cost, with no goodwill or other intangible assets recorded.

Operations prior to the Business Combination are those of the Studio Business.

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

In connection with the Business Combination, as described above, approximately 12.2 % of the Lionsgate Studios common shares were issued to the SEAC public shareholders and founders and other common equity financing investors in exchange for net proceeds of $ 278.2 million.

The following table reconciles the gross proceeds to the net proceeds reflected in the consolidated statement of cash flows and the consolidated statement of equity (deficit):

(Amounts in millions)

Total gross cash proceeds

SEAC warrant exchange payment (1)

Transaction costs ( 39.3 )

Net proceeds from the sale of noncontrolling interest in Lionsgate Studios Corp.

per the condensed consolidated statement of equity (deficit) 278.2

Transaction costs accrued and not paid, net of transaction costs previously paid 3.5

Net cash proceeds from the sale of noncontrolling interest in Lionsgate Studios per the condensed consolidated statement of cash flows $ 281.7

______________

(1) Prior to the Closing, each of the then issued and outstanding whole warrants of SEAC, sold as part of SEAC’s initial public offering (the “SEAC Public Warrants”) was automatically exchanged for $ 0.50 in cash pursuant to the terms of

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

an amendment to the agreement governing the SEAC Public Warrants.

As of the Closing, no SEAC Public Warrants were outstanding.

The Company recorded a reduction of noncontrolling interest in shareholders' equity (deficit) of $ 100.2 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.

The reduction in noncontrolling interest was due to the negative carrying value of Lionsgate Studios as of May 13, 2024, partially offset by an amount allocated to certain options described below.

The difference between the net cash proceeds and the amounts recorded as noncontrolling interest and accumulated other comprehensive income was reflected as a reduction of accumulated deficit in the consolidated statement of shareholders' equity (deficit).

In connection with the Business Combination, 2,200,000 options (the "Sponsor Options") to receive Lionsgate Studios common shares, were issued to certain noncontrolling interest holders, with an exercise price of $ 0.0001 per share.

The Sponsor Options will become exercisable (i) on or after the date on which the trading price of Lionsgate Studios common shares (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) equals or exceeds $ 16.05 per share or (ii) if a Change of Control (as defined in the sponsor option agreement) occurs, subject to certain conditions.

The Company has recorded the Sponsor Options as part of the noncontrolling interest recorded.

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.

The aggregate cash purchase price was approximately $ 373.1 million.

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

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

Allocation of Purchase Consideration.

The Company has made an allocation of the purchase price of eOne to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair value as follows:

(Amounts in millions)

Cash and cash equivalents $ 54.1

Accounts receivable 293.2

Investment in films and television programs 370.2

Property and equipment 14.0

Intangible assets 4.0

Other assets (1)

Accounts payable and accrued liabilities ( 69.3 )

Content related payables ( 38.8 )

Participations and residuals (1)

Film related obligations (1)

Other liabilities and deferred revenue (1)

Fair value of net assets acquired 360.2

Goodwill 12.9

Purchase price consideration at December 31, 2024

______________

(1) Includes current and non-current amounts.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The goodwill amount reflected in the table above arises from the opportunity for strengthening the Company's global distribution infrastructure and enhanced positioning for motion picture and television projects and selling opportunities.

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

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

Investment in films and television programs includes the 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 fair value of films and television programs in production, pre-production and development.

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

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

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

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

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

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

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

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

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

Pro Forma Statement of Operations Information.

The following unaudited pro forma condensed consolidated statement of operations information presented below illustrates the results of operations of the Company as if the acquisition of eOne as described above occurred on April 1, 2023.

The unaudited pro forma condensed consolidated financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the acquisition had occurred on April 1, 2023, nor is it indicative of future results.

The statement of operations information below includes the statement of operations of eOne for the nine months ended September 30, 2023 combined with the Company's statement of operations for the nine months ended December 31, 2023, respectively.

Three Months Ended Nine Months Ended

December 31, December 31,

Discontinued Operations

During the fiscal years ended March 31, 2024 and March 31, 2023, the Company announced its plans to restructure its LIONSGATE+ business.

As a result, the Company made the strategic decision to shut down the LIONSGATE+ service in Europe (outside the United Kingdom), Latin America and the United Kingdom (the "discontinued operations").

The Company entered into agreements to transfer subscribers of the services in these territories to a third party, and the shutdowns were completed in May 2024.

Management of Canadian operations was transferred to the Starz Networks segment and the Company's continuing international operations in India and Southeast Asia were reported as International in the accompanying financial statements until the transfer of the India and Southeast Asia operations to New Lionsgate, effective April 1, 2025.

Net income from Starz's discontinued operations consists of the following:

Three Months Ended

(Amounts in millions)

Revenues $ 1,116.0 $ 3,318.4

Net loss attributable to Lions Gate Entertainment Corp.

shareholders $ ( 87.4 ) $ ( 1,344.0 )

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

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

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

In addition, the unaudited pro forma condensed consolidated financial information for the nine months ended December 31, 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 nine months ended September 30, 2023.

LIONS GATE ENTERTAINMENT CORP.

Revenue $ 2.5

Programming amortization 1.6

Other operating 0.4

Advertising and marketing ( 0.1 )

General and administrative 0.8

Restructuring and other ( 4.5 )

Total expenses ( 1.8 )

Operating income 4.3

Interest expense ( 0.2 )

Interest and other income 0.1

Income from discontinued operations before income taxes 4.2

Income tax provision ( 1.1 )

Net income from discontinued operations, net of income taxes $ 3.1

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Investment in Films and Television Programs and Licensed Program Rights

Total investment in films and television programs and licensed program rights by predominant monetization strategy is as follows:

Programming Content

The predominant monetization strategy for the Company's programming content (which includes licensed program rights and owned and produced films and television programs) is as a group.

Total programming content is as follows:

2025 March 31,

(Amounts in millions)

Investment in Films and Television Programs:

Individual Monetization

Released, net of accumulated amortization $ 899.5 $ 878.3

Completed and not released 201.3 225.4

In progress 794.7 469.2

In development 107.6 65.7

2,003.1 1,638.6

Film Group Monetization

Licensed program rights, net of accumulated amortization $ 1,073.2 $ 1,080.0

Owned and produced films and television programs:

Released, net of accumulated amortization 6.3 9.2

Completed and not released 274.9 170.1

In progress 5.9 —

In development 7.3 7.1

1,082.7 850.5

Licensed program rights, net of accumulated amortization 290.5 273.1

Investment in films and television programs and licensed program rights, net $ 3,376.3 $ 2,762.2

At December 31, 2024, acquired film and television libraries have remaining unamortized costs of $ 245.0 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 13.5 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:

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

Programming content, net $ 1,092.7 $ 1,096.3

Amortization of programming content is as follows and is included in programming amortization in the accompanying statements of operations:

Three Months Ended

(Amounts in millions)

Amortization expense:

Individual monetization $ 286.0 $ 214.2 $ 797.6 $ 618.6

Film group monetization 56.5 66.8 212.5 276.7

Licensed program rights $ 161.5 $ 147.7

$ 431.7 $ 371.2 $ 1,205.9 $ 1,138.7

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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 nine months ended December 31, 2024 and 2023:

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(Amounts in millions)

Impairments by segment:

Included in direct operating expense (1) :

Motion Picture $ 0.2 $ 0.5 $ 18.8 $ 27.5

Television Production 0.4 1.2 0.4 6.6

Impairments not included in segment operating results (2) :

Included in restructuring and other 0.9 77.8 ( 1.9 ) 317.4

$ 1.5 $ 79.5 $ 17.3 $ 351.5

________________

(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.

(2) Represents charges (net recoveries) primarily related to the Media Networks restructuring plan initiatives.

In addition, amounts in the three and nine months ended December 31, 2024 also include content impairments of $ 7.3 million related to the Motion Picture and Television Production segments associated with exiting local production in certain international territories.

See Note 14 for further information.

The Company's investments consisted of the following:

2024 March 31,

(Amounts in millions)

Investments in equity method investees $ 69.7 $ 68.4

Other investments (1)

$ 79.4 $ 74.8

________________

(1) Other investments represents equity investments without readily determinable fair values.

Equity Method Investments:

The Company has investments in various equity method investees with ownership percentages ranging from approximately 6 % to 49 %.

These investments include:

Spyglass is a global premium content company, focused on developing, producing, financing and acquiring motion pictures and television programming across all platforms for worldwide audiences.

STARZPLAY Arabia.

STARZPLAY Arabia (Playco Holdings Limited) offers a STARZ-branded online subscription video-on-demand service in the Middle East and North Africa.

Roadside Attractions .

Roadside Attractions is an independent theatrical distribution company.

Pantelion Films.

Pantelion Films is a joint venture with Videocine, an affiliate of Televisa, which produces, acquires and distributes a slate of English and Spanish language feature films that target Hispanic moviegoers in the U.S.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

with offices in London and Los Angeles.

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

Goodwill and Intangible Assets

Changes in the carrying value of goodwill by reporting segment were as follows:

Picture Television

Production Media Networks Total

(Amounts in millions)

Balance as of March 31, 2024 (1)

$ 398.6 $ 412.6 $ — $ 811.2

Measurement period adjustments (2)

( 1.7 ) ( 1.0 ) — ( 2.7 )

Balance as of December 31, 2024 (1)

Owned and produced films and television programs 1.0 1.3

$ 162.5 $ 149.0

_______________

(1) As of December 31, 2024 and March 31, 2024, accumulated goodwill impairment losses totaled $ 1.969 billion related to the Media Networks reporting unit.

(2) Measurement period adjustments for the acquisition of eOne reflect a decrease to goodwill of $ 2.7 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.

The decrease in the estimated fair value of the net assets acquired consisted of a net decrease to accounts receivable of $ 5.6 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 $ 1.0 million, and accrued and other liabilities of $ 1.9 million, partially offset by a net increase to other assets of $ 4.2 million.

Fiscal 2024 Goodwill and Intangible Asset Impairments:

Goodwill Impairment.

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.

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

Based on its quantitative impairment assessment, the Company determined that the fair value of its Media Networks reporting unit was less than its carrying value (after the impairment write-down of its indefinite-lived intangible assets discussed below).

The analysis resulted in a goodwill impairment charge of $ 493.9 million in the second quarter 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 in the nine months ended December 31, 2023.

Intangible Asset Impairment.

During the second quarter 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.

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.

Based on the quantitative impairment assessment of the trade names, the Company recorded an impairment charge of $ 170.0 million in the second quarter 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 in the nine months ended December 31, 2023.

After performing its quantitative

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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:

(1) Amortization expense for the three months ended June 30, 2024 excludes COVID-related insurance recoveries of $( 1.1 ) million.

