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 December 31, 2016 and March 31, 2016, and for the nine months ended December 31, 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
	December 31, 2016
	Lions Gate Entertainment Corp.		Lions Gate Entertainment Inc.			Non-guarantor Subsidiaries		Consolidating Adjustments			Lions Gate Consolidated
	(Amounts in millions)
BALANCE SHEET
Assets
Cash and cash equivalents	$	1	$	84		$	510	$	—		$	595
Restricted cash	—		3			—		—			3
Accounts receivable, net	1		2			774		—			777
Program rights	—		—			236		—			236
Other current assets	1		20			243		(5		)	259
Total current assets	3		109			1,763		(5		)	1,870
Investment in films and television programs and program rights, net	—		6			1,810		—			1,816
Property and equipment, net	—		38			130		—			168
Investments	40		12			305		—			357
Intangible assets	—		—			2,024		—			2,024
Goodwill	10		—			2,724		—			2,734
Other assets	—		17			388		—			405
Deferred tax assets	6		232			—		(232		)	6
Subsidiary investments and advances	5,708		1,652			3,136		(10,496		)	—
	$	5,767	$	2,066		$	12,280	$	(10,733	)	$	9,380
Liabilities and Shareholders' Equity (Deficiency)
Accounts payable and accrued liabilities	42		98			391		—			531
Participations and residuals	—		4			495		—			499
Film obligations and production loans	—		—			257		—			257
Debt - short term portion	70		42			6		—			118
Deferred revenue	—		3			177		—			180
Total current liabilities	112		147			1,326		—			1,585
Debt	3,332		53			72		—			3,457
Participations and residuals	—		—			304		—			304
Film obligations and production loans	—		—			162		—			162
Other liabilities	—		—			33		—			33
Dissenting shareholders liability	—		—			886		—			886
Deferred revenue	—		—			76		—			76
Deferred tax liabilities	—		—			693		(232		)	461
Intercompany payable	—		2,342			2,666		(5,008		)	—
Redeemable noncontrolling interest	—		—			94		—			94
Total shareholders' equity (deficiency)	2,323		(476		)	5,968		(5,493		)	2,322
	$	5,767	$	2,066		$	12,280	$	(10,733	)	$	9,380



	Nine Months Ended
	December 31, 2016
	Lions Gate Entertainment Corp.			Lions Gate Entertainment Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments			Lions Gate Consolidated
				(Amounts in millions)
STATEMENT OF OPERATIONS
Revenues	$	—		$	12		$	1,933		$	—		$	1,945
EXPENSES:
Direct operating	—			2			1,181			—			1,183
Distribution and marketing	—			1			521			—			522
General and administration	2			96			138			(1		)	235
Depreciation and amortization	—			8			15			—			23
Restructuring and other	2			63			5			—			70
Total expenses	4			170			1,860			(1		)	2,033
OPERATING INCOME (LOSS)	(4		)	(158		)	73			1			(88		)
Other expenses (income):
Interest expense	45			171			150			(308		)	58
Interest and other income	(173		)	—			(138		)	307			(4		)
Gain on Starz investment	(20		)	—			—			—			(20		)
Loss on extinguishment of debt	22			3			3			—			28
Total other expenses (income)	(126		)	174			15			(1		)	62
INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES	122			(332		)	58			2			(150		)
Equity interests income (loss)	(159		)	67			16			87			11
INCOME (LOSS) BEFORE INCOME TAXES	(37		)	(265		)	74			89			(139		)
Income tax provision (benefit)	10			(106		)	32			(28		)	(92		)
NET INCOME (LOSS)	(47		)	(159		)	42			117			(47		)
Less: Net loss attributable to noncontrolling interest	—			—			—			—			—
Net income (loss) attributable to Lions Gate Entertainment Corp. shareholders	$	(47	)	$	(159	)	$	42		$	117		$	(47	)



