ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
British Columbia, Canada | N/A | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Large accelerated filer þ | Accelerated filer o | Non accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Title of Each Class | Outstanding at August 1, 2016 | |
Common Shares, no par value per share | 147,655,494 shares |
Item | Page |
June 30, 2016 | March 31, 2016 | ||||||
(Amounts in thousands, except share amounts) | |||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 69,897 | $ | 57,742 | |||
Restricted cash | 10,801 | 2,906 | |||||
Accounts receivable, net of reserves for returns and allowances of $42,218 (March 31, 2016 - $51,809) and provision for doubtful accounts of $5,939 (March 31, 2016 - $6,014) | 899,721 | 1,049,289 | |||||
Investment in films and television programs, net | 1,429,279 | 1,478,296 | |||||
Property and equipment, net | 42,815 | 43,384 | |||||
Investments | 493,139 | 464,346 | |||||
Goodwill | 534,780 | 534,780 | |||||
Other assets | 67,965 | 69,075 | |||||
Deferred tax assets | 166,863 | 134,421 | |||||
Total assets | $ | 3,715,260 | $ | 3,834,239 | |||
LIABILITIES | |||||||
Senior revolving credit facility | $ | 220,970 | $ | 156,136 | |||
5.25% Senior Notes | 221,240 | 220,796 | |||||
Term Loan | 388,701 | 388,207 | |||||
Accounts payable and accrued liabilities | 288,806 | 377,698 | |||||
Participations and residuals | 650,698 | 607,358 | |||||
Film obligations and production loans | 560,877 | 715,018 | |||||
Convertible senior subordinated notes | 100,555 | 99,984 | |||||
Deferred revenue | 321,566 | 328,244 | |||||
Total liabilities | 2,753,413 | 2,893,441 | |||||
Commitments and contingencies (Note 16) | |||||||
Redeemable noncontrolling interest | 91,776 | 90,525 | |||||
SHAREHOLDERS' EQUITY | |||||||
Common shares, no par value, 500,000,000 shares authorized, 147,638,816 shares issued (March 31, 2016 - 146,785,940 shares) | 903,207 | 885,800 | |||||
Retained earnings | — | 7,584 | |||||
Accumulated other comprehensive loss | (33,136 | ) | (43,111 | ) | |||
Total shareholders' equity | 870,071 | 850,273 | |||||
Total liabilities and shareholders' equity | $ | 3,715,260 | $ | 3,834,239 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands, except per share amounts) | |||||||
Revenues | $ | 553,575 | $ | 408,941 | |||
Expenses: | |||||||
Direct operating | 366,276 | 230,310 | |||||
Distribution and marketing | 125,039 | 71,924 | |||||
General and administration | 78,667 | 60,712 | |||||
Depreciation and amortization | 5,616 | 1,830 | |||||
Total expenses | 575,598 | 364,776 | |||||
Operating income (loss) | (22,023 | ) | 44,165 | ||||
Other expenses (income): | |||||||
Interest expense | |||||||
Cash interest | 12,892 | 10,371 | |||||
Amortization of debt discount and deferred financing costs | 2,342 | 2,254 | |||||
Total interest expense | 15,234 | 12,625 | |||||
Interest and other income | (949 | ) | (600 | ) | |||
Total other expenses, net | 14,285 | 12,025 | |||||
Income (loss) before equity interests and income taxes | (36,308 | ) | 32,140 | ||||
Equity interests income | 10,846 | 11,388 | |||||
Income (loss) before income taxes | (25,462 | ) | 43,528 | ||||
Income tax provision (benefit) | (26,302 | ) | 2,844 | ||||
Net income | 840 | 40,684 | |||||
Less: Net loss attributable to noncontrolling interest | 414 | — | |||||
Net income attributable to Lions Gate Entertainment Corp. shareholders | $ | 1,254 | $ | 40,684 | |||
Per share information attributable to Lions Gate Entertainment Corp. shareholders: | |||||||
Basic net income per common share | $ | 0.01 | $ | 0.28 | |||
Diluted net income per common share | $ | 0.01 | $ | 0.26 | |||
Weighted average number of common shares outstanding: | |||||||
Basic | 147,215 | 147,619 | |||||
Diluted | 149,611 | 157,498 | |||||
Dividends declared per common share | $ | 0.09 | $ | 0.07 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Net income | $ | 840 | $ | 40,684 | |||
Foreign currency translation adjustments, net of tax | (4,326 | ) | 3,490 | ||||
Net unrealized gain on available-for-sale securities, net of tax | 16,904 | 42,234 | |||||
Net unrealized gain (loss) on foreign exchange contracts, net of tax | (2,603 | ) | 7 | ||||
Comprehensive income | 10,815 | 86,415 | |||||
Less: Comprehensive loss attributable to noncontrolling interest | 414 | — | |||||
Comprehensive income attributable to Lions Gate Entertainment Corp. shareholders | $ | 11,229 | $ | 86,415 |
Common Shares | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||
Number | Amount | Total | ||||||||||||||||
(Amounts in thousands, except share amounts) | ||||||||||||||||||
Balance at March 31, 2016 | 146,785,940 | $ | 885,800 | $ | 7,584 | $ | (43,111 | ) | $ | 850,273 | ||||||||
Exercise of stock options | 27,163 | 423 | — | — | 423 | |||||||||||||
Share-based compensation, net of withholding tax obligations of $13,230 | 814,798 | 23,769 | — | — | 23,769 | |||||||||||||
Issuance of common shares to directors for services | 10,915 | 236 | — | — | 236 | |||||||||||||
Dividends declared | — | (7,021 | ) | (6,264 | ) | — | (13,285 | ) | ||||||||||
Net income attributable to Lions Gate Entertainment Corp. shareholders | — | — | 1,254 | — | 1,254 | |||||||||||||
Foreign currency translation adjustments, net of tax | — | — | — | (4,326 | ) | (4,326 | ) | |||||||||||
Net unrealized gain on available-for-sale securities, net of tax | — | — | — | 16,904 | 16,904 | |||||||||||||
Net unrealized loss on foreign exchange contracts, net of tax | — | — | — | (2,603 | ) | (2,603 | ) | |||||||||||
Noncontrolling interest adjustments to redemption value | — | — | (2,574 | ) | — | (2,574 | ) | |||||||||||
Balance at June 30, 2016 | 147,638,816 | $ | 903,207 | $ | — | $ | (33,136 | ) | $ | 870,071 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Operating Activities: | |||||||
Net income | $ | 840 | $ | 40,684 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||||
Depreciation and amortization | 5,616 | 1,830 | |||||
Amortization of films and television programs | 292,394 | 160,419 | |||||
Amortization of debt discount and deferred financing costs | 2,342 | 2,254 | |||||
Non-cash share-based compensation | 21,731 | 16,591 | |||||
Other non-cash items | 1,250 | — | |||||
Equity interests income | (10,846 | ) | (11,388 | ) | |||
Deferred income taxes | (30,720 | ) | 791 | ||||
Changes in operating assets and liabilities: | |||||||
Restricted cash | (7,895 | ) | — | ||||
Accounts receivable, net | 145,962 | 134,173 | |||||
Investment in films and television programs | (250,011 | ) | (315,861 | ) | |||
Other assets | 702 | (2,514 | ) | ||||
Accounts payable and accrued liabilities | (70,861 | ) | (95,336 | ) | |||
Participations and residuals | 43,590 | 29,916 | |||||
Film obligations | 5,518 | (9,218 | ) | ||||
Deferred revenue | (6,523 | ) | 16,776 | ||||
Net Cash Flows Provided By (Used In) Operating Activities | 143,089 | (30,883 | ) | ||||
Investing Activities: | |||||||
Investment in equity method investees | (4,172 | ) | (800 | ) | |||
Purchases of property and equipment | (2,906 | ) | (3,248 | ) | |||
Net Cash Flows Used In Investing Activities | (7,078 | ) | (4,048 | ) | |||
Financing Activities: | |||||||
Senior revolving credit facility - borrowings | 185,000 | — | |||||
Senior revolving credit facility - repayments | (121,000 | ) | — | ||||
Term Loan - borrowings, net of deferred financing costs of $616 in 2015 | — | 24,384 | |||||
Convertible senior subordinated notes - repurchases | — | (5 | ) | ||||
Production loans - borrowings | 63,263 | 203,087 | |||||
Production loans - repayments | (222,730 | ) | (74,276 | ) | |||
Dividends paid | (13,210 | ) | (10,187 | ) | |||
Distributions from noncontrolling interest | (2,159 | ) | — | ||||
Excess tax benefits on equity-based compensation awards | — | 45 | |||||
Exercise of stock options | 423 | 3,118 | |||||
Tax withholding required on equity awards | (13,752 | ) | (16,082 | ) | |||
Net Cash Flows Provided By (Used In) Financing Activities | (124,165 | ) | 130,084 | ||||
Net Change In Cash And Cash Equivalents | 11,846 | 95,153 | |||||
Foreign Exchange Effects on Cash | 309 | (1,300 | ) | ||||
Cash and Cash Equivalents - Beginning Of Period | 57,742 | 102,697 | |||||
Cash and Cash Equivalents - End Of Period | $ | 69,897 | $ | 196,550 |
June 30, 2016 | March 31, 2016 | ||||||
(Amounts in thousands) | |||||||
Motion Pictures Segment - Theatrical and Non-Theatrical Films | |||||||
Released, net of accumulated amortization | $ | 565,259 | $ | 584,419 | |||
Acquired libraries, net of accumulated amortization | 3,054 | 3,612 | |||||
Completed and not released | 48,828 | 33,806 | |||||
In progress | 395,508 | 421,687 | |||||
In development | 34,329 | 28,148 | |||||
Product inventory | 21,035 | 20,693 | |||||
1,068,013 | 1,092,365 | ||||||
Television Production Segment - Direct-to-Television Programs | |||||||
Released, net of accumulated amortization | 194,710 | 189,246 | |||||
In progress | 161,193 | 191,161 | |||||
In development | 5,363 | 5,524 | |||||
361,266 | 385,931 | ||||||
$ | 1,429,279 | $ | 1,478,296 |
June 30, 2016 | March 31, 2016 | |||||||
(Amounts in thousands) | ||||||||
Equity method investments | $ | 309,066 | $ | 297,546 | ||||
Available-for-sale securities | 140,882 | 123,978 | ||||||
Cost method investments | 43,191 | 42,822 | ||||||
$ | 493,139 | $ | 464,346 |
June 30, 2016 | |||||||||
Equity Method Investee | Ownership Percentage | June 30, 2016 | March 31, 2016 | ||||||
(Amounts in thousands) | |||||||||
EPIX | 31.2% | $ | 182,794 | $ | 171,837 | ||||
Pop | 50.0% | 99,035 | 98,719 | ||||||
Other | Various | 27,237 | 26,990 | ||||||
$ | 309,066 | $ | 297,546 |
Three Months Ended | |||||||
June 30, | |||||||
Equity Method Investee | 2016 | 2015 | |||||
(Amounts in thousands) | |||||||
EPIX | $ | 10,957 | $ | 13,072 | |||
Pop | 314 | (367 | ) | ||||
Other | (425 | ) | (1,317 | ) | |||
$ | 10,846 | $ | 11,388 |
June 30, 2016 | March 31, 2016 | ||||||
(Amounts in thousands) | |||||||
Current assets | $ | 405,707 | $ | 355,735 | |||
Non-current assets | $ | 362,095 | $ | 360,441 | |||
Current liabilities | $ | 98,423 | $ | 90,837 | |||
Non-current liabilities | $ | 25,015 | $ | 23,948 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Revenues | $ | 98,295 | $ | 111,351 | |||
Expenses: | |||||||
Operating expenses | 49,151 | 62,937 | |||||
Selling, general and administrative expenses | 6,162 | 5,789 | |||||
Operating income | 42,982 | 42,625 | |||||
Interest and other income (expense) | 17 | (509 | ) | ||||
Net income | $ | 42,999 | $ | 42,116 | |||
Reconciliation of net income reported by EPIX to equity interest income: | |||||||
Net income reported by EPIX | $ | 42,999 | $ | 42,116 | |||
Ownership interest in EPIX | 31.15 | % | 31.15 | % | |||
The Company's share of net income | 13,394 | 13,119 | |||||
Eliminations of the Company’s share of profits on licensing sales to EPIX(1) | (3,707 | ) | (2,795 | ) | |||
Realization of the Company’s share of profits on licensing sales to EPIX(2) | 1,270 | 2,748 | |||||
Total equity interest income recorded | $ | 10,957 | $ | 13,072 |
(1) | Represents the elimination of the gross profit recognized by the Company on licensing sales to EPIX in proportion to the Company's ownership interest in EPIX. |
(2) | Represents the realization of a portion of the profits previously eliminated. This profit remains eliminated until realized by EPIX. EPIX initially records the license fee for the title as inventory on its balance sheet and amortizes the inventory over the license period. Accordingly, the profit is realized as the inventory on EPIX's books is amortized. |
June 30, 2016 | March 31, 2016 | ||||||
(Amounts in thousands) | |||||||
Current assets | $ | 46,738 | $ | 38,278 | |||
Non-current assets | $ | 188,316 | $ | 192,461 | |||
Current liabilities | $ | 27,150 | $ | 29,090 | |||
Non-current liabilities | $ | 5,547 | $ | 8,198 | |||
Redeemable preferred stock | $ | 490,482 | $ | 466,501 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Revenues | $ | 24,890 | $ | 20,554 | |||
Expenses: | |||||||
Cost of services | 11,504 | 9,365 | |||||
Selling, marketing, and general and administration | 10,353 | 9,892 | |||||
Depreciation and amortization | 1,963 | 1,944 | |||||
Operating income (loss) | 1,070 | (647 | ) | ||||
Interest expense, net | 164 | 111 | |||||
Accretion of redeemable preferred stock units(1) | 15,981 | 13,638 | |||||
Total interest expense, net | 16,145 | 13,749 | |||||
Net loss | $ | (15,075 | ) | $ | (14,396 | ) | |
Reconciliation of net loss reported by Pop to equity interest income (loss): | |||||||
Net loss reported by Pop | $ | (15,075 | ) | $ | (14,396 | ) | |
Ownership interest in Pop | 50 | % | 50 | % | |||
The Company's share of net loss | (7,538 | ) | (7,198 | ) | |||
Accretion of dividend and interest income on redeemable preferred stock units(1) | 7,990 | 6,819 | |||||
Elimination of the Company's share of profits on licensing sales to Pop | (186 | ) | (133 | ) | |||
Realization of the Company’s share of profits on licensing sales to Pop | 48 | 145 | |||||
Total equity interest income (loss) recorded | $ | 314 | $ | (367 | ) |
(1) | Accretion of mandatorily redeemable preferred stock units represents Pop's 10% dividend and the amortization of discount on its mandatorily redeemable preferred stock units held by the Company and the other interest holder. The Company recorded its share of this expense as income from the accretion of dividend and discount on mandatorily redeemable preferred stock units within equity interest income (loss). |
June 30, 2016 | March 31, 2016 | |||||||
(Amounts in thousands) | ||||||||
Cost basis | $ | 158,916 | $ | 158,916 | ||||
Gross unrealized loss | (18,034 | ) | (34,938 | ) | ||||
Fair value | $ | 140,882 | $ | 123,978 |
June 30, 2016 | March 31, 2016 | ||||||
(Amounts in thousands) | |||||||
Prepaid expenses and other | $ | 57,082 | $ | 57,725 | |||
Finite-lived intangible assets | 10,883 | 11,350 | |||||
$ | 67,965 | $ | 69,075 |
June 30, 2016 | March 31, 2016 | ||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Finite-lived intangible assets: | |||||||||||||||||||||||
Noncompete agreements | $ | 9,500 | $ | 755 | $ | 8,745 | $ | 9,500 | $ | 449 | $ | 9,051 | |||||||||||
Trademarks and trade names | 8,600 | 6,574 | 2,026 | 8,600 | 6,451 | 2,149 | |||||||||||||||||
Sales agency relationships | 6,200 | 6,088 | 112 | 6,200 | 6,050 | 150 | |||||||||||||||||
$ | 24,300 | $ | 13,417 | $ | 10,883 | $ | 24,300 | $ | 12,950 | $ | 11,350 |
June 30, 2016 | March 31, 2016 | ||||||
(Amounts in thousands) | |||||||
Senior revolving credit facility, net of debt issuance costs of $4,030 (March 31, 2016 - $4,864) | $ | 220,970 | $ | 156,136 | |||
5.25% Senior Notes, net of debt issuance costs of $3,760 (March 31, 2016 - $4,204) | 221,240 | 220,796 | |||||
Term Loan Due 2022, net of debt issuance costs of $11,299 (March 31, 2016 - $11,793) | 388,701 | 388,207 | |||||
Convertible senior subordinated notes, net of debt issuance costs and unamortized discount of $1,295 (March 31, 2016 - $1,866) | 100,555 | 99,984 | |||||
$ | 931,466 | $ | 865,123 |
Conversion Price Per Share at June 30, 2016 | Maturity Date | Year Ended March 31, | ||||||||||||||||||||||||||||||
Debt Type | 2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||||||
Senior revolving credit facility | N/A | September 2017 | $ | — | $ | 225,000 | $ | — | $ | — | $ | — | $ | — | $ | 225,000 | ||||||||||||||||
5.25% Senior Notes | N/A | August 2018 | — | — | 225,000 | — | — | — | 225,000 | |||||||||||||||||||||||
Term Loan Due 2022 | N/A | March 2022 | — | — | — | — | — | 400,000 | 400,000 | |||||||||||||||||||||||
Principal amounts of convertible senior subordinated notes: | ||||||||||||||||||||||||||||||||
January 2012 4.00% Notes | $10.21 | January 2017 | 41,850 | — | — | — | — | — | 41,850 | |||||||||||||||||||||||
April 2013 1.25% Notes | $29.19 | April 2018 | — | — | 60,000 | — | — | — | 60,000 | |||||||||||||||||||||||
$ | 41,850 | $ | 225,000 | $ | 285,000 | $ | — | $ | — | $ | 400,000 | 951,850 | ||||||||||||||||||||
Less aggregate unamortized discount & debt issuance costs | (20,384 | ) | ||||||||||||||||||||||||||||||
$ | 931,466 |
Maturity Date | Conversion Price Per Share at June 30, 2016 | June 30, 2016 | March 31, 2016 | |||||||||||||||||||||||||
Convertible Senior Subordinated Notes | Principal | Unamortized Discount & Debt Issuance Costs | Net Carrying Amount | Principal | Unamortized Discount & Debt Issuance Costs | Net Carrying Amount | ||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||
January 2012 4.00% Notes | January 11, 2017 | $10.21 | $ | 41,850 | $ | (1,272 | ) | $ | 40,578 | $ | 41,850 | $ | (1,840 | ) | $ | 40,010 | ||||||||||||
April 2013 1.25% Notes | April 15, 2018 | $29.19 | 60,000 | (23 | ) | 59,977 | 60,000 | (26 | ) | 59,974 | ||||||||||||||||||
$ | 101,850 | $ | (1,295 | ) | $ | 100,555 | $ | 101,850 | $ | (1,866 | ) | $ | 99,984 |
Three Months Ended | |||
June 30, | |||
2015 | |||
(Amounts in thousands, except share amounts) | |||
April 2009 3.625% Notes | |||
Principal amount converted | $ | 16,162 | |
Common shares issued upon conversion | 1,983,058 | ||
Weighted average conversion price per share | $ | 8.15 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Interest Expense | |||||||
Contractual interest coupon | $ | 607 | $ | 549 | |||
Amortization of discount on liability component and debt issuance costs | 568 | 517 | |||||
$ | 1,175 | $ | 1,066 |
June 30, 2016 | March 31, 2016 | ||||||
(Amounts in thousands) | |||||||
Film obligations | $ | 30,217 | $ | 24,989 | |||
Production loans, net of debt issuance costs of $244 (March 31, 2016 - $342) | 530,660 | 690,029 | |||||
Total film obligations and production loans | $ | 560,877 | $ | 715,018 |
Nine Months Ending | |||||||||||||||||||||||||||
March 31, | Year Ended March 31, | ||||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||||||
Film obligations | $ | 27,306 | $ | 2,000 | $ | 1,000 | $ | — | $ | — | $ | — | $ | 30,306 | |||||||||||||
Production loans | 433,296 | 97,608 | — | — | — | — | 530,904 | ||||||||||||||||||||
$ | 460,602 | $ | 99,608 | $ | 1,000 | $ | — | $ | — | $ | — | $ | 561,210 | ||||||||||||||
Less imputed interest on film obligations and debt issuance costs on production loans | (333 | ) | |||||||||||||||||||||||||
$ | 560,877 |
• | Level 1 — Quoted prices in active markets for identical assets or liabilities. |
• | Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 2 liabilities that are not required to be measured at fair value on a recurring basis include the Company’s convertible senior subordinated notes, production loans, 5.25% Senior Notes, and Term Loan, which are priced using discounted cash flow techniques that use observable market inputs, such as LIBOR-based yield curves, swap rates, and credit ratings. |
• | Level 3 — Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. The Company measures the fair value of its investment in Pop's Mandatorily Redeemable Preferred Stock Units using primarily a discounted cash flow analysis based on the expected cash flows of the investment. The analysis reflects the contractual terms of the investment, including the period to maturity, and uses a discount rate commensurate with the risk associated with the investment. |
June 30, 2016 | March 31, 2016 | ||||||||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | ||||||||||||||||||
Assets: | (Amounts in thousands) | ||||||||||||||||||||||
Available-for-sale securities (see Note 3): | |||||||||||||||||||||||
Starz Series A common stock | $ | 63,372 | $ | — | $ | 63,372 | $ | 55,768 | $ | — | $ | 55,768 | |||||||||||
Starz Series B common stock | — | 77,510 | 77,510 | — | 68,210 | 68,210 | |||||||||||||||||
Forward exchange contracts (see Note 18) | — | 8,996 | 8,996 | — | 9,417 | 9,417 | |||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Forward exchange contracts (see Note 18) | — | (1,011 | ) | (1,011 | ) | — | (748 | ) | (748 | ) | |||||||||||||
$ | 63,372 | $ | 85,495 | $ | 148,867 | $ | 55,768 | $ | 76,879 | $ | 132,647 |
June 30, 2016 | March 31, 2016 | ||||||||||||||
(Amounts in thousands) | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(Level 3) | (Level 3) | ||||||||||||||
Assets: | |||||||||||||||
Investment in Pop's Mandatorily Redeemable Preferred Stock Units | $ | 99,035 | $ | 114,500 | $ | 98,719 | $ | 114,500 | |||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
(Level 2) | (Level 2) | ||||||||||||||
Liabilities: | |||||||||||||||
January 2012 4.00% Notes | 40,578 | 42,255 | 40,010 | 41,477 | |||||||||||
April 2013 1.25% Notes | 59,977 | 55,282 | 59,974 | 54,188 | |||||||||||
Production loans | 530,660 | 530,904 | 690,029 | 690,371 | |||||||||||
5.25% Senior Notes | 221,240 | 232,313 | 220,796 | 229,500 | |||||||||||
Term Loan | 388,701 | 398,000 | 388,207 | 400,500 | |||||||||||
$ | 1,241,156 | $ | 1,258,754 | $ | 1,399,016 | $ | 1,416,036 |
Preliminary allocation of the total purchase consideration: | (Amounts in thousands) | ||
Cash and cash equivalents | $ | 15,816 | |
Accounts receivable, net | 15,248 | ||
Investment in films and television programs, net | 63,387 | ||
Other assets acquired | 7,019 | ||
Finite-lived intangible assets: | |||
Noncompete agreements | 9,500 | ||
Trade name | 2,000 | ||
Other liabilities assumed | (32,638 | ) | |
Fair value of net assets acquired | 80,332 | ||
Goodwill | 211,452 | ||
Redeemable noncontrolling interest (Note 10) | (90,128 | ) | |
$ | 201,656 |
Three Months Ended | ||||
June 30, | ||||
2015 | ||||
(Amounts in thousands, except per share amounts) | ||||
Revenues | $ | 448,265 | ||
Net income attributable to Lions Gate Entertainment Corp. shareholders | $ | 40,064 | ||
Basic Net Income Per Common Share attributable to Lions Gate Entertainment Corp. shareholders | $ | 0.27 | ||
Diluted Net Income Per Common Share attributable to Lions Gate Entertainment Corp. shareholders | $ | 0.26 |
Three Months Ended | |||
June 30, | |||
2016 | |||
(Amounts in thousands) | |||
Beginning balance | $ | 90,525 | |
Net loss of Pilgrim Studios attributable to noncontrolling interest | (414 | ) | |
Noncontrolling interest discount accretion | 1,250 | ||
Adjustments to redemption value | 2,574 | ||
Cash distributions | (2,159 | ) | |
Ending balance | $ | 91,776 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands, except per share amounts) | |||||||
Basic Net Income Per Common Share: | |||||||
