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 September 30, 2016 and March 31, 2016 , and for the six months ended September 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. As of September 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 $ 1,354 $ 55,329 $ 49,270 $ — $ 105,953 Restricted cash — 2,900 — — 2,900 Accounts receivable, net 862 1,935 950,454 — 953,251 Investment in films and television programs, net — 6,462 1,322,336 — 1,328,798 Property and equipment, net — 36,438 6,217 — 42,655 Investments 40,072 15,526 446,689 — 502,287 Goodwill 10,172 — 524,608 — 534,780 Other assets 3,790 39,753 32,785 (5,121 ) 71,207 Deferred tax assets — 210,163 12,964 — 223,127 Subsidiary investments and advances 1,721,926 1,644,298 3,113,325 (6,479,549 ) — $ 1,778,176 $ 2,012,804 $ 6,458,648 $ (6,484,670 ) $ 3,764,958 Liabilities and Shareholders' Equity (Deficiency) Senior revolving credit facility $ 297,803 $ — $ — $ — $ 297,803 5.25% Senior Notes 221,689 — — — 221,689 Term Loan 389,197 — — — 389,197 Accounts payable and accrued liabilities 12,383 76,082 260,225 — 348,690 Participations and residuals — 3,528 648,066 — 651,594 Film obligations and production loans — — 512,678 — 512,678 Convertible senior subordinated notes — 101,140 — — 101,140 Deferred revenue — 3,599 288,439 — 292,038 Intercompany payable — 2,246,129 2,409,403 (4,655,532 ) — Redeemable noncontrolling interest — — 93,025 — 93,025 Total shareholders' equity (deficiency) 857,104 (417,674 ) 2,246,812 (1,829,138 ) 857,104 $ 1,778,176 $ 2,012,804 $ 6,458,648 $ (6,484,670 ) $ 3,764,958 Six Months Ended September 30, 2016 Lions Gate Entertainment Corp. Lions Gate Entertainment Inc. Non-guarantor Subsidiaries Consolidating Adjustments Lions Gate Consolidated (Amounts in thousands) STATEMENT OF OPERATIONS Revenues $ — $ 8,823 $ 1,184,286 $ — $ 1,193,109 EXPENSES: Direct operating 6 1,464 751,714 — 753,184 Distribution and marketing — 460 346,532 — 346,992 General and administration 1,297 92,387 70,111 (637 ) 163,158 Depreciation and amortization — 5,857 4,106 — 9,963 Total expenses 1,303 100,168 1,172,463 (637 ) 1,273,297 OPERATING INCOME (LOSS) (1,303 ) (91,345 ) 11,823 637 (80,188 ) Other expenses (income): Interest expense 22,869 114,169 91,471 (197,393 ) 31,116 Interest and other income (107,808 ) — (91,489 ) 197,117 (2,180 ) Total other expenses (income) (84,939 ) 114,169 (18 ) (276 ) 28,936 INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES 83,636 (205,514 ) 11,841 913 (109,124 ) Equity interests income (loss) (96,890 ) 24,108 13,604 71,932 12,754 INCOME (LOSS) BEFORE INCOME TAXES (13,254 ) (181,406 ) 25,445 72,845 (96,370 ) Income tax provision (benefit) 2,950 (84,516 ) 11,156 (9,496 ) (79,906 ) NET INCOME (LOSS) (16,204 ) (96,890 ) 14,289 82,341 (16,464 ) Less: Net loss attributable to noncontrolling interest — — — 260 260 Net income (loss) attributable to Lions Gate Entertainment Corp. shareholders $ (16,204 ) $ (96,890 ) $ 14,289 $ 82,601 $ (16,204 ) Six Months Ended September 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) $ (16,204 ) $ (96,890 ) $ 14,289 $ 82,341 $ (16,464 ) Foreign currency translation adjustments, net of tax (5,485 ) (8,901 ) (9,090 ) 17,991 (5,485 ) Net unrealized gain on available-for-sale securities, net of tax 22,884 — 22,884 (22,884 ) 22,884 Net unrealized gain on foreign exchange contracts, net of tax (2,986 ) — (2,986 ) 2,986 (2,986 ) COMPREHENSIVE INCOME (LOSS) (1,791 ) (105,791 ) 25,097 80,434 (2,051 ) Less: Comprehensive loss attributable to noncontrolling interest — — — 260 260 Comprehensive income (loss) attributable to Lions Gate Entertainment Corp. shareholders $ (1,791 ) $ (105,791 ) $ 25,097 $ 80,694 $ (1,791 ) Six Months Ended September 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 $ (85,736 ) $ 32,731 $ 247,403 $ — $ 194,398 INVESTING ACTIVITIES: Investment in equity method investees — (1,000 ) (4,344 ) — (5,344 ) Distributions from equity method investees — — 2,263 — 2,263 Purchases of property and equipment — (4,493 ) (1,808 ) — (6,301 ) NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES — (5,493 ) (3,889 ) — (9,382 ) FINANCING ACTIVITIES: Senior revolving credit facility - borrowings 