	Nine Months Ended
	December 31, 2016
	Lions Gate Entertainment Corp.			Lions Gate Entertainment Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments			Lions Gate Consolidated
STATEMENT OF COMPREHENSIVE INCOME (LOSS)				(Amounts in millions)
NET INCOME (LOSS)	$	(47	)	$	(159	)	$	42		$	117		$	(47	)
Foreign currency translation adjustments, net of tax	(8		)	(14		)	(10		)	24			(8		)
Net unrealized gain on available-for-sale securities, net of tax	55			—			55			(55		)	55
Reclassification adjustment for gain on available-for-sale securities realized in net loss	(20		)	—			(20		)	20			(20		)
Net unrealized loss on foreign exchange contracts, net of tax	(5		)	—			(5		)	5			(5		)
COMPREHENSIVE INCOME (LOSS)	(25		)	(173		)	62			111			(25		)
Less: Comprehensive loss attributable to noncontrolling interest	—			—			—			—			—
Comprehensive income (loss) attributable to Lions Gate Entertainment Corp. shareholders	$	(25	)	$	(173	)	$	62		$	111		$	(25	)



	Nine Months Ended
	December 31, 2016
	Lions Gate Entertainment Corp.			Lions Gate Entertainment Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments		Lions Gate Consolidated
	(Amounts in millions)
STATEMENT OF CASH FLOWS
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	(2,542	)	$	66		$	2,892		$	—	$	416
INVESTING ACTIVITIES:
Investment in equity method investees	—			(1		)	(12		)	—		(13		)
Distributions from equity method investees	—			—			2			—		2
Purchase of Starz, net of cash acquired of $73	—			—			(1,057		)	—		(1,057		)
Capital expenditures	—			(9		)	(7		)	—		(16		)
NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES	—			(10		)	(1,074		)	—		(1,084		)
FINANCING ACTIVITIES:
Debt - borrowings	3,911			—			—			—		3,911
Debt - repayments	(1,311		)	—			(941		)	—		(2,252		)
Production loans - borrowings	—			—			231			—		231
Production loans - repayments	—			—			(623		)	—		(623		)
Dividends paid	(27		)	—			—			—		(27		)
Distributions to noncontrolling interest	—			—			(6		)	—		(6		)
Exercise of stock options	1			—			—			—		1
Tax withholding required on equity awards	(32		)	—			—			—		(32		)
NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES	2,542			—			(1,339		)	—		1,203
NET CHANGE IN CASH AND CASH EQUIVALENTS	—			56			479			—		535
FOREIGN EXCHANGE EFFECTS ON CASH	—			—			2			—		2
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD	1			28			29			—		58
CASH AND CASH EQUIVALENTS — END OF PERIOD	$	1		$	84		$	510		$	—	$	595



	As of
	March 31, 2016
	Lions Gate Entertainment Corp.		Lions Gate Entertainment Inc.			Non-guarantor Subsidiaries		Consolidating Adjustments			Lions Gate Consolidated
	(Amounts in millions)
BALANCE SHEET
Assets
Cash and cash equivalents	$	1	$	28		$	29	$	—		$	58
Restricted cash	—		3			—		—			3
Accounts receivable, net	1		2			567		—			570
Other current assets	—		18			219		—			237
Total current assets	2		51			815		—			868
Investment in films and television programs, net	—		6			1,452		—			1,458
Property and equipment, net	—		36			7		—			43
Investments	40		15			409		—			464
Intangible assets	—		—			11		—			11
Goodwill	10		—			525		—			535
Other assets	—		24			302		(5		)	321
Deferred tax assets	1		122			11		—			134
Subsidiary investments and advances	1,584		1,519			3,095		(6,198		)	—
	$	1,637	$	1,773		$	6,627	$	(6,203	)	$	3,834
Liabilities and Shareholders' Equity (Deficiency)
Accounts payable and accrued liabilities	22		90			243		—			355
Participations and residuals	—		3			434		—			437
Film obligations and production loans	—		—			663		—			663
Debt - short term portion	—		40			—		—			40
Deferred revenue	—		—			246		—			246
Total current liabilities	22		133			1,586		—			1,741
Debt	765		60			—		—			825
Participations and residuals	—		1			169		—			170
Film obligations and production loans	—		—			52		—			52
Other liabilities	—		—			23		—			23
Deferred revenue	—		5			77		—			82
Intercompany payable	—		1,907			2,416		(4,323		)	—
Redeemable noncontrolling interest	—		—			91		—			91
Total shareholders' equity (deficiency)	850		(333		)	2,213		(1,880		)	850
	$	1,637	$	1,773		$	6,627	$	(6,203	)	$	3,834