Debt is summarized as follows:

2025 March 31,

1 unchanged sentence

Corporate debt:

Revolving Credit Facility $ 390.0 $ 575.0

Term Loan A 300.0 $ —

Term Loan B — 819.2

5.5 % Senior Notes and Exchange Notes

eOne IP Credit Facility 331.5 —

LG IP Credit Facility 850.0 —

Total corporate debt 2,600.9 2,508.5

5.5 % Senior Notes (1)

Unamortized debt issuance costs ( 13.4 ) ( 15.1 )

Total debt, net 2,560.8 2,480.0

Less current portion ( 119.0 ) ( 860.3 )

Non-current portion of debt $ 2,441.8 $ 1,619.7

Senior Credit Facilities (Revolving Credit Facility, Term Loan A and Term Loan B)

Revolving Credit Facility Availability of Funds & Commitment Fee.

The Revolving Credit Facility provides for borrowings and letters of credit up to an aggregate of $ 1.25 billion, and at December 31, 2024 there was $ 860.0 million available.

However, borrowing levels are subject to certain financial covenants as discussed below.

There were no letters of credit outstanding at December 31, 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.

Maturity Date:

• Revolving Credit Facility & Term Loan A:

April 6, 2026.

• Term Loan B:

In November 2024, the Company paid in full the term loan B facility due March 24, 2025 (the "Term Loan B").

See the "Other Debt Transactions" section below.

• 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 .

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 6.18 % as of December 31, 2024, before the impact of interest rate swaps, see Note 17 for interest rate swaps).

• Term Loan B:

The Term Loan B bore 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).

Required Principal Payments:

• Term Loan A:

Quarterly principal payments, at quarterly rates of 1.75 % and increasing to 2.50 % beginning September 30, 2024 through March 31, 2026, with the balance payable at maturity.

LIONS GATE ENTERTAINMENT CORP.

Total debt, net (non-current) $ 611.7 $ 699.9

_______________

(1) Amounts as of June 30, 2025 and March 31, 2025 include the $ 325.1 million of the 5.5 % Senior Notes not exchanged as discussed below, and amounts as of March 31, 2025 include both the $ 325.1 million of the 5.5 % Senior Notes not exchanged and $ 389.9 million of the Exchange Notes.

In connection with the Separation, a wholly owned subsidiary of New Lionsgate assumed the Exchange Notes and the initial Starz issuer was released and discharged from all obligations thereunder.

See Changes Upon Completion of the Separation below.

Starz Credit Agreement

On May 6, 2025, in connection with the consummation of the Separation, Starz entered into a new credit agreement with Starz Capital Holdings LLC, as borrower (the “Borrower”), the guarantors referred to therein, the lenders referred to therein and JPMorgan Chase Bank, N.A., as administrative agent.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Term Loan A also requires mandatory prepayments in connection with certain asset sales, subject to certain significant exceptions, as defined in the Credit Agreement.

Optional Prepayment:

• Revolving Credit Facility & Term Loan A:

The Company may voluntarily prepay the Revolving Credit Facility & Term Loan A at any time without premium or penalty

The Senior Credit Facilities are guaranteed by the guarantors named in the Credit Agreement and are secured by a security interest in substantially all of the assets of Lionsgate and the Guarantors (as defined in the Credit Agreement), subject to certain exceptions.

The Senior Credit Facilities contain representations and warranties, events of default and affirmative and negative covenants that are customary for similar financings and which include, among other things and subject to certain significant exceptions, restrictions on the ability to declare or pay dividends, create liens, incur additional indebtedness, make investments, dispose of assets and merge or consolidate with any other person.

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.

As of December 31, 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.

5.5 % Senior Notes and Exchange Notes

The Starz Credit Agreement provides for (i) a $ 300.0 million senior secured term loan credit facility ("Term Loan A" and (ii) a $ 150.0 million senior secured revolving credit facility.

The Starz Credit Agreement and commitments thereunder will mature on the date that is the earlier of five years after the closing date of the facility and 135 days prior to the 5.5 % Senior Notes maturity date.

Borrowings bear interest at a rate per annum equal to, at the Borrower’s option, either Term SOFR or a base rate, in each case plus an applicable margin initially of 3 % for Term SOFR loans and 2 % for base rate loans.

On and after the first full fiscal quarter after the closing date of the Starz Credit Agreement, the applicable margin will vary based on the Borrower’s Net Total Leverage Ratio (as defined in the Credit Agreement).

Repayments under the Term Loan A are as follows and assumes a maturity date of December 1, 2028 (135 days prior to the 5.5 % Senior Notes maturity date):

Year Ended December 31, Total payments

2026 2027 2028

(Amounts in millions)

Principal payments of Term Loan A due

March 31, $ — $ 3.8 $ 5.2

June 30, — 3.8 5.2

September 30, 3.8 5.2 7.5

December 31, 3.8 5.2 256.5

Total principal payments due $ 7.6 $ 18.0 $ 274.4 $ 300.0

Starz will pay a commitment fee equal to 0.375 % per annum in respect of unutilized commitments thereunder.

Borrowings may be used for working capital needs and other general corporate purposes, including the financing of permitted acquisitions and investments.

Starz’s obligations under the Starz Credit Agreement are guaranteed by Starz and substantially all of its wholly owned restricted subsidiaries and secured by substantially all assets of the Borrower and the guarantors, in each case subject to certain customary exceptions.

The Starz Credit Agreement contains certain customary affirmative and negative covenants that limit the ability of the Borrower and its restricted subsidiaries, among other things and subject to certain significant exceptions, to incur debt or liens, make investments, enter into certain mergers, consolidations, asset sales and acquisitions, pay dividends and make other restricted payments and enter into transactions with affiliates.

The Starz Credit Agreement also contains events of default customary for financings of this type, including relating to a change of control.

In addition, the Starz Credit Agreement contains financial covenants requiring the Borrower to maintain (A) a Net Total Leverage Ratio, as of the last day of each fiscal quarter ending on and after (i) June 30, 2025, no greater than 4.50 to 1.00;

(ii) March 31, 2026, no greater than 4.25 to 1.00;

(iii) March 31, 2027, no greater than 4.00 to 1.00;

and (iv) March 31, 2028, no greater than 3.50 to 1.00;

(B) a Net First Lien Leverage Ratio (as defined in the Starz Credit Agreement) no greater than 3.00 to 1.00;

and (C) an Interest Coverage Ratio (as defined in the Starz Credit Agreement) no less than 2.50 to 1.00.

As of June 30, 2025, the Company was in compliance with all applicable covenants.

5.5 % Senior 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).

See Changes Upon Separation of the Starz Business from the Studio Business below for further information.

Maturity Date:

April 15, 2029.

See Changes Upon Separation of the Starz Business from the Studio Business below for further information.

Optional Redemption:

(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.

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.

Such redemption prices are as follows (as a percentage of the principal amount redeemed):

2 unchanged sentences

and (iii) on or after April 15, 2026 - 100 %.

See Changes Upon Separation of the Starz Business from the Studio Business below for further information.

The 5.5 % Senior Notes and Exchange Notes are unsubordinated, unsecured obligations of the Company.

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.

As of December 31, 2024, the Company was in compliance with all applicable covenants.

Change in Control.

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.

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.

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").

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.

On or after the Separation Closing Date, as defined in the indenture to the

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Exchange Notes, the Company may redeem the 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):

(i) on or after the Separation Closing Date until, but excluding, the one-year anniversary thereof - 103.0 %;

(ii) on or after the one-year anniversary of the Separation Closing Date until, but excluding the two-year anniversary thereof - 102.0 %;

(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 %.

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.

eOne IP Credit Facility.

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.

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.

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.

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 6.58 % as of December 31, 2024, before the impact of interest rate swaps, see Note 17 for interest rate swaps).

The eOne IP Credit Facility matures on July 3, 2029.

LG IP Credit Facility.

In September 2024, certain subsidiaries of the Company entered into a $ 455.0 million 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.

In November 2024 and December 2024, the Company closed amendments which increased the maximum principal amount of the LG IP Credit Facility to $ 850.0 million as of December 31, 2024, subject to the amount of collateral available, which is based on the valuation of unsold rights from the libraries.

The LG IP Credit Facility is subject to quarterly required principal payments of $ 21.25 million, beginning February 14, 2025, with the balance payable at maturity.

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 6.58 % as of December 31, 2024, before the impact of interest rate swaps, see Note 17 for interest rate swaps).

The LG IP Credit Facility matures on September 30, 2029.

Capacity to Pay Dividends

At December 31, 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 $ 259.5 million and accumulated deficit of $ 3,422.7 million were deemed free of restrictions from paying dividends at December 31, 2024.

Other Debt Transactions:

Term Loan A and Term Loan B Prepayment.

In May 2024, the Company used the proceeds from the equity issuance associated with the Business Combination (Note 2) 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.

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.

In November 2024, the Company used the proceeds from the increase in the LG IP Credit Facility to pay in full the remaining $ 250.0 million principal amount of the Term Loan B, together with accrued and unpaid interest thereon.

Senior Notes Repurchases.

In the nine months ended December 31, 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 December 31, 2023).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Gain (Loss) on Extinguishment of Debt:

During the three and nine months ended December 31, 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

December 31, Nine Months Ended

2024 2023 2024 2023

(Amounts in millions)

Gain (Loss) on Extinguishment of Debt:

Senior Notes exchange and repurchases (1)

$ — $ — $ ( 4.9 ) $ 21.2

Term Loan A and B prepayments ( 0.3 ) — ( 1.8 ) —

$ ( 0.3 ) $ — $ ( 6.7 ) $ 21.2

________________

(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.

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 nine months ended December 31, 2024.

Film Related Obligations

2024 March 31,

(Amounts in millions)

Film related obligations:

Production Loans $ 1,346.0 $ 1,292.2

Production Tax Credit Facility 257.8 260.0

Programming Notes 75.8 —

Backlog Facility and Other 179.0 287.3

Film Library Facility 87.5 109.9

Total film related obligations 1,946.1 1,949.4

Unamortized issuance costs ( 5.9 ) ( 11.4 )

Total film related obligations, net 1,940.2 1,938.0

Less current portion ( 1,497.0 ) ( 1,393.1 )

Total non-current film related obligations $ 443.2 $ 544.9

Production Loans .

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

The majority of the Company's production loans have contractual repayment dates either at or near the expected completion or release dates, with the exception of certain loans containing repayment dates on a longer term basis, and incur primarily SOFR-based interest at a weighted average rate of 5.82 % (before the impact of interest rate swaps, see Note 17 for interest rate swaps).

Production loans amounting to $ 1,212.8 million are secured by collateral which consists of the underlying rights related to the intellectual property (i.e.

film or television show), and $ 133.2 million are unsecured.

Production Tax Credit Facility.

In January 2021, as amended in March 2024, the Company entered into a non-recourse

LIONS GATE ENTERTAINMENT CORP.