Numerator: | |||||||
Net income attributable to Lions Gate Entertainment Corp. shareholders | $ | 1,254 | $ | 40,684 | |||
Denominator: | |||||||
Weighted average common shares outstanding | 147,215 | 147,619 | |||||
Basic net income per common share | $ | 0.01 | $ | 0.28 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands, except per share amounts) | |||||||
Diluted Net Income Per Common Share: | |||||||
Numerator: | |||||||
Net income attributable to Lions Gate Entertainment Corp. shareholders | $ | 1,254 | $ | 40,684 | |||
Add: | |||||||
Interest on convertible notes, net of tax | — | 676 | |||||
Numerator for diluted net income per common share | $ | 1,254 | $ | 41,360 | |||
Denominator: | |||||||
Weighted average common shares outstanding | 147,215 | 147,619 | |||||
Effect of dilutive securities: | |||||||
Conversion of notes | — | 6,325 | |||||
Share purchase options | 2,293 | 3,130 | |||||
Restricted share units | 103 | 424 | |||||
Adjusted weighted average common shares outstanding | 149,611 | 157,498 | |||||
Diluted net income per common share | $ | 0.01 | $ | 0.26 |
Three Months Ended | |||||
June 30, | |||||
2016 | 2015 | ||||
(Amounts in thousands) | |||||
Anti-dilutive shares issuable | |||||
Conversion of notes | 6,154 | — | |||
Share purchase options | 9,370 | 3,945 | |||
Restricted share units | 884 | 67 | |||
Contingently issuable shares | 1,245 | 397 | |||
Total weighted average anti-dilutive shares issuable excluded from diluted net income per common share | 17,653 | 4,409 |
June 30, 2016 | March 31, 2016 | ||||
(Amounts in thousands) | |||||
Stock options outstanding, average exercise price $24.66 (March 31, 2016 - $24.55) | 15,749 | 15,332 | |||
Restricted share units — unvested | 1,410 | 1,647 | |||
Share purchase options and restricted share units available for future issuance | 1,374 | 2,093 | |||
Shares issuable upon conversion of January 2012 4.00% Notes at conversion price of $10.21 per share (March 31, 2016 - $10.26) | 4,099 | 4,079 | |||
Shares issuable upon conversion of April 2013 1.25% Notes at conversion price of $29.19 per share (March 31, 2016 - $29.32) | 2,055 | 2,046 | |||
Shares reserved for future issuance | 24,687 | 25,197 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Compensation Expense: | |||||||
Stock Options | $ | 7,725 | $ | 9,234 | |||
Restricted Share Units and Other Share-based Compensation | 14,455 | 7,357 | |||||
Share Appreciation Rights | — | 288 | |||||
22,180 | 16,879 | ||||||
Tax impact(1) | (8,096 | ) | (6,190 | ) | |||
Reduction in net income | $ | 14,084 | $ | 10,689 |
(1) | Represents the income tax benefit recognized in the statements of income for share-based compensation arrangements. |
Stock Options | Weighted-Average Exercise Price | Restricted Share Units | Weighted-Average Grant-Date Fair Value | ||||||
Outstanding at March 31, 2016 | 16,093,896 | $23.83 | 1,647,432 | $31.74 | |||||
Granted | 750,973 | $29.24 | 1,270,333 | $21.03 | |||||
Options exercised or RSUs vested | (27,163 | ) | $15.58 | (1,432,095 | ) | $23.05 | |||
Forfeited or expired | (306,243 | ) | $30.90 | (75,675 | ) | $32.57 | |||
Outstanding at June 30, 2016 | 16,511,463 | $23.96 | 1,409,995 | $30.87 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Segment revenues | |||||||
Motion Pictures | $ | 362,479 | $ | 275,387 | |||
Television Production | 191,096 | 133,554 | |||||
$ | 553,575 | $ | 408,941 | ||||
Gross segment contribution | |||||||
Motion Pictures | $ | 56,434 | $ | 79,632 | |||
Television Production | 17,743 | 23,141 | |||||
$ | 74,177 | $ | 102,773 | ||||
Segment general and administration | |||||||
Motion Pictures | $ | 21,033 | $ | 18,202 | |||
Television Production | 6,800 | 4,383 | |||||
$ | 27,833 | $ | 22,585 | ||||
Segment profit | |||||||
Motion Pictures | $ | 35,401 | $ | 61,430 | |||
Television Production | 10,943 | 18,758 | |||||
$ | 46,344 | $ | 80,188 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Company’s total segment profit | $ | 46,344 | $ | 80,188 | |||
Share-based compensation expense | (22,180 | ) | (16,879 | ) | |||
Restructuring and other items(1) | (7,431 | ) | — | ||||
Non-cash imputed interest charge(2) | (621 | ) | — | ||||
Purchase accounting and related adjustments(3) | (5,554 | ) | — | ||||
Start-up losses of new business initiatives(4) | (9,570 | ) | — | ||||
Backstopped prints and advertising expense(5) | (144 | ) | 3,934 | ||||
General and administrative expenses for corporate and shared services | (17,251 | ) | (21,248 | ) | |||
Depreciation and amortization | (5,616 | ) | (1,830 | ) | |||
Operating income (loss) | (22,023 | ) | 44,165 | ||||
Interest expense | (15,234 | ) | (12,625 | ) | |||
Interest and other income | 949 | 600 | |||||
Equity interests income | 10,846 | 11,388 | |||||
Income (loss) before income taxes | $ | (25,462 | ) | $ | 43,528 |
(1) | Restructuring and other items includes restructuring and severance costs, certain transaction related costs, and certain unusual items, when applicable, included in general and administrative expense. Amounts in the three months ended June 30, 2016 primarily represent professional fees associated with the Starz Transaction (see Note 9). |
(2) | Non-cash imputed interest charge represents a charge associated with the interest cost of long-term accounts receivable for Television Production licensed product that become due beyond one-year. |
(3) | Purchase accounting and related adjustments represent the incremental amortization expense associated with the non-cash fair value adjustments on television assets of $4.3 million included in direct operating expense resulting from the application of purchase accounting and the charge of $1.3 million included in general and administrative expense related to the accretion of the noncontrolling interest discount (see Note 10). |
(4) | Start-up losses of new business initiatives represent losses associated with the Company's direct to consumer initiatives including its subscription video-on-demand platforms, of which $2.7 million is included in the Company's consolidated general and administrative expense. |
(5) | Backstopped P&A represents the amount of theatrical marketing expense for third party titles that the Company funded and expensed for which a third party provides a first dollar loss guarantee (subject to a cap) that such expense will be recouped from the performance of the film (which results in minimal risk of loss to the Company). The amount represents the P&A expense incurred and expensed net of the impact of expensing the P&A cost over the revenue streams similar to a participation expense (i.e., the P&A under these arrangements are being expensed similar to a participation cost for purposes of measuring segment profit). |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Segment revenues: | |||||||
Motion Pictures | |||||||
Theatrical | $ | 47,190 | $ | 23,112 | |||
Home Entertainment | 143,500 | 115,426 | |||||
Television | 53,337 | 48,442 | |||||
International | 113,797 | 84,808 | |||||
Other | 4,655 | 3,599 | |||||
Total Motion Pictures revenues | $ | 362,479 | $ | 275,387 | |||
Television Production | |||||||
Domestic Television | 153,003 | 58,990 | |||||
International | 27,735 | 59,400 | |||||
Home Entertainment | 6,773 | 14,079 | |||||
Other | 3,585 | 1,085 | |||||
Total Television Production revenues | $ | 191,096 | $ | 133,554 | |||
Total revenues | $ | 553,575 | $ | 408,941 |
June 30, 2016 | March 31, 2016 | ||||||||||||||||||||||
Motion Pictures | Television Production | Total | Motion Pictures | Television Production | Total | ||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||
Significant assets by segment | |||||||||||||||||||||||
Accounts receivable | $ | 407,502 | $ | 492,219 | $ | 899,721 | $ | 557,532 | $ | 491,757 | $ | 1,049,289 | |||||||||||
Investment in films and television programs, net | 1,068,013 | 361,266 | 1,429,279 | 1,092,365 | 385,931 | 1,478,296 | |||||||||||||||||
Goodwill | 294,367 | 240,413 | 534,780 | 294,367 | 240,413 | 534,780 | |||||||||||||||||
$ | 1,769,882 | $ | 1,093,898 | $ | 2,863,780 | $ | 1,944,264 | $ | 1,118,101 | $ | 3,062,365 | ||||||||||||
Other unallocated assets (primarily cash, other assets, and investments) | 851,480 | 771,874 | |||||||||||||||||||||
Total assets | $ | 3,715,260 | $ | 3,834,239 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Acquisition of investment in films and television programs | |||||||
Motion Pictures | $ | 159,370 | $ | 235,237 | |||
Television Production | 90,641 | 80,624 | |||||
$ | 250,011 | $ | 315,861 |
As of | |||||||||||||||||||
June 30, 2016 | |||||||||||||||||||
Lions Gate Entertainment Corp. | Lions Gate Entertainment Inc. | Non-guarantor Subsidiaries | Consolidating Adjustments | Lions Gate Consolidated | |||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
BALANCE SHEET | |||||||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 1,142 | $ | 28,469 | $ | 40,286 | $ | — | $ | 69,897 | |||||||||
Restricted cash | — | 10,801 | — | — | 10,801 | ||||||||||||||
Accounts receivable, net | 458 | 2,499 | 896,764 | — | 899,721 | ||||||||||||||
Investment in films and television programs, net | — | 6,407 | 1,422,872 | — | 1,429,279 | ||||||||||||||
Property and equipment, net | — | 36,261 | 6,554 | — | 42,815 | ||||||||||||||
Investments | 40,072 | 15,734 | 437,333 | — | 493,139 | ||||||||||||||
Goodwill | 10,172 | — | 524,608 | — | 534,780 | ||||||||||||||
Other assets | 2,198 | 39,855 | 31,173 | (5,261 | ) | 67,965 | |||||||||||||
Deferred tax assets | 1,526 | 150,358 | 14,979 | — | 166,863 | ||||||||||||||
Subsidiary investments and advances | 1,672,210 | 1,657,629 | 3,173,843 | (6,503,682 | ) | — | |||||||||||||
$ | 1,727,778 | $ | 1,948,013 | $ | 6,548,412 | $ | (6,508,943 | ) | $ | 3,715,260 | |||||||||
Liabilities and Shareholders' Equity (Deficiency) | |||||||||||||||||||
Senior revolving credit facility | $ | 220,970 | $ | — | $ | — | $ | — | $ | 220,970 | |||||||||
5.25% Senior Notes | 221,240 | — | — | — | 221,240 | ||||||||||||||
Term Loan | 388,701 | — | — | — | 388,701 | ||||||||||||||
Accounts payable and accrued liabilities | 26,796 | 67,910 | 194,100 | — | 288,806 | ||||||||||||||
Participations and residuals | — | 3,556 | 647,142 | — | 650,698 | ||||||||||||||
Film obligations and production loans | — | — | 560,877 | — | 560,877 | ||||||||||||||
Convertible senior subordinated notes | — | 100,555 | — | — | 100,555 | ||||||||||||||
Deferred revenue | — | 4,111 | 317,455 | — | 321,566 | ||||||||||||||
Intercompany payable | — | 2,136,356 | 2,478,793 | (4,615,149 | ) | — | |||||||||||||
Redeemable noncontrolling interest | — | — | 91,776 | — | 91,776 | ||||||||||||||
Total shareholders' equity (deficiency) | 870,071 | (364,475 | ) | 2,258,269 | (1,893,794 | ) | 870,071 | ||||||||||||
$ | 1,727,778 | $ | 1,948,013 | $ | 6,548,412 | $ | (6,508,943 | ) | $ | 3,715,260 |
Three Months Ended | |||||||||||||||||||
June 30, 2016 | |||||||||||||||||||
Lions Gate Entertainment Corp. | Lions Gate Entertainment Inc. | Non-guarantor Subsidiaries | Consolidating Adjustments | Lions Gate Consolidated | |||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
STATEMENT OF INCOME | |||||||||||||||||||
Revenues | $ | — | $ | 5,223 | $ | 548,352 | $ | — | $ | 553,575 | |||||||||
EXPENSES: | |||||||||||||||||||
Direct operating | 6 | 974 | 365,296 | — | 366,276 | ||||||||||||||
Distribution and marketing | — | 486 | 124,553 | — | 125,039 | ||||||||||||||
General and administration | 432 | 46,337 | 32,010 | (112 | ) | 78,667 | |||||||||||||
Depreciation and amortization | — | 3,601 | 2,015 | — | 5,616 | ||||||||||||||
Total expenses | 438 | 51,398 | 523,874 | (112 | ) | 575,598 | |||||||||||||
OPERATING INCOME (LOSS) | (438 | ) | (46,175 | ) | 24,478 | 112 | (22,023 | ) | |||||||||||
Other expenses (income): | |||||||||||||||||||
Interest expense | 11,131 | 57,084 | 45,719 | (98,700 | ) | 15,234 | |||||||||||||
Interest and other income | (53,943 | ) | 73 | (45,642 | ) | 98,563 | (949 | ) | |||||||||||
Total other expenses (income) | (42,812 | ) | 57,157 | 77 | (137 | ) | 14,285 | ||||||||||||
INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES | 42,374 | (103,332 | ) | 24,401 | 249 | (36,308 | ) | ||||||||||||
Equity interests income (loss) | (40,588 | ) | 35,351 | 11,488 | 4,595 | 10,846 | |||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 1,786 | (67,981 | ) | 35,889 | 4,844 | (25,462 | ) | ||||||||||||
Income tax provision (benefit) | 532 | (27,393 | ) | 14,226 | (13,667 | ) | (26,302 | ) | |||||||||||
NET INCOME (LOSS) | 1,254 | (40,588 | ) | 21,663 | 18,511 | 840 | |||||||||||||
Less: Net loss attributable to noncontrolling interest | — | — | — | 414 | 414 | ||||||||||||||
Net income (loss) attributable to Lions Gate Entertainment Corp. shareholders | $ | 1,254 | $ | (40,588 | ) | $ | 21,663 | $ | 18,925 | $ | 1,254 |
Three Months Ended | |||||||||||||||||||
June 30, 2016 | |||||||||||||||||||
Lions Gate Entertainment Corp. | Lions Gate Entertainment Inc. | Non-guarantor Subsidiaries | Consolidating Adjustments | Lions Gate Consolidated | |||||||||||||||
STATEMENT OF COMPREHENSIVE INCOME (LOSS) | (Amounts in thousands) | ||||||||||||||||||
NET INCOME (LOSS) | $ | 1,254 | $ | (40,588 | ) | $ | 21,663 | $ | 18,511 | $ | 840 | ||||||||
Foreign currency translation adjustments, net of tax | (4,326 | ) | (7,019 | ) | (10,973 | ) | 17,992 | (4,326 | ) | ||||||||||
Net unrealized gain on available-for-sale securities, net of tax | 16,904 | — | 16,904 | (16,904 | ) | 16,904 | |||||||||||||
Net unrealized gain on foreign exchange contracts, net of tax | (2,603 | ) | — | (2,603 | ) | 2,603 | (2,603 | ) | |||||||||||
COMPREHENSIVE INCOME (LOSS) | 11,229 | (47,607 | ) | 24,991 | 22,202 | 10,815 | |||||||||||||
Less: Comprehensive loss attributable to noncontrolling interest | — | — | — | 414 | 414 | ||||||||||||||
Comprehensive income (loss) attributable to Lions Gate Entertainment Corp. shareholders | $ | 11,229 | $ | (47,607 | ) | $ | 24,991 | $ | 22,616 | $ | 11,229 |
Three Months Ended | |||||||||||||||||||
June 30, 2016 | |||||||||||||||||||
Lions Gate Entertainment Corp. | Lions Gate Entertainment Inc. | Non-guarantor Subsidiaries | Consolidating Adjustments | Lions Gate Consolidated | |||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
STATEMENT OF CASH FLOWS | |||||||||||||||||||
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | (36,973 | ) | $ | 2,424 | $ | 177,638 | $ | — | $ | 143,089 | ||||||||
INVESTING ACTIVITIES: | |||||||||||||||||||
Investment in equity method investees | — | — | (4,172 | ) | — | (4,172 | ) | ||||||||||||
Purchases of property and equipment | — | (2,046 | ) | (860 | ) | — | (2,906 | ) | |||||||||||
NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES | — | (2,046 | ) | (5,032 | ) | — | (7,078 | ) | |||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||
Senior revolving credit facility - borrowings | 185,000 | — | — | — | 185,000 | ||||||||||||||
Senior revolving credit facility - repayments | (121,000 | ) | — | — | — | (121,000 | ) | ||||||||||||
Production loans - borrowings | — | — | 63,263 | — | 63,263 | ||||||||||||||
Production loans - repayments | — | — | (222,730 | ) | — | (222,730 | ) | ||||||||||||
Dividends paid | (13,210 | ) | — | — | — | (13,210 | ) | ||||||||||||
Distributions from noncontrolling interest | — | — | (2,159 | ) | — | (2,159 | ) | ||||||||||||
Exercise of stock options | 423 | — | — | — | 423 | ||||||||||||||
Tax withholding required on equity awards | (13,752 | ) | — | — | — | (13,752 | ) | ||||||||||||
NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES | 37,461 | — | (161,626 | ) | — | (124,165 | ) | ||||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 488 | 378 | 10,980 | — | 11,846 | ||||||||||||||
FOREIGN EXCHANGE EFFECTS ON CASH | — | — | 309 | — | 309 | ||||||||||||||
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD | 654 | 28,091 | 28,997 | — | 57,742 | ||||||||||||||
CASH AND CASH EQUIVALENTS — END OF PERIOD | $ | 1,142 | $ | 28,469 | $ | 40,286 | $ | — | $ | 69,897 |
As of | |||||||||||||||||||
March 31, 2016 | |||||||||||||||||||
Lions Gate Entertainment Corp. | Lions Gate Entertainment Inc. | Non-guarantor Subsidiaries | Consolidating Adjustments | Lions Gate Consolidated | |||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
BALANCE SHEET | |||||||||||||||||||
Assets | |||||||||||||||||||
Cash and cash equivalents | $ | 654 | $ | 28,091 | $ | 28,997 | $ | — | $ | 57,742 | |||||||||
Restricted cash | — | 2,906 | — | — | 2,906 | ||||||||||||||
Accounts receivable, net | 676 | 1,579 | 1,047,034 | — | 1,049,289 | ||||||||||||||
Investment in films and television programs, net | — | 6,407 | 1,471,889 | — | 1,478,296 | ||||||||||||||
Property and equipment, net | — | 36,171 | 7,213 | — | 43,384 | ||||||||||||||
Investments | 40,072 | 15,354 | 408,920 | — | 464,346 | ||||||||||||||
Goodwill | 10,172 | — | 524,608 | — | 534,780 | ||||||||||||||
Other assets | 314 | 42,143 | 32,015 | (5,397 | ) | 69,075 | |||||||||||||
Deferred tax assets | 1,502 | 121,725 | 11,194 | — | 134,421 | ||||||||||||||
Subsidiary investments and advances | 1,584,187 | 1,518,348 | 3,094,974 | (6,197,509 | ) | — | |||||||||||||
$ | 1,637,577 | $ | 1,772,724 | $ | 6,626,844 | $ | (6,202,906 | ) | $ | 3,834,239 | |||||||||
Liabilities and Shareholders' Equity (Deficiency) | |||||||||||||||||||
Senior revolving credit facility | $ | 156,136 | $ | — | $ | — | $ | — | $ | 156,136 | |||||||||
5.25% Senior Notes | 220,796 | — | — | — | 220,796 | ||||||||||||||
Term Loan | 388,207 | — | — | — | 388,207 | ||||||||||||||
Accounts payable and accrued liabilities | 22,165 | 89,903 | 265,630 | — | 377,698 | ||||||||||||||
Participations and residuals | — | 3,663 | 603,695 | — | 607,358 | ||||||||||||||
Film obligations and production loans | — | — | 715,018 | — | 715,018 | ||||||||||||||
Convertible senior subordinated notes | — | 99,984 | — | — | 99,984 | ||||||||||||||
Deferred revenue | — | 4,833 | 323,411 | — | 328,244 | ||||||||||||||
Intercompany payable | — | 1,906,899 | 2,415,792 | (4,322,691 | ) | — | |||||||||||||
Redeemable noncontrolling interest | — | — | 90,525 | — | 90,525 | ||||||||||||||
Total shareholders' equity (deficiency) | 850,273 | (332,558 | ) | 2,212,773 | (1,880,215 | ) | 850,273 | ||||||||||||
$ | 1,637,577 | $ | 1,772,724 | $ | 6,626,844 | $ | (6,202,906 | ) | $ | 3,834,239 |
Three Months Ended | |||||||||||||||||||
June 30, 2015 | |||||||||||||||||||
Lions Gate Entertainment Corp. | Lions Gate Entertainment Inc. | Non-guarantor Subsidiaries | Consolidating Adjustments | Lions Gate Consolidated | |||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
STATEMENT OF INCOME | |||||||||||||||||||
Revenues | $ | — | $ | 2,105 | $ | 406,999 | $ | (163 | ) | $ | 408,941 | ||||||||
EXPENSES: | |||||||||||||||||||
Direct operating | — | (1,504 | ) | 231,814 | — | 230,310 | |||||||||||||
Distribution and marketing | — | 522 | 71,402 | — | 71,924 | ||||||||||||||
General and administration | 858 | 36,916 | 23,332 | (394 | ) | 60,712 | |||||||||||||
Depreciation and amortization | — | 1,551 | 279 | — | 1,830 | ||||||||||||||
Total expenses | 858 | 37,485 | 326,827 | (394 | ) | 364,776 | |||||||||||||
OPERATING INCOME (LOSS) | (858 | ) | (35,380 | ) | 80,172 | 231 | 44,165 | ||||||||||||
Other expenses (income): | |||||||||||||||||||
Interest expense | 8,985 | 53,542 | 42,160 | (92,062 | ) | 12,625 | |||||||||||||
Interest and other income | (50,534 | ) | (162 | ) | (41,841 | ) | 91,937 | (600 | ) | ||||||||||
Total other expenses (income) | (41,549 | ) | 53,380 | 319 | (125 | ) | 12,025 | ||||||||||||
INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES | 40,691 | (88,760 | ) | 79,853 | 356 | 32,140 | |||||||||||||
Equity interests income (loss) | 677 | 89,484 | 11,848 | (90,621 | ) | 11,388 | |||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES | 41,368 | 724 | 91,701 | (90,265 | ) | 43,528 | |||||||||||||
Income tax provision (benefit) | 684 | 47 | 6,092 | (3,979 | ) | 2,844 | |||||||||||||
NET INCOME (LOSS) | 40,684 | 677 | 85,609 | (86,286 | ) | 40,684 | |||||||||||||
Less: Net loss attributable to noncontrolling interest | — | — | — | — | — | ||||||||||||||
Net income (loss) attributable to Lions Gate Entertainment Corp. shareholders | $ | 40,684 | $ | 677 | $ | 85,609 | $ | (86,286 | ) | $ | 40,684 |
Three Months Ended | |||||||||||||||||||
June 30, 2015 | |||||||||||||||||||
Lions Gate Entertainment Corp. | Lions Gate Entertainment Inc. | Non-guarantor Subsidiaries | Consolidating Adjustments | Lions Gate Consolidated | |||||||||||||||
STATEMENT OF COMPREHENSIVE INCOME (LOSS) | (Amounts in thousands) | ||||||||||||||||||
NET INCOME (LOSS) | $ | 40,684 | $ | 677 | $ | 85,609 | $ | (86,286 | ) | $ | 40,684 | ||||||||
Foreign currency translation adjustments, net of tax | 45,731 | 45,915 | (1,543 | ) | (86,613 | ) | 3,490 | ||||||||||||
Net unrealized gain on available-for-sale securities, net of tax | — | — | 42,234 | — | 42,234 | ||||||||||||||
Net unrealized gain on foreign exchange contracts, net of tax | — | — | 7 | — | 7 | ||||||||||||||
COMPREHENSIVE INCOME (LOSS) | $ | 86,415 | $ | 46,592 | $ | 126,307 | $ | (172,899 | ) | $ | 86,415 | ||||||||
Less: Comprehensive loss attributable to noncontrolling interest | — | — | — | — | — | ||||||||||||||
Comprehensive income (loss) attributable to Lions Gate Entertainment Corp. shareholders | $ | 86,415 | $ | 46,592 | $ | 126,307 | $ | (172,899 | ) | $ | 86,415 |
Three Months Ended | |||||||||||||||||||
June 30, 2015 | |||||||||||||||||||
Lions Gate Entertainment Corp. | Lions Gate Entertainment Inc. | Non-guarantor Subsidiaries | Consolidating Adjustments | Lions Gate Consolidated | |||||||||||||||
(Amounts in thousands) | |||||||||||||||||||
STATEMENT OF CASH FLOWS | |||||||||||||||||||
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES | $ | 10,380 | $ | 62,627 | $ | (103,890 | ) | $ | — | $ | (30,883 | ) | |||||||
INVESTING ACTIVITIES: | |||||||||||||||||||
Investment in equity method investees | — | — | (800 | ) | — | (800 | ) | ||||||||||||
Purchases of property and equipment | — | (3,124 | ) | (124 | ) | — | (3,248 | ) | |||||||||||
NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES | — | (3,124 | ) | (924 | ) | — | (4,048 | ) | |||||||||||
FINANCING ACTIVITIES: | |||||||||||||||||||
Term Loan - borrowings, net of deferred financing costs of $616 | 24,384 | — | — | — | 24,384 | ||||||||||||||