454,000 — — — 454,000 Senior revolving credit facility - repayments (314,000 ) — — — (314,000 ) Production loans - borrowings — — 152,296 — 152,296 Production loans - repayments — — (373,726 ) — (373,726 ) Dividends paid (26,819 ) — — — (26,819 ) Distributions to noncontrolling interest — — (3,309 ) — (3,309 ) Exercise of stock options 500 — — — 500 Tax withholding required on equity awards (27,253 ) — — — (27,253 ) NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES 86,428 — (224,739 ) — (138,311 ) NET CHANGE IN CASH AND CASH EQUIVALENTS 692 27,238 18,775 — 46,705 FOREIGN EXCHANGE EFFECTS ON CASH 8 — 1,498 — 1,506 CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD 654 28,091 28,997 — 57,742 CASH AND CASH EQUIVALENTS — END OF PERIOD $ 1,354 $ 55,329 $ 49,270 $ — $ 105,953 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 Six Months Ended September 30, 2015 Lions Gate Entertainment Corp. Lions Gate Entertainment Inc. Non-guarantor Subsidiaries Consolidating Adjustments Lions Gate Consolidated (Amounts in thousands) STATEMENT OF OPERATIONS Revenues $ — $ 14,215 $ 872,182 $ (697 ) $ 885,700 EXPENSES: Direct operating 597 (163 ) 522,686 — 523,120 Distribution and marketing — 3,530 221,534 — 225,064 General and administration 3,042 78,875 47,197 (825 ) 128,289 Depreciation and amortization — 3,747 603 — 4,350 Total expenses 3,639 85,989 792,020 (825 ) 880,823 OPERATING INCOME (LOSS) (3,639 ) (71,774 ) 80,162 128 4,877 Other expenses (income): Interest expense 18,294 107,134 83,947 (184,120 ) 25,255 Interest and other income (101,066 ) (316 ) (83,639 ) 183,866 (1,155 ) Total other expenses (income) (82,772 ) 106,818 308 (254 ) 24,100 INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES 79,133 (178,592 ) 79,854 382 (19,223 ) Equity interests income (loss) (80,554 ) 96,699 20,298 (17,906 ) 18,537 INCOME (LOSS) BEFORE INCOME TAXES (1,421 ) (81,893 ) 100,152 (17,524 ) (686 ) Income tax provision (benefit) (36 ) (1,339 ) 2,516 (442 ) 699 NET INCOME (LOSS) (1,385 ) (80,554 ) 97,636 (17,082 ) (1,385 ) Less: Net loss attributable to noncontrolling interest — — — — — Net income (loss) attributable to Lions Gate Entertainment Corp. shareholders $ (1,385 ) $ (80,554 ) $ 97,636 $ (17,082 ) $ (1,385 ) Six Months Ended September 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) $ (1,385 ) $ (80,554 ) $ 97,636 $ (17,082 ) $ (1,385 ) Foreign currency translation adjustments, net of tax 1,993 3,136 (2,162 ) (974 ) 1,993 Net unrealized gain on available-for-sale securities, net of tax 12,002 12,002 (12,002 ) 12,002 Net unrealized gain on foreign exchange contracts, net of tax 2,994 — 2,994 (2,994 ) 2,994 COMPREHENSIVE INCOME (LOSS) $ 15,604 $ (77,418 ) $ 110,470 $ (33,052 ) $ 15,604 Less: Comprehensive loss attributable to noncontrolling interest — — — — — Comprehensive income (loss) attributable to Lions Gate Entertainment Corp. shareholders $ 15,604 $ (77,418 ) $ 110,470 $ (33,052 ) $ 15,604 Six Months Ended September 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 $ 42,018 $ 53,149 $ (263,775 ) $ — $ (168,608 ) INVESTING ACTIVITIES: Investment in equity method investees — — (3,659 ) — (3,659 ) Purchases of property and equipment — (6,765 ) (115 ) — (6,880 ) NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES — (6,765 ) (3,774 ) — (10,539 ) FINANCING ACTIVITIES: Term Loan - borrowings, net of deferred financing costs of $964 24,036 — — — 24,036 Convertible senior subordinated notes - repurchases — (5 ) — — (5 ) Production loans - borrowings — — 370,945 — 370,945 Production loans - repayments — — (112,474 ) — (112,474 ) Dividends paid (20,563 ) — — — (20,563 ) Excess tax benefits on equity-based compensation awards — — — — — Exercise of stock options 4,453 — — — 4,453 Tax withholding required on equity awards (18,983 ) — — — (18,983 ) NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES (11,057 ) (5 ) 258,471 — 247,409 NET CHANGE IN CASH AND CASH EQUIVALENTS 30,961 46,379 (9,078 ) — 68,262 FOREIGN EXCHANGE EFFECTS ON CASH — — (542 ) — (542 ) CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD 3,499 47,290 51,908 — 102,697 CASH AND CASH EQUIVALENTS — END OF PERIOD $ 34,460 $ 93,669 $ 42,288 $ — $ 170,417 |