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 March 31, 2016 and March 31, 2015 , and for the years ended March 31, 2016 , 2015 and 2014 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. 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 7,225 56,159 32,357 (5,397 ) 90,344 Deferred tax assets 1,502 121,725 11,194 — 134,421 Subsidiary investments and advances 1,598,137 1,504,398 3,094,974 (6,197,509 ) — $ 1,658,438 $ 1,772,790 $ 6,627,186 $ (6,202,906 ) $ 3,855,508 Liabilities and Shareholders’ Equity (Deficiency) Senior revolving credit facility $ 161,000 $ — $ — $ — $ 161,000 5.25% Senior Notes 225,000 — — — 225,000 Term Loan 400,000 — — — 400,000 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 — — 715,360 — 715,360 Convertible senior subordinated notes — 100,050 — — 100,050 Deferred revenue — 4,833 323,411 — 328,244 Intercompany payable — 1,906,899 2,415,792 (4,322,691 ) — Redeemable noncontrolling interests — — 90,525 — 90,525 Shareholders’ equity (deficiency) 850,273 (332,558 ) 2,212,773 (1,880,215 ) 850,273 $ 1,658,438 $ 1,772,790 $ 6,627,186 $ (6,202,906 ) $ 3,855,508 Year Ended March 31, 2016 Lions Gate Entertainment Corp. Lions Gate Entertainment Inc. Non-guarantor Subsidiaries Consolidating Adjustments Lions Gate Consolidated (Amounts in thousands) STATEMENT OF INCOME Revenues $ — $ 23,683 $ 2,324,170 $ (434 ) $ 2,347,419 EXPENSES: Direct operating — 563 1,414,781 — 1,415,344 Distribution and marketing — 6,497 655,292 — 661,789 General and administration 6,530 159,128 118,123 (1,549 ) 282,232 Depreciation and amortization — 9,284 3,800 — 13,084 Total expenses 6,530 175,472 2,191,996 (1,549 ) 2,372,449 OPERATING INCOME (LOSS) (6,530 ) (151,789 ) 132,174 1,115 (25,030 ) Other expenses (income): Interest expense 38,609 220,609 175,975 (380,314 ) 54,879 Interest and other income (209,419 ) (172 ) (172,056 ) 379,796 (1,851 ) Loss on extinguishment of debt — — — — — Total other expenses (income) (170,810 ) 220,437 3,919 (518 ) 53,028 INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES 164,280 (372,226 ) 128,255 1,633 (78,058 ) Equity interests income (loss) (113,199 ) 182,694 46,719 (71,983 ) 44,231 INCOME (LOSS) BEFORE INCOME TAXES 51,081 (189,532 ) 174,974 (70,350 ) (33,827 ) Income tax provision (benefit) 872 (76,333 ) 65,526 (66,592 ) (76,527 ) NET INCOME (LOSS) 50,209 (113,199 ) 109,448 (3,758 ) 42,700 Less: Net loss attributable to noncontrolling interests — — — 7,509 7,509 Net income (loss) attributable to Lions Gate Entertainment Corp. shareholders $ 50,209 $ (113,199 ) $ 109,448 $ 3,751 $ 50,209 Year Ended March 31, 2016 Lions Gate Entertainment Corp. Lions Gate Entertainment Inc. Non-guarantor Subsidiaries Consolidating Adjustments Lions Gate Consolidated (Amounts in thousands) STATEMENT OF COMPREHENSIVE INCOME (LOSS) NET INCOME (LOSS) 50,209 (113,199 ) 109,448 (3,758 ) 42,700 Foreign currency translation adjustments, net of tax (3,056 ) (4,334 ) (6,457 ) 10,791 (3,056 ) Net unrealized loss on available-for-sale securities, net of tax benefit of ($403) (37,643 ) — (37,643 ) 37,643 (37,643 ) Net unrealized gain on foreign exchange contracts, net of tax (193 ) — (193 ) 193 (193 ) COMPREHENSIVE INCOME (LOSS) 9,317 (117,533 ) 65,155 44,869 1,808 Less: Comprehensive loss attributable to noncontrolling interest — — — 7,509 7,509 Comprehensive income (loss) attributable to Lions Gate Entertainment Corp. shareholders $ 9,317 $ (117,533 ) $ 65,155 $ 52,378 $ 9,317 Year Ended March 31, 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 $ (49,146 ) $ 7,730 $ 22,410 $ — $ (19,006 ) INVESTING ACTIVITIES: Investment in equity method investees — (7,863 ) (8,126 ) — (15,989 ) Purchase of Pilgrim Studios, net of cash acquired of $15,816 — — (126,892 ) — (126,892 ) Purchases of other investments — (750 ) — — (750 ) Purchases of property and equipment — (18,311 ) (122 ) — (18,433 ) NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES — (26,924 ) (135,140 ) — (162,064 ) FINANCING ACTIVITIES: Senior revolving credit facility - borrowings 605,500 — — — 605,500 Senior revolving credit facility - repayments (444,500 ) — — — (444,500 ) Term Loan - borrowings, net of deferred financing costs of $964 24,036 — — — 24,036 Convertible senior subordinated notes - repurchases — (5 ) — — (5 ) Production loans - borrowings — — 572,572 — 572,572 Production loans - repayments — — (483,145 ) — (483,145 ) Repurchase of common shares (73,180 ) — — — (73,180 ) Dividends paid (47,447 ) — — — (47,447 ) Exercise of stock options 6,097 — — — 6,097 Tax withholding required on equity awards (24,205 ) — — — (24,205 ) NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES 46,301 (5 ) 89,427 — 135,723 NET CHANGE IN CASH AND CASH EQUIVALENTS (2,845 ) (19,199 ) (23,303 ) — (45,347 ) FOREIGN EXCHANGE EFFECTS ON CASH — — 392 — 392 CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD 3,499 47,290 51,908 — 102,697 CASH AND CASH EQUIVALENTS — END OF PERIOD $ 654 $ 28,091 $ 28,997 $ — $ 57,742 As of March 31, 2015 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 $ 3,499 $ 47,290 $ 51,908 $ — $ 102,697 Restricted cash — 2,508 — — 2,508 Accounts receivable, net 617 7,933 883,330 — 891,880 Investment in films and television programs, net — 6,402 1,375,427 — 1,381,829 Property and equipment, net — 24,938 1,713 — 26,651 Investments 40,072 9,229 388,997 — 438,298 Goodwill 10,172 — 313,156 — 323,328 Other assets 8,109 61,409 11,180 (5,914 ) 74,784 Deferred tax assets 10,524 32,252 7,338 — 50,114 Subsidiary investments and advances 1,385,522 1,378,571 2,571,801 (5,335,894 ) — $ 1,458,515 $ 1,570,532 $ 5,604,850 $ (5,341,808 ) $ 3,292,089 Liabilities and Shareholders’ Equity (Deficiency) Senior revolving credit facility $ — $ — $ — $ — $ — 5.25% Senior Notes 225,000 — — — 225,000 Term Loan 375,000 — — — 375,000 Accounts payable and accrued liabilities 16,228 86,472 229,773 — 332,473 Participations and residuals — 3,417 468,244 — 471,661 Film obligations and production loans — — 656,755 — 656,755 Convertible senior subordinated notes — 114,126 — — 114,126 Deferred revenue — 7,722 267,065 — 274,787 Intercompany payable — 1,530,299 2,547,928 (4,078,227 ) — Redeemable noncontrolling interests — — — — — Shareholders’ equity (deficiency) 842,287 (171,504 ) 1,435,085 (1,263,581 ) 842,287 $ 1,458,515 $ 1,570,532 $ 5,604,850 $ (5,341,808 ) $ 3,292,089 Year Ended March 31, 2015 Lions Gate Entertainment Corp. Lions Gate Entertainment Inc. Non-guarantor Subsidiaries Consolidating Adjustments Lions Gate Consolidated (Amounts in thousands) STATEMENT OF INCOME Revenues $ — $ 29,631 $ 2,370,730 $ (721 ) $ 2,399,640 EXPENSES: Direct operating — 6,909 1,308,866 — 1,315,775 Distribution and marketing — 1,243 590,248 — 591,491 General and administration 11,325 159,908 92,754 (480 ) 263,507 Depreciation and amortization — 4,048 2,538 — 6,586 Total expenses 11,325 172,108 1,994,406 (480 ) 2,177,359 OPERATING INCOME (LOSS) (11,325 ) (142,477 ) 376,324 (241 ) 222,281 Other expenses (income): Interest expense 33,830 188,789 134,054 (304,197 ) 52,476 Interest and other income (172,520 ) (2,881 ) (131,112 ) 303,723 (2,790 ) Loss on extinguishment of debt 6,739 4,925 — — 11,664 Total other expenses (income) (131,951 ) 190,833 2,942 (474 ) 61,350 INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES 120,626 (333,310 ) 373,382 233 160,931 Equity interests income (loss) 59,327 402,959 52,988 (462,797 ) 52,477 INCOME (LOSS) BEFORE INCOME TAXES 179,953 69,649 426,370 (462,564 ) 213,408 Income tax provision (1,828 ) 10,322 63,447 (40,314 ) 31,627 NET INCOME (LOSS) 181,781 59,327 362,923 (422,250 ) 181,781 Less: Net loss attributable to noncontrolling interests — — — — — Net income (loss) attributable to Lions Gate Entertainment Corp. shareholders $ 181,781 $ 59,327 $ 362,923 $ (422,250 ) $ 181,781 Year Ended March 31, 2015 Lions Gate Entertainment Corp. Lions Gate Entertainment Inc. Non-guarantor Subsidiaries Consolidating Adjustments Lions Gate Consolidated (Amounts in thousands) STATEMENT OF COMPREHENSIVE INCOME (LOSS) NET INCOME (LOSS) 181,781 59,327 362,923 (422,250 ) 181,781 Foreign currency translation adjustments, net of tax (844 ) (3,554 ) (1,902 ) (91 ) (6,391 ) Net unrealized gain on available-for-sale securities, net of tax charge of $404 — — 2,705 — 2,705 Net unrealized gain (loss) on foreign exchange contracts, net of tax — — 2,842 — 2,842 COMPREHENSIVE INCOME (LOSS) 180,937 55,773 366,568 (422,341 ) 180,937 Less: Comprehensive loss attributable to noncontrolling interest — — — — — Comprehensive income (loss) attributable to Lions Gate Entertainment Corp. shareholders $ 180,937 $ 55,773 $ 366,568 $ (422,341 ) $ 180,937 Year Ended March 31, 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 $ 171,222 $ 62,901 $ (137,614 ) $ — $ 96,509 INVESTING ACTIVITIES: Proceeds from the sale of equity method investees — — 14,575 — 14,575 Investment in equity method investees — (4,655 ) (18,075 ) — (22,730 ) Purchases of other investments (28,000 ) (2,000 ) — — (30,000 ) Purchases of property and equipment — (14,939 ) (2,074 ) — (17,013 ) NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES (28,000 ) (21,594 ) (5,574 ) — (55,168 ) FINANCING ACTIVITIES: Senior revolving credit facility - borrowings 778,500 — — — 778,500 Senior revolving credit facility - repayments (876,119 ) — — — (876,119 ) Term Loan - borrowings, net of deferred financing costs of $4,315 370,685 — — — 370,685 Term Loan - repayments (229,500 ) — — — (229,500 ) Convertible senior subordinated notes - repurchases — (16 ) — — (16 ) Production loans - borrowings — — 631,709 — 631,709 Production loans - repayments — — (449,648 ) — (449,648 ) Repurchase of common shares (144,840 ) — — — (144,840 ) Dividends paid (33,353 ) — — — (33,353 ) Exercise of stock options 6,839 — — — 6,839 Tax withholding required on equity awards (20,062 ) — — — (20,062 ) NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES (147,850 ) (16 ) 182,061 — 34,195 NET CHANGE IN CASH AND CASH EQUIVALENTS (4,628 ) 41,291 38,873 — 75,536 FOREIGN EXCHANGE EFFECTS ON CASH (1 ) — 1,470 — 1,469 CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD 8,128 5,999 11,565 — 25,692 CASH AND CASH EQUIVALENTS — END OF PERIOD $ 3,499 $ 47,290 $ 51,908 $ — $ 102,697 Year Ended March 31, 2014 Lions Gate Lions Gate Non-guarantor Consolidating Lions Gate (Amounts in thousands) STATEMENT OF INCOME Revenues $ 6,748 $ 26,113 $ 2,606,551 $ (9,158 ) $ 2,630,254 EXPENSES: Direct operating (254 ) (3,331 ) 1,372,199 767 1,369,381 Distribution and marketing 2 3,058 736,401 — 739,461 General and administration 9,968 163,110 82,309 (462 ) 254,925 