Convertible senior subordinated notes - repurchases | — | (5 | ) | — | — | (5 | ) | ||||||||||||
Production loans - borrowings | — | — | 203,087 | — | 203,087 | ||||||||||||||
Production loans - repayments | — | — | (74,276 | ) | — | (74,276 | ) | ||||||||||||
Dividends paid | (10,187 | ) | — | — | — | (10,187 | ) | ||||||||||||
Excess tax benefits on equity-based compensation awards | — | 45 | — | — | 45 | ||||||||||||||
Exercise of stock options | 3,118 | — | — | — | 3,118 | ||||||||||||||
Tax withholding required on equity awards | (16,082 | ) | — | — | — | (16,082 | ) | ||||||||||||
NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES | 1,233 | 40 | 128,811 | — | 130,084 | ||||||||||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 11,613 | 59,543 | 23,997 | — | 95,153 | ||||||||||||||
FOREIGN EXCHANGE EFFECTS ON CASH | (1 | ) | — | (1,299 | ) | — | (1,300 | ) | |||||||||||
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD | 3,499 | 47,290 | 51,908 | — | 102,697 | ||||||||||||||
CASH AND CASH EQUIVALENTS — END OF PERIOD | $ | 15,111 | $ | 106,833 | $ | 74,606 | $ | — | $ | 196,550 |
June 30, 2016 | ||||||||||
Foreign Currency | Foreign Currency Amount | US Dollar Amount | Weighted Average Exchange Rate Per $1 USD | |||||||
(Amounts in millions) | (Amounts in millions) | |||||||||
British Pound Sterling | £13.1 | in exchange for | $18.7 | £0.70 | ||||||
Australian Dollar | A$56.8 | in exchange for | $50.6 | A$1.12 | ||||||
Canadian Dollar | C$11.2 | in exchange for | $8.4 | C$1.32 |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in thousands) | |||||||
Non-cash financing activities: | |||||||
Accrued dividends (see Note 12) | $ | 13,285 | $ | 10,376 | |||
Conversions of convertible senior subordinated notes (see Note 5) | $ | — | $ | 16,162 |
• | Theatrical. Theatrical revenues are derived from the domestic theatrical release of motion pictures licensed to theatrical exhibitors on a picture-by-picture basis (distributed by us directly in the U.S. and through a sub-distributor in Canada). The revenues from Canada are reported net of distribution fees and release expenses of the Canadian sub-distributor. The financial terms that we negotiate with our theatrical exhibitors in the U.S. generally provide that we receive a percentage of the box office results and are negotiated on a picture-by-picture basis. |
• | Home Entertainment. Home Entertainment revenues are derived from the sale or rental of our film productions and acquired or licensed films and certain television programs (including theatrical and direct-to-video releases) on packaged media and through digital media platforms. In addition, we have revenue sharing arrangements with certain digital media platforms which generally provide that, in exchange for a nominal or no upfront sales price, we share in the rental or sales revenues generated by the platform on a title-by-title basis. We categorize our Home Entertainment revenue as follows: |
• | Packaged media revenue: Packaged media revenue consists of the sale or rental of DVDs and Blu-ray discs. |
• | Digital media revenue: Digital media revenue consists of revenues generated from pay-per-view and video-on-demand platforms, electronic sell-through (“EST”), and digital rental. |
• | Television. Television revenues are primarily derived from the licensing of our theatrical productions and acquired films to the linear pay, basic cable and free television markets. |
• | International. International revenues are derived from the licensing of our productions, acquired films, our catalog product and libraries of acquired titles from our international subsidiaries to international distributors, on a territory-by-territory basis. International revenues also includes revenues from the direct distribution of our productions, acquired films, and our catalog product and libraries of acquired titles in the United Kingdom. |
• | Motion Pictures - Other. Other revenues are derived from, among others, our interactive ventures and games division, our global franchise management and strategic partnerships division (which includes location-based entertainment), the sales and licensing of music from the theatrical exhibition of our films and the television broadcast of our productions, and from the licensing of our films and television programs to ancillary markets. |
• | Domestic Television. Domestic television revenues are derived from the licensing and syndication to domestic markets of one-hour and half-hour scripted and unscripted series, television movies, mini-series and non-fiction programming. |
• | International. International revenues are derived from the licensing and syndication to international markets of one-hour and half-hour scripted and unscripted series, television movies, mini-series and non-fiction programming. |
• | Home Entertainment. Home entertainment revenues are derived from the sale or rental of television production movies or series on packaged media and through digital media platforms. Home entertainment revenue consists of packaged media revenue and digital media revenue. |
• | Television Production - Other. Other revenues are derived from, among others, product integration in our television episodes and programs, the sales and licensing of music from the television broadcasts of our productions, and from the licensing of our television programs to ancillary markets. |
Three Months Ended | ||||||||||||||||||||
June 30, | ||||||||||||||||||||
2016 | 2015 | Increase (Decrease) | ||||||||||||||||||
Amount | % of Segment Revenues | Amount | % of Segment Revenues | Amount | Percent | |||||||||||||||
(Amounts in millions) | ||||||||||||||||||||
Segment revenues | ||||||||||||||||||||
Motion Pictures | $ | 362.5 | $ | 275.4 | $ | 87.1 | 31.6 | % | ||||||||||||
Television Production | 191.1 | 133.6 | 57.5 | 43.0 | % | |||||||||||||||
$ | 553.6 | $ | 409.0 | $ | 144.6 | 35.4 | % | |||||||||||||
Gross segment contribution(1) | ||||||||||||||||||||
Motion Pictures | $ | 56.4 | 15.6 | % | $ | 79.6 | 28.9 | % | $ | (23.2 | ) | (29.1 | )% | |||||||
Television Production | 17.7 | 9.3 | 23.1 | 17.3 | (5.4 | ) | (23.4 | )% | ||||||||||||
$ | 74.1 | 13.4 | % | $ | 102.7 | 25.1 | % | $ | (28.6 | ) | (27.8 | )% |
(1) | Gross segment contribution is defined as segment revenue less segment direct operating and distribution and marketing expenses, and excludes purchase accounting and related adjustments, start-up costs of new business initiatives, non-cash imputed interest charges, and backstopped prints and advertising ("P&A") expense (see Note 15 to our unaudited condensed consolidated financial statements). Gross segment contribution amounts for the three months ended June 30, 2015 reflect the reclassification of certain distribution and marketing expenses in order to be consistent with the current period presentation (see Distribution and Marketing Expenses below). |
Three Months Ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2016 | 2015 | Amount | Percent | |||||||||||
(Amounts in millions) | ||||||||||||||
Home Entertainment Revenue | ||||||||||||||
Motion Pictures | $ | 143.5 | $ | 115.4 | $ | 28.1 | 24.4 | % | ||||||
Television Production | 6.8 | 14.1 | (7.3 | ) | (51.8 | )% | ||||||||
$ | 150.3 | $ | 129.5 | $ | 20.8 | 16.1 | % |
Three Months Ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2016 | 2015 | Amount | Percent | |||||||||||
(Amounts in millions) | ||||||||||||||
Motion Pictures | ||||||||||||||
Theatrical | $ | 47.2 | $ | 23.1 | $ | 24.1 | 104.3 | % | ||||||
Home Entertainment | 143.5 | 115.4 | 28.1 | 24.4 | % | |||||||||
Television | 53.3 | 48.4 | 4.9 | 10.1 | % | |||||||||
International | 113.8 | 84.8 | 29.0 | 34.2 | % | |||||||||
Other | 4.7 | 3.7 | 1.0 | 27.0 | % | |||||||||
$ | 362.5 | $ | 275.4 | $ | 87.1 | 31.6 | % |
Three Months Ended June 30, | ||||
2016 | 2015 | |||
Theatrical Release Date | Theatrical Release Date | |||
Fiscal 2017 Theatrical Slate: | Fiscal 2016 Theatrical Slate: | |||
Now You See Me 2 | June 2016 | The Age of Adaline | April 2015 | |
Criminal | April 2016 | Child 44* | April 2015* | |
Fiscal 2016 Theatrical Slate: | Fiscal 2015 Theatrical Slate: | |||
The Divergent Series: Allegiant | March 2016 | The Divergent Series: Insurgent | March 2015 |
Three Months Ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2016 | 2015 | Amount | Percent | |||||||||||
(Amounts in millions) | ||||||||||||||
Theatrical revenues | ||||||||||||||
Feature Film(1) | $ | 43.9 | $ | 18.5 | $ | 25.4 | 137.3 | % | ||||||
Managed Brands(2) | 1.9 | 4.5 | (2.6 | ) | (57.8 | )% | ||||||||
Other(3) | 1.4 | 0.1 | 1.3 | n/m | ||||||||||
$ | 47.2 | $ | 23.1 | $ | 24.1 | 104.3 | % |
(1) | Feature Film includes releases through our Lionsgate and Summit Entertainment film labels, which includes films developed and produced in-house, films co-developed and co-produced and films acquired from third parties. |
(2) | Managed Brands represents direct-to-DVD motion pictures, acquired and licensed brands, third-party library product and ancillary-driven platform theatrical releases. These theatrical releases included releases through our specialty films distribution labels, Lionsgate Premiere, and through CodeBlack Films, and with our equity method investee, Roadside Attractions. |
(3) | Represents certain specialty theatrical releases with our equity method investee, Pantelion Films, and other titles. |
Three Months Ended June 30, | ||||
2016 | 2015 | |||
Packaged Media Release Date | Packaged Media Release Date | |||
Fiscal 2016 Theatrical Slate: | Fiscal 2015 Theatrical Slate: | |||
Gods of Egypt | May 2016 | The D.U.F.F. | June 2015 | |
Dirty Grandpa | May 2016 | Mortdecai | May 2015 | |
The Choice | May 2016 | The Hunger Games: Mockingjay - Part 1 | March 2015 | |
Norm of the North | April 2016 | John Wick | February 2015 | |
The Hunger Games: Mockingjay - Part 2 | March 2016 | |||
The Last Witch Hunter | February 2016 | |||
Sicario | January 2016 | |||
Managed Brands: | Managed Brands: | |||
The Witch | May 2016 | The Last Knights | June 2015 | |
A Most Violent Year | April 2015 | |||
Wild Card | March 2015 |
Three Months Ended June 30, | |||||||||||||||||||||||||||
2016 | 2015 | Total Increase (Decrease) | |||||||||||||||||||||||||
Packaged Media | Digital Media(1) | Total | Packaged Media | Digital Media(1) | Total | ||||||||||||||||||||||
(Amounts in millions) | |||||||||||||||||||||||||||
Home entertainment revenues(2) | |||||||||||||||||||||||||||
Feature Film: | |||||||||||||||||||||||||||
Fiscal 2016 Theatrical Slate | $ | 37.9 | $ | 41.4 | $ | 79.3 | $ | — | $ | — | $ | — | $ | 79.3 | |||||||||||||
Fiscal 2015 Theatrical Slate | 0.1 | 2.7 | 2.8 | 15.0 | 28.4 | 43.4 | (40.6 | ) | |||||||||||||||||||
Prior Theatrical Slates | 9.2 | 7.1 | 16.3 | 8.4 | 9.0 | 17.4 | (1.1 | ) | |||||||||||||||||||
Total Feature Film | 47.2 | 51.2 | 98.4 | 23.4 | 37.4 | 60.8 | 37.6 | ||||||||||||||||||||
Managed Brands | 26.8 | 16.4 | 43.2 | 32.4 | 20.1 | 52.5 | (9.3 | ) | |||||||||||||||||||
Other | 1.3 | 0.6 | 1.9 | 1.6 | 0.5 | 2.1 | (0.2 | ) | |||||||||||||||||||
$ | 75.3 | $ | 68.2 | $ | 143.5 | $ | 57.4 | $ | 58.0 | $ | 115.4 | $ | 28.1 |
(1) | Digital media revenue consists of revenues generated from pay-per-view and video-on-demand platforms, EST, and digital rental. |
(2) | Certain amounts in the prior year's quarter have been reclassified between product types in order to be consistent with the current quarter classification. |
Three Months Ended June 30, | ||
2016 | 2015 | |
Fiscal 2016 Theatrical Slate: | Fiscal 2015 Theatrical Slate: | |
The Last Witch Hunter | Addicted | |
Shaun the Sheep | John Wick | |
Sicario | The Expendables 3 | |
Prior Theatrical Slates: | ||
The Hunger Games: Catching Fire |
Three Months Ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2016 | 2015 | Amount | Percent | |||||||||||
(Amounts in millions) | ||||||||||||||
Television revenues(1) | ||||||||||||||
Feature Film: | ||||||||||||||
Fiscal 2016 Theatrical Slate | $ | 25.9 | $ | — | $ | 25.9 | n/m | |||||||
Fiscal 2015 Theatrical Slate | — | 23.7 | (23.7 | ) | (100.0 | )% | ||||||||
Prior Theatrical Slates | 22.0 | 17.6 | 4.4 | 25.0 | % | |||||||||
Total Feature Film | 47.9 | 41.3 | 6.6 | 16.0 | % | |||||||||
Managed Brands | 4.9 | 6.1 | (1.2 | ) | (19.7 | )% | ||||||||
Other | 0.5 | 1.0 | (0.5 | ) | (50.0 | )% | ||||||||
$ | 53.3 | $ | 48.4 | $ | 4.9 | 10.1 | % |
(1) | Certain amounts in the prior year's quarter have been reclassified between product types in order to be consistent with the current quarter classification. |
Three Months Ended June 30, | ||
2016 | 2015 | |
Fiscal 2017 Theatrical Slate: | Fiscal 2016 Theatrical Slate: | |
Now You See Me 2 | Child 44 | |
Fiscal 2016 Theatrical Slate: | Fiscal 2015 Theatrical Slate: | |
Gods of Egypt | Mortdecai | |
The Divergent Series: Allegiant | The Divergent Series: Insurgent | |
The Hunger Games: Mockingjay - Part 2 | The Hunger Games: Mockingjay - Part 1 | |
UK Third Party Product: | UK Third Party Product: | |
Eddie the Eagle | A Little Chaos |
Three Months Ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2016 | 2015 | Amount | Percent | |||||||||||
(Amounts in millions) | ||||||||||||||
International revenues(1) | ||||||||||||||
Feature Film: | ||||||||||||||
Fiscal 2017 Theatrical Slate | $ | 31.3 | $ | — | $ | 31.3 | n/m | |||||||
Fiscal 2016 Theatrical Slate | 60.5 | 12.9 | 47.6 | n/m | ||||||||||
Fiscal 2015 Theatrical Slate | 1.2 | 35.6 | (34.4 | ) | (96.6 | )% | ||||||||
Prior Theatrical Slates | 8.1 | 16.4 | (8.3 | ) | (50.6 | )% | ||||||||
Total Feature Film | 101.1 | 64.9 | 36.2 | 55.8 | % | |||||||||
UK Third Party Product(2) | 8.4 | 14.5 | (6.1 | ) | (42.1 | )% | ||||||||
Managed Brands | 2.5 | 4.0 | (1.5 | ) | (37.5 | )% | ||||||||
Other | 1.8 | 1.4 | 0.4 | 28.6 | % | |||||||||
$ | 113.8 | $ | 84.8 | $ | 29.0 | 34.2 | % |
(1) | Certain amounts in the prior year's quarter have been reclassified between product types in order to be consistent with the current quarter classification. |
(2) | UK Third Party Product represents titles acquired separately for self-distribution in the U.K. territory. |
Three Months Ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2016 | 2015 | Amount | Percent | |||||||||||
(Amounts in millions) | ||||||||||||||
Television Production | ||||||||||||||
Domestic Television | $ | 153.0 | $ | 59.0 | $ | 94.0 | 159.3 | % | ||||||
International | 27.7 | 59.4 | (31.7 | ) | (53.4 | )% | ||||||||
Home Entertainment | ||||||||||||||
Digital | 3.6 | 10.3 | (6.7 | ) | (65.0 | )% | ||||||||
Packaged Media | 3.2 | 3.8 | (0.6 | ) | (15.8 | )% | ||||||||
Total Home Entertainment | 6.8 | 14.1 | (7.3 | ) | (51.8 | )% | ||||||||
Other | 3.6 | 1.1 | 2.5 | 227.3 | % | |||||||||
$ | 191.1 | $ | 133.6 | $ | 57.5 | 43.0 | % |
Three Months Ended | Three Months Ended | |||||||||||||
June 30, 2016 | June 30, 2015 | |||||||||||||
Episodes | Hours | Episodes | Hours | |||||||||||
Casual - Season 2 | 1/2 hr | 8 | 4.0 | Nashville - Season 3 | 1hr | 5 | 5.0 | |||||||
Feed The Beast - Season 1 | 1hr | 7 | 7.0 | Orange Is The New Black - Season 3 | 1hr | 1 | 1.0 | |||||||
Graves | 1/2 hr | 6 | 3.0 | Other(1) | 1/2hr & 1hr | 12 | 9.0 | |||||||
Greenleaf - Season 1 | 1hr | 10 | 10.0 | |||||||||||
Guilt - Season 1 | 1hr | 3 | 3.0 | |||||||||||
Monica the Medium - Season 2 | 1hr | 9 | 9.0 | |||||||||||
Nashville - Season 4 | 1hr | 5 | 5.0 | |||||||||||
Other(1) | 1/2hr | 16 | 8.0 | |||||||||||
64 | 49.0 | 18 | 15.0 |
(1) | Other in the three months ended June 30, 2016 includes episodes delivered for Deadbeat (Season 3), Douglas Family Gold, Nightcap (Season 1) and Crushed. Other in the three months ended June 30, 2015 includes episodes delivered for Casual, Cuckoo, Deadbeat (Season 2), Deion's Family Playbook, and DeSean Jackson: Home Team (Season 1). |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
June 30, 2016 | June 30, 2015 | ||||||||||||||||||||||
Motion Pictures | Television Production | Total | Motion Pictures | Television Production | Total | ||||||||||||||||||
(Amounts in millions) | |||||||||||||||||||||||
Direct operating expenses | |||||||||||||||||||||||
Amortization of films and television programs | $ | 150.6 | $ | 132.8 | $ | 283.4 | $ | 91.7 | $ | 68.7 | $ | 160.4 | |||||||||||
Participation and residual expense | 37.2 | 34.2 | 71.4 | 40.9 | 31.4 | 72.3 | |||||||||||||||||
Provision for doubtful accounts and foreign exchange losses | 2.7 | (0.2 | ) | 2.5 | (3.2 | ) | 0.8 | (2.4 | ) | ||||||||||||||
190.5 | 166.8 | 357.3 | 129.4 | 100.9 | 230.3 | ||||||||||||||||||
Other(1) | — | — | 9.0 | — | — | — | |||||||||||||||||
Total direct operating expenses | $ | 190.5 | $ | 166.8 | $ | 366.3 | $ | 129.4 | $ | 100.9 | $ | 230.3 | |||||||||||
Direct operating expenses as a percentage of segment revenues | 52.6 | % | 87.3 | % | 66.2 | % | 47.0 | % | 75.5 | % | 56.3 | % |
(1) | Other direct operating expenses primarily consist of the incremental amortization expense of the purchase accounting fair value adjustments on television assets related to the acquisition of Pilgrim Studios, and direct operating costs related to our new direct-to-consumer business initiatives including our subscription video-on-demand platforms. |
Three Months Ended | Three Months Ended | ||||||||||||||||||||||
June 30, 2016 | June 30, 2015 | ||||||||||||||||||||||
Motion Pictures | Television Production | Total | Motion Pictures | Television Production | Total | ||||||||||||||||||
(Amounts in millions) | |||||||||||||||||||||||
Distribution and marketing expenses | |||||||||||||||||||||||
Theatrical | $ | 71.8 | $ | — | $ | 71.8 | $ | 26.7 | $ | — | $ | 26.7 | |||||||||||
Home Entertainment | 28.7 | 1.2 | 29.9 | 24.7 | 1.8 | 26.5 | |||||||||||||||||
International | 13.5 | 2.1 | 15.6 | 12.0 | 4.9 | 16.9 | |||||||||||||||||
Television | 1.3 | 3.9 | 5.2 | 2.9 | 2.8 | 5.7 | |||||||||||||||||
115.3 | 7.2 | 122.5 | 66.3 | 9.5 | 75.8 | ||||||||||||||||||
Other(1) | — | — | 2.5 | — | — | (3.9 | ) | ||||||||||||||||
Total distribution and marketing expenses | $ | 115.3 | $ | 7.2 | $ | 125.0 | $ | 66.3 | $ | 9.5 | $ | 71.9 |
(1) | Other distribution and marketing expenses in the three months ended June 30, 2016 consist of distribution and marketing costs related to our new direct-to-consumer business initiatives, including our subscription video-on-demand platforms, and backstopped P&A expense, which represents the amount of theatrical marketing expense for third party titles that we funded and expensed for which a third party provides a first dollar loss guarantee (subject to a cap) that such expense will be recouped from the performance of the film (which results in minimal risk of loss to the Company). The amount represents the P&A expense incurred and expensed net of the impact of expensing the P&A costs over the revenue streams similar to a participation expense. We do not consider these costs part of segment distribution and marketing expense and have reclassified the prior year quarter's amount of $3.9 million of backstopped P&A from the Motion Pictures segment to Other to be consistent with the current quarter presentation. |
Three Months Ended | ||||||||||||||||||||
June 30, | ||||||||||||||||||||
2016 | 2015 | Increase (Decrease) | ||||||||||||||||||
Amount | % of Segment Revenues | Amount | % of Segment Revenues | Amount | Percent | |||||||||||||||
(Amounts in millions) | ||||||||||||||||||||
Gross segment contribution | ||||||||||||||||||||
Motion Pictures | $ | 56.4 | 15.6 | % | $ | 79.6 | 28.9 | % | $ | (23.2 | ) | (29.1 | )% | |||||||
Television Production | 17.7 | 9.3 | 23.1 | 17.3 | (5.4 | ) | (23.4 | )% | ||||||||||||
$ | 74.1 | 13.4 | % | $ | 102.7 | 25.1 | % | $ | (28.6 | ) | (27.8 | )% |
Three Months Ended | ||||||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||||||
2016 | % of Revenues | 2015 | % of Revenues | Amount | Percent | |||||||||||||
(Amounts in millions) | ||||||||||||||||||
General and administrative expenses | ||||||||||||||||||
Motion Pictures | $ | 21.0 | $ | 18.2 | $ | 2.8 | 15.4 | % | ||||||||||
Television Production | 6.8 | 4.4 | 2.4 | 54.5 | % | |||||||||||||
Shared services and corporate expenses, excluding items below | 17.3 | 21.2 | (3.9 | ) | (18.4 | )% | ||||||||||||
General and administrative expenses before items below: | 45.1 | 8.1% | 43.8 | 10.7% | 1.3 | 3.0 | % | |||||||||||
Share-based compensation expense | 22.2 | 16.9 | 5.3 | 31.4 | % | |||||||||||||
Restructuring and other items | 7.4 | — | 7.4 | n/m | ||||||||||||||
Purchase accounting and related adjustments | 1.3 | — | 1.3 | n/m | ||||||||||||||
Start-up costs of new business initiatives | 2.7 | — | 2.7 | n/m | ||||||||||||||
Total general and administrative expenses | $ | 78.7 | 14.2% | $ | 60.7 | 14.8% | $ | 18.0 | 29.7 | % |
Three Months Ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2016 | 2015 | Amount | Percent | |||||||||||
(Amounts in millions) | ||||||||||||||
Share-based compensation expense: | ||||||||||||||
Stock options | $ | 7.7 | $ | 9.2 | $ | (1.5 | ) | (16.3 | )% | |||||
Restricted share units and other share-based compensation | 14.5 | 7.4 | 7.1 | 95.9 | % | |||||||||
Share appreciation rights | — | 0.3 | (0.3 | ) | (100.0 | )% | ||||||||
$ | 22.2 | $ | 16.9 | $ | 5.3 | 31.4 | % |
Three Months Ended | |||||||
June 30, | |||||||
2016 | 2015 | ||||||
(Amounts in millions) | |||||||
Interest Expense | |||||||
Cash Based: | |||||||
Senior revolving credit facility | $ | 2.9 | $ | 0.9 | |||
Convertible senior subordinated notes | 0.6 | 0.5 | |||||
5.25% Senior Notes | 3.0 | 3.0 | |||||
Term Loan | 5.0 | 4.9 | |||||
Other | 1.4 | 1.0 | |||||
12.9 | 10.3 | ||||||
Non-Cash Based: | |||||||
Amortization of discount and deferred financing costs | 2.3 | 2.3 | |||||
$ | 15.2 | $ | 12.6 |
June 30, 2016 | Three Months Ended | ||||||||
June 30, | |||||||||
Ownership Percentage | 2016 | 2015 | |||||||
(Amounts in millions) | |||||||||
EPIX(1) | 31.2% | $ | 11.0 | $ | 13.1 | ||||
Pop(1) | 50.0% | 0.3 | (0.4 | ) | |||||
Other | Various | (0.5 | ) | (1.3 | ) | ||||
$ | 10.8 | $ | 11.4 |
(1) | We license certain of our theatrical releases and other films and television programs to EPIX and Pop. A portion of the profits of these licenses reflecting our ownership share in the venture is eliminated through an adjustment to the equity interest income (loss) of the venture. These profits are recognized as they are realized by the venture (see Note 3 to our unaudited condensed consolidated financial statements). |