The 5.5 % Senior Notes are unsecured obligations of the Company.

The Company and its subsidiaries are guarantors under the 5.5 % Senior Notes.

The 5.5 % Senior Notes were amended in connection with the Exchange Transaction to remove certain covenants.

As of June 30, 2025, the Company was in compliance with all applicable covenants.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

senior secured revolving credit facility (the "Production Tax Credit Facility") based on and secured by collateral consisting solely of certain of the Company’s tax credit receivables.

As of December 31, 2024, the maximum principal amount of the Production Tax Credit Facility was $ 260.0 million, subject to the amount of collateral available, which is based on specified percentages of amounts payable to the Company by governmental authorities pursuant to the tax incentive laws of certain eligible jurisdictions that arise from the production or exploitation of motion pictures and television programming in such jurisdiction.

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

As of December 31, 2024, tax credit receivables amounting to $ 353.1 million represented collateral related to the Production Tax Credit Facility.

Advances under the Production Tax Credit Facility bear interest at a rate equal to SOFR plus 0.10 % to 0.25 % depending on the SOFR term (i.e., one, three or six months), plus 1.50 % per annum or the base rate plus 0.50 % per annum (effective interest rate of 5.93 % at December 31, 2024).

As of December 31, 2024, there was $ 2.2 million available under the Production Tax Credit Facility.

The Production Tax Credit Facility was to mature on January 27, 2025, however in January and February 2025, the Company entered into amendments to the Production Tax Credit Facility which extended the maturity to January 27, 2028 and increased the maximum principal amount to $ 280.0 million, see Note 19.

Programming Notes .

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

The Company's programming notes have contractual repayment dates in January 2025, and incur SOFR-based interest at a weighted average rate of 7.33 %.

Film Library Facility.

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.

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.

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:

Cumulative Period From

September 29, 2022 Through:

Cumulative Minimum Guaranteed Payment Amounts Payment Due Date

(in millions)

September 30, 2025 $ 91.1 November 14, 2025

September 30, 2026 $ 121.4 November 14, 2026

July 30, 2027 $ 161.9 July 30, 2027

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 6.75 % at December 31, 2024).

The Film Library Facility matures on July 30, 2027.

Backlog Facility and Other:

Backlog Facility.

In March 2022, as amended in August 2022, certain subsidiaries of the Company entered into a committed secured revolving credit facility (the "Backlog Facility") based on and secured by collateral consisting solely of certain of the Company's fixed fee or minimum guarantee contracts where cash will be received in the future.

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

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.

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 5.58 % at December 31, 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.

As of December 31, 2024, there was $ 151.9 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.

As of December 31, 2024, there was $ 27.1 million outstanding (March 31,

LIONS GATE ENTERTAINMENT CORP.

Changes Upon Completion of the Separation.

On May 6, 2025, in connection with the completion of the Separation, Starz was released and discharged from all obligations in connection with the Exchange Notes by way of supplemental indenture (the "Supplemental Indenture").

Pursuant to the terms of the Supplemental Indenture, LGTV, a subsidiary of New Lionsgate, agreed to assume and perform as primary obligor all obligations of the initial issuer under the Exchange Notes.

Programming Related Obligations

Programming related obligations include programming notes, which represent individual unsecured loans for the licensing of film and television programs.

As if June 30, 2025, outstanding programming notes had a balance of $ 88.2 million and had contractual repayment dates ranging from July 2025 through August 2025, and incurred SOFR-based interest at a weighted average rate of 8.82 %.

There were $ 90.7 million of programming notes outstanding as of March 31, 2025.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2024 - $ 112.3 million outstanding) under the "other" loans, incurring SOFR-based interest at a weighted average rate of 5.76 %, with a contractual repayment date in July 2025.

As of December 31, 2024, accounts receivable amounting to $ 20.8 million and contracted receivables not yet reflected as accounts receivable on the balance sheet at December 31, 2024 amounting to $ 11.0 million represented collateral related to the "other" loans.

Fair Value Measurements

9 unchanged sentences

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

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

December 31, 2024 March 31, 2024

Level 1 Level 2 Total Level 1 Level 2 Total

(Amounts in millions)

Forward exchange contracts (see Note 17)

$ — $ 1.9 $ 1.9 $ — $ — $ —

Interest rate swaps (see Note 17)

— 0.7 0.7 — 35.6 35.6

Forward exchange contracts (see Note 17)

— — — — ( 2.8 ) ( 2.8 )

Interest rate swaps (see Note 17)

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

December 31, 2024 March 31, 2024

(Amounts in millions)

Carrying Value Fair Value (1)

The following table sets forth the carrying values and fair values of the Company’s outstanding debt and programming notes:

June 30, 2025 March 31, 2025

(Amounts in millions) (Amounts in millions)

Value Fair Value (1)

Carrying Value Fair Value (1)

(Level 2) (Level 2)

Revolving Credit Facility $ 386.8 $ 390.0 $ 569.9 $ 575.0

Term Loan A $ 292.9 $ 292.9 $ — $ —

Term Loan B — — 816.9 818.1

5.5 % Senior Notes and Exchange Notes

5.5 % Senior Notes

318.8 258.2 699.9 623.7

eOne IP Credit Facility 325.8 331.5 — —

LG IP Credit Facility 836.0 850.0 — —

Production Loans 1,342.3 1,346.0 1,286.2 1,292.2

Production Tax Credit Facility 257.7 257.8 258.7 260.0

Programming Notes 88.2 88.2 90.7 90.7

Backlog Facility and Other 178.6 179.0 285.4 287.3

Film Library Facility 85.7 87.5 107.6 109.9

Forward exchange contracts (2)

Interest exchange swaps (2)

$ — $ 0.6 $ — $ —

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

The Company’s financial instruments also include cash and cash equivalents, accounts receivable, accounts payable, content related payables, other accrued liabilities, and other liabilities.

The carrying values of these financial instruments approximated the fair values at December 31, 2024 and March 31, 2024.

Noncontrolling Interests

Redeemable Noncontrolling Interests

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

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

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

Nine Months Ended

(Amounts in millions)

Beginning balance $ 123.3 $ 343.6

Net loss attributable to redeemable noncontrolling interests ( 1.6 ) ( 4.4 )

Adjustments to redemption value 0.9 71.5

Cash contributions (distributions) 0.5 ( 1.0 )

Purchase of noncontrolling interest ( 23.4 ) ( 0.6 )

Ending balance $ 99.7 $ 409.1

3 Arts Entertainment.

During the fourth quarter of the year ended March 31, 2024 (in January 2024), the Company closed on the acquisition of an additional 25 % of 3 Arts Entertainment representing approximately half of the noncontrolling interest for $ 194.1 million.

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

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

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

Since the redemption features described above were based on a formula using a fixed multiple, the compensatory portion of the noncontrolling interest is now considered a liability award, and as a result, 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 December 31, 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.

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

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

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

shareholders (see Note 11).

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

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

Pilgrim Media Group.

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.

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.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company has other immaterial redeemable noncontrolling interests.

Other Noncontrolling Interests

The Company has other noncontrolling interests that are not redeemable, which are classified in shareholder's equity on the Company's consolidated balance sheets.

These noncontrolling interests include:

Lionsgate Studios.

In connection with the Business Combination discussed in Note 2, on May 13, 2024, the Company recorded a noncontrolling interest representing approximately 12.2 % of Lionsgate Studios amounting to a reduction of noncontrolling interest in shareholders' equity (deficit) of $ 100.2 million, due to the negative carrying value of Lionsgate Studios at May 13, 2024, partially offset by an amount allocated to certain options.

See Note 2 for further information.

In connection with the Company's investment in CP LG and acquisition of the acquired library and related assets and liabilities discussed in Note 2, on June 5, 2024, the Company recorded a noncontrolling interest representing approximately 49 % of CP LG amounting to $ 33.6 million ($ 29.8 million at December 31, 2024).

See Note 2 for further information.

In addition, the Company has other immaterial noncontrolling interests that are not redeemable.

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

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

Revenue by Segment, Market or Product Line

The table below presents revenues by segment, market or product line for the three and nine months ended December 31, 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).

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Three Months Ended Nine Months Ended

December 31, December 31,

________________

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

(2) Represents the fair value measurements of the Company’s derivative instruments, specifically forward exchange contracts and interest rate swaps, as of June 30, 2025.

These instruments are classified within the fair value hierarchy in accordance with ASC 820.

See Note 13, Derivative Instruments and Hedging Activities , for further detail.

The Company’s financial instruments also include cash and cash equivalents, accounts receivable, accounts payable, programming related payables, other accrued liabilities and other liabilities.

The carrying values of these financial instruments approximated the fair values of these financial instruments as of June 30, 2025 and March 31, 2025.

There were no material, non-recurring fair value adjustments in the three months ended June 30, 2025 and June 30, 2024.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Revenue by segment is as follows:

Three Months Ended

(Amounts in millions)

Revenue by Type:

Motion Picture

Theatrical $ 35.0 $ 100.1 $ 91.1 $ 194.2

Home Entertainment

Digital Media 145.7 155.5 400.3 495.3

Packaged Media 16.0 21.0 37.8 63.0

Total Home Entertainment 161.7 176.5 438.1 558.3

Television 38.3 65.3 235.0 214.5

International 68.3 94.7 284.3 255.3

Other 5.9 6.6 14.8 23.3

Total Motion Picture revenues 309.2 443.2 1,063.3 1,245.6

Television Production

Television 259.9 182.3 733.1 554.2

International 59.3 32.1 144.8 137.7

Home Entertainment

Digital Media 55.5 17.4 108.7 113.4

Packaged Media 1.7 0.3 3.0 1.0

Total Home Entertainment 57.2 17.7 111.7 114.4

Other 28.2 16.3 72.9 54.4

Total Television Production revenues 404.6 248.4 1,062.5 860.7

Media Networks - Programming Revenues

341.9 346.9 1,030.1 1,032.6

Starz Networks $ 319.7 $ 345.3

International (1)

Total revenue $ 319.7 $ 347.6

_____________________

Intersegment eliminations ( 87.8 ) ( 133.7 ) ( 413.5 ) ( 422.1 )

Total revenues $ 970.5 $ 975.1 $ 2,753.8 $ 2,899.1

(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.

Revenues from Canada of $ 4.2 million and $ 12.7 million, respectively, for the three and nine months ended December 31, 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).

Revenues expected to be recognized in the future related to performance obligations that are unsatisfied at December 31, 2024 are as follows:

Rest of Year Ending March 31, 2025 Year Ending March 31,

(1) Includes the operations in India and Southeast Asia for the three months ended June 30, 2024.

Remaining Revenue Performance Obligations

Remaining revenue performance obligations represent deferred revenue included 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), if any.

