Income Taxes (Tables)

12 Months Ended

Mar. 31, 2024

Dec. 25, 2022

Summary Of Components Of Pretax Income (Loss)

The components of pretax income (loss), net of intercompany eliminations, are as follows:

	Year Ended March 31,
	2024			2023			2022
	(Amounts in millions)
United States	$	(143.8	)	$	(33.5	)	$	20.4
International		71.1			38.9			(9.2	)
	$	(72.7	)	$	5.4		$	11.2

Summary Of Income Tax Effects Of Temporary Differences Between The Book Value And Tax Basis Of Assets And Liabilities

The income tax effects of temporary differences between the book value and tax basis of assets and liabilities are as follows:

	March 31, 2024			March 31, 2023
	(Amounts in millions)
Deferred tax assets:
Net operating losses	$	241.9		$	94.1
Foreign tax credits		—			7.2
Intangible assets		9.5			—
Accrued compensation		42.9			50.7
Operating leases- liabilities		83.5			24.4
Other assets		50.7			14.5
Reserves		21.1			8.0
Interest		68.0			21.8
Total deferred tax assets		517.6			220.7
Valuation allowance		(341.6	)		(152.2	)
Deferred tax assets, net of valuation allowance		176.0			68.5
Deferred tax liabilities:
Intangible assets		—			(8.0	)
Investment in film and television programs		(56.9	)		(3.6	)
Unrealized gains on derivative contracts		(32.9	)		(33.5	)
Operating leases - assets		(78.2	)		(21.9	)
Other		(21.7	)		(19.6	)
Total deferred tax liabilities		(189.7	)		(86.6	)
Net deferred tax liabilities	$	(13.7	)	$	(18.1	)

Summary Of Company's Current And Deferred Income Tax Provision

The Company’s current and deferred income tax provision are as follows:

	Year Ended March 31,
	2024			2023			2022
	(Amounts in millions)
Current provision:
Federal	$	20.4		$	3.2		$	5.7
States		5.6			(0.5	)		3.2
International		12.6			10.0			7.2
Total current provision		38.6		$	12.7		$	16.1
Deferred provision:
Federal		(3.4	)		0.4			0.9
States		0.3			(0.1	)		0.3
International		(1.3	)		1.3			—
Total deferred provision		(4.4	)		1.6			1.2
Total provision for income taxes	$	34.2		$	14.3		$	17.3

Summary Of Differences Between Income Tax Rates And The Income Tax Provision

The differences between income taxes expected at U.S. statutory income tax rates and the income tax provision are as set forth below:

	Year Ended March 31,
	2024			2023			2022
	(Amounts in millions)
Income taxes computed at Federal statutory rate	$	(15.3	)	$	1.1		$	2.4
Foreign operations subject to different income tax rates		6.8			5.0			7.1
State income tax		5.9			(0.6	)		3.5
Remeasurements of originating deferred tax assets and liabilities		4.7			(4.7	)		(9.2	)
Permanent differences		0.1			2.1			—
Nondeductible share-based compensation		1.2			1.8			(2.7	)
Nondeductible officers compensation		7.7			9.8			5.1
Non-controlling interest in partnerships		18.6			1.8			3.7
Foreign derived intangible income		(2.4	)		(1.4	)		—
Other		2.7			1.7			1.5
Changes in valuation allowance		4.2			(2.3	)		5.9
Total provision for income taxes	$	34.2		$	14.3		$	17.3

Summary Of The Gross Unrecognized Tax Benefits, Exclusive Of Interest And Penalties

The following table summarizes the changes to the gross unrecognized tax benefits, exclusive of interest and penalties, for the years ended March 31, 2024, 2023 and 2022:

	Amounts in millions
Gross unrecognized tax benefits at March 31, 2021	$	0.6
Increases related to current year tax position		—
Increases related to prior year tax positions		0.4
Decreases related to prior year tax positions		—
Settlements		—
Lapse in statute of limitations		—
Gross unrecognized tax benefits at March 31, 2022		1.0
Increases related to current year tax position		—
Increases related to prior year tax positions		—
Decreases related to prior year tax positions		—
Settlements		—
Lapse in statute of limitations		(0.7	)
Gross unrecognized tax benefits at March 31, 2023		0.3
Increases related to current year tax position		—
Increases related to prior year tax positions		5.3
Decreases related to prior year tax positions		—
Settlements		—
Lapse in statute of limitations		(0.3	)
Gross unrecognized tax benefits at March 31, 2024	$	5.3