Three Months Ended | ||||||||||||
June 30, | ||||||||||||
2016 | 2015 | Net Change | ||||||||||
(Amounts in thousands) | ||||||||||||
Operating income (loss) | $ | (22,023 | ) | $ | 44,165 | $ | (66,188 | ) | ||||
Amortization of films and television programs | 292,394 | 160,419 | 131,975 | |||||||||
Non-cash share-based compensation | 21,731 | 16,591 | 5,140 | |||||||||
Cash interest | (12,892 | ) | (10,371 | ) | (2,521 | ) | ||||||
Current income tax provision | (4,418 | ) | (2,053 | ) | (2,365 | ) | ||||||
Other non-cash charges included in operating activities | 7,815 | 2,430 | 5,385 | |||||||||
Cash flows from operations before changes in operating assets and liabilities | 282,607 | 211,181 | 71,426 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable, net | 145,962 | 134,173 | 11,789 | |||||||||
Investment in films and television programs | (250,011 | ) | (315,861 | ) | 65,850 | |||||||
Other changes in operating assets and liabilities | (35,469 | ) | (60,376 | ) | 24,907 | |||||||
Changes in operating assets and liabilities | (139,518 | ) | (242,064 | ) | 102,546 | |||||||
Net Cash Flows Provided By (Used In) Operating Activities | $ | 143,089 | $ | (30,883 | ) | $ | 173,972 |
Three Months Ended | ||||||||
June 30, | ||||||||
2016 | 2015 | |||||||
(Amounts in thousands) | ||||||||
Investment in equity method investees | $ | (4,172 | ) | $ | (800 | ) | ||
Purchases of property and equipment | (2,906 | ) | (3,248 | ) | ||||
Net Cash Flows Used In Investing Activities | $ | (7,078 | ) | $ | (4,048 | ) |
Three Months Ended | ||||||||
June 30, | ||||||||
2016 | 2015 | |||||||
(Amounts in thousands) | ||||||||
Senior revolving credit facility - borrowings | $ | 185,000 | $ | — | ||||
Senior revolving credit facility - repayments | (121,000 | ) | — | |||||
Net proceeds from senior revolving credit facility | 64,000 | — | ||||||
Term Loan - borrowings, net of deferred financing costs of $616 in 2015 | — | 24,384 | ||||||
Convertible senior subordinated notes - repurchases | — | (5 | ) | |||||
Net proceeds from corporate debt | 64,000 | 24,379 | ||||||
Production loans - borrowings | 63,263 | 203,087 | ||||||
Production loans - repayments | (222,730 | ) | (74,276 | ) | ||||
Net proceeds from production loans | (159,467 | ) | 128,811 | |||||
Repurchase of common shares | — | — | ||||||
Other financing activities | (28,698 | ) | (23,106 | ) | ||||
Net Cash Flows (Used In) Provided By Financing Activities | $ | (124,165 | ) | $ | 130,084 |
Maturity Date | Conversion Price Per Share as of June 30, 2016 | Principal Amounts Outstanding | |||||||||
June 30, | March 31, | ||||||||||
2016 | 2016 | ||||||||||
(Amounts in thousands) | |||||||||||
Senior revolving credit facility(1) | September 2017 | N/A | $ | 225,000 | $ | 161,000 | |||||
5.25% Senior Notes(2) | August 2018 | N/A | 225,000 | 225,000 | |||||||
Term Loan Due 2022(3) | March 2022 | N/A | 400,000 | 400,000 | |||||||
Principal amounts of convertible senior subordinated notes | |||||||||||
January 2012 4.00% Notes | January 2017 | $10.21 | 41,850 | 41,850 | |||||||
April 2013 1.25% Notes | April 2018 | $29.19 | 60,000 | 60,000 | |||||||
$ | 951,850 | $ | 887,850 |
(1) | Senior Revolving Credit Facility: The senior revolving credit facility provides for borrowings up to $800.0 million, limited by a borrowing base and also reduced by outstanding letters of credit, if any. At June 30, 2016, there was $575.0 million available (March 31, 2016 — $639.0 million). Interest is payable at an alternative base rate, as defined, plus 1.5% or LIBOR plus 2.5% as designated by us. We are required to pay a quarterly commitment fee of 0.375% to 0.5% per annum on our unused capacity for the period. Obligations are secured by collateral (as defined in the credit agreement) granted by us and certain of our subsidiaries, as well as a pledge of equity interests in certain of our subsidiaries. The senior revolving credit facility contains a number of covenants, and as of June 30, 2016, we were in compliance with all applicable covenants. |
(2) | 5.25% Senior Notes: The 5.25% Senior Notes contain a number of restrictions and covenants, and as of June 30, 2016, we were in compliance with all applicable covenants. Interest is payable semi-annually on February 1 and August 1 of each year at a rate of 5.25% per year. |
(3) | Term Loan Due 2022: The Term Loan Due 2022 contains a number of restrictions and covenants, and as of June 30, 2016, we were in compliance with all applicable covenants. Interest is payable on the last business day of each April, July, October and January at a rate of 5.00% per year. |
June 30, | March 31, | |||||||
2016 | 2016 | |||||||
(Amounts in thousands) | ||||||||
Production loans(1) | $ | 530,904 | $ | 690,371 |
(1) | Represents individual loans for the production of film and television programs that we produce. Production loans have contractual repayment dates either at or near the expected film or television program completion date, with the exception of certain loans containing repayment dates on a longer term basis, and incur interest at rates ranging from 3.39% to 3.89%. |
Nine Months Ended March 31, | Year Ended March 31, | ||||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | |||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||||||
Future annual repayment of debt recorded as of June 30, 2016 (on-balance sheet arrangements) | |||||||||||||||||||||||||||
Senior revolving credit facility | $ | — | $ | 225,000 | $ | — | $ | — | $ | — | $ | — | $ | 225,000 | |||||||||||||
5.25% Senior Notes | — | — | 225,000 | — | — | — | 225,000 | ||||||||||||||||||||
Term Loan Due 2022 | — | — | — | — | — | 400,000 | 400,000 | ||||||||||||||||||||
Film obligations and production loans(1) | 460,602 | 99,608 | 1,000 | — | — | — | 561,210 | ||||||||||||||||||||
Principal amounts of convertible senior subordinated notes | 41,850 | — | 60,000 | — | — | — | 101,850 | ||||||||||||||||||||
502,452 | 324,608 | 286,000 | — | — | 400,000 | 1,513,060 | |||||||||||||||||||||
Contractual commitments by expected repayment date (off-balance sheet arrangements) | |||||||||||||||||||||||||||
Film obligation and production loan commitments(2) | 310,302 | 241,373 | 8,259 | — | — | — | 559,934 | ||||||||||||||||||||
Interest payments(3) | 28,862 | 32,563 | 26,281 | 20,000 | 20,000 | 22,444 | 150,150 | ||||||||||||||||||||
Operating lease commitments | 10,908 | 14,073 | 14,468 | 14,863 | 14,799 | 33,862 | 102,973 | ||||||||||||||||||||
Other contractual obligations | 61,036 | 48,327 | 21,850 | 7,946 | 4,440 | 6,070 | 149,669 | ||||||||||||||||||||
411,108 | 336,336 | 70,858 | 42,809 | 39,239 | 62,376 | 962,726 | |||||||||||||||||||||
Total future commitments under contractual obligations (4) | $ | 913,560 | $ | 660,944 | $ | 356,858 | $ | 42,809 | $ | 39,239 | $ | 462,376 | $ | 2,475,786 |
(1) | Film obligations include minimum guarantees and theatrical marketing obligations. Production loans represent loans for the production of film and television programs that we produce. Repayment dates are based on anticipated delivery or release date of the related film or contractual due dates of the obligation. |
(2) | Film obligation commitments include distribution and marketing commitments and minimum guarantee commitments. Distribution and marketing commitments represent contractual commitments for future expenditures associated with distribution and marketing of films which we will distribute. The payment dates of these amounts are primarily based on the anticipated release date of the film. Minimum guarantee commitments represent contractual commitments related to the purchase of film rights for pictures to be delivered in the future. Production loan commitments represent amounts committed for future film production and development to be funded through production financing and recorded as a production loan liability when incurred. Future payments under these commitments are based on anticipated delivery or release dates of the related film or contractual due dates of the commitment. The amounts include future interest payments associated with the commitment. |
(3) | Includes cash interest payments on our corporate debt, excluding the interest payments on the senior revolving credit facility as future amounts are not fixed or determinable due to fluctuating balances and interest rates. |
(4) | Not included in the amounts above are $91.8 million of redeemable noncontrolling interest, as future amounts and timing are subject to a number of uncertainties such that we are unable to make sufficiently reliable estimations of future payments (see Note 10 to our unaudited condensed consolidated financial statements). |
June 30, 2016 | ||||||||||
Foreign Currency | Foreign Currency Amount | US Dollar Amount | Weighted Average Exchange Rate Per $1 USD | |||||||
(Amounts in millions) | (Amounts in millions) | |||||||||
British Pound Sterling | £13.1 | in exchange for | $18.7 | £0.70 | ||||||
Australian Dollar | A$56.8 | in exchange for | $50.6 | A$1.12 | ||||||
Canadian Dollar | C$11.2 | in exchange for | $8.4 | C$1.32 |
Nine Months Ended March 31, | Year Ended March 31, | Fair Value | |||||||||||||||||||||||||||||
2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | June 30, 2016 | ||||||||||||||||||||||||
(Amounts in thousands) | |||||||||||||||||||||||||||||||
Variable Rates: | |||||||||||||||||||||||||||||||
Senior Revolving Credit Facility(1) | $ | — | $ | 225,000 | $ | — | $ | — | $ | — | $ | — | $ | 225,000 | $ | 225,000 | |||||||||||||||
Average Interest Rate | — | 2.97 | % | — | — | — | — | ||||||||||||||||||||||||
Production loans(2) | 433,296 | 97,608 | — | — | — | — | 530,904 | 530,904 | |||||||||||||||||||||||
Average Interest Rate | 3.58 | % | 3.61 | % | — | — | — | — | |||||||||||||||||||||||
Fixed Rates: | |||||||||||||||||||||||||||||||
5.25% Senior Notes(3) | — | — | 225,000 | — | — | — | 225,000 | 232,313 | |||||||||||||||||||||||
Average Interest Rate | — | — | 5.25 | % | — | — | — | ||||||||||||||||||||||||
Term Loan Due 2022(4) | — | — | — | — | — | 400,000 | 400,000 | 398,000 | |||||||||||||||||||||||
Average Interest Rate | — | — | — | — | — | 5.00 | % | ||||||||||||||||||||||||
Principal Amounts of Convertible Senior Subordinated Notes: | |||||||||||||||||||||||||||||||
January 2012 4.00% Notes | 41,850 | — | — | — | — | — | 41,850 | 42,255 | |||||||||||||||||||||||
Average Interest Rate | 4.00 | % | — | — | — | — | — | ||||||||||||||||||||||||
April 2013 1.25% Notes | — | — | 60,000 | — | — | — | 60,000 | 55,282 | |||||||||||||||||||||||
Average Interest Rate | — | — | 1.25 | % | — | — | — | ||||||||||||||||||||||||
$ | 475,146 | $ | 322,608 | $ | 285,000 | $ | — | $ | — | $ | 400,000 | $ | 1,482,754 | $ | 1,483,754 |
(1) | Amended and restated senior revolving credit facility, which expires September 27, 2017 and bears interest of 2.50% over the Adjusted LIBOR rate. |
(2) | Represents amounts owed to film production entities on anticipated delivery date or release date of the titles or the contractual due dates of the obligation, that incur interest at rates ranging from approximately 3.39% to 3.89%. |
(3) | Senior secured second-priority notes with a fixed interest rate equal to 5.25%. |
(4) | Term loan maturing on March 17, 2022 with a fixed interest rate equal to 5.00%. |
• | it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, motion picture and television development, production and distribution, debt service requirements, acquisitions or general corporate or other purposes, or limit our ability to obtain such financing on terms acceptable to us; |
• | a portion of our cash flows from operations will be dedicated to the payment of principal and interest on our indebtedness and will not be available for other purposes, including funding motion picture and television production, development and distribution and other operating expenses, capital expenditures and future business opportunities; |
• | the debt service requirements of our indebtedness could make it more difficult for us to satisfy our financial obligations; |
• | certain of our borrowings, including borrowings under our secured credit facilities are at variable rates of interest, exposing us to the risk of increased interest rates; |
• | it may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have less debt; |
• | it may limit our ability to pursue strategic acquisitions and other business opportunities that may be in our best interests; |
• | we may be vulnerable to a downturn in general economic conditions or in our business; and/or |
• | we may be unable to carry out capital spending that is important to our growth. |
• | Lionsgate being required, under certain circumstances, to pay Starz a termination fee in connection with the merger agreement; |
• | Lionsgate having to pay substantial costs relating to the merger, such as legal, accounting, financial advisor, filing, printing and mailing fees and integration costs that have already been incurred or will continue to be incurred until the closing of the merger; |
• | Lionsgate experiencing negative reactions from the financial markets, including negative impacts on their respective stock prices, or from their respective customers, regulators and employees; |
• | Lionsgate having had to comply with restrictions on the conduct of their respective business prior to the completion of the merger, as set forth in the merger agreement; |
• | the management of Lionsgate focusing on the merger instead of on pursuing other opportunities that could be beneficial to the company, in each case, without realizing any of the benefits of having the merger completed; and |
• | reputational harm due to the adverse perception of any failure to successfully complete the merger. |
• | the inability to successfully combine the businesses of Lionsgate and Starz in a manner that permits Lionsgate to achieve the benefits anticipated to result from the merger, in the time frame currently anticipated or at all; |
• | the complexities associated with managing Lionsgate out of several different locations and integrating personnel from the two companies; |
• | the additional complexities of combining two companies with different histories, cultures, regulatory restrictions, markets and customer bases; |
• | the failure by Lionsgate to retain key employees of either Lionsgate or Starz; |
• | potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the merger; and |
• | performance shortfalls at one or both of the two companies as a result of the diversion of management’s attention in connection with completing the merger and integrating the companies’ operations. |
• | requiring Lionsgate to use a substantial portion of its cash flow from operations to service its indebtedness, which would reduce the available cash flow to fund working capital, capital expenditures, development projects, and other general corporate purposes and reduce cash for distributions or limiting Lionsgate’s ability to obtain additional financing to fund such needs; |
• | exposing Lionsgate to increased interest expense to the extent Lionsgate refinances existing debt with higher cost debt, including potential movement of interest rates prior to the completion of the merger; |
• | increasing Lionsgate’s vulnerabilities to fluctuations in market interest rates to the extent that Lionsgate’s debt is subject to floating interest rates; |
• | limiting Lionsgate’s ability to compete with other companies that are not as highly leveraged, as Lionsgate may be less capable of responding to adverse economic and industry conditions; and |
• | restricting the way in which Lionsgate conducts its business because of financial and operating covenants in the agreements governing Lionsgate’s existing and future indebtedness and exposing Lionsgate to potential events of default (if not cured or waived) under covenants contained in Lionsgate’s debt instruments. |
Exhibit | ||
Number | Description of Documents | |
2.1(4) | Agreement and Plan of Merger, dated as of June 30, 2016, by and among Lions Gate, Starz and Orion Arm Acquisition Inc. | |
3.1(1) | Articles | |
3.2(2) | Notice of Articles | |
3.3(3) | Vertical Short Form Amalgamation Application | |
3.4(3) | Certificate of Amalgamation | |
10.118 (4) | Stock Exchange Agreement, dated as of June 30, 2016, by and among Lions Gate, Orion Arm Acquisition Inc., and the stockholders listed on Schedule 1 thereto | |
10.119 (4) | Voting Agreement, dated as of June 30, 2016, by and among Lions Gate, Starz, and (each as defined therein) Liberty Stockholder and Liberty Parent | |
10.120 (4) | Voting Agreement, dated as of June 30, 2016, by and among Lions Gate, Starz, and (each as defined therein) Discovery Stockholder and Discovery Parent | |
10.121 (4) | Voting Agreement, dated as of June 30, 2016, by and among Lions Gate, Starz, and the stockholders listed on Schedule A thereto, including certain affiliates of John C. Malone | |
10.122 (4) | Voting Agreement, dated as of June 30, 2016, by and among Lions Gate, Starz, and the stockholders listed on Schedule A thereto, including certain affiliates of Mark H. Rachesky | |
10.123 (4) | Voting Agreement, dated as of June 30, 2016, by and among Lions Gate, Starz, LG Leopard Canada LP and the stockholders listed on Schedule A thereto | |
10.124 (4) | Amendment to Voting and Standstill Agreement, dated as of June 30, 2016, by and among Lions Gate, Liberty Global plc, Discovery, Dr. John C. Malone, MHR Fund Management, LLC, Liberty, Discovery Communications, Inc. and the Mammoth Funds (as defined therein) | |
10.125 (4) | Amendment No. 1 to Investor Rights Agreement, dated as of June 30, 2016, by and among Lions Gate, Mammoth, Liberty, Discovery, Liberty Global plc, Discovery Communications, Inc., and the affiliated funds of Mammoth party thereto | |
10.126 (4) | Commitment Letter, dated as of June 27, 2016, among Lions Gate, and JPMorgan Chase Bank, N.A., Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Islands Branch, and Deutsche Bank Securities Inc. | |
31.1 | Certification of CEO pursuant to Section 302 of Sarbanes-Oxley Act of 2002 | |
31.2 | Certification of CFO pursuant to Section 302 of Sarbanes-Oxley Act of 2002 | |
32.1 | Certification of CEO and CFO pursuant to Section 906 of Sarbanes-Oxley Act of 2002 | |
101 | The following materials from the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Shareholders' Equity, (v) the Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements |
(1) | Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2005 as filed on June 29, 2005. |
(2) | Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2010, as filed on February 9, 2011 |
(3) | Incorporated by reference to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2007 as filed on May 30, 2007. |
(4) | Incorporated by reference as Exhibits to the Company's Current Report on Form 8-K as filed on July 1, 2016 |
LIONS GATE ENTERTAINMENT CORP. | ||||
By: | /s/ JAMES W. BARGE | |||
Name: | James W. Barge | |||
DATE: August 4, 2016 | Title: | Duly Authorized Officer and Chief Financial Officer |
/s/ JON FELTHEIMER |
Jon Feltheimer |
Chief Executive Officer |
/s/ JAMES W. BARGE |
James W. Barge |
Chief Financial Officer |
(i) | the Form 10-Q of the Company (the “Report”) for the quarterly period ended June 30, 2016, fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for the periods presented in this report. |
/s/ JON FELTHEIMER | |||
Jon Feltheimer | |||
Chief Executive Officer | |||
Date: | August 4, 2016 | ||
/s/ JAMES W. BARGE | |||
James W. Barge | |||
Chief Financial Officer | |||
Date: | August 4, 2016 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Aug. 01, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | LIONS GATE ENTERTAINMENT CORP /CN/ | |
Entity Central Index Key | 0000929351 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 147,655,494 |
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
---|---|---|
Reserve for returns and allowances on accounts receivable | $ 42,218 | $ 51,809 |
Provision for doubtful accounts on accounts receivable | $ 5,939 | $ 6,014 |
Common shares, no par value | ||
Authorized common shares | 500,000,000 | 500,000,000 |
Common stock, shares issued | 147,638,816 | 146,785,940 |
5.25% Senior Notes | Senior Secured Second-Priority Notes | ||
Coupon rate | 5.25% | 5.25% |
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 840 | $ 40,684 |
Foreign currency translation adjustments, net of tax | (4,326) | 3,490 |
Net unrealized gain on available-for-sale securities, net of tax | 16,904 | 42,234 |
Net unrealized gain (loss) on foreign exchange contracts, net of tax | (2,603) | 7 |
Comprehensive income | 10,815 | 86,415 |
Less: Comprehensive loss attributable to noncontrolling interest | 414 | 0 |
Comprehensive income attributable to Lions Gate Entertainment Corp. shareholders | $ 11,229 | $ 86,415 |
Unaudited Condensed Consolidated Statement of Shareholders' Equity (Parenthetical) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
| |
Statement of Stockholders' Equity [Abstract] | |
Withholding tax obligations for share-based compensation | $ 13,230 |
Unaudited Condensed Consolidated Statements of Cash Flows (Parenthetical) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2015
USD ($)
| |
Term Loan | |
Deferred financing costs | $ 616 |
General |
3 Months Ended |
---|---|
Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General Nature of Operations Lions Gate Entertainment Corp. (the “Company,” “Lionsgate,” "Lions Gate," “we,” “us” or “our”) is a premier next generation global content leader with a diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, international distribution and sales, branded channel platforms, interactive ventures and games, and location-based entertainment. 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. 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 months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2017. The balance sheet at March 31, 2016 has been derived from the audited 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, 2016. Certain amounts presented in prior years have been reclassified to conform to the current year’s presentation. Use of Estimates The preparation of financial statements in conformity with U.S. 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 for investment in films and television programs; estimates of sales returns and other allowances and provisions for doubtful accounts; fair value of equity-based compensation; fair value of assets and liabilities for allocation of the purchase price of companies acquired; income taxes; accruals for contingent liabilities; and impairment assessments for investment in films and television programs, property and equipment, equity investments, goodwill and intangible assets. Actual results could differ from such estimates. Recent Accounting Pronouncements Revenue Recognition: In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standard update relating to the recognition of revenue from contracts with customers, which will supersede most current U.S. GAAP revenue recognition guidance, including industry-specific guidance. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. Based on the current guidance, the new framework will become effective on either a full or modified retrospective basis for the Company on April 1, 2018. The Company is currently evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements. Presentation of Debt Issuance Costs: In April 2015, the FASB issued an accounting standards update relating to the presentation of debt issuance costs. The accounting update requires companies to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, rather than as an asset. The guidance is effective for the Company's fiscal year beginning April 1, 2016, and must be applied on a retrospective basis to all prior periods presented in the financial statements. The Company adopted the new guidance effective April 1, 2016, which resulted in the reclassification of approximately $19.4 million and $21.3 million, respectively, of debt issuance costs from other assets to their respective debt liabilities in the unaudited condensed consolidated balance sheets as of June 30, 2016 and March 31, 2016. Recognition and Measurement of Financial Instruments: In January 2016, the FASB issued new guidance that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Among other provisions, the new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. For investments without readily determinable fair values, entities have the option to either measure these investments at fair value or at cost adjusted for changes in observable prices minus impairment. The guidance is effective for the Company's fiscal year beginning April 1, 2018. Early adoption is not permitted, except for certain provisions relating to financial liabilities. The Company is currently evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements. Accounting for Leases: In February 2016, the FASB issued guidance on accounting for leases which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. The new guidance also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. The guidance is effective for the Company's fiscal year beginning April 1, 2019, with early adoption permitted, and is required to be implemented using a modified retrospective approach. The Company is currently evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements. Employee Share-Based Payment Accounting: In March 2016, the FASB issued amended guidance related to employee share-based payment accounting. One aspect of the guidance, which will become effective on a prospective basis, requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. In addition, the guidance eliminates the requirement that excess tax benefits be realized (i.e., through a reduction in income taxes payable) before companies can recognize them. This part of the guidance will be applied using a modified retrospective transition method and will result in the Company recording a cumulative-effect adjustment in retained earnings for excess tax benefits not previously recognized. The guidance also requires presentation of excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity, and can be applied retrospectively or prospectively. The guidance also increases the amount companies can withhold to cover income taxes on awards without triggering liability classification for shares used to satisfy statutory income tax withholding obligations and requires application of a modified retrospective transition method. Finally, the guidance provides for an election to account for forfeitures of share-based payments either by (1) recognizing forfeitures of awards as they occur or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change (as is required under the current guidance). The guidance is effective for the Company's fiscal year beginning April 1, 2017, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements. Equity Method of Accounting: In March 2016, the FASB issued guidance that changes the requirements for equity method accounting when an investment qualifies for use of the equity method as a result of an increase in the investor’s ownership interest in or degree of influence over an investee. The guidance (i) eliminates the need to retroactively apply the equity method of accounting upon qualifying for such treatment, (ii) requires that the cost of acquiring the additional interest in an investee be added to the basis of the previously held interest and (iii) requires that unrealized holding gains or losses for available-for-sale equity securities that qualify for the equity method of accounting be recognized in earnings at the date the investment becomes qualified for use of the equity method of accounting. The guidance is effective for the Company's fiscal year beginning April 1, 2017, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements. |
Investment In Films and Television Programs |
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Investment In Films And Television Programs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment In Films and Television Programs | Investment in Films and Television Programs
The Company expects approximately 49% of completed films and television programs, net of accumulated amortization, will be amortized during the one-year period ending June 30, 2017. Additionally, the Company expects approximately 81% of completed and released films and television programs, net of accumulated amortization and excluding acquired libraries, will be amortized during the three-year period ending June 30, 2019. During the three months ended June 30, 2016 and 2015, the Company performed fair value measurements related to certain films. In determining the fair value of its films, the Company employs a discounted cash flows ("DCF") methodology that includes cash flow estimates of a film’s ultimate revenue and costs as well as a discount rate. The discount rate utilized in the DCF analysis is based on the Company’s weighted average cost of capital plus a risk premium representing the risk associated with producing a particular film. As the primary determination of fair value is determined using a DCF model, the resulting fair value is considered a Level 3 measurement (see Note 8). During the three months ended June 30, 2016 and 2015, the Company recorded $1.9 million and $0.6 million, respectively, of fair value film write-downs. |
Investments |
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Equity Method Investments, Cost Method Investments, and Investments in Debt and Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments The carrying amounts of investments, by category, at June 30, 2016 and March 31, 2016 were as follows:
Equity Method Investments: The carrying amounts of equity method investments at June 30, 2016 and March 31, 2016 were as follows:
Equity interests in equity method investments for the three months ended June 30, 2016 and 2015 were as follows (income (loss)):
EPIX. In April 2008, the Company formed a joint venture with Viacom, its Paramount Pictures unit and Metro-Goldwyn-Mayer Studios to create a premium television channel and subscription video-on-demand service named “EPIX”. The Company invested $80.4 million through September 30, 2010, and no additional amounts have been funded since. Since the Company's original investment in April 2008, the Company has received distributions from EPIX of $28.0 million. No distributions were received during the three months ended June 30, 2016 or 2015. EPIX Financial Information: The following table presents summarized balance sheet data as of June 30, 2016 and March 31, 2016 for EPIX:
The following table presents the summarized statements of income for the three months ended June 30, 2016 and 2015 for EPIX and a reconciliation of the net income reported by EPIX to equity interest income recorded by the Company:
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Pop. The Company’s investment interest in Pop consists of an equity investment in its common stock units and mandatorily redeemable preferred stock units. The Company's partner in Pop, CBS TVG Inc. ("CBS"), has a call option to purchase a portion of the Company's ownership interest in Pop at fair market value, which would result in CBS owning 80% of Pop, exercisable beginning March 26, 2018 for a period of 30 days. During the three months ended June 30, 2016, the Company made no contributions to Pop (2015 - $0.8 million). The mandatorily redeemable preferred stock units carry a dividend rate of 10% compounded annually and are mandatorily redeemable in May 2019 at the stated value plus the dividend return and any additional capital contributions less previous distributions. The mandatorily redeemable preferred stock units were initially recorded based on their estimated fair value, as determined using an option pricing model. The mandatorily redeemable preferred stock units and the 10% dividend are being accreted up to their redemption amount over the ten-year period to the redemption date, which is recorded as income within equity interest. Pop Financial Information: The following table presents summarized balance sheet data as of June 30, 2016 and March 31, 2016 for Pop:
The following table presents the summarized statements of operations for the three months ended June 30, 2016 and 2015 for Pop and a reconciliation of the net loss reported by Pop to equity interest income (loss) recorded by the Company:
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Other Equity Method Investments Defy Media. In June 2007, the Company acquired an interest in Break Media, a multi-platform digital media company and a leader in male-targeted content creation and distribution. In October 2013, Break Media merged with Alloy Digital, a multi-platform digital media company with a strong presence in the youth market, to create Defy Media. The Company's effective economic interest in Defy Media through its investment in Break Media and its direct investment in Defy Media is approximately 13.8%. The Company is accounting for its investment in Defy Media, a limited liability company, under the equity method of accounting due to the Company's board representation that provides significant influence over the investee. Roadside Attractions. Roadside Attractions is an independent theatrical distribution company. The Company owns a 43.0% interest in Roadside Attractions. 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. The Company owns a 49.0% interest in Pantelion Films. Atom Tickets. Atom Tickets is the first-of-its-kind theatrical mobile ticketing platform and app. The Company made initial investments totaling $4.3 million in Atom Tickets during the year ended March 31, 2015. During the year ended March 31, 2016, the Company agreed to participate in an equity offering of Atom Tickets and subscribed for an additional $7.9 million. The Company owns an interest of approximately 19.3% in Atom Tickets. The Company is accounting for its investment in Atom Tickets, a limited liability company, under the equity method of accounting due to the Company's board representation that provides significant influence over the investee. Tribeca Short List. Tribeca Short List is a subscription video-on-demand service. The Company made an initial investment of $2.1 million during the year ended March 31, 2015, and during the year ended March 31, 2016, the Company made capital contributions to Tribeca Short List of $2.4 million, net of cash acquired of $0.4 million (see below). The Company holds a 75.0% economic interest in Tribeca Short List. Through October 17, 2015, the power to direct the activities that most significantly impact the economic performance of Tribeca Short List was shared equally with Tribeca Enterprises, and accordingly through October 17, 2015, the Company's interest in Tribeca Short List was accounted for under the equity method of accounting. Subsequent to October 17, 2015, the terms of the arrangement increased the Company's power to control the board, and the Company now has the power to direct the activities that most significantly impact the economic performance of Tribeca Short List. Accordingly, the Company has consolidated Tribeca Short List beginning in the quarter ended December 31, 2015, with no gain or loss recognized upon consolidation since the carrying value of the net assets approximated the fair value. Available-for-Sale Securities: The cost basis, unrealized losses and fair market value of available-for-sale securities are set forth below:
Starz. At June 30, 2016 and March 31, 2016, available-for-sale securities consisted of the Company's minority interest in Starz. On March 27, 2015, pursuant to the terms of a stock exchange agreement entered into on February 10, 2015 (the "Exchange Agreement"), the Company exchanged 4,967,695 of its newly issued common shares for 2,118,038 shares of Series A common stock of Starz and 2,590,597 shares of Series B common stock of Starz held by certain affiliates of John C. Malone ("Dr. Malone") (the exchange transaction, the "Exchange"). The Exchange Agreement placed certain restrictions on the ability to transfer the shares issued by the Company. The Company classifies the Series A common stock of Starz within Level 1 of the fair value hierarchy as the valuation inputs are based on quoted prices in active markets (see Note 8). The Series B common stock of Starz are considered a Level 2 security because the quoted market prices are based on infrequent transactions. Therefore, the fair value of the Series B common stock, which is convertible, at the holder’s option, into Series A common stock of Starz is based on the quoted market price of the Series A common stock, which is an equivalent security other than for the voting rights. As of June 30, 2016, the Company's investment in Starz was in an unrealized loss position, however due to the fluctuation of the security's market price in an active market and the short-term duration of the unrealized loss, the Company has the intent and ability to hold the securities until the fair value recovers. As of August 3, 2016, the fair value of the Company's minority interest in Starz was $140.2 million, compared to the Company's original cost basis of $158.9 million. Cost Method Investments: Telltale. Telltale Games ("Telltale") is a creator, developer and publisher of interactive software episodic games based upon popular stories and characters across all major gaming and entertainment platforms. In February 2015, the Company invested $40.0 million in Telltale, which consisted of a cash investment in Telltale of $28.0 million in exchange for 2,628,072 of Telltale's Series D Convertible Preferred Stock, and 361,229 newly issued common shares of the Company with a fair value of approximately $12.0 million in exchange for approximately 1,126,316 existing common shares of Telltale, representing in the aggregate an approximately 14% economic interest in Telltale. Next Games. Next Games is a mobile games development company headquartered in Helsinki, Finland, with a focus on crafting visually impressive, highly engaging games. In July 2014, the Company invested $2.0 million in Next Games for a small minority ownership interest, and during the year ended March 31, 2016, the Company invested an additional $0.2 million in Next Games. |
Other Assets |
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Other Assets | Other Assets The composition of the Company’s other assets is as follows as of June 30, 2016 and March 31, 2016:
Prepaid Expenses and Other. Prepaid expenses and other primarily include prepaid expenses, security deposits, and other assets. Finite-lived Intangible Assets. Finite-lived intangibles consist primarily of noncompete agreements, trademarks and trade names, and sales agency relationships. The composition of the Company's finite-lived intangible assets and the associated accumulated amortization is as follows as of June 30, 2016 and March 31, 2016:
Amortization expense associated with the Company's intangible assets for the three months ended June 30, 2016 and 2015 was approximately $0.5 million and $0.2 million, respectively. Amortization expense remaining relating to intangible assets for each of the years ending March 31, 2017 through 2021 is estimated to be approximately $1.4 million, $1.4 million, $1.4 million, $1.4 million, and $1.4 million, respectively. |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate Debt | Corporate Debt The total carrying values of corporate debt of the Company, excluding film obligations and production loans, were as follows as of June 30, 2016 and March 31, 2016, and are reflected net of unamortized debt issuance costs and unamortized discount if applicable:
The following table sets forth future annual contractual principal payment commitments of corporate debt as of June 30, 2016:
Senior Revolving Credit Facility Availability of Funds. The senior revolving credit facility provides for borrowings and letters of credit up to an aggregate of $800.0 million, and at June 30, 2016 there was $575.0 million available (March 31, 2016 — $639.0 million). The availability of funds is limited by a borrowing base and also reduced by outstanding letters of credit, if any. There were no letters of credit outstanding at June 30, 2016 (March 31, 2016 — none). Maturity Date. September 27, 2017. Interest. Interest is payable at an alternative base rate, as defined, plus 1.5%, or LIBOR plus 2.5%, as designated by the Company. As of June 30, 2016, borrowings under the senior revolving credit facility bore interest of 2.5% over the LIBOR rate (effective interest rate of 2.97% and 2.94% on borrowings outstanding as of June 30, 2016 and March 31, 2016, respectively). Commitment Fee. The Company is required to pay a quarterly commitment fee of 0.375% to 0.5% per annum, depending on the average balance of borrowings outstanding during the period, on the total senior revolving credit facility of $800 million less the amount drawn. Security. Obligations are secured by collateral (as defined in the credit agreement) granted by the Company and certain subsidiaries of the Company, as well as a pledge of equity interests in certain of the Company’s subsidiaries. Covenants. The senior revolving credit facility contains a number of covenants that, among other things, require the Company to satisfy certain financial covenants and restrict the ability of the Company to incur additional debt, pay dividends, make certain investments and acquisitions, repurchase its stock, prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, enter into sale-leaseback transactions, transfer and sell material assets and merge or consolidate. As of June 30, 2016, 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. 5.25% Senior Notes Issuance Date. On July 19, 2013, Lions Gate Entertainment Corp. issued $225.0 million aggregate principal amount of 5.25% Senior Secured Second-Priority Notes (the "5.25% Senior Notes"). Interest. Interest is payable semi-annually on February 1 and August 1 of each year at a rate of 5.25% per year. Maturity Date. August 1, 2018. Optional Redemption. Redeemable by the Company, in whole or in part, at a price equal to 100% of the principal amount, plus the Applicable Premium, as defined in the indenture governing the 5.25% Senior Notes, plus accrued and unpaid interest, if any, to the date of redemption. The Applicable Premium amounts to the greater of (i) 1.0% of the principal amount redeemed and (ii) the excess of the present value of the principal amount of the notes redeemed plus interest through the maturity date over the principal amount of the notes redeemed on the redemption date. Covenants. The 5.25% Senior Notes contain certain restrictions and covenants that, subject to certain exceptions, limit the Company’s ability to incur additional indebtedness, pay dividends or repurchase the Company’s common shares, make certain loans or investments, and sell or otherwise dispose of certain assets subject to certain conditions, among other limitations. As of June 30, 2016, the Company was in compliance with all applicable covenants. Term Loan Due 2022 Issuance Date. On March 17, 2015, Lions Gate Entertainment Corp. entered into a second lien credit and guarantee agreement (the "Credit Agreement"), and pursuant to the Credit Agreement, borrowed a term loan in an aggregate amount of $375.0 million (the "Term Loan Due 2022"). In May 2015, Lions Gate Entertainment Corp. amended the Credit Agreement governing its Term Loan Due 2022, and pursuant to the amended Credit Agreement, borrowed an additional term loan in an aggregate amount of $25.0 million. Interest. Interest on the Term Loan Due 2022 is payable on the last business day of each April, July, October and January at a rate of 5.00% per year. Maturity Date. The Term Loan Due 2022 matures on March 17, 2022. Optional Prepayment. The Company may voluntarily prepay the Term Loan Due 2022 at any time, provided that if prepaid (i) on or before March 17, 2017, the Company shall pay to lenders a prepayment premium of 2.0% on the principal amount prepaid; (ii) after March 17, 2017 and on or before March 17, 2018, the Company shall pay to lenders a prepayment premium of 1.0% on the principal amount prepaid; and (iii) on or after March 17, 2018, no prepayment premium shall be payable. Covenants. Substantially similar to the 5.25% Senior Notes discussed above. As of June 30, 2016, the Company was in compliance with all applicable covenants. Convertible Senior Subordinated Notes Outstanding Amount and Terms. The following table sets forth the convertible senior subordinated notes outstanding and certain key terms of these notes at June 30, 2016 and March 31, 2016:
January 2012 4.00% Notes: In January 2012, Lions Gate Entertainment Inc. ("LGEI") issued approximately $45.0 million of January 2012 4.00% Notes, of which $10.1 million was allocated to the equity component. Interest is payable semi-annually on January 15 and July 15 of each year. April 2013 1.25% Notes: In April 2013, LGEI issued approximately $60.0 million in aggregate principal amount of April 2013 1.25% Notes. Interest is payable semi-annually on April 15 and October 15 of each year, and commenced on October 15, 2013. Conversion Features: The convertible senior subordinated notes are convertible, at any time, into the number of common shares of the Company determined by the principal amount being converted divided by the conversion price, subject to adjustment in certain circumstances, including upon the issuance of dividends. The January 2012 4.00% Notes provide that upon conversion, the Company has the option to deliver, in lieu of common shares, cash or a combination of cash and common shares of the Company. Convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) are recorded by separately accounting for the liability and equity component (i.e., conversion feature), thereby reducing the principal amount with a debt discount that is amortized as interest expense over the expected life of the note using the effective interest method. The effective interest rate on the liability component of the January 2012 4.00% Notes is 9.56%. The April 2013 1.25% Notes are convertible only into the Company's common shares and do not carry an option to be settled in cash upon conversion, and accordingly, have been recorded at their principal amount (not reduced by a debt discount for the equity component). Conversions. The following conversions were completed with respect to the Company's convertible senior subordinated notes in the three months ended June 30, 2015 (none in the three months ended June 30, 2016):
Interest Expense. Interest expense recognized for the convertible senior subordinated notes for the three months ended June 30, 2016 and 2015 is presented below:
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Participations and Residuals |
3 Months Ended |
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Jun. 30, 2016 | |
Participations And Residuals [abstract] | |
Participations And Residuals | Participations and Residuals The Company expects approximately 73% of accrued participations and residuals will be paid during the one-year period ending June 30, 2017. Theatrical Slate Participation On March 10, 2015, the Company entered into a theatrical slate participation arrangement with TIK Films (U.S.), Inc. and TIK Films (Hong Kong) Limited (collectively, "TIK Films"), both wholly owned subsidiaries of Hunan TV & Broadcast Intermediary Co. Ltd. Under the arrangement, TIK Films, in general and subject to certain limitations including per picture and annual caps, will contribute a minority share of 25% of the Company’s production or acquisition costs of “qualifying” theatrical feature films, released during the three-year period ending January 23, 2018, and participate in a pro-rata portion of the pictures’ net profits or losses similar to a co-production arrangement based on the portion of costs funded. The arrangement excludes among others, any theatrical feature film incorporating any elements from the Twilight, Hunger Games or Divergent franchises. The percentage of the contribution could vary on certain pictures. Amounts provided from TIK Films are reflected as a participation liability in the Company's consolidated balance sheet and amounted to $87.3 million at June 30, 2016 (March 31, 2016 - $61.3 million). The difference between the ultimate participation expected to be paid to TIK Films and the amount provided by TIK Films is amortized as a charge to or a reduction of participation expense under the individual-film-forecast method. |
Film Obligations and Production Loans |
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Film Obligations And Production Loans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Film Obligations and Production Loans | Film Obligations and Production Loans
The following table sets forth future annual repayment of film obligations and production loans as of June 30, 2016:
Film Obligations Film obligations include minimum guarantees, which represent amounts payable for film rights that the Company has acquired and certain theatrical marketing obligations for amounts received from third parties that are contractually committed for theatrical marketing expenditures associated with specific titles. Production Loans Production loans represent individual loans for the production of film and television programs that the Company produces. The majority of production loans have contractual repayment dates either at or near the expected completion date, with the exception of certain loans containing repayment dates on a longer term basis, and incur interest at rates ranging from 3.39% to 3.89%. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair Value Accounting guidance and standards about fair value define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair Value Hierarchy Fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The accounting guidance and standards establish three levels of inputs that may be used to measure fair value:
The following table sets forth the assets and liabilities required to be carried at fair value on a recurring basis as of June 30, 2016 and March 31, 2016:
The following table sets forth the carrying values and fair values of the Company’s investment in Pop's mandatorily redeemable preferred stock units and outstanding debt at June 30, 2016 and March 31, 2016:
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Mergers and Acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mergers and Acquisitions | Mergers and Acquisitions Starz Transaction. On June 30, 2016, Lionsgate and Starz entered into an Agreement and Plan of Merger (the "Merger Agreement") under which Lionsgate will acquire Starz for a combination of cash and common stock totaling approximately $4.4 billion enterprise value (the "Starz Transaction"). Under the terms of the Merger Agreement, immediately prior to consummation of the proposed merger, Lionsgate will effect the reclassification of its capital stock, pursuant to which each existing Lionsgate common share will be converted into 0.5 shares of a newly issued class of Lionsgate Class A voting shares and 0.5 shares of a newly issued class of Lionsgate Class B non-voting shares, subject to the terms and conditions of the Merger Agreement. Following the reclassification, in the proposed merger, (a) each share of Starz Series A common stock will be converted into the right to receive $18.00 in cash and 0.6784 of a share of Lionsgate Class B non-voting shares, and (b) each share of Starz Series B common stock will be converted into the right to receive $7.26 in cash, 0.6321 of a share of Lionsgate Class B non-voting shares and 0.6321 of a share of Lionsgate Class A voting shares, in each case, subject to the terms and conditions of the Merger Agreement. The total enterprise value of Starz based on the estimated value of purchase price consideration is approximately $4.4 billion, including cash, equity and Starz debt to be assumed. The Merger Agreement has been approved by the boards of directors of Lionsgate and Starz and will be submitted to their respective shareholders for approval as well as to regulatory authorities. Lionsgate has commitments of approximately $4.57 billion from banks to provide for (i) a $1.9 billion term loan B facility, (ii) a $1.0 billion term loan A facility, (iii) a $1.0 billion revolving credit facility (iv) a $520 million unsecured bridge facility and (v) a $150 million unsecured funded bridge facility. The proceeds of the committed financing will be used, among other things, to (i) finance the payment of the cash purchase consideration of the merger, (ii) repay all amounts outstanding under Starz's credit facility and senior notes, (iii) repay all amounts outstanding under Lionsgate's senior revolving credit facility, term loan and senior notes, and (iv) pay fees and expenses related to the foregoing, and (v) in the case of the revolving credit facility, for working capital and other general corporate purposes after the closing of the proposed merger. In connection with the Merger Agreement, on June 30, 2016, Lions Gate entered into a Stock Exchange Agreement (the "Exchange Agreement") with Orion Arm Acquisition Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Lions Gate Entertainment Corp. ("Merger Sub") and certain stockholders of Starz (the "Exchange Stockholders"), pursuant to which, if the Merger Agreement is terminated (1) by Lionsgate because Starz' board of directors changes its recommendation in favor of the transactions (2) by Starz in order to enter into a superior transaction or (3) by either party because Starz' stockholders fail to approve the transactions, then the Exchange Stockholders will sell to Merger Sub all shares of Starz Series B Common Stock held by the Exchange Stockholders (the "Starz Exchange Shares"), which as of June 30, 2016 constituted approximately 69.9% of the total voting power of the issued and outstanding shares of Starz Series B Common Stock, in exchange for per share consideration of $7.26 in cash and 1.2646 newly issued shares of Lionsgate Common Stock (the "Lions Gate Exchange Shares"). At the election of Dr. John C. Malone, or if Lionsgate should fail to receive the required stockholder approval to issue the Lions Gate Exchange Shares, the Exchange Stockholders will instead receive per share consideration of $36.30 in cash for each Starz Exchange Share. Lions Gate plans to seek such required stockholder approval at the same meeting where it will seek the required approvals pursuant to the Merger Agreement. The Merger Agreement contains certain termination rights for Lions Gate and Starz. The Merger Agreement can be terminated by either party (1) by mutual written consent; (2) if the Merger has not been consummated by an outside date of December 31, 2016 (which either party may generally extend to March 31, 2017 if the only closing condition that has not been met is the condition related to the receipt of regulatory approvals); (3) if there is a permanent, non-appealable injunction or law restraining or prohibiting the consummation of the Merger; (4) if either party’s stockholders fail to approve the transactions; (5) if the other party’s board of directors changes its recommendation in favor of the transactions; (6) if the other party materially breaches its non-solicitation covenant; or (7) if the other party has breached its representations or covenants in a way that prevents satisfaction of a closing condition, subject to a cure period. The Merger Agreement can also be terminated by Starz (x) in order to enter into a superior transaction (subject to compliance with certain terms and conditions included in the Merger Agreement) or (y) if Lions Gate fails to consummate the Merger when otherwise required because of a failure to receive its debt financing. Subject to the terms and conditions of the Merger Agreement, Starz will pay Lions Gate a termination fee of $150 million if (1) Starz terminates the Merger Agreement in order to enter into a superior transaction (subject to compliance with certain terms and conditions included in the Merger Agreement), (2) Lions Gate terminates the Merger Agreement because Starz’ board of directors changes its recommendation in favor of the transactions, (3) Lions Gate terminates the Merger Agreement because Starz materially breaches its non-solicitation covenant or (4) (a) an alternative transaction proposal is made to Starz, (b) thereafter the Merger Agreement is terminated (i) by either party for failure to consummate the Merger by the outside date (at such time as Starz’ stockholders have failed to approve the transactions and such termination does not result in the payment of a termination fee by Lions Gate), (ii) by either party because Starz’ stockholders fail to approve the transactions or (iii) by Lions Gate because Starz has breached its representations or covenants in a way that prevents satisfaction of a closing condition, subject to a cure period, and (c) within 18 months of such termination, Starz enters into or consummates an alternative transaction. Subject to the terms and conditions of the Merger Agreement, Lions Gate will pay Starz (1) a termination fee of $150 million if either party terminates the Merger Agreement because Lions Gate’s stockholders fail to approve the transactions, (2) a termination fee of $175 million if Starz terminates the Merger Agreement because Lions Gate’s board of directors changes its recommendation in favor of the transactions or because Lions Gate materially breaches its non-solicitation covenant, (3) a termination fee of $250 million if Starz terminates the Merger Agreement because Lions Gate fails to consummate the Merger when it would otherwise be required because of a failure to receive the debt financing and (4) a termination fee of $175 million if (a) an alternative transaction proposal is made to Lions Gate, (b) thereafter the Merger Agreement is terminated (i) by either party for failure to consummate the Merger by the outside date (at such time as Lions Gate’s stockholders have failed to approve the transactions and such termination does not result in the payment of a termination fee by Starz), (ii) by either party because Lions Gate’s stockholders fail to approve the transactions or (iii) by Starz because Lions Gate has breached its representations or covenants in a way that prevents satisfaction of a closing condition, subject to a cure period, and (c) within 18 months of such termination, Lions Gate enters into or consummates an alternative transaction. A description of the Merger Agreement and other transactional documents was disclosed by the Company on a Current Report on Form 8-K dated June 30, 2016, filed with the SEC on July 1, 2016. On August 1, 2016, the Company filed a Form S-4 Registration Statement with the SEC, which includes detailed information regarding the merger. Acquisition of Pilgrim Studios. On November 12, 2015, the Company purchased 62.5% of the membership interests in Pilgrim Media Group, LLC ("Pilgrim Studios"), a worldwide independent reality television producer and distributor. The aggregate purchase price was approximately $201.7 million. The purchase price consisted of $144.7 million in cash and 1,517,451 of the Company's common shares, valued at $57.0 million. These shares were valued based on the closing price of the Company’s common shares on the date of closing of the acquisition, discounted to the fair value of the shares considering certain transfer restrictions. The Company incurred approximately $3.4 million of acquisition-related costs that were expensed in general and administrative expenses during the year ended March 31, 2016. The acquisition was accounted for as a purchase, with the results of operations of Pilgrim Studios included in the Company's consolidated results from November 12, 2015. The Company made a preliminary allocation of the estimated purchase price of Pilgrim Studios to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair value. Since the initial allocation of the estimated purchase price, the Company has adjusted the preliminary purchase price allocation for new information obtained about facts and circumstances that existed as of the acquisition date, that, if known, would have affected the measurements of the amounts recognized at that date. The preliminary purchase price allocation is subject to revision, as a more detailed analysis of investment in television programs and intangible assets is completed and additional information on the fair value of assets and liabilities becomes available, including receipt of final appraisals of the net assets acquired. A change in the fair value of the net assets may change the amount of the purchase price allocable to goodwill, and could impact the amounts of amortization expense. The Company used DCF analyses, which represent Level 3 fair value measurements, to assess certain components of its purchase price allocation. The preliminary allocation of the purchase price, including the fair value of redeemable noncontrolling interest recognized, is as follows:
Goodwill of $211.5 million represents the excess of the purchase price over the preliminary estimate of the fair value of the underlying tangible and identifiable intangible assets acquired and liabilities assumed. The acquisition goodwill arises from the opportunity for synergies of the combined companies to grow and diversify the Company's television operations by adding nonfiction programming to complement its existing scripted production and syndication operations and leverage the strength of the Company's global distribution infrastructure. The goodwill recorded as part of this acquisition is included in the Television Production segment. Although the goodwill will not be amortized for financial reporting purposes, it is anticipated that substantially all of the goodwill will be deductible for federal tax purposes over the statutory period of 15 years. The following unaudited pro forma condensed consolidated statement of income information presented below illustrate the results of operations of the Company as if the acquisition of Pilgrim Studios as described above occurred on April 1, 2015. The information below is based on a preliminary estimate of the purchase price allocation to the assets and liabilities acquired. The statements of income information below includes the statement of income of Pilgrim Studios for the three months ended March 31, 2015 combined with the Company's statement of income for the three months ended June 30, 2015.
The unaudited pro forma condensed consolidated statement of income information does not include adjustments for any restructuring activities, operating efficiencies or cost savings, and exclude certain one-time transactional costs of $7.7 million attributable to the noncontrolling shareholder expensed in connection with the transaction, as well as $3.4 million of acquisition-related costs that were expensed in general and administrative expenses during the year ended March 31, 2016. There were no changes in the carrying amount of goodwill by reporting segment in the three months ended June 30, 2016. |
Redeemable Noncontrolling Interest |
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | Redeemable Noncontrolling Interest In connection with the acquisition of a controlling interest in Pilgrim Studios on November 12, 2015, the Company recorded a redeemable noncontrolling interest of $90.1 million, representing 37.5% of Pilgrim Studios. The noncontrolling interest holder has a right to put and the Company has a right to call a portion of the noncontrolling interest, equal to 17.5% of Pilgrim Studios, at fair value, subject to a cap, exercisable at five years after the acquisition date of November 12, 2015. In addition, the noncontrolling interest holder has a right to put and the Company has a right to call the remaining amount of noncontrolling interest at fair value, subject to a cap, exercisable at seven years after the acquisition date of November 12, 2015. The put and call options have been determined to be embedded in the noncontrolling interest, and because the put rights are outside the control of the Company and require partial cash settlement, the noncontrolling interest holder's interest is presented as redeemable noncontrolling interest outside of shareholders' equity on the Company's unaudited condensed consolidated balance sheets. In addition, the noncontrolling interest holder is the President and CEO of Pilgrim Studios, who will continue in this role pursuant to an employment contract entered into at the time of closing. Pursuant to the operating agreement, if the employment of the noncontrolling interest holder is terminated, under certain circumstances as defined in the operating agreement, the Company can call and the noncontrolling interest holder can put the noncontrolling interest at a discount to fair value. The amount of the discount related to the 17.5% noncontrolling interest is being expensed through the five-year call period, and the portion of the discount related to the remaining noncontrolling interest is being expensed over the seven-year call period. The amounts are included in general and administrative expense of Pilgrim Studios and reflected as an addition to redeemable noncontrolling interest. Redeemable noncontrolling interest is 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, as discussed above, or (ii) the historical value resulting from the original acquisition date value plus or minus any earnings or loss attribution, plus the amount of unamortized noncontrolling interest discount as discussed above. The amount of the redemption value in excess of the historical values of the noncontrolling interest, if any, is recognized as an increase to noncontrolling interest and a charge to retained earnings. The table below presents the reconciliation of changes in redeemable noncontrolling interest:
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Net Income Per Share |
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Net Income Per Share | Net Income Per Share Basic net income per share is calculated based on the weighted average common shares outstanding for the period. Basic net income per share for the three months ended June 30, 2016 and 2015 is presented below:
Diluted net income per common share reflects the potential dilutive effect, if any, of the conversion of convertible senior subordinated notes under the "if converted" method. Diluted net income per common share also reflects share purchase options, including equity-settled share appreciation rights and restricted share units ("RSUs") using the treasury stock method when dilutive, and any contingently issuable shares when dilutive. Diluted net income per common share for the three months ended June 30, 2016 and 2015 is presented below:
For the three months ended June 30, 2016 and 2015, the outstanding common shares issuable presented below were excluded from diluted net income per common share because their inclusion would have had an anti-dilutive effect.