Revenue expected to be recognized in the future related to performance obligations that are unsatisfied as of June 30, 2025 are as follows:

Rest of Year Ending December 31, Year Ending December 31,

2025 2026 2027 Thereafter Total

(Amounts in millions)

Remaining Performance Obligations $ 652.5 $ 783.7 $ 184.9 $ 139.0 $ 1,760.1

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Remaining Revenue Performance Obligations $ 36.4 3.4 — — $ 39.8

The above table does not include estimates of variable consideration for transactions involving sales or usage-based royalties in exchange for licenses of intellectual property.

The revenues included in the above table include all fixed fee contracts regardless of duration.

Revenues of $ 46.3 million and $ 204.2 million, respectively, including variable and fixed fee arrangements, were recognized during the three and nine months ended December 31, 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.

Accounts Receivable, Contract Assets and Deferred Revenue

The timing of revenue recognition, billings and cash collections affects the recognition of accounts receivable, contract assets and deferred revenue.

See the unaudited condensed consolidated balance sheets or Note 18 for accounts receivable, contract assets and deferred revenue balances at December 31, 2024 and March 31, 2024.

Accounts Receivable and Deferred Revenue

The timing of revenue recognition, billings and cash collections affects the recognition of accounts receivable and deferred revenue.

See the accompanying balance sheets or Note 14 for accounts receivable and deferred revenue balances at June 30, 2025 and 2024.

Accounts Receivable.

Accounts receivable are presented net of a provision for doubtful accounts.

Accounts receivable are presented net of a provision for credit losses.

The Company estimates provisions for accounts receivable based on historical experience for the respective risk categories and current and future expected economic conditions.

To assess collectability, the Company analyzes market trends, economic conditions, the aging of receivables and customer specific risks, and records a provision for estimated credit losses expected over the lifetime of the receivables in direct operating expense.

The Company performs ongoing credit evaluations and monitors its credit exposure through active review of customers' financial condition, aging of receivable balances, historical collection trends, and expectations about relevant future events that may significantly affect collectability.

The Company monitors its credit exposure through active review of customers' financial condition, aging of receivable balances, historical collection trends, and expectations about relevant future events that may significantly affect collectability.

The Company generally does not require collateral for its trade accounts receivable.

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

March 31, 2024 (Benefit) provision for doubtful accounts Other (1)

Uncollectible accounts written-off December 31, 2024

(Amounts in millions)

Provision for doubtful accounts $ 7.2 $ ( 0.6 ) $ 2.5 $ ( 1.0 ) $ 8.1

______________________

(1) Represents a measurement period adjustment to the provision for doubtful accounts acquired in the acquisition of eOne (see Note 2).

Contract Assets.

Contract assets relate to the Company’s conditional right to consideration for completed performance under the contract (e.g., unbilled receivables).

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.

See Note 18 for contract assets at December 31, 2024 and March 31, 2024.

Concentration of credit risk with the Company’s customers is limited due to the Company’s customer base and the diversity of its sales throughout the U.S.

The Company performs ongoing credit evaluations and maintains a provision for potential credit losses.

Deferred Revenue.

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

Deferred revenue as of December 31, 2024 increased as compared to March 31, 2024 due to the receipt of customers’ payments for certain television programs and motion pictures prior to the Company satisfying the corresponding performance obligation (i.e., completion and delivery of the television programs and motion pictures, and the start of the customers' exploitation rights).

The change in deferred revenue was also impacted by the industry strikes which has affected the timing of content deliveries.

Revenues of $ 13.0 million and $ 148.8 million, respectively, were recognized during the three and nine months ended December 31, 2024 related to the balance of deferred revenue at March 31, 2024.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Net Loss Per Share

Basic net loss per share is calculated based on the weighted average common shares outstanding for the period.

Basic and diluted net loss per share for the three and nine months ended December 31, 2024 and 2023 is presented below:

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(Amounts in millions, except per share amounts)

Basic and Diluted Net Loss Per Common Share:

Net loss attributable to Lions Gate Entertainment Corp.

shareholders $ ( 21.9 ) $ ( 106.6 ) $ ( 244.7 ) $ ( 1,063.5 )

Accretion of redeemable noncontrolling interest ( 0.3 ) — ( 1.0 ) —

Net loss attributable to Lions Gate Entertainment Corp.

shareholders after accretion of redeemable noncontrolling interest $ ( 22.2 ) $ ( 106.6 ) $ ( 245.7 ) $ ( 1,063.5 )

Weighted average common shares outstanding 240.2 235.1 238.4 233.1

Basic and diluted net loss per common share $ ( 0.09 ) $ ( 0.45 ) $ ( 1.03 ) $ ( 4.56 )

As a result of the net loss in the three and nine months ended December 31, 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.

The weighted average anti-dilutive shares excluded from the calculation due to the net loss for the three and nine months ended December 31, 2024 totaled 1.1 million and 2.5 million, respectively, (three and nine months ended December 31, 2023 - 1.6 million and 2.7 million, respectively).

Additionally, for the three and nine months ended December 31, 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.

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(Amounts in millions)

Anti-dilutive shares issuable

Share purchase options 18.2 16.8 16.6 18.0

Restricted share units 5.2 0.6 3.9 2.5

Other issuable shares 4.7 4.4 4.1 4.1

Total weighted average anti-dilutive shares issuable excluded from diluted net income (loss) per common share 28.1 21.8 24.6 24.6

LIONS GATE ENTERTAINMENT CORP.

Deferred revenue relates primarily to subscribers to the Starz App, who are billed in advance of the start of their monthly or multi-month membership.

Revenue is recognized ratably over each applicable membership period when the Company satisfies the corresponding performance obligation.

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

Revenue of $ 26.0 million was recognized during the quarter ended June 30, 2025, related to the balance of deferred revenue at March 31, 2025.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Capital Stock

(a) Common Shares

The Company had 500 million authorized Class A voting shares and 500 million authorized Class B non-voting shares at December 31, 2024 and March 31, 2024.

Common Shares

The Company has an unlimited number of authorized common shares following the closing of the Separation and at June 30, 2025.

The table below outlines common shares reserved for future issuance:

2024 March 31,

June 30, 2025

(Amounts in millions)

Stock options and share appreciation rights (SARs) outstanding

Restricted share units and restricted stock — unvested 15.0 13.4

Restricted share units and other share-based compensation — unvested

Common shares available for future issuance

Shares reserved for future issuance

(b) Share-based Compensation

The Company recognized the following share-based compensation expense during the three and nine months ended December 31, 2024 and 2023:

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

The Company recognized the following share-based compensation expense:

Three Months Ended

(Amounts in millions)

Compensation Expense:

Stock options $ 0.2 $ 0.4 $ 0.7 $ 1.9

Restricted share units and other share-based compensation $ 5.2 $ 4.5

Share appreciation rights 0.2 0.1 0.5 1.3

18.4 24.9 54.1 66.9

Impact of accelerated vesting on equity awards (1)

— 6.8 4.9 8.4

Corporate allocation of share-based compensation — 0.7

Impact of modification for change to cash payment (1)

Total share-based compensation expense $ 7.4 $ 5.2

_____________________

(1) Represents the impact of the acceleration of vesting schedules for equity awards pursuant to certain severance arrangements.

Share-based compensation expense, by expense category, consisted of the following:

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(1) This balance reflects a one-time modification of equity awards in connection with the Separation.

In June 2025, the Compensation Committee of the Company's Board of Directors approved a cash payment in lieu of share issuance for the restricted share units vesting during the quarter ending September 30, 2025.

Refer to Note 17, Subsequent Events , for further detail regarding the modification.

Share-based compensation expense from continuing operations, by expense category, consisted of the following:

Three Months Ended

(Amounts in millions)

Share-Based Compensation Expense:

Direct operating $ 0.7 $ 0.9 $ 2.1 $ 2.3

Distribution and marketing 0.2 0.2 0.7 0.7

Other operating expense $ 0.9 $ 0.8

General and administration 4.3 4.4

Restructuring and other 2.2 —

$ 18.4 $ 31.7 $ 59.0 $ 75.3

LIONS GATE ENTERTAINMENT CORP.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table sets forth the stock option, SARs, restricted stock and restricted share unit activity during the nine months ended December 31, 2024:

Stock Options and SARs Restricted Stock and Restricted Share Units

Class A Voting Shares Class B Non-Voting Shares Class A Voting Shares Class B Non-Voting Shares

Number of Shares Weighted-Average Exercise Price Number of Shares Weighted-Average Exercise Price Number of Shares Weighted-Average Grant-Date Fair Value Number of Shares Weighted-Average Grant-Date Fair Value

(Number of shares in millions)

Stock options, share appreciation rights, and restricted share units

The following tables present Starz’s capital stock (including stock option and share appreciation rights, "SARs", and restricted share units, "RSUs") before and after the Separation and related conversion during the quarter ended June 30, 2025.

Each outstanding stock award and strike price was exchanged at Separation date using a ratio as determined under the employee matters agreement.

Stock awards prior to Separation date of May 6, 2025 :

Stock Options and SARs Restricted Share Units

Class A Common Shares Weighted-Average Exercise Price Class B Common Shares Weighted-Average Exercise Price Number of Shares Weighted-Average Grant Date Fair Value

(Amounts in millions, except for shares and weighted-average exercise price)

Outstanding at March 31, 2025 593 $ 7.70 1,151,938 $ 13.66 3,125,047 $ 8.15

Granted 7,813 8.01

$ 7.12 0.1 $ 8.24 10.3 $ 7.98

Options exercised or restricted stock or RSUs vested — — ( 0.1 ) $ 5.86 ( 0.1 ) $ 9.20 ( 8.0 ) $ 8.76

Forfeited or expired ( 27,970 ) 8.07

Outstanding at December 31, 2024 2.3 $ 23.09 16.0 $ 13.66 0.1 $ 8.39 14.9 $ 8.19

Outstanding at May 6, 2025 593 $ 7.70 1,151,938 $ 13.66 3,104,890 $ 8.15

Stock awards after exchange post-Separation:

Starz Stock Options and SARs Restricted Share Units

Number of Shares Weighted-Average Exercise Price Intrinsic Value Remaining Term Number of Shares Weighted-Average Grant Date Fair Value Remaining Term

(Amounts in millions, except for shares and weighted-average exercise price and years)

Shares issued on May 6, 2025 696,187 $ 17.73 1,939,316 $ 8.15

Shares issued to Dual Director Grants on May 6, 2025 32,081 7.98

Granted 143,265 11.20 —

Forfeited - Time RSUs ( 42,494 ) 8.03

Cancelled - Performance RSUs ( 18,887 ) 8.00

Forfeited - Performance RSUs ( 72,623 ) 8.10

Outstanding at June 30, 2025 839,452 $ 16.62 $ 1.6 4.8 1,837,393 $ 8.15 1.0

Exercisable at June 30, 2025 696,187 $ 17.73 $ 0.9 3.8

_____________________

(1) Represents less than 0.1 million shares.