LIONS GATE ENTERTAINMENT CORP [Member]

Summary Of Components Of Pretax Income (Loss)

The components of pretax income (loss), net of intercompany eliminations, are as follows:

	Year Ended March 31,
	2024			2023			2022
	(Amounts in millions)
United States	$	(1,389.9	)	$	(2,218.6	)	$	(359.2	)
International		208.6			221.1			182.2
	$	(1,181.3	)	$	(1,997.5	)	$	(177.0	)

Schedule of Effective Income Tax Rate Reconciliation

The differences between income taxes expected at U.S. statutory income tax rates and the income tax provision are as set forth below:

	Year Ended March 31,
	2024			2023			2022
	(Amounts in millions)
Income taxes computed at Federal statutory rate	$	(248.1	)	$	(419.5	)	$	(37.2	)
Foreign affiliate dividends		(27.3	)		(35.4	)		(35.2	)
Foreign operations subject to different income tax rates		41.2			48.2			50.0
State income tax		(9.6	)		(0.5	)		8.1
Nondeductible goodwill impairment		101.9			304.3			—
Remeasurements of originating deferred tax assets and liabilities		(78.3	)		13.6			(1.3	)
Permanent differences		1.0			2.3			0.8
Nondeductible share based compensation		2.5			2.3			(3.3	)
Nondeductible officers compensation		7.7			9.8			5.6
Non-controlling interest in partnerships		18.6			1.8			3.7
Uncertain tax benefits		(70.0	)		5.3			3.6
Other		(0.9	)		1.9			1.2
Changes in valuation allowance		196.3			87.2			32.4
Total provision for income taxes	$	(65.0	)	$	21.3		$	28.4

Summary of Income Tax Contingencies

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

	Amounts in millions
Gross unrecognized tax benefits at March 31, 2021 (liability as of March 31, 2021)	$	68.0
Increases related to current year tax position		—
Increases related to prior year tax positions		2.6
Decreases related to prior year tax positions		—
Settlements		—
Lapse in statute of limitations		(0.4	)
Gross unrecognized tax benefits at March 31, 2022 (liability as of March 31, 2022)		70.2
Increases related to current year tax position		—
Increases related to prior year tax positions		0.2
Decreases related to prior year tax positions		—
Settlements		(4.3	)
Lapse in statute of limitations		(1.2	)
Gross unrecognized tax benefits at March 31, 2023 (liability as of March 31, 2023)		64.9
Increases related to current year tax position		—
Increases related to prior year tax positions		8.9
Decreases related to prior year tax positions		—
Settlements		(60.7	)
Lapse in statute of limitations		(1.0	)
Gross unrecognized tax benefits at March 31, 2024 (liability as of March 31, 2024)	$	12.1

Schedule of Deferred Tax Assets and Liabilities by Balance Sheet Location

The income tax effects of temporary differences between the book value and tax basis of assets and liabilities are as follows:

	March 31, 2024			March 31, 2023
	(Amounts in millions)
Deferred tax assets:
Net operating losses	$	624.4		$	450.4
Foreign tax credits		64.9			73.0
Investment in film and television programs		34.2			67.1
Accrued compensation		54.3			63.2
Operating leases - liabilities		99.0			41.4
Other assets		57.7			22.6
Reserves		22.9			9.0
Interest		201.0			104.6
Total deferred tax assets		1,158.4			831.3
Valuation allowance		(808.3	)		(455.7	)
Deferred tax assets, net of valuation allowance		350.1			375.6
Deferred tax liabilities:
Intangible assets		(222.4	)		(317.0	)
Operating leases - assets		(88.9	)		(34.6	)
Other		(52.1	)		(55.8	)
Total deferred tax liabilities	$	(363.4	)	$	(407.4	)
Net deferred tax liabilities	$	(13.3	)	$	(31.8	)