Depreciation and amortization — 2,218 4,321 — 6,539 Total expenses 9,716 165,055 2,195,230 305 2,370,306 OPERATING INCOME (LOSS) (2,968 ) (138,942 ) 411,321 (9,463 ) 259,948 Other expenses (income): Interest expense 18,718 111,956 43,349 (107,853 ) 66,170 Interest and other income (69,552 ) (3,945 ) (40,027 ) 107,494 (6,030 ) Loss on extinguishment of debt 2,600 36,972 — — 39,572 Total other expenses (income) (48,234 ) 144,983 3,322 (359 ) 99,712 INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES 45,266 (283,925 ) 407,999 (9,104 ) 160,236 Equity interests income (loss) 98,244 403,443 29,467 (506,430 ) 24,724 INCOME (LOSS) BEFORE INCOME TAXES 143,510 119,518 437,466 (515,534 ) 184,960 Income tax provision (8,527 ) 21,274 78,086 (57,910 ) 32,923 NET INCOME (LOSS) 152,037 98,244 359,380 (457,624 ) 152,037 Less: Net loss attributable to noncontrolling interests — — — — — Net income (loss) attributable to Lions Gate Entertainment Corp. shareholders $ 152,037 $ 98,244 $ 359,380 $ (457,624 ) $ 152,037 Year Ended March 31, 2014 Lions Gate Lions Gate Non-guarantor Consolidating Lions Gate (Amounts in thousands) STATEMENT OF COMPREHENSIVE INCOME (LOSS) NET INCOME (LOSS) 152,037 98,244 359,380 (457,624 ) 152,037 Foreign currency translation adjustments, net of tax 5,102 1,665 26,348 (28,821 ) 4,294 Net unrealized gain on foreign exchange contracts, net of tax — (661 ) 1,469 — 808 COMPREHENSIVE INCOME (LOSS) 157,139 99,248 387,197 (486,445 ) 157,139 Less: Comprehensive loss attributable to noncontrolling interest — — — — — Comprehensive income (loss) attributable to Lions Gate Entertainment Corp. shareholders $ 157,139 $ 99,248 $ 387,197 $ (486,445 ) $ 157,139 Year Ended March 31, 2014 Lions Gate Lions Gate Non-guarantor Consolidating Lions Gate (Amounts in thousands) STATEMENT OF CASH FLOWS NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES $ (512,508 ) $ 727,357 $ 37,663 $ — $ 252,512 INVESTING ACTIVITIES: Proceeds from the sale of equity method investees — — 9,000 — 9,000 Investment in equity method investees — (750 ) (16,500 ) — (17,250 ) Distributions from equity method investee in excess of earnings — — 4,169 — 4,169 Repayment of loans receivable — — 4,275 — 4,275 Purchases of property and equipment — (8,384 ) (415 ) — (8,799 ) NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES — (9,134 ) 529 — (8,605 ) FINANCING ACTIVITIES: Senior revolving credit facility - borrowings 409,120 463,100 — — 872,220 Senior revolving credit facility - repayments (311,501 ) (801,574 ) — — (1,113,075 ) Term Loan and 5.25% Senior Notes - borrowings, net of deferred financing costs of $6,860 440,640 — — — 440,640 10.25% Senior Notes - repurchases and redemptions — (470,584 ) — — (470,584 ) Convertible senior subordinated notes - borrowings — 60,000 — — 60,000 Production loans - borrowings — — 532,416 — 532,416 Production loans - repayments — — (517,874 ) — (517,874 ) Pennsylvania Regional Center credit facility - repayments — — (65,000 ) — (65,000 ) Dividends paid (6,900 ) — — — (6,900 ) Exercise of stock options 11,972 — — — 11,972 Tax withholding required on equity awards (23,077 ) — — — (23,077 ) NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES 520,254 (749,058 ) (50,458 ) — (279,262 ) NET CHANGE IN CASH AND CASH EQUIVALENTS 7,746 (30,835 ) (12,266 ) — (35,355 ) FOREIGN EXCHANGE EFFECTS ON CASH (210 ) — (1,106 ) — (1,316 ) CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD 592 36,834 24,937 — 62,363 CASH AND CASH EQUIVALENTS — END OF PERIOD $ 8,128 $ 5,999 $ 11,565 $ — $ 25,692 |