During the three and nine months ended December 31, 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.

The income tax provision for the three and nine months ended December 31, 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.

The Company's income tax provision for the three and nine months ended December 31, 2024 and 2023 was impacted by changes in the valuation allowances against certain U.S.

The fair value of each option award is estimated on the date of grant using a closed-form option valuation model (Black-Scholes).

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The income tax provision for the three months ended June 30, 2025 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.

For the three months ended June 30, 2024, income taxes have been calculated as if the Starz Business files income tax returns on a standalone basis.

The Starz Business’s U.S.

operations and certain of its non-U.S.

operations historically have been included in the income tax returns of Lionsgate or its subsidiaries that may not be part of the Starz Business.

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.

The Company’s income tax provision for the three months ended June 30, 2025 and 2024 were impacted by changes in the valuation allowances against certain U.S.

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

The Company's income tax provision for the three and nine months ended December 31, 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.

The Company's income tax provision for the nine months ended December 31, 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 for the three months ended June 30, 2024 benefited from the release of uncertain tax benefits due to the close of audits or expiration of statutory limitations.

The Company’s income tax provision for the three months ended June 30, 2024 was also impacted by additional deferred tax expense as a result of the Studio 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.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA makes permanent key element of the 2017 Tax Cuts and Jobs Act, including 100% bonus depreciation, current expensing of domestic research and development costs, and the use of EBITDA as a measure of computing the business interest expense deduction limitation.

Accounting Standards Codification 740 requires the effects of changes in tax rates and deferred tax balances due to tax legislation to be reflected in the period in which the legislation is enacted.

Consequently, during the three months ended September 30, 2025, the Company will evaluate the impact of the OBBBA on deferred tax balances, and the results of such evaluation will be reflected in the Company’s Form 10-Q for the quarter ended September 30, 2025.

Restructuring and Other

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

During the three and nine months ended December 31, 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.

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 nine months ended December 31, 2024 and 2023:

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

Restructuring and other includes restructuring and severance costs, costs related to the Separation, and certain transaction and other costs, as applicable.

During the quarters ended June 30, 2025 and 2024, the Company also incurred certain other unusual charges, which are included in other operating expenses and advertising and marketing expenses in the accompanying unaudited condensed statements of operations and are described below.

The following table sets forth restructuring and other and these other unusual charges or benefits and the statement of operations line items they are included in:

Three Months Ended

(Amounts in millions)

Restructuring and other:

Content and other impairments (1)

$ 0.9 $ 77.8 $ 17.1 $ 317.4

Severance (2)

21.3 30.7 26.2 41.3

Transaction and other costs $ 4.5 $ —

21.1 8.4 28.6 12.3

Share-based compensation 2.2 —

Content impairment recoveries ( 0.3 ) ( 0.6 )

Total Restructuring and Other $ 6.4 $ ( 0.6 )

Other unusual charges not included in restructuring and other or the Company's operating segments:

COVID-19 related charges (benefit) included in direct operating expense (4)

— ( 0.1 ) ( 3.1 ) ( 0.5 )

Unallocated rent cost included in direct operating expense (5)

Total restructuring and other and other unusual charges not included in restructuring and other $ 47.4 $ 116.8 $ 83.4 $ 370.5

_______________________

(1) Media Networks Restructuring:

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.

The Company has incurred impairment charges from the inception of the plan through December 31, 2024 amounting to $ 735.1 million.

During the three and nine months ended December 31, 2024, the Company recorded net recoveries of content impairment charges related to the Media Networks segment of $ 6.4 million and $ 8.8 million, respectively (three and nine months ended December 31, 2023 - the Company recorded content impairment charges related to the Media Networks segment of $ 77.8 million and $ 317.4 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.

Subsequent to December 31, 2024, the Company removed programming on Starz's domestic platform which had a carrying value of approximately $ 77.4 million, which charge, measured as the excess of the carrying value over the fair value of the titles removed, will be recorded during the fourth quarter ending March 31, 2025.

The Company may incur additional content impairment and other restructuring charges as it continues to execute its restructuring plan.

Content and Other Impairments:

Amounts in the three and nine months ended December 31, 2024 also include content impairments of $ 7.3 million related to the Motion Picture and Television Production segments associated with exiting local production in certain international territories.

Amounts in the nine months ended December 31, 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.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

During the quarter ended December 31, 2024, in connection with the Company's current restructuring plan, approximately 8 % of its eligible U.S.

employees elected to take advantage of voluntary severance and early retirement packages.

A total of approximately $ 26.1 million in severance expense is expected to be incurred under the voluntary severance program, of which $ 14.6 million of severance expense was recognized in restructuring and other in the three and nine months ended December 31, 2024, and the remaining amount is expected to be recognized in the fourth quarter ended March 31, 2025.

In the three and nine months ended December 31, 2023, amounts were due to restructuring activities including integration of the acquisition of eOne, Media Networks international restructuring and our Motion Picture and Television Production segments.

(3) Transaction and other costs in the three and nine months ended December 31, 2024 and 2023 reflect transaction, integration and legal costs associated with certain strategic transactions, and restructuring activities and also include costs associated with legal and other matters.

In the nine months ended December 31, 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.

(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 nine months ended December 31, 2024, respectively (three and nine months ended December 31, 2023 - insurance recoveries of $ 0.1 million and $ 0.7 million, respectively).

In the nine months ended December 31, 2024 and the three and nine months ended December 31, 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.

Changes in the restructuring and other severance liability were as follows for the nine months ended December 31, 2024 and 2023:

Nine Months Ended

Net (Loss) Earnings Per Share

Basic and diluted net (loss) income per share is calculated based on the weighted average common shares outstanding for the period.

Basic and diluted net (loss) income per share for the three months ended June 30, 2025 and 2024 is presented below:

Three Months Ended

(Amounts in millions, except per share amounts)

Basic and Diluted (Loss) Earnings Per Common Share:

Net income (loss) from continuing operations $ ( 42.5 ) $ 1.1

Net income from discontinued operations — 3.1

Net income (loss) attributable to common stockholders $ ( 42.5 ) $ 4.2

Weighted average common shares outstanding 16.7 16.7

Basic and diluted net (loss) income per common share - continuing operations $ ( 2.54 ) $ 0.07

Basic and diluted net income per common share - discontinued operations — 0.19

Basic and diluted net (loss) income per common share $ ( 2.54 ) $ 0.26

As a result of the net loss for the three months ended June 30, 2025, the dilutive effect of the stock options and RSUs, presented below were considered anti-dilutive and, therefore, excluded from diluted net loss per common share.

For the three months ended June 30, 2025, the outstanding common shares issuable presented below were excluded from net loss per common share because their inclusion would have had an anti-dilutive effect:

Three Months Ended

(Amounts in millions)

Severance liability

Beginning balance $ 23.6 $ 8.7

Severance payments ( 20.1 ) ( 12.1 )

Ending balance (1)

$ 24.8 $ 29.5

_______________________

(1) As of December 31, 2024, the remaining severance liability of approximately $ 24.8 million is expected to be paid in the next 12 months.

(2) Excludes $ 4.9 million and $ 8.4 million in the nine months ended December 31, 2024 and 2023, respectively, of accelerated vesting on equity awards.

Segment Information

The Company’s reportable segments have been determined based on the distinct nature of their operations, the Company's internal management structure, and the financial information that is evaluated regularly by the Company's chief operating decision maker.

The Company has three reportable business segments:

(1) Motion Picture, (2) Television Production and (3) Media Networks.

The Company refers to its Motion Picture and Television Production segments collectively as the Studio Business.

Studio Business:

Motion Picture.

Motion Picture consists of the development and production of feature films, acquisition of North American and worldwide distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and worldwide licensing of distribution rights to feature films produced and acquired.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Television Production.

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.

Television Production includes the licensing of Starz original series productions to Starz Networks and to Starz platforms outside of the U.S.

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.

Media Networks Business:

Media Networks.

Media Networks consists of the following product lines (i) Starz Networks, which includes the domestic distribution of STARZ branded premium subscription video services through over-the-top ("OTT") platforms, on a direct-to-consumer basis through the Starz App, and through U.S.

and Canada multichannel video programming distributors ("MVPDs") including cable operators, satellite television providers and telecommunication companies (collectively, "Distributors");

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.

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

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

LIONS GATE ENTERTAINMENT CORP.

Anti-dilutive shares issuable

Stock options and share appreciation rights

Restricted share units

Total weighted average anti-dilutive shares issuable excluded from diluted net income (loss) per common share

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Segment Information

Our Chief Executive Officer ("CEO") is the CODM.

As described in Note 1, as of June 30, 2025, the Company has one reportable segment:

Starz Networks, which includes our operations in the U.S.

The continuing operations outside the U.S.

and Canada , which through March 31, 2025 included operations in India and Southeast Asia, is reported as International and is disclosed to provide a reconciliation of segment amounts to amounts appearing in the accompanying financial statements.

As described in Note 1, Description of Business, Basis of Presentation and Significant Accounting Policies, and effective April 1, 2025, we transferred our operations in India and Southeast Asia to New Lionsgate.