Entertainment One Film And Television Business [Member]

Summary Of Components Of Pretax Income (Loss)

The components of earnings (loss) before income taxes, determined by tax jurisdiction, are as follows:

(In thousands)	2022			2021
United States	$	(25,855	)	$	17,656
International		18,532			(27,928	)
Total loss before income taxes	$	(7,323	)	$	(10,272	)

Schedule of Income Taxes Attributable to Earnings (Loss) Before Income Taxes

The Company’s current and deferred income tax provision (benefits) are as follows:

	Year Ended March 31,
	2024			2023			2022
Current provision (benefit):	(Amounts in millions)
Federal	$	(62.5	)	$	11.9		$	11.0
States		1.7			(0.4	)		10.7
International		14.3			15.1			8.4
Total current provision (benefit)	$	(46.5	)	$	26.6		$	30.1
Deferred provision (benefit):
Federal	$	(6.6	)	$	(7.7	)	$	0.9
States		(11.9	)		(0.1	)		(2.6	)
International		—			2.5			—
Total deferred provision (benefit)		(18.5	)		(5.3	)		(1.7	)
Total provision (benefit) for income taxes	$	(65.0	)	$	21.3		$	28.4

Income tax expense (benefit) attributable to loss before income taxes are:

(In thousands)	2022		2021
Current
United States	$	—	$	—
State and local		526		802
International		9,634		(778	)
		10,160		24
Deferred
United States		—		—
State and local		—		—
International		2,578		1,445
		2,578		1,445
Total income taxes	$	12,738	$	1,469

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the statutory United States federal income tax rate to the Company’s effective income tax rate is as follows:

(In thousands)	2022			2021
Statutory income tax rate	$	(1,538	)	$	(2,157	)
State and local income taxes, net		(1,203	)		650
Tax on international earnings		(1,269	)		(297	)
Change in valuation allowance		23,579			11,041
Deferred tax rate change		(848	)		5,748
Loss on disposition of business		(1,514	)		—
Uncertain tax positions		380			(6,393	)
Partnership interest		(420	)		(420	)
Provision to return adjustments		(4,707	)		(6,029	)
Other permanent adjustments		278			(674	)
	$	12,738		$	1,469

Summary Of Income Tax Effects Of Temporary Differences Between The Book Value And Tax Basis Of Assets And Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 25, 2022 and December 26, 2021 are:

(In thousands)	2022			2021
Deferred Tax Assets
Interest carryforward	$	10,050			7,920
Lease liability		16,663			8,902
Depreciation and amortization of long-lived assets		24,039			6,283
Other compensation		6,571			1,016
Loss and credit carryforwards		232,437			249,644
Other		8,504			12,032
Gross deferred tax asset		298,264			285,797
Deferred Tax Liabilities
Right of use asset		16,277			8,834
Depreciation and amortization of long-lived assets		26,260			31,160
Other		5,038			7,475
Gross deferred tax liabilities		47,575			47,469
Valuation allowance		(267,106	)		(253,797	)
Net deferred income taxes	$	(16,417	)	$	(15,469	)

Schedule of Deferred Tax Assets and Liabilities by Balance Sheet Location

At December 25, 2022 and December 26, 2021, the Company’s net deferred income taxes are recorded in the Combined Balance Sheets as follows:

(In thousands)	2022			2021
Other assets	$	—		$	—
Other liabilities		(16,417	)		(15,469	)
Net deferred income taxes	$	(16,417	)	$	(15,469	)

Summary Of The Gross Unrecognized Tax Benefits, Exclusive Of Interest And Penalties

A reconciliation of unrecognized tax benefits, excluding potential interest and penalties, for the fiscal years ended December 25, 2022, and December 26, 2021 is as follows:

(In thousands)	2022			2021
Balance at beginning of year	$	23,850		$	31,535
Gross increase in prior period tax positions		—			—
Gross decrease in prior period tax positions		(2,137	)		(2,137	)
Gross increase in current period tax positions		—			—
Decrease related to settlements with tax authorities		(143	)		(5,548	)
Decreases from the expiration of statute of limitations	$	21,570		$	23,850