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Capital Stock |
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Equity and Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock | Capital Stock (a) Common Shares The Company had 500 million authorized common shares at June 30, 2016 and March 31, 2016. The table below outlines common shares reserved for future issuance:
In September 2012, the Company adopted the 2012 Performance Incentive Plan, as amended on September 9, 2014 (the "2012 Plan"). The 2012 Plan provides for the issuance of up to 27.6 million common shares of the Company, stock options, share appreciation rights, restricted shares, stock bonuses and other forms of awards granted or denominated in common shares or units of common shares of the Company, as well as certain cash bonus awards to eligible directors of the Company, officers or employees of the Company or any of its subsidiaries, and certain consultants and advisors to the Company or any of its subsidiaries. (b) Share-based Compensation The Company recognized the following share-based compensation expense during the three months ended June 30, 2016, and 2015:
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The following table sets forth the stock option, equity-settled share appreciation rights, and restricted share unit activity during the three months ended June 30, 2016:
There were no excess tax benefits realized from tax deductions associated with option exercises and RSU activity for the three months ended June 30, 2016 (2015 - insignificant). Total unrecognized compensation cost related to unvested stock options and restricted share unit awards at June 30, 2016 are $39.8 million and $28.0 million, respectively, and are expected to be recognized over a weighted average period of 1.2 and 1.6 years, respectively. (c) Dividends On June 17, 2016, the Company's Board of Directors declared a quarterly cash dividend of $0.09 per common share payable on August 5, 2016, to shareholders of record as of June 30, 2016. As of June 30, 2016, the Company had $13.3 million of cash dividends payable included in accounts payable and accrued liabilities on the unaudited condensed consolidated balance sheet. (d) Shareholder Transactions In November 2015, the Company was advised that each of Liberty Global Incorporated Limited (“Liberty”), a limited company organized under the laws of the United Kingdom and a wholly owned subsidiary of Liberty Global plc, and Discovery Lightning Investments Ltd. (“Discovery”), a limited company organized under the laws of the United Kingdom and a wholly owned subsidiary of Discovery Communications, Inc., agreed to each purchase 5,000,000 common shares, no par value per share, of the Company (“common shares”) from funds affiliated with MHR Fund Management, LLC (“MHR Fund Management”). In connection with the purchases, the Company entered into separate registration rights agreements with each of Liberty and Discovery, and amended the registration rights agreement with MHR Fund Management, which provide Liberty, Discovery and MHR Fund Management (together with certain of their affiliates) with certain registration rights, subject to the terms and conditions set forth therein. The Company also entered into an underwriting agreement with J.P. Morgan Securities LLC, as underwriter, Liberty, Discovery and Bank of America, N.A. in connection with a registered underwritten secondary public offering of the common shares. Among other transaction costs, the Company has incurred expenses on behalf of MHR Fund Management for certain costs related to the registration and offering of the common shares. Such costs, amounting to approximately $0.8 million, were included in general and administration expense in the consolidated statement of income for the year ended March 31, 2016. Mark H. Rachesky, the Chairman of the Board of the Company, is the principal of MHR Fund Management, which holds approximately 20.5% of the Company’s outstanding common stock as of July 22, 2016. The registration and offering were disclosed by the Company on Current Reports on Form 8-K dated November 10, 2015 and November 13, 2015. |
Income Taxes |
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Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In the quarter ended June 30, 2016, the Company determined that a small change in its estimated pretax results for the year ending March 31, 2017 would create a large change in its expected annual effective rate. Accordingly, it was determined that a reliable estimate of the expected annual effective tax rate could not be made. As a result, the Company computed its tax provision (benefit) using the cut-off method which resulted in an income tax benefit of $26.3 million for the three months ended June 30, 2016 based on the actual taxes attributable to its year-to-date earnings. This tax benefit is primarily related to the mix of the Company's pre-tax income (loss) generated across the various jurisdictions in which the Company operates in addition to the tax deductions generated by the Company's capital structure. The income tax provision for the three months ended June 30, 2015 was calculated by estimating the Company's annual effective tax rate, and then applying the effective tax rate to income before income taxes for the period, along with any items that relate discretely to the period. The Company's effective tax rate differs from the federal statutory rate, has changed from the prior period and could fluctuate significantly in the future, as the Company's effective tax rates are 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 valuation allowances on its deferred tax assets, tax planning strategies available to the Company, and other discrete items. |
Government Assistance |
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Jun. 30, 2016 | |
Government Assistance [Abstract] | |
Government Assistance | Government Assistance Tax credits earned for film and television production activity for the three months ended June 30, 2016 and 2015 totaled $24.1 million and $17.8 million, respectively, and are recorded as a reduction of the cost of the related film and television program. Accounts receivable at June 30, 2016 includes $267.0 million with respect to tax credits receivable (March 31, 2016 - $257.1 million). The Company is subject to routine inquiries and review by regulatory authorities of its various incentive claims which have been received or are receivable. Adjustments of claims have generally not been material historically. |
Segment Information |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company’s reportable segments are determined based on the distinct nature of their operations and each segment is a strategic business unit that offers different products and services and is managed separately. The Company has two reportable business segments as of June 30, 2016: Motion Pictures and Television Production. Motion Pictures 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. 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. Segment information by business unit is as follows:
Gross segment contribution is defined as segment revenue less segment direct operating and distribution and marketing expenses, and excludes purchase accounting and related adjustments, start-up costs of new business initiatives, non-cash imputed interest charge, and backstopped prints and advertising ("P&A") expense. Gross segment contribution amounts for the three months ended June 30, 2015 reflect the reclassification of $3.9 million of backstopped P&A from Motion Pictures distribution and marketing expenses in order to be consistent with the current period presentation. Segment profit is defined as gross segment contribution less segment general and administration expenses. The reconciliation of total segment profit to the Company’s income (loss) before income taxes is as follows:
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The following table sets forth revenues by media as broken down by segment for the three months ended June 30, 2016 and 2015:
The following table sets forth significant assets as broken down by segment and other unallocated assets as of June 30, 2016 and March 31, 2016:
The following table sets forth acquisition of investment in films and television programs as broken down by segment for the three months ended June 30, 2016 and 2015:
Purchases of property and equipment amounted to $2.9 million and $3.2 million for the three months ended June 30, 2016 and 2015, respectively, primarily pertaining to purchases for the Company’s corporate headquarters. |
Contingencies |
3 Months Ended |
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Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Two purported Lions Gate stockholders initiated legal proceedings in the United States District Court for the Southern District of New York relating to the March 13, 2014 announcement that the Company had entered into an administrative order with the United States Securities and Exchange Commission (the "SEC") that resolved the SEC’s investigation into transactions that the Company announced on July 20, 2010. These actions were captioned Laborers Pension Trust Fund-Detroit & Vicinity v. Lions Gate Entertainment Corp., et al., Case No. 14 CV 5197 (filed July 11, 2014) and Barger v. Lions Gate Entertainment Corp., Case No. 14 CV 5477 (filed July 21, 2014). The actions alleged, among other things, that the Company and certain of its current and former officers and directors violated the federal securities laws by failing to disclose the SEC’s investigation prior to March 13, 2014. On October 28, 2014, the court consolidated the actions under the caption In re Lions Gate Entertainment Corp. Securities Litigation, Case No. 1:14-cv-05197-JGK, and appointed lead plaintiff and lead counsel. Lead plaintiff filed a consolidated amended complaint on December 29, 2014 and a second consolidated amended complaint on March 30, 2015. On April 30, 2015, defendants moved to dismiss the action. The court held oral argument on November 5, 2015. On January 22, 2016, the court granted the defendants’ motion to dismiss. In addition, on May 16, 2014, the Company received a letter from another purported stockholder, Arkansas Teacher Retirement System, demanding that the Company seek to recover damages, including the costs associated with the SEC investigation, and the fine paid, from the directors who were on the Board of Directors (and certain officers) at the time the July 20, 2010 transactions occurred. On August 6, 2014, the Board of Directors created a Special Committee of independent directors (composed of Mr. Frank Giustra and Mr. Gordon Crawford) to consider the demand. On October 1, 2014, the Arkansas Teacher Retirement System filed a petition in the Supreme Court of British Columbia seeking an order granting it leave to prosecute the claims in the name and on behalf of Lions Gate. The Special Committee concluded that commencing an action in British Columbia against the proposed defendants (or any of them) as demanded by the Arkansas Teacher Retirement System would not be in the best interests of the Company, and the Company has taken steps to oppose the petition, including through filing materials in opposition in December 2014 and January 2015. The Arkansas Teacher Retirement System filed materials in reply. The petition was heard on February 1 to 4, 2016. On March 11, 2016, the court found that granting leave to permit a derivative action would not be in the best interests of the Company and dismissed the action. Between July 19, 2016 and July 29, 2016, six putative class action complaints were filed by purported Starz stockholders in the Court of Chancery of the State of Delaware: Freedman v. Malone, et al., C.A. No. 12571-VCG; Oklahoma Police Pension & Retirement System v. Malone, et al., C.A. No. 12584- VCG; The Firemen’s Retirement System of St. Louis v. Malone, et al., C.A. No. 12596-VCG; City of Cambridge Retirement System v. Malone, et al., C.A. No. 12598-VCG; and Norfolk County Retirement System v. Malone, et al., C.A. No. 12599-VCG; and City of Providence v. Starz, et al., C.A. No. 12604. The complaints name as defendants the members of the board of directors of Starz, Dr. John C. Malone and Robert R. Bennett, as well as Lionsgate and Orion Arm Acquisition Inc., a wholly owned subsidiary of Lionsgate. Some of the complaints also name as defendants Starz, Leslie Malone, The Tracey L. Neal Trust A, The Evan D. Malone Trust A, Deborah J. Bennett, Hilltop Investments, LLC (“Hilltop”), Dr. Rachesky and LionTree Advisors LLC (“LionTree”). The complaints allege, among other things, that the members of the Starz board of directors breached fiduciary duties owed to Starz and the holders of Starz Series A common stock in connection with the merger and the transactions contemplated by the Merger Agreement, dated as of June 30, 2016 by and among Lionsgate, Starz and Merger Sub, pursuant to which Merger Sub will merge with and into Starz (the “Merger”); that Dr. Malone (and, in one action, Mr. Bennett) is a controlling stockholder who breached fiduciary duties owed to other Starz stockholders in connection with the Merger (and, in certain of the actions, by entering into that certain Exchange Agreement dated as of June 30, 2016); and that some or all of Starz, Lions Gate, Merger Sub, The Tracey L. Neal Trust A, The Evan D. Malone Trust A, Deborah J. Bennett, Hilltop, and LionTree aided and abetted such breaches of fiduciary duty. Some or all of the complaints seek, among other relief, rescission of the proposed Merger, an injunction to prevent the Merger from proceeding, a judgment declaring the Exchange Agreement is invalid and void, damages, and/or attorneys’ fees. Defendants believe that the complaints are without merit and intends to defend the actions vigorously. From time to time, the Company is involved in other claims and legal proceedings arising in the normal course of business. While the resolution of these matters cannot be predicted with certainty, we do not believe, based on current knowledge, that the outcome of any currently pending legal proceedings in which the Company is currently involved will have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flow. |
Consolidating Financial Information - Convertible Senior Subordinated Notes |
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Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidating Financial Information - Convertible Senior Subordinated Notes | Consolidating Financial Information — Convertible Senior Subordinated Notes The January 2012 4.00% Notes and the April 2013 1.25% Notes by their terms, are fully and unconditionally guaranteed by the Company. LGEI, the issuer of the January 2012 4.00% Notes and the April 2013 1.25% Notes that are guaranteed by the Company, is 100% owned by the parent company guarantor, Lions Gate Entertainment Corp. The following tables present condensed consolidating financial information as of June 30, 2016 and March 31, 2016, and for the three months ended June 30, 2016 and 2015 for (1) the Company, on a stand-alone basis, (2) LGEI, on a stand-alone basis, (3) the non-guarantor subsidiaries of the Company (including the subsidiaries of LGEI), on a combined basis (collectively, the “Non-guarantor Subsidiaries”) and (4) the Company, on a consolidated basis.
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Derivative Instruments and Hedging Activities |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities 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. As of June 30, 2016, the Company had the following outstanding forward foreign exchange contracts (all outstanding contracts have maturities of less than 21 months from June 30, 2016):
Changes in the fair value representing a net unrealized fair value gain (loss) on foreign exchange contracts that qualified as effective hedge contracts outstanding during the three months ended June 30, 2016 were losses, net of tax, of $2.6 million, (2015 - gains, net of tax, of less than $0.1 million), and are included in accumulated other comprehensive loss, a separate component of shareholders’ equity. Changes in the fair value representing a net unrealized fair value loss on foreign exchange contracts that did not qualify as effective hedge contracts outstanding during the three months ended June 30, 2016 were $0.4 million (2015 - gain of $0.1 million) and are included in direct operating expenses in the consolidated statements of income. The Company monitors its positions with, and the credit quality of, the financial institutions that are party to its financial transactions. As of June 30, 2016, $9.0 million was included in other assets and $1.0 million in accounts payable and accrued liabilities (March 31, 2016 - $9.4 million in other assets and $0.7 million in accounts payable and accrued liabilities) in the accompanying consolidated balance sheets related to the Company's use of foreign currency derivatives. The Company classifies its forward foreign exchange contracts within Level 2 as the valuation inputs are based on quoted prices and market observable data of similar instruments. During the three months ended June 30, 2016, the Company reclassified $3.5 million of gains out of accumulated other comprehensive loss into earnings. As of June 30, 2016, based on the current release schedule, the Company estimates approximately $1.9 million of gains associated with cash flow hedges in accumulated other comprehensive loss to be reclassified into earnings during the one-year period ending June 30, 2017. |
Supplementary Cash Flow Statement Information |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplementary Cash Flow Statement Information | Supplementary Cash Flow Statement Information The supplemental schedule of non-cash investing and financing activities for the three months ended June 30, 2016 and 2015 is presented below.
There were no significant non-cash investing activities for the three months ended June 30, 2016 and 2015. |
General (Policies) |
3 Months Ended |
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Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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. 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 months ended June 30, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2017. The balance sheet at March 31, 2016 has been derived from the audited 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, 2016. Certain amounts presented in prior years have been reclassified to conform to the current year’s presentation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. 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 for investment in films and television programs; estimates of sales returns and other allowances and provisions for doubtful accounts; fair value of equity-based compensation; fair value of assets and liabilities for allocation of the purchase price of companies acquired; income taxes; accruals for contingent liabilities; and impairment assessments for investment in films and television programs, property and equipment, equity investments, goodwill and intangible assets. Actual results could differ from such estimates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Revenue Recognition: In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standard update relating to the recognition of revenue from contracts with customers, which will supersede most current U.S. GAAP revenue recognition guidance, including industry-specific guidance. The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. Based on the current guidance, the new framework will become effective on either a full or modified retrospective basis for the Company on April 1, 2018. The Company is currently evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements. Presentation of Debt Issuance Costs: In April 2015, the FASB issued an accounting standards update relating to the presentation of debt issuance costs. The accounting update requires companies to present debt issuance costs related to a recognized debt liability as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, rather than as an asset. The guidance is effective for the Company's fiscal year beginning April 1, 2016, and must be applied on a retrospective basis to all prior periods presented in the financial statements. The Company adopted the new guidance effective April 1, 2016, which resulted in the reclassification of approximately $19.4 million and $21.3 million, respectively, of debt issuance costs from other assets to their respective debt liabilities in the unaudited condensed consolidated balance sheets as of June 30, 2016 and March 31, 2016. Recognition and Measurement of Financial Instruments: In January 2016, the FASB issued new guidance that addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. Among other provisions, the new guidance requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. For investments without readily determinable fair values, entities have the option to either measure these investments at fair value or at cost adjusted for changes in observable prices minus impairment. The guidance is effective for the Company's fiscal year beginning April 1, 2018. Early adoption is not permitted, except for certain provisions relating to financial liabilities. The Company is currently evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements. Accounting for Leases: In February 2016, the FASB issued guidance on accounting for leases which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. The new guidance also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. The guidance is effective for the Company's fiscal year beginning April 1, 2019, with early adoption permitted, and is required to be implemented using a modified retrospective approach. The Company is currently evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements. Employee Share-Based Payment Accounting: In March 2016, the FASB issued amended guidance related to employee share-based payment accounting. One aspect of the guidance, which will become effective on a prospective basis, requires all income tax effects of awards to be recognized in the income statement when the awards vest or are settled. In addition, the guidance eliminates the requirement that excess tax benefits be realized (i.e., through a reduction in income taxes payable) before companies can recognize them. This part of the guidance will be applied using a modified retrospective transition method and will result in the Company recording a cumulative-effect adjustment in retained earnings for excess tax benefits not previously recognized. The guidance also requires presentation of excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity, and can be applied retrospectively or prospectively. The guidance also increases the amount companies can withhold to cover income taxes on awards without triggering liability classification for shares used to satisfy statutory income tax withholding obligations and requires application of a modified retrospective transition method. Finally, the guidance provides for an election to account for forfeitures of share-based payments either by (1) recognizing forfeitures of awards as they occur or (2) estimating the number of awards expected to be forfeited and adjusting the estimate when it is likely to change (as is required under the current guidance). The guidance is effective for the Company's fiscal year beginning April 1, 2017, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements. Equity Method of Accounting: In March 2016, the FASB issued guidance that changes the requirements for equity method accounting when an investment qualifies for use of the equity method as a result of an increase in the investor’s ownership interest in or degree of influence over an investee. The guidance (i) eliminates the need to retroactively apply the equity method of accounting upon qualifying for such treatment, (ii) requires that the cost of acquiring the additional interest in an investee be added to the basis of the previously held interest and (iii) requires that unrealized holding gains or losses for available-for-sale equity securities that qualify for the equity method of accounting be recognized in earnings at the date the investment becomes qualified for use of the equity method of accounting. The guidance is effective for the Company's fiscal year beginning April 1, 2017, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this new guidance will have on its consolidated financial statements. |
Net Income Per Share | Basic net income per share is calculated based on the weighted average common shares outstanding for the period. Diluted net income per common share reflects the potential dilutive effect, if any, of the conversion of convertible senior subordinated notes under the "if converted" method. Diluted net income per common share also reflects share purchase options, including equity-settled share appreciation rights and restricted share units ("RSUs") using the treasury stock method when dilutive, and any contingently issuable shares when dilutive. |
Investment In Films and Television Programs (Tables) |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment In Films And Television Programs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment In Films And Television Programs |
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Investments (Tables) |
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Equity Method Investments, Cost Method Investments, and Investments in Debt and Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amount of Investments, By Category | The carrying amounts of investments, by category, at June 30, 2016 and March 31, 2016 were as follows:
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Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Amount of Equity Method Investments | The carrying amounts of equity method investments at June 30, 2016 and March 31, 2016 were as follows:
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Equity Method Investee, Income (Loss) | Equity interests in equity method investments for the three months ended June 30, 2016 and 2015 were as follows (income (loss)):
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Available-for-sale Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Available-for-sale Securities | The cost basis, unrealized losses and fair market value of available-for-sale securities are set forth below:
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EPIX | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Balance Sheet | The following table presents summarized balance sheet data as of June 30, 2016 and March 31, 2016 for EPIX:
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Summarized Statement of Operations | The following table presents the summarized statements of income for the three months ended June 30, 2016 and 2015 for EPIX and a reconciliation of the net income reported by EPIX to equity interest income recorded by the Company:
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Pop | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summarized Balance Sheet | The following table presents summarized balance sheet data as of June 30, 2016 and March 31, 2016 for Pop:
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Summarized Statement of Operations | The following table presents the summarized statements of operations for the three months ended June 30, 2016 and 2015 for Pop and a reconciliation of the net loss reported by Pop to equity interest income (loss) recorded by the Company:
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Other Assets (Tables) |
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Other Assets, Unclassified [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | The composition of the Company’s other assets is as follows as of June 30, 2016 and March 31, 2016:
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Finite-Lived Intangible Assets | Finite-lived intangibles consist primarily of noncompete agreements, trademarks and trade names, and sales agency relationships. The composition of the Company's finite-lived intangible assets and the associated accumulated amortization is as follows as of June 30, 2016 and March 31, 2016:
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Corporate Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Carrying Values of Corporate Debt, Excluding Film Obligations and Production Loans | The total carrying values of corporate debt of the Company, excluding film obligations and production loans, were as follows as of June 30, 2016 and March 31, 2016, and are reflected net of unamortized debt issuance costs and unamortized discount if applicable:
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Future Annual Contractual Principal Payment Commitments Under Corporate Debt | The following table sets forth future annual contractual principal payment commitments of corporate debt as of June 30, 2016:
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Convertible Senior Subordinated Notes Outstanding and Certain Key Terms | The following table sets forth the convertible senior subordinated notes outstanding and certain key terms of these notes at June 30, 2016 and March 31, 2016:
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Conversions of Convertible Senior Subordinated Notes | The following conversions were completed with respect to the Company's convertible senior subordinated notes in the three months ended June 30, 2015 (none in the three months ended June 30, 2016):
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Interest Expense on Convertible Senior Subordinated Notes | Interest expense recognized for the convertible senior subordinated notes for the three months ended June 30, 2016 and 2015 is presented below:
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Film Obligations and Production Loans (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Film Obligations And Production Loans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Films Obligations And Production Loans |
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Future Annual Repayment of Film Obligations and Production Loans | The following table sets forth future annual repayment of film obligations and production loans as of June 30, 2016:
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Required to be Carried at Fair Value on a Recurring Basis | The following table sets forth the assets and liabilities required to be carried at fair value on a recurring basis as of June 30, 2016 and March 31, 2016:
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Carrying Values and Fair Values of Assets and Liabilities Not Required to be Carried at Fair Value on a Recurring Basis | The following table sets forth the carrying values and fair values of the Company’s investment in Pop's mandatorily redeemable preferred stock units and outstanding debt at June 30, 2016 and March 31, 2016:
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Mergers and Acquisitions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase Price Allocation |
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Acquisition of Pilgrim Studios, Pro Forma Statement of Income Information | The statements of income information below includes the statement of income of Pilgrim Studios for the three months ended March 31, 2015 combined with the Company's statement of income for the three months ended June 30, 2015.
The unaudited pro forma condensed consolidated statement of income information does not include adjustments for any restructuring activities, operating efficiencies or cost savings, and exclude certain one-time transactional costs of $7.7 million attributable to the noncontrolling shareholder expensed in connection with the transaction, as well as $3.4 million of acquisition-related costs that were expensed in general and administrative expenses during the year ended March 31, 2016. |
Redeemable Noncontrolling Interest (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | The table below presents the reconciliation of changes in redeemable noncontrolling interest:
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Net Income Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic Net Income Per Common Share | Basic net income per share for the three months ended June 30, 2016 and 2015 is presented below:
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Diluted Net Income Per Common Share | Diluted net income per common share for the three months ended June 30, 2016 and 2015 is presented below:
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Anti-dilutive Shares Issuable | For the three months ended June 30, 2016 and 2015, the outstanding common shares issuable presented below were excluded from diluted net income per common share because their inclusion would have had an anti-dilutive effect.
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Capital Stock (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and Share-based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Shares Reserved For Future Issuance | The table below outlines common shares reserved for future issuance:
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation Expense | The Company recognized the following share-based compensation expense during the three months ended June 30, 2016, and 2015:
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Schedule of Stock Option, Equity-Settled Share Appreciation Rights and Restricted Share Unit Activity | The following table sets forth the stock option, equity-settled share appreciation rights, and restricted share unit activity during the three months ended June 30, 2016:
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Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information By Business Unit | Segment information by business unit is as follows:
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Reconciliation Of Total Segment Profit To The Company's Income (Loss) Before Income Taxes | The reconciliation of total segment profit to the Company’s income (loss) before income taxes is as follows:
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Segment Revenues by Media | The following table sets forth revenues by media as broken down by segment for the three months ended June 30, 2016 and 2015:
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Reconciliation of Assets from Segment to Consolidated | The following table sets forth significant assets as broken down by segment and other unallocated assets as of June 30, 2016 and March 31, 2016:
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Acquisition of Investment in Films and Television Programs by Segment | The following table sets forth acquisition of investment in films and television programs as broken down by segment for the three months ended June 30, 2016 and 2015:
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Consolidating Financial Information - Convertible Senior Subordinated Notes (Tables) - Convertible Senior Subordinated Notes |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidating Financial Information [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Balance Sheet |
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Condensed Consolidating Statement of Income |
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Condensed Consolidating Statement of Comprehensive Income |
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Condensed Consolidating Statement of Cash Flows |
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Derivative Instruments and Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Forward Foreign Exchange Contracts | As of June 30, 2016, the Company had the following outstanding forward foreign exchange contracts (all outstanding contracts have maturities of less than 21 months from June 30, 2016):
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Supplementary Cash Flow Statement Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Schedule of Non-Cash Investing and Financing Activities | The supplemental schedule of non-cash investing and financing activities for the three months ended June 30, 2016 and 2015 is presented below.