Segment information is presented in the table below:

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

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(Amounts in millions)

Segment revenues

Studio Business:

Motion Picture $ 309.2 $ 443.2 $ 1,063.3 $ 1,245.6

Television Production 404.6 248.4 1,062.5 860.7

Total Studio Business 713.8 691.6 2,125.8 2,106.3

Media Networks 344.5 417.2 1,041.5 1,214.9

Intersegment eliminations ( 87.8 ) ( 133.7 ) ( 413.5 ) ( 422.1 )

$ 970.5 $ 975.1 $ 2,753.8 $ 2,899.1

Intersegment revenues

Studio Business:

Motion Picture $ 9.9 $ 36.6 $ 146.2 $ 113.7

Television Production 77.9 97.1 267.3 308.4

Total Studio Business 87.8 133.7 413.5 422.1

Media Networks — — — —

$ 87.8 $ 133.7 $ 413.5 $ 422.1

Gross contribution

Studio Business:

Motion Picture $ 106.0 $ 127.5 $ 246.1 $ 320.3

Television Production 75.4 21.6 145.3 134.6

Total Studio Business 181.4 149.1 391.4 454.9

Media Networks 45.1 108.2 173.5 255.4

Intersegment eliminations 7.3 ( 12.0 ) ( 42.5 ) ( 43.8 )

$ 233.8 $ 245.3 $ 522.4 $ 666.5

Segment general and administration

Studio Business:

Motion Picture $ 22.4 $ 27.1 $ 73.6 $ 83.2

Television Production 14.5 13.5 49.3 40.5

Total Studio Business 36.9 40.6 122.9 123.7

Media Networks 20.2 22.7 64.0 71.3

$ 57.1 $ 63.3 $ 186.9 $ 195.0

Segment profit

Studio Business:

Motion Picture $ 83.6 $ 100.4 $ 172.5 $ 237.1

Television Production 60.9 8.1 96.0 94.1

Total Studio Business 144.5 108.5 268.5 331.2

Media Networks 24.9 85.5 109.5 184.1

Intersegment eliminations 7.3 ( 12.0 ) ( 42.5 ) ( 43.8 )

$ 176.7 $ 182.0 $ 335.5 $ 471.5

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

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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

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

The reconciliation of total segment profit to the Company’s loss before income taxes is as follows:

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

Three Months Ended

Starz Networks Starz Networks International Total

(Amounts in millions)

Company’s total segment profit $ 176.7 $ 182.0 $ 335.5 $ 471.5

Corporate general and administrative expenses (1)

OTT revenue $ 221.1 $ 232.1 $ 2.3 $ 234.4

Linear and other revenue 98.6 113.2 — 113.2

Total revenue 319.7 345.3 2.3 347.6

Operating expenses:

Programming amortization 162.5 146.1 1.8 147.9

Payroll expense (1)

29.7 28.2 0.5 28.7

Adjusted depreciation and amortization (2)

Advertising and marketing 63.4 82.4 0.3 82.7

35.9 36.6 0.6 37.2

Depreciation and amortization 48.7 41.6 — 41.6

Restructuring and other 6.4 ( 0.6 ) — ( 0.6 )

Goodwill and intangible asset impairment — — — ( 663.9 )

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

— 0.1 3.1 0.5

Unallocated rent cost included in direct operating expense (4)

( 4.1 ) — ( 14.6 ) —

Adjusted share-based compensation expense (5)

( 18.4 ) ( 24.9 ) ( 54.1 ) ( 66.9 )

Purchase accounting and related adjustments (6)

( 38.3 ) ( 39.2 ) ( 117.1 ) ( 120.5 )

Operating income (loss) 35.8 ( 43.5 ) ( 34.1 ) ( 877.9 )

Total expenses 346.6 334.3 3.2 337.5

Operating (loss) income ( 26.9 ) 11.0 ( 0.9 ) 10.1

Interest expense ( 13.2 ) ( 10.8 ) — ( 10.8 )

Interest and other income — 0.8 — 0.8

Other gains (losses), net 8.4 ( 2.5 ) ( 10.6 ) ( 19.6 )

Gain (loss) on extinguishment of debt ( 0.3 ) — ( 6.7 ) 21.2

Gain on investments, net — 4.4 — 2.7

Equity interests income 7.6 4.2 8.5 5.7

Loss before income taxes $ ( 14.5 ) $ ( 102.7 ) $ ( 243.5 ) $ ( 1,054.3 )

___________________

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

(2) Adjusted depreciation and amortization represents depreciation and amortization as presented on our 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:

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(Amounts in millions)

Depreciation and amortization $ 43.8 $ 49.9 $ 135.4 $ 138.9

Amount included in purchase accounting and related adjustments ( 35.4 ) ( 36.4 ) ( 110.3 ) ( 105.5 )

Adjusted depreciation and amortization $ 8.4 $ 13.5 $ 25.1 $ 33.4

LIONS GATE ENTERTAINMENT CORP.

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).

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

(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.

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

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(Amounts in millions)

Total share-based compensation expense $ 18.4 $ 31.7 $ 59.0 $ 75.3

Amount included in restructuring and other (i)

— ( 6.8 ) ( 4.9 ) ( 8.4 )

Adjusted share-based compensation $ 18.4 $ 24.9 $ 54.1 $ 66.9

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

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

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

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(Amounts in millions)

Purchase accounting and related adjustments:

General and administrative expense (i)

$ 2.9 $ 2.8 $ 6.8 $ 15.0

Depreciation and amortization 35.4 36.4 110.3 105.5

Other expense ( 2.5 ) ( 1.7 ) — ( 1.7 )

Loss on extinguishment of debt — ( 4.9 ) — ( 4.9 )

Loss from continuing operations before income taxes ( 42.6 ) ( 5.6 ) ( 0.9 ) ( 6.5 )

Income tax benefit 0.1 7.7 ( 0.1 ) 7.6

Net (loss) income from continuing operations $ ( 42.5 ) $ 2.1 $ ( 1.0 ) $ 1.1

______________________________________

(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.

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.

See Note 10 for revenues by media or product line as broken down by segment for the three and nine months ended December 31, 2024 and 2023.

The following table reconciles segment general and administration expense to the Company's total consolidated general and administration expense:

LIONS GATE ENTERTAINMENT CORP.

(1) Payroll expense by segment, which includes salaries and employee benefits, is reviewed by the CODM on a quarterly basis.

(2) Includes total other operating and general and administrative expenses per the accompanying statements of operations, less payroll expense per note (1).

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

(Amounts in millions)

General and administration

Segment general and administrative expenses $ 57.1 $ 63.3 $ 186.9 $ 195.0

Corporate general and administrative expenses 28.4 31.1 89.9 94.2

Share-based compensation expense included in general and administrative expense 17.5 23.8 51.3 63.9

Purchase accounting and related adjustments 2.9 2.8 6.8 15.0

$ 105.9 $ 121.0 $ 334.9 $ 368.1

The reconciliation of total segment assets to the Company’s total consolidated assets is as follows:

1 unchanged sentence

(Amounts in millions)

Motion Picture $ 1,916.8 $ 1,851.4

Television Production 2,555.6 2,347.8

Media Networks 2,091.9 2,036.7

Starz Networks $ 1,971.1 $ 2,017.8

International — 6.5

Other unallocated assets (1)

1 unchanged sentence

_____________________

(1) Other unallocated assets primarily consist of cash, other assets and investments.

Contingencies

From time to time, the Company is involved in certain claims and legal proceedings arising in the normal course of business.

The Company establishes an accrued liability for claims and legal proceedings when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated.

Once established, accruals are adjusted from time to time, as appropriate, in light of additional information.

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.

As of December 31, 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.

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(1) Other unallocated assets primarily consist of cash and other assets.

Long-lived assets by geographic location are as follows:

June 30, 2025 March 31,

(Amounts in millions)

Long-lived assets (1)

United States $ 1,189.5 $ 1,180.5

_____________

(1) Long-lived assets represents programming content, net, property and equipment, net, and right-of-use assets.

Derivative Instruments and Hedging Activities

Forward Foreign Exchange Contracts

The Company enters into forward foreign exchange contracts to hedge its foreign currency exposures on future production expenses and tax credit receivables denominated in various foreign currencies (i.e., cash flow hedges).

The Company also enters into forward foreign exchange contracts that economically hedge certain of its foreign currency risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The Company may enter forward foreign exchange contracts to hedge its foreign currency exposures on future production costs and tax credit receivables denominated in various foreign currencies (i.e., cash flow hedges).

The Company may also enter forward foreign exchange contracts that economically hedge certain of its foreign currency risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

The Company monitors its positions with, and the credit quality of, the financial institutions that are party to its financial transactions.

Changes in the fair value of the foreign exchange contracts that are designated as hedges are reflected in accumulated other comprehensive income (loss), and changes in the fair value of foreign exchange contracts that are not designated as hedges and do not qualify for hedge accounting are recorded in direct operating expense.

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.

As of December 31, 2024, the Company had the following outstanding forward foreign exchange contracts (all outstanding contracts have maturities of less than 16 months from December 31, 2024):

December 31, 2024

Gains and losses realized upon settlement of the foreign exchange contracts that are designated as hedges are amortized to other programming expense included in other operating expense.

As of June 30, 2025, the Company had the following outstanding forward foreign exchange contracts (all outstanding contracts have maturities of less than 24 months from June 30, 2025):

June 30, 2025

Foreign Currency Foreign Currency Amount US Dollar Amount Weighted Average Exchange Rate Per $1 USD

(Amounts in millions) (Amounts in millions)

British Pound Sterling 0.2 GBP in exchange for $ 0.3 0.77 GBP

Czech Koruna 180.0 CZK in exchange for $ 7.7 23.29 CZK

Euro 13.9 EUR in exchange for $ 14.6 0.94 EUR

Canadian Dollar 8.5 CAD in exchange for $ 6.2 1.37 CAD

Mexican Peso 20.7 MXN in exchange for $ 1.0 20.43 MXN

Hungarian Forint 5,612.8 HUF in exchange for $ 15.0 373.74 HUF

New Zealand Dollar 2.7 NZD in exchange for $ 1.7 1.67 NZD

(Amounts in millions)

British Pound £ 30.20 in exchange for US$ 41.00 US$ 0.73

British Pound £ 6.60 in exchange for US$ 8.90 US$ 0.74

Interest Rate Swaps

1 unchanged sentence

The Company’s objective is to mitigate the impact of interest rate changes on earnings and cash flows.

The Company primarily uses pay-fixed interest rate swaps to facilitate its interest rate risk management activities, which the Company generally designates as cash flow hedges of interest payments on floating-rate borrowings.

The Company primarily uses pay-fixed interest rate swaps to facilitate its interest rate risk management activities.

Pay-fixed swaps effectively convert floating-rate borrowings to fixed-rate borrowings.

The unrealized gains or losses from these designated cash flow hedges are deferred in accumulated other comprehensive income (loss) and recognized in interest expense as the interest payments occur.

The unrealized gains or losses from designated cash flow hedges are deferred in accumulated other comprehensive income (loss) and recognized in interest expense as the interest payments occur.

Changes in the fair value of interest rate swaps that are not designated as hedges are recorded in interest expense (see further explanation below).

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

LIONS GATE ENTERTAINMENT CORP.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Designated Cash Flow Hedges.

As of March 31, 2024, the Company had the following pay-fixed interest rate swaps, which were designated as cash flow hedges outstanding (all related to the Company's SOFR-based debt, see Note 6 and Note 7), and were terminated in December 2024, as further described below.

Designated Cash Flow Hedges at March 31, 2024:

Effective Date

Notional Amount Fixed Rate Paid Maturity Date

(in millions)

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

May 23, 2018 $ 700.0 2.915 % March 24, 2025

June 25, 2018 $ 200.0 2.723 % March 23, 2025

July 31, 2018 $ 300.0 2.885 % March 23, 2025

December 24, 2018 $ 50.0 2.744 % March 23, 2025

December 24, 2018 $ 100.0 2.808 % March 23, 2025

December 24, 2018 $ 50.0 2.728 % March 23, 2025

Total $ 1,700.0

In December 2024, the Company terminated all of its pay-fixed interest rate swaps which were outstanding at March 31, 2024, as shown in the table above.