	Nine Months Ended
	December 31, 2015
	Lions Gate Entertainment Corp.			Lions Gate Entertainment Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments			Lions Gate Consolidated
	(Amounts in millions)
STATEMENT OF OPERATIONS
Revenues	$	—		$	16		$	1,541		$	(1	)	$	1,556
EXPENSES:
Direct operating	1			—			926			—			927
Distribution and marketing	—			6			422			—			428
General and administration	3			105			73			(1		)	180
Depreciation and amortization	—			6			1			—			7
Restructuring and other	3			4			11			—			18
Total expenses	7			121			1,433			(1		)	1,560
OPERATING INCOME (LOSS)	(7		)	(105		)	108			—			(4		)
Other expenses (income):
Interest expense	28			164			129			(281		)	40
Interest and other income	(154		)	(1		)	(127		)	280			(2		)
Total other expenses (income)	(126		)	163			2			(1		)	38
INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES	119			(268		)	106			1			(42		)
Equity interests income (loss)	(81		)	186			30			(106		)	29
INCOME (LOSS) BEFORE INCOME TAXES	38			(82		)	136			(105		)	(13		)
Income tax provision (benefit)	(1		)	(45		)	54			(52		)	(44		)
NET INCOME (LOSS)	39			(37		)	82			(53		)	31
Less: Net loss attributable to noncontrolling interest	—			—			—			8			8
Net income (loss) attributable to Lions Gate Entertainment Corp. shareholders	$	39		$	(37	)	$	82		$	(45	)	$	39



	Nine Months Ended
	December 31, 2015
	Lions Gate Entertainment Corp.			Lions Gate Entertainment Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments			Lions Gate Consolidated
STATEMENT OF COMPREHENSIVE INCOME (LOSS)	(Amounts in millions)
NET INCOME (LOSS)	$	39		$	(37	)	$	82		$	(53	)	$	31
Foreign currency translation adjustments, net of tax	(1		)	(4		)	(4		)	10			1
Net unrealized loss on available-for-sale securities, net of tax	—			—			(4		)	—			(4		)
Net unrealized gain on foreign exchange contracts, net of tax	—			—			2			—			2
COMPREHENSIVE INCOME (LOSS)	$	38		$	(41	)	$	76		$	(43	)	$	30
Less: Comprehensive loss attributable to noncontrolling interest	—			—			—			8			8
Comprehensive income (loss) attributable to Lions Gate Entertainment Corp. shareholders	$	38		$	(41	)	$	76		$	(35	)	$	38



	Nine Months Ended
	December 31, 2015
	Lions Gate Entertainment Corp.			Lions Gate Entertainment Inc.			Non-guarantor Subsidiaries			Consolidating Adjustments		Lions Gate Consolidated
	(Amounts in millions)
STATEMENT OF CASH FLOWS
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	25		$	18		$	(154	)	$	—	$	(111	)
INVESTING ACTIVITIES:
Investment in equity method investees and other investments	—			(1		)	(3		)	—		(4		)
Purchase of Pilgrim Media Group, net of cash acquired of $16	—			—			(127		)	—		(127		)
Capital expenditures	—			(13		)	(1		)	—		(14		)
NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES	—			(14		)	(131		)	—		(145		)
FINANCING ACTIVITIES:
Debt - borrowings	262			—			—			—		262
Debt - repayments	(238		)	—			—			—		(238		)
Production loans - borrowings	—			—			510			—		510
Production loans - repayments	—			—			(241		)	—		(241		)
Dividends paid	(34		)	—			—			—		(34		)
Exercise of stock options	6			—			—			—		6
Tax withholding required on equity awards	(23		)	—			—			—		(23		)
NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES	(27		)	—			269			—		242
NET CHANGE IN CASH AND CASH EQUIVALENTS	(2		)	4			(16		)	—		(14		)
FOREIGN EXCHANGE EFFECTS ON CASH	—			—			(1		)	—		(1		)
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD	4			47			52			—		103
CASH AND CASH EQUIVALENTS — END OF PERIOD	$	2		$	51		$	35		$	—	$	88