There were no significant non-cash investing activities for the three months ended June 30, 2016 and 2015. |
General (Narrative) (Details) - USD ($) $ in Millions |
Jun. 30, 2016 |
Mar. 31, 2016 |
---|---|---|
Presentation of Debt Issuance Costs | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Debt issuance costs reclassified | $ 19.4 | $ 21.3 |
Investment In Films and Television Programs (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
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Investment In Films And Television Programs [Abstract] | ||
Percentage of unamortized film costs, one year | 49.00% | |
Percentage of unamortized film costs, three years | 81.00% | |
Fair value film write-downs | $ 1.9 | $ 0.6 |
Investments (Investments by Category) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
---|---|---|
Equity Method Investments, Cost Method Investments, and Investments in Debt and Equity [Abstract] | ||
Equity method investments | $ 309,066 | $ 297,546 |
Available-for-sale securities | 140,882 | 123,978 |
Cost method investments | 43,191 | 42,822 |
Investments | $ 493,139 | $ 464,346 |
Investments (Carrying Amount Of Equity Method Investments) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
Jun. 30, 2015 |
---|---|---|---|
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 309,066 | $ 297,546 | |
EPIX | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, ownership percentage | 31.15% | 31.15% | |
Equity method investments | $ 182,794 | 171,837 | |
Pop | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, ownership percentage | 50.00% | 50.00% | |
Equity method investments | $ 99,035 | 98,719 | |
Other | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments | $ 27,237 | $ 26,990 |
Investments (Equity Method Investee, Income (Loss)) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Schedule of Equity Method Investments [Line Items] | ||
Equity interests income | $ 10,846 | $ 11,388 |
EPIX | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interests income | 10,957 | 13,072 |
Pop | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interests income | 314 | (367) |
Other | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interests income | $ (425) | $ (1,317) |
Investments (Summarized Balance Sheet) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
---|---|---|
EPIX | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | $ 405,707 | $ 355,735 |
Non-current assets | 362,095 | 360,441 |
Current liabilities | 98,423 | 90,837 |
Non-current liabilities | 25,015 | 23,948 |
Pop | ||
Schedule of Equity Method Investments [Line Items] | ||
Current assets | 46,738 | 38,278 |
Non-current assets | 188,316 | 192,461 |
Current liabilities | 27,150 | 29,090 |
Non-current liabilities | 5,547 | 8,198 |
Redeemable preferred stock | $ 490,482 | $ 466,501 |
Investments (Summarized Statement Of Operations) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
||||||||
Reconciliation of net income (loss) reported by investee to equity interest income (loss): | |||||||||
Total equity interest income (loss) recorded | $ 10,846 | $ 11,388 | |||||||
EPIX | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Revenues | 98,295 | 111,351 | |||||||
Expenses: | |||||||||
Operating expenses | 49,151 | 62,937 | |||||||
Selling, marketing, general and administrative expenses | 6,162 | 5,789 | |||||||
Operating income (loss) | 42,982 | 42,625 | |||||||
Interest and other income (expense) | 17 | (509) | |||||||
Reconciliation of net income (loss) reported by investee to equity interest income (loss): | |||||||||
Net income (loss) | $ 42,999 | $ 42,116 | |||||||
Ownership interest in investee | 31.15% | 31.15% | |||||||
The Company's share of net income (loss) | $ 13,394 | $ 13,119 | |||||||
Eliminations of the Company's share of profits on licensing sales to investee | [1] | (3,707) | (2,795) | ||||||
Realization of the Company's share of profits on licensing sales to investee | [2] | 1,270 | 2,748 | ||||||
Total equity interest income (loss) recorded | 10,957 | 13,072 | |||||||
Pop | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Revenues | 24,890 | 20,554 | |||||||
Expenses: | |||||||||
Cost of services | 11,504 | 9,365 | |||||||
Selling, marketing, general and administrative expenses | 10,353 | 9,892 | |||||||
Depreciation and amortization | 1,963 | 1,944 | |||||||
Operating income (loss) | 1,070 | (647) | |||||||
Interest expense, net | 164 | 111 | |||||||
Accretion of redeemable preferred stock units | [3] | 15,981 | 13,638 | ||||||
Total interest expense, net | 16,145 | 13,749 | |||||||
Reconciliation of net income (loss) reported by investee to equity interest income (loss): | |||||||||
Net income (loss) | $ (15,075) | $ (14,396) | |||||||
Ownership interest in investee | 50.00% | 50.00% | |||||||
The Company's share of net income (loss) | $ (7,538) | $ (7,198) | |||||||
Accretion of dividend and interest income on redeemable preferred stock units | [3] | 7,990 | 6,819 | ||||||
Eliminations of the Company's share of profits on licensing sales to investee | (186) | (133) | |||||||
Realization of the Company's share of profits on licensing sales to investee | 48 | 145 | |||||||
Total equity interest income (loss) recorded | $ 314 | $ (367) | |||||||
|
Investments (Available-for-sale Securities) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
---|---|---|
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract] | ||
Cost basis | $ 158,916 | $ 158,916 |
Gross unrealized loss | (18,034) | (34,938) |
Fair value | $ 140,882 | $ 123,978 |
Investments (Available-for-sale Narrative) (Details) - USD ($) $ in Thousands |
Mar. 27, 2015 |
Aug. 03, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
---|---|---|---|---|
Schedule of Available-for-sale Securities [Line Items] | ||||
Fair value | $ 140,882 | $ 123,978 | ||
Cost basis | $ 158,916 | $ 158,916 | ||
Starz | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Issuance of common shares related to investments, shares | 4,967,695 | |||
Series A Common Stock | Starz | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Shares received in exchange (in shares) | 2,118,038 | |||
Series B Common Stock | Starz | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Shares received in exchange (in shares) | 2,590,597 | |||
Subsequent Event | Starz | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Fair value | $ 140,200 | |||
Cost basis | $ 158,900 |
Investments (Cost Method Investments) (Details) - USD ($) $ in Millions |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Feb. 28, 2015 |
Jul. 31, 2014 |
Mar. 31, 2016 |
Jun. 30, 2016 |
|
Telltale | ||||
Schedule of Cost-method Investments [Line Items] | ||||
Cost method investments, amount invested | $ 40.0 | |||
Payments to acquire cost method investments | $ 28.0 | |||
Cost method investments, ownership percentage | 14.00% | |||
Shares issued to purchase cost method investment (in shares) | 361,229 | |||
Value of shares issued to purchase cost method investment | $ 12.0 | |||
Next Games | ||||
Schedule of Cost-method Investments [Line Items] | ||||
Payments to acquire cost method investments | $ 2.0 | $ 0.2 | ||
Common Stock | Telltale | ||||
Schedule of Cost-method Investments [Line Items] | ||||
Shares received (in shares) | 1,126,316 | |||
Convertible Preferred Stock | Series D Convertible Preferred Stock | Telltale | ||||
Schedule of Cost-method Investments [Line Items] | ||||
Shares received (in shares) | 2,628,072 |
Other Assets (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization of intangible assets | $ 0.5 | $ 0.2 |
Estimated remaining amortization expense, year ended March 31, 2017 | 1.4 | |
Estimated amortization expense, year ended March 31, 2018 | 1.4 | |
Estimated amortization expense, year ended March 31, 2019 | 1.4 | |
Estimated amortization expense, year ended March 31, 2020 | 1.4 | |
Estimated amortization expense, year ended March 31, 2021 | $ 1.4 |
Other Assets (Composition Of Other Assets) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
---|---|---|
Other Assets, Unclassified [Abstract] | ||
Prepaid expenses and other | $ 57,082 | $ 57,725 |
Finite-lived intangible assets | 10,883 | 11,350 |
Total other assets | $ 67,965 | $ 69,075 |
Other Assets (Finite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 24,300 | $ 24,300 |
Accumulated Amortization | 13,417 | 12,950 |
Net Carrying Amount | 10,883 | 11,350 |
Noncompete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 9,500 | 9,500 |
Accumulated Amortization | 755 | 449 |
Net Carrying Amount | 8,745 | 9,051 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 8,600 | 8,600 |
Accumulated Amortization | 6,574 | 6,451 |
Net Carrying Amount | 2,026 | 2,149 |
Sales agency relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6,200 | 6,200 |
Accumulated Amortization | 6,088 | 6,050 |
Net Carrying Amount | $ 112 | $ 150 |
Corporate Debt (Narrative - Convertible Senior Subordinated Notes) (Details) - Convertible Senior Subordinated Notes - USD ($) $ in Millions |
Jun. 30, 2016 |
Apr. 30, 2013 |
Jan. 31, 2012 |
---|---|---|---|
January 2012 Notes | |||
Debt Instrument [Line Items] | |||
Coupon rate | 4.00% | ||
Principal amount of notes | $ 45.0 | ||
Equity component | $ 10.1 | ||
Effective interest rate of liability component | 9.56% | ||
April 2013 Notes | |||
Debt Instrument [Line Items] | |||
Coupon rate | 1.25% | ||
Principal amount of notes | $ 60.0 |
Corporate Debt (Conversions of Convertible Senior Subordinated Notes) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Debt Instrument [Line Items] | ||
Principal amount converted | $ 0 | $ 16,162 |
Convertible Senior Subordinated Notes | April 2009 Notes | ||
Debt Instrument [Line Items] | ||
Principal amount converted | $ 16,162 | |
Common shares issued upon conversion (in shares) | 1,983,058 | |
Weighted average conversion price per share (in usd per share) | $ 8.15 | |
Coupon rate | 3.625% |
Corporate Debt (Interest Expense) (Details) - Convertible Senior Subordinated Notes - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Debt Instrument [Line Items] | ||
Contractual interest coupon | $ 607 | $ 549 |
Amortization of discount on liability component and debt issuance costs | 568 | 517 |
Interest expense, total | $ 1,175 | $ 1,066 |
Participations and Residuals (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Mar. 31, 2016 |
|
Participations And Residuals [abstract] | ||
Percentage of accrued participations and residuals payable within one year | 73.00% | |
Contribution of TIK Films, in general, subject to certain limitations | 25.00% | |
Theatrical slate participation arrangement, length of term ending January 23, 2018 | 3 years | |
Theatrical slate participation arrangement, amount payable to TIK Films | $ 87.3 | $ 61.3 |
Film Obligations and Production Loans (Narrative) (Details) - Production Loans |
Jun. 30, 2016 |
---|---|
Minimum | |
Interest rates on production loans | 3.39% |
Maximum | |
Interest rates on production loans | 3.89% |
Film Obligations and Production Loans (Film Obligations And Production Loans) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
---|---|---|
Film obligations | $ 30,217 | $ 24,989 |
Production loans, net of debt issuance costs | 530,660 | 690,029 |
Total film obligations and production loans | 560,877 | 715,018 |
Production Loans | ||
Debt issuance costs | $ 244 | $ 342 |
Mergers and Acquisitions (Purchase Price Allocation) (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Mar. 31, 2016 |
Nov. 12, 2015 |
---|---|---|---|
Finite-lived intangible assets: | |||
Goodwill | $ 534,780 | $ 534,780 | |
Pilgrim Studios | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 15,816 | ||
Accounts receivable, net | 15,248 | ||
Investment in films and television programs, net | 63,387 | ||
Other assets acquired | 7,019 | ||
Finite-lived intangible assets: | |||
Other liabilities assumed | (32,638) | ||
Fair value of net assets acquired | 80,332 | ||
Goodwill | 211,452 | ||
Redeemable noncontrolling interest (Note 10) | (90,128) | ||
Total purchase consideration | 201,656 | ||
Noncompete agreements | Pilgrim Studios | |||
Finite-lived intangible assets: | |||
Finite-lived intangible assets | 9,500 | ||
Trade name | Pilgrim Studios | |||
Finite-lived intangible assets: | |||
Finite-lived intangible assets | $ 2,000 |
Mergers and Acquisitions (Pro Forma Statement of Income Information) (Details) - Pilgrim Studios $ / shares in Units, $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2015
USD ($)
$ / shares
| |
Business Acquisition [Line Items] | |
Revenues | $ | $ 448,265 |
Net income attributable to Lions Gate Entertainment Corp. shareholders | $ | $ 40,064 |
Basic Net Income Per Common Share attributable to Lions Gate Entertainment Corp. shareholders | $ / shares | $ 0.27 |
Diluted Net Income Per Common Share attributable to Lions Gate Entertainment Corp. shareholders | $ / shares | $ 0.26 |
Redeemable Noncontrolling Interest (Narrative) (Details) - Pilgrim Studios - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Nov. 12, 2015 |
Jun. 30, 2016 |
|
Redeemable Noncontrolling Interest [Line Items] | ||
Initial fair value of redeemable noncontrolling interest of Pilgrim Studios | $ 90.1 | |
Redeemable noncontrolling interest, ownership percentage held by noncontrolling owner | 37.50% | |
Portion of noncontrolling interest redeemable after first term, five years after November 12, 2015 | 17.50% | |
First Put/ Call Option, Term | 5 years | |
Second Put/ Call Option, Term | 7 years |
Redeemable Noncontrolling Interest (Changes In Redeemable Noncontrolling Interest) (Details) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2016
USD ($)
| |
Increase (Decrease) in Temporary Equity [Roll Forward] | |
Beginning balance | $ 90,525 |
Net loss of Pilgrim Studios attributable to noncontrolling interest | (414) |
Noncontrolling interest discount accretion | 1,250 |
Adjustments to redemption value | 2,574 |
Cash distributions | (2,159) |
Ending balance | $ 91,776 |
Net Income Per Share (Basic) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Numerator: | ||
Net income attributable to Lions Gate Entertainment Corp. shareholders | $ 1,254 | $ 40,684 |
Denominator: | ||
Weighted average common shares outstanding (in shares) | 147,215 | 147,619 |
Basic net income per common share (in usd per share) | $ 0.01 | $ 0.28 |
Net Income Per Share (Diluted) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Numerator: | ||
Net income attributable to Lions Gate Entertainment Corp. shareholders | $ 1,254 | $ 40,684 |
Interest on convertible notes, net of tax | 0 | 676 |
Numerator for diluted net income per common share | $ 1,254 | $ 41,360 |
Denominator: | ||
Weighted average common shares outstanding (in shares) | 147,215 | 147,619 |
Conversion of notes (in shares) | 0 | 6,325 |
Share purchase options (in shares) | 2,293 | 3,130 |
Restricted share units (in shares) | 103 | 424 |
Adjusted weighted average common shares outstanding (in shares) | 149,611 | 157,498 |
Diluted net income per common share (in usd per share) | $ 0.01 | $ 0.26 |
Net Income Per Share (Anti-dilutive Shares Issuable) (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Anti-dilutive shares issuable [Line Items] | ||
Anti-dilutive shares issuable (in shares) | 17,653 | 4,409 |
Conversion of Notes | ||
Anti-dilutive shares issuable [Line Items] | ||
Anti-dilutive shares issuable (in shares) | 6,154 | 0 |
Share Purchase Options | ||
Anti-dilutive shares issuable [Line Items] | ||
Anti-dilutive shares issuable (in shares) | 9,370 | 3,945 |
Restricted Share Units (RSUs) | ||
Anti-dilutive shares issuable [Line Items] | ||
Anti-dilutive shares issuable (in shares) | 884 | 67 |
Contingently Issuable Shares | ||
Anti-dilutive shares issuable [Line Items] | ||
Anti-dilutive shares issuable (in shares) | 1,245 | 397 |
Capital Stock (Share-Based Compensation Expense) (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|||
Share-Based Compensation Expense [Line Items] | ||||
Share-based compensation expense | $ 22,180 | $ 16,879 | ||
Tax impact | [1] | (8,096) | (6,190) | |
Reduction in net income | 14,084 | 10,689 | ||
Stock Options | ||||
Share-Based Compensation Expense [Line Items] | ||||
Share-based compensation expense | 7,725 | 9,234 | ||
Restricted Share Units and Other Share-based Compensation | ||||
Share-Based Compensation Expense [Line Items] | ||||
Share-based compensation expense | 14,455 | 7,357 | ||
Share Appreciation Rights (SARs) | ||||
Share-Based Compensation Expense [Line Items] | ||||
Share-based compensation expense | $ 0 | $ 288 | ||
|
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Income tax provision (benefit) | $ (26,302) | $ 2,844 |
Government Assistance (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Mar. 31, 2016 |
|
Government Assistance [Abstract] | |||
Tax credits earned for film and television production activity | $ 24.1 | $ 17.8 | |
Tax credits receivable for film and television production | $ 267.0 | $ 257.1 |
Segment Information (Segment Information By Business Unit) (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016
USD ($)
segment
|
Jun. 30, 2015
USD ($)
|
|
Segment Reporting Information [Line Items] | ||
Number of reportable business segments | segment | 2 | |
Segment revenues | $ 553,575 | $ 408,941 |
Gross segment contribution | 74,177 | 102,773 |
Segment general and administration | 27,833 | 22,585 |
Segment profit | 46,344 | 80,188 |
Backstopped prints and advertising expense | 3,900 | |
Motion Pictures | ||
Segment Reporting Information [Line Items] | ||
Segment revenues | 362,479 | 275,387 |
Gross segment contribution | 56,434 | 79,632 |
Segment general and administration | 21,033 | 18,202 |
Segment profit | 35,401 | 61,430 |
Television Production | ||
Segment Reporting Information [Line Items] | ||
Segment revenues | 191,096 | 133,554 |
Gross segment contribution | 17,743 | 23,141 |
Segment general and administration | 6,800 | 4,383 |
Segment profit | $ 10,943 | $ 18,758 |
Segment Information (Reconciliation Of Total Segment Profit To The Company's Income (Loss) Before Income Taxes) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Company’s total segment profit | $ 46,344 | $ 80,188 | |||||||||||
Share-based compensation expense | (22,180) | (16,879) | |||||||||||
Backstopped prints and advertising expense | 3,900 | ||||||||||||
Depreciation and amortization | (5,616) | (1,830) | |||||||||||
Operating income (loss) | (22,023) | 44,165 | |||||||||||
Interest expense | (15,234) | (12,625) | |||||||||||
Interest and other income | 949 | 600 | |||||||||||
Equity interests income | 10,846 | 11,388 | |||||||||||
Income (loss) before income taxes | (25,462) | 43,528 | |||||||||||
General and administrative expense, direct to consumer initiatives | 2,700 | ||||||||||||
Operating segments | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Company’s total segment profit | 46,344 | 80,188 | |||||||||||
Corporate and reconciling items | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Share-based compensation expense | (22,180) | (16,879) | |||||||||||
Restructuring and other items | [1] | (7,431) | 0 | ||||||||||
Non-cash imputed interest charge | [2] | (621) | 0 | ||||||||||
Purchase accounting and related adjustments | [3] | (5,554) | 0 | ||||||||||
Start-up losses of new business initiatives | [4] | (9,570) | 0 | ||||||||||
Backstopped prints and advertising expense | [5] | (144) | 3,934 | ||||||||||
Corporate and shared services | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
General and administrative expenses for corporate and shared services | (17,251) | $ (21,248) | |||||||||||
Pilgrim Studios | |||||||||||||
Segment Reporting Information [Line Items] | |||||||||||||
Direct operating expense, incremental expense from purchase accounting adjustment | 4,300 | ||||||||||||
Accretion of noncontrolling interest discount | $ 1,300 | ||||||||||||
|
Segment Information (Acquisition of Investment in Films and Television Programs by Segment) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Segment Reporting Information [Line Items] | ||
Acquisition of investment in films and television programs | $ 250,011 | $ 315,861 |
Motion Pictures | ||
Segment Reporting Information [Line Items] | ||
Acquisition of investment in films and television programs | 159,370 | 235,237 |
Television Production | ||
Segment Reporting Information [Line Items] | ||
Acquisition of investment in films and television programs | $ 90,641 | $ 80,624 |
Contingencies (Narrative) (Details) |
Jul. 29, 2016 |
---|---|
Subsequent Event | |
Subsequent Event [Line Items] | |
Contingencies, putative class action complaints filed, number | 6 |
Consolidating Financial Information - Convertible Senior Subordinated Notes (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2015 |
Jun. 30, 2016 |
Mar. 31, 2016 |
|
January 2012 Notes | Convertible Senior Subordinated Notes | |||
Consolidating Financial Information [Line Items] | |||
Coupon rate | 4.00% | ||
April 2013 Notes | Convertible Senior Subordinated Notes | |||
Consolidating Financial Information [Line Items] | |||
Coupon rate | 1.25% | ||
5.25% Senior Notes | Senior Secured Second-Priority Notes | |||
Consolidating Financial Information [Line Items] | |||
Coupon rate | 5.25% | 5.25% | |
Lions Gate Entertainment Corp. | Convertible Senior Subordinated Notes | |||
Consolidating Financial Information [Line Items] | |||
Deferred financing costs | $ 616 | ||
Lions Gate Entertainment Inc. | |||
Consolidating Financial Information [Line Items] | |||
Percentage ownership of LGEI, the issuer, by parent company guarantor | 100.00% |
Derivative Instruments and Hedging Activities (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Mar. 31, 2016 |
|
Derivative [Line Items] | |||
Remaining maturity of forward foreign exchange contracts, maximum | 21 months | ||
Net unrealized fair value gain (loss) on foreign exchange contracts, effective portion | $ (2.6) | $ 0.1 | |
Net unrealized fair value gain (loss) on foreign exchange contracts that did not qualify as effective hedge contracts | (0.4) | $ 0.1 | |
Foreign currency cash flow hedge gain reclassified to earnings | 3.5 | ||
Foreign currency cash flow hedge gain estimated to be reclassified into earnings during next 12 months | 1.9 | ||
Other Assets | Foreign Exchange Forward | |||
Derivative [Line Items] | |||
Derivative asset | 9.0 | $ 9.4 | |
Accounts Payable and Accrued Liabilities | Foreign Exchange Forward | |||
Derivative [Line Items] | |||
Derivative liability | $ 1.0 | $ 0.7 |
Derivative Instruments and Hedging Activities (Outstanding Forward Foreign Exchange Contracts) (Details) - Foreign Exchange Forward £ in Millions, CAD in Millions, AUD in Millions, $ in Millions |
Jun. 30, 2016
USD ($)
|
Jun. 30, 2016
AUD
|
Jun. 30, 2016
GBP (£)
|
Jun. 30, 2016
CAD
|
---|---|---|---|---|
British Pounds Sterling | ||||
Derivative [Line Items] | ||||
Foreign Currency Amount | £ | £ 13.1 | |||
US Dollar Amount | $ 18.7 | |||
Weighted average exchange rate per $1 USD | 0.70 | 0.70 | 0.70 | 0.70 |
Australia, Dollars | ||||
Derivative [Line Items] | ||||
Foreign Currency Amount | AUD | AUD 56.8 | |||
US Dollar Amount | $ 50.6 | |||
Weighted average exchange rate per $1 USD | 1.12 | 1.12 | 1.12 | 1.12 |
Canada, Dollars | ||||
Derivative [Line Items] | ||||
Foreign Currency Amount | CAD | CAD 11.2 | |||
US Dollar Amount | $ 8.4 | |||
Weighted average exchange rate per $1 USD | 1.32 | 1.32 | 1.32 | 1.32 |
Supplementary Cash Flow Statement Information (Non-Cash Investing and Financing Activities) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Non-cash financing activities | ||
Accrued dividends (see Note 12) | $ 13,285 | $ 10,376 |
Conversions of convertible senior subordinated notes (see Note 5) | $ 0 | $ 16,162 |
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