As a result of the termination, the Company received approximately $ 9.4 million, which was recorded as a reduction of the interest rate swap asset values, and represents the amount of unrealized gains recorded in accumulated other comprehensive income related to the terminated interest rate swaps which will be amortized as a reduction of interest expense through the remaining term of the terminated swaps unless it becomes probable that the cash flows originally hedged will not occur, in which case the proportionate amount of the gain will be recorded to interest expense at that time.

The receipt of approximately $ 9.4 million was classified in the consolidated statement of cash flows as cash provided by operating activities.

During the nine months ended December 31, 2024, the Company entered into 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).

Designated Cash Flow Hedges at December 31, 2024:

Effective Date

Notional Amount Fixed Rate Paid Maturity Date

As of June 30, 2025, the Company had the following pay-fixed interest rate swaps, which the Company has elected not to apply hedge accounting (all related to the Company’s SOFR-based debt, see Note 4, Debt ):

Effective Date Notional Amount Fixed Rate Paid Maturity Date

(in millions)

August 15, 2024 $ 65.0 4.045 % September 15, 2026

August 15, 2024 $ 77.5 3.803 % August 15, 2026

August 15, 2024 $ 77.5 3.810 % September 15, 2026

December 15, 2024 $ 125.0 3.970 % December 15, 2026

June 6, 2025 $ 35.0 3.59 % June 6, 2028

June 6, 2025 15.0 3.58 % June 6, 2028

June 6, 2025 35.0 3.62 % June 6, 2028

June 6, 2025 65.0 3.59 % June 6, 2028

Total $ 150.0

1 unchanged sentence

Unaudited condensed consolidated statements of operations and comprehensive loss:

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 nine months ended December 31, 2024 and 2023:

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

The following table presents the pre-tax effect of the Company’s derivatives on the accompanying statements of operations and comprehensive income (loss) for the three months ended June 30, 2025:

Three Months Ended

(Amounts in millions)

Derivatives designated as cash flow hedges:

Forward exchange contracts

Gain (loss) recognized in accumulated other comprehensive income (loss) $ 2.4 $ ( 4.3 ) $ 3.5 $ ( 7.3 )

Loss reclassified from accumulated other comprehensive income (loss) into direct operating expense $ ( 0.1 ) $ ( 2.6 ) $ ( 1.2 ) $ ( 2.5 )

Interest rate swaps

Gain (loss) recognized in accumulated other comprehensive income (loss) $ 1.6 $ ( 11.7 ) $ ( 1.1 ) $ 24.7

Gain reclassified from accumulated other comprehensive income (loss) into interest expense $ 2.0 $ 11.4 $ 24.3 $ 31.5

Derivatives not designated as cash flow hedges:

Gain (loss) recognized in other operating expense $ 0.2

Interest rate swaps

Gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense $ 1.4 $ ( 1.8 ) $ ( 1.7 ) $ ( 5.5 )

Total direct operating expense on consolidated statements of operations $ 567.3 $ 510.8 $ 1,639.7 $ 1,549.1

Total interest expense on consolidated statements of operations $ 69.1 $ 67.1 $ 212.2 $ 192.9

Gain (loss) recognized in interest expense ( 0.6 )

Unaudited condensed consolidated balance sheets:

The Company classifies its forward foreign exchange contracts and interest rate swap agreements within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments (see Note 8).

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.

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

LIONS GATE ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of December 31, 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:

December 31, 2024

Other Current Assets Other Non-Current Assets Other Accrued Liabilities (current)

(Amounts in millions)

Derivatives designated as cash flow hedges:

Forward exchange contracts $ 1.9 $ — $ —

Interest rate swaps — 0.7 —

Fair value of derivatives $ 1.9 $ 0.7 $ —

March 31, 2024

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 the accompanying balance sheets.

As of June 30, 2025, there were no swaps outstanding that were subject to a master netting arrangement.

As of June 30, 2025, the Company had the following amounts recorded in the accompanying balance sheets related to the Company’s use of derivatives:

June 30, 2025

Other Current Assets Other Accrued Liabilities (current)

(Amounts in millions)

Derivatives designated as cash flow hedges:

Forward exchange contracts $ 0.2 $ —

1 unchanged sentence

Fair value of derivatives $ 0.2 $ 0.6

As of December 31, 2024, based on the current release schedule, the Company estimates approximately $ 1.3 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 December 31, 2025.

As of December 31, 2024, the Company estimates approximately $ 26.7 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 December 31, 2025.

Additional Financial Information

The following tables present supplemental information related to the unaudited condensed consolidated financial statements.

Cash, Cash Equivalents and Restricted Cash

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 December 31, 2024 and March 31, 2024.

At December 31, 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)

2024 March 31,

(Amounts in millions)

Cash and cash equivalents $ 200.5 $ 314.0

Restricted cash included in other current assets 42.8 43.7

Restricted cash included in other non-current assets 10.8 13.7

Total cash, cash equivalents and restricted cash $ 254.1 $ 371.4

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

2024 March 31,

(Amounts in millions)

Other current assets

Prepaid expenses and other $ 54.4 $ 58.2

Restricted cash 42.8 43.7

Contract assets 72.5 59.9

Interest rate swap assets — 35.6

Tax credits receivable 140.7 199.1

$ 310.4 $ 396.5

Other non-current assets

Prepaid expenses and other $ 18.6 $ 21.6

Restricted cash 10.8 13.7

Accounts receivable 48.0 111.7

Contract assets 10.3 3.2

Tax credits receivable 440.6 361.7

Operating lease right-of-use assets 338.6 388.8

Interest rate swap assets 0.7 —

$ 867.6 $ 900.7

The following tables present supplemental information related to the accompanying financial statements.

Accounts Receivable Monetization

Under the Company's accounts receivable monetization programs, the Company has entered into (1) individual agreements to monetize certain of its trade accounts receivable directly with third-party purchasers and (2) a revolving agreement to monetize designated pools of trade accounts receivable with various financial institutions, as further described below.

Under these programs, the Company transfers receivables to purchasers in exchange for cash proceeds, and the Company continues to service the receivables for the purchasers.

The Company accounts for the transfers of these receivables as a sale, removes (derecognizes) the carrying amount of the receivables from its balance sheets and classifies the proceeds received as cash flows from operating activities in the statements of cash flows.

The Company records a loss on the sale of these receivables reflecting the net proceeds received (net of any obligations incurred), less the carrying amount of the receivables transferred.

The loss is reflected in the "other gains (losses), net" line item on the unaudited condensed consolidated statements of operations.

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 nine months ended December 31, 2024 and 2023.

LIONS GATE ENTERTAINMENT CORP.

Under the Company's accounts receivable monetization programs, the Company has entered into an agreement to monetize certain of its trade accounts receivable directly with a third-party purchaser (historically, the Company entered into individual agreements), as further described below.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Individual Monetization Agreements.

The Company enters into individual agreements to monetize trade accounts receivable.

Under the accounts receivable monetization programs, the Company transfers receivables to purchasers in exchange for cash proceeds, and the Company continues to service the receivables for the purchasers.

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

The following table sets forth a summary of the receivables transferred under individual agreements or purchases during the three and nine months ended December 31, 2024 and 2023:

Three Months Ended Nine Months Ended

December 31, December 31,

2024 2023 2024 2023

The Company accounts for the transfers of these receivables as a sale, removes (derecognizes) the carrying amount of the receivables from its balance sheets and classifies the proceeds received as cash flows provided by operating activities in the statements its cash flows.

The Company records a loss on the sale of these receivables reflecting the net proceeds received (net of any costs incurred), less the carrying amount of the receivables transferred.

The loss is reflected in other expense on the accompanying statements of operations.

The following table sets forth a summary of the receivables transferred:

Three Months Ended

(Amounts in millions)

Carrying value of receivables transferred and derecognized $ 211.4 $ 206.3

Net cash proceeds received 254.5 300.7 948.1 1,045.6

Net cash proceeds received from third party purchasers 209.4 204.6

Loss recorded related to transfers of receivables 1.8 1.7

At December 31, 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 $ 534.4 million (March 31, 2024 - $ 613.4 million).

Pooled Monetization Agreement.

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

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

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

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

The following table sets forth a summary of the receivables transferred under the pooled monetization agreement during the nine months ended December 31, 2023:

Nine Months Ended

At June 30, 2025, the outstanding amount of receivables derecognized from the Company's accompanying balance sheets, but which the Company continues to service, related to the Company's agreement to monetize trade accounts receivable was $ 134.9 million and was $ 144.2 million at March 31, 2025.

Other Accrued Liabilities and Other Liabilities

The composition of the Company’s other accrued liabilities (current) and other liabilities (non-current) is as follows:

2025 March 31,

(Amounts in millions)

Gross cash proceeds received for receivables transferred and derecognized $ 22.2

Less amounts from collections reinvested under revolving agreement ( 9.1 )

Proceeds from new transfers 13.1

Collections not reinvested and remitted or to be remitted ( 13.4 )

Net cash proceeds received (paid or to be paid) (1)

Carrying value of receivables transferred and derecognized (2)

Obligations recorded $ 2.1

Loss recorded related to transfers of receivables $ 2.0

Other accrued liabilities (current)

Employee related liabilities $ 46.7 $ 27.9

Operating lease liabilities 10.1 9.9

Interest payable 5.8 18.0

Other accrued expenses and short-term liabilities 1.0 8.7

$ 63.6 $ 64.5

(1) During the three and nine months ended December 31, 2023, the Company voluntarily repurchased $ 46.0 million of receivables previously transferred.

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

At December 31, 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.

LIONS GATE ENTERTAINMENT CORP.

Other liabilities (non-current)

Operating lease liabilities $ 53.8 $ 45.6

Programming related payables 24.7 26.5

Other long-term liabilities 3.7 3.8

$ 82.2 $ 75.9

Supplemental Cash Flow Information

Refer to Note 15, Due To/From LG Studios Business , for further detail regarding non-cash activity with Parent.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Accrued Liabilities

Other accrued liabilities include employee related liabilities (such as accrued bonuses and salaries and wages) of $ 55.8 million and $ 147.4 million at December 31, 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.

During the nine months ended December 31, 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

Due To/From LG Studios Business

Certain Transactions with Old Lionsgate

As described in Note 1, prior to the Studio Separation, Old Lionsgate utilized a centralized approach to cash management.

Cash generated by the Company or borrowed under certain debt obligations was routinely transferred into accounts managed by Old Lionsgate’s centralized treasury function which was then transferred to the Company or the LG Studios Business to fund operating activities when needed.

Because of this centralized approach to cash management, financial transactions for cash movement, except for cash settlement of specific payables with Old Lionsgate, were accounted for through the net parent investment account.

Settlement of payables and receivables with Old Lionsgate when due were also accounted for through the net parent investment account.

Net parent investment is presented in the accompanying statements of equity.

Settlements of amounts receivable and accounts payable when due through the net parent investment account are reflected as cash payments or receipts for the applicable operating transaction within operating activities in the accompanying statements of cash flows, with the net change in parent net investment included within financing activities in the accompanying statements of cash flows.

Intercompany Revolver:

On May 13, 2024, LGAC International LLC, a Delaware limited liability company and wholly owned subsidiary of Lionsgate Studios (“LGAC International”) and Lions Gate Capital Holdings 1, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“LGCH1”) (which was renamed Starz Capital Holdings 1, Inc.

at Separation), entered into a revolving credit agreement (the “Intercompany Revolver”), pursuant to which LGAC International and LGCH1 agreed to make revolving loans to each other from time to time, provided that the net amount owing by one party to the other at any particular time may not exceed $ 150.0 million.

Amounts advanced by one party will be used to repay existing indebtedness owing to the other party thereunder, if any, such that at no time will amounts be owing in both directions.

The net amount owing under the Intercompany Revolver, at any time, shall bear interest on the outstanding principal amount at a rate equal to adjusted term SOFR plus 1.75 %.

There was $ 81.6 million outstanding and due to LGCH1 at March 31, 2025.

In connection with the Separation, all outstanding obligations in respect of principal, interest and fees under the Intercompany Revolver were repaid in full and all commitments thereunder were terminated.

The cash flows related to the intercompany revolver are presented as increases and decreases in the New Lionsgate revolving credit facility on the accompanying statements of cash flows.

Prior to the Separation, in the normal course of business, the Starz Business entered into transactions with Old Lionsgate and the LG Studios Business which included the following:

Licensing of content from Lionsgate:

The Starz Business licensed motion pictures and television programming (including Starz original productions) from the LG Studios Business.

The license fees incurred generally were due upon delivery or due at a point in time following the first showing.

Prior to the Studio Separation, license fees related to Starz original programs were settled with the LG Studios Business through parent net investment.

License fees related to library and output content were generally settled in cash.

License fees payable, prior to the Separation, not yet due and not yet paid to the LG Studios Business, are reflected in Due to LG Studios Business on the accompanying balance sheets.

Corporate expense allocations:

As previously described in Note 1, for the periods prior to the Studio Separation the accompanying financial statements include allocations of general and administrative expenses from Old Lionsgate related to certain corporate and shared service functions historically provided by Old Lionsgate, including, but not limited to, executive oversight, accounting, tax, legal, human resources, o ccupancy, and other shared services.

For the three months ended June 30, 2024 , corporate expense allocations amounted to $ 3.6 million.

At Studio Separation, Old Lionsgate and Legacy Lionsgate Studios entered into a shared services and overhead sharing agreement resulting in $ 10.0 million annually charged to the Company up to Separation of which approximately $ 1.0 million was recorded during the three months ended June 30, 2025.

Operating expense reimbursement:

As previously described in Note 1, for the periods prior to the Separation, the LG Studios Business paid certain expenses on behalf of the Company such as certain rent expense, employee benefits, insurance and other administrative operating costs.

The Company also paid certain expenses on behalf of the LG Studios Business such as legal expenses, software development costs and severance.

Those expenditures were reflected in the financial statements of the Company and the LG Studios Business as applicable.

Share-based compensation:

For the periods prior to the Separation, Old Lionsgate allocated to the Company share-based compensation related to the Company's employees.

In addition, prior to Separation, Old Lionsgate allocated a proportionate amount of its share-based compensation related to the corporate functions provided by Old Lionsgate to the Company.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Parent Net Investment

The net transfers to and from Old Lionsgate prior to the Separation were as follows:

Three Months Ended

(Amounts in millions)

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

Other comprehensive income (loss) ( 11.3 ) 4.4 ( 6.9 )

Reclassifications to net loss (1)

— ( 21.4 ) ( 21.4 )

Reclassifications to noncontrolling interest (2)

5.3 ( 16.6 ) ( 11.3 )

December 31, 2024 $ ( 28.7 ) $ 105.1 $ 76.4

March 31, 2023 $ ( 21.6 ) $ 142.5 $ 120.9

Other comprehensive income (loss) 1.6 17.4 19.0

Reclassifications to net loss (1)

Net transfers to Parent per consolidated statements of cash flows (1)

Net non-cash transfers with Parent (2)

Stock-based compensation expense prior to Separation ( 1.4 )

Net transfers from Parent per consolidated statements of equity (deficit) $ ( 0.1 )

_____________________

December 31, 2023 $ ( 20.0 ) $ 136.4 $ 116.4

(1) Amount represents cash distributions to New Lionsgate in connection with the transfer of the LGPlay and ECI businesses, during the quarter ended June 30, 2025.

(2) This amount represents the settlement of deferred financing costs in relation to the release of the Exchange Notes liability with New Lionsgate, in connection with the Separation, in addition to a one-time equity-based severance payment to an Old Lionsgate employee, adjusted for carve-out basis presentation at date of Separation.

Three Months Ended

(Amounts in millions)

Cash pooling and general financing activities $ ( 83.0 )

Licensing of content (1)

Operating expense reimbursement 5.3

Corporate expense allocations (excluding allocation of share-based compensation) ( 2.3 )

Net transfers from Parent per consolidated statements of cash flows (2)

Share-based compensation (including allocation of share-based compensation) (3)

Other non-cash transfer (4)

Net transfers from Parent per condensed consolidated statements of equity $ ( 49.7 )

_____________________

(1) Represents a loss of $ 1.2 million included in direct operating expense and a gain of $ 22.6 million included in interest expense on the unaudited condensed consolidated statement of operations in the nine months ended December 31, 2024 (nine months ended December 31, 2023 - loss of $ 2.5 million included in direct operating expense and a gain of $ 26.0 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

Significant non-cash transactions during the nine months ended December 31, 2024 and 2023 include certain interest rate swap agreements, which are discussed in Note 17, "Derivative Instruments and Hedging Activities".

There were no significant non-cash financing or investing activities for the nine months ended December 31, 2024 and 2023.

(1) Reflects the settlement of amounts due to the LG Studios Business related to the LG Studios Business' licensing arrangements with the Company.

(2) Amounts include net transfers from Parent included in net cash provided by financing activities from discontinued operations of $ 2.7 million for the quarter ended June 30, 2024.

(3) Amounts include share-based compensation from discontinued operations of $ 0.3 million for the quarter ended June 30, 2024.

(4) Includes a non-cash transfer of debt through Parent net investment of $ 35.0 million in connection with the Studio Separation during the quarter ended June 30, 2024 that was accounted for through the Due to LG Studios Business as it was made under the Old Lionsgate's revolving credit facility available to the Company.

STARZ ENTERTAINMENT CORP.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Contingencies

From time to time, the Company is involved in certain claims and legal proceedings arising in the normal course of business.

The Company establishes an accrued liability for claims and legal proceedings when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated.

Once established, accruals are adjusted from time to time, as appropriate, in light of additional information.

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.

The Company expenses legal fees as incurred.

Claims and legal proceedings may be brought against the Company without merit, are inherently uncertain, are difficult to predict, and the Company’s view on these matters may change as events unfold.

Reasonably possible losses, if any, are not estimable, however, based on our current understanding and evaluation of the relevant facts and circumstances, as of June 30, 2025, the Company is not a party to any pending claims or legal proceedings for which management believes the resolution would have a material adverse effect on the Company’s financial position, results of operations or cash flows, 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.

For additional detail regarding certain legal proceedings in which Starz is involved, Starz provides the following information:

On August 27, 2024, purported holders of former 5.5 % Notes of ours (prior to the Separation) filed a complaint in New York State court asserting claims for breach of certain contractual provisions and breach of the implied covenant of good faith and fair dealing based on a May 2024 transaction in which the Company exchanged approximately $ 390 million in aggregate principal amount of 5.5 % Notes for new 5.5 % exchange notes due 2029 (now, the 6 % Notes) and entered into Supplemental Indenture No.

10 to the indenture governing the 5.5 % Notes (the “Indenture”).

The main basis for these claims is that Supplemental Indenture No.

10 allegedly implicated certain provisions of the Indenture that require consent of each affected holder for certain types of waivers, amendments, and supplements to the Indenture.

The relief sought includes a request for a declaration that Supplemental Indenture No.

10 and the associated exchange transaction are null and void.

On September 13, 2024, another purported holder sought to intervene as a plaintiff in the same suit asserting nearly identical claims, which intervention was granted on October 11, 2024.

The second holder subsequently added additional theories and brought claims against other parties.

Starz filed a motion to dismiss the claims.

On May 23, 2025, both plaintiffs amended their complaints in view of the completion of the Separation, and on June 10, 2025, Starz moved to dismiss the amended complaints.

Oral argument on this motion is set for September 22, 2025.

Although Starz believes that the existing allegations are without merit, there can be no assurance that the plaintiffs will not be successful in obtaining relief sought in their amended complaints.

If the plaintiffs are successful, they may issue a notice of default to the trustee of the 5.5 % Notes and seek accelerated payments for amounts due under the 5.5 % Notes.

These actions may result in an outcome that could have a material adverse impact on Starz’s business, operations and financial conditions as well as our stakeholders, as any such action could require payments on the 5.5 % Notes earlier than expected.

The Company is party to certain arbitration claims arising from alleged violation of the federal Video Privacy Protection Act (the “VPPA”) and analogous state laws relating to the Company’s alleged use of a third-party pixel on the website for its subscription video service.

Although the outcome of these matters cannot be predicted with certainty, management does not presently believe that the resolution of these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Legal proceedings can be expensive and disruptive to normal business operations.

Even if Starz is successful in defending against such claims, it may expend significant management time and attention and funds to defend against such claims.

The Company is involved in legal proceedings not listed herein, but as previously stated, it does not presently consider the matters to be material either individually or in the aggregate at this time.

The Company’s view of the matters not listed may change in the future as the proceedings unfold.

Subsequent Events

In January 2025, the Company entered into a $ 100.0 million notional, pay-fixed interest rate swap with a fixed rate of 4.060 % and maturity date of January 2027.

The Company expects to designate this interest rate swap as a cash flow hedge (all related to the Company’s SOFR-based debt, see Note 6 and Note 7).

In January and February 2025, the Company entered into amendments to the Production Tax Credit Facility which extended the maturity to January 27, 2028 and increased the maximum principal amount to $ 280.0 million.

In June 2025, as a result of the Separation, the Compensation Committee of the Company's Board of Directors approved a one-time modification for restricted share units vesting during the quarter ending September 30, 2025 to allow for a cash payment in lieu of share issuance.

The Company paid $ 18.0 million in July 2025 related to such modification.

STARZ ENTERTAINMENT CORP.

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

What changed 10-Q

Item 1. Financial Statements