XML 35 R16.htm IDEA: XBRL DOCUMENT
v3.19.1

Debt | 12 Months Ended
--- | ---
Mar. 31, 2019
Debt Disclosure [Abstract] |
Debt | Debt Total debt of the Company, excluding film obligations and production loans, was as follows as of March 31, 2019 and March 31, 2018:
| March 31, 2019 |  | March 31, 2018
| (Amounts in millions)
Corporate debt: |  |  |
Revolving credit facility | $ | — |  |  | $ | — |
Term Loan A(1) | 750.0 |  |  | 750.0 |
Term Loan B(1) | 1,107.5 |  |  | 1,250.0 |
5.875% Senior Notes | 520.0 |  |  | 520.0 |
6.375% Senior Notes | 550.0 |  |  | — |
Total corporate debt | 2,927.5 |  |  | 2,520.0 |
Convertible senior subordinated notes | — |  |  | 60.0 |
Capital lease obligations | 45.4 |  |  | 50.5 |
Total debt | 2,972.9 |  |  | 2,630.5 |
Unamortized discount and debt issuance costs, net of fair value adjustment on capital lease obligations | (68.5 | ) |  | (73.1 | )
Total debt, net | 2,904.4 |  |  | 2,557.4 |
Less current portion | (53.6 | ) |  | (79.1 | )
Non-current portion of debt | $ | 2,850.8 |  |  | $ | 2,478.3 |
______________
(1) | To manage interest rate risk on certain of its LIBOR-based floating-rate corporate debt, as of March 31, 2019, the Company has entered into interest rate swaps to effectively convert the floating interest rates to fixed interest rates on a $1.7 billion notional amount, which as of March 31, 2019 converts the effective rate on $1.7 billion of our LIBOR-based corporate debt to 4.987% (see Note 18 for further information).
The following table sets forth future annual contractual principal payment commitments of debt as of March 31, 2019:
|  | Maturity Date |  | Year Ended March 31,
Debt Type |  |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | 2024 |  | Thereafter |  | Total
|  |  |  | (Amounts in millions)
Revolving Credit Facility |  | March 2023 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Term Loan A |  | March 2023 |  | 37.5 |  |  | 52.5 |  |  | 75.0 |  |  | 585.0 |  |  | — |  |  | — |  |  | 750.0 |
Term Loan B |  | March 2025 |  | 12.5 |  |  | 12.5 |  |  | 12.5 |  |  | 12.5 |  |  | 12.5 |  |  | 1,045.0 |  |  | 1,107.5 |
5.875% Senior Notes |  | November 2024 |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 520.0 |  |  | 520.0 |
6.375% Senior Notes |  | February 2024 |  | — |  |  | — |  |  | — |  |  | — |  |  | 550.0 |  |  | — |  |  | 550.0 |
Capital lease obligations |  | Various |  | 3.0 |  |  | 3.0 |  |  | 0.9 |  |  | 0.9 |  |  | 1.0 |  |  | 36.6 |  |  | 45.4 |
|  |  |  | $ | 53.0 |  |  | $ | 68.0 |  |  | $ | 88.4 |  |  | $ | 598.4 |  |  | $ | 563.5 |  |  | $ | 1,601.6 |  |  | 2,972.9 |
Less aggregate unamortized discount & debt issuance costs, net of fair value adjustment on capital lease obligations |  |  |  |  |  |  |  |  |  |  |  |  |  | (68.5 | )
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,904.4 |
Senior Credit Facilities (Revolving Credit Facility, Term Loan A and Term Loan B) Revolving Credit Facility Availability of Funds & Commitment Fee. The revolving credit facility provides for borrowings and letters of credit up to an aggregate of $1.5 billion, and at March 31, 2019 there was $1.5 billion available. However, borrowing levels are subject to certain financial covenants as discussed below. There were no letters of credit outstanding at March 31, 2019. The Company is required to pay a quarterly commitment fee on the Revolving Credit Facility of 0.250% to 0.375% per annum, depending on the achievement of certain leverage ratios, as defined in the Amended Credit Agreement, on the total Revolving Credit Facility of $1.5 billion less the amount drawn. Maturity Date: •Revolving Credit Facility & Term Loan A: March 22, 2023. •Term Loan B: March 24, 2025. Interest:
• | Revolving Credit Facility & Term Loan A: Initially bore interest at a rate per annum equal to LIBOR plus 1.75% (or an alternative base rate plus 0.75%) margin, with a LIBOR floor of zero. The margin is subject to potential increases of up to 50 basis points (two (2) increases of 25 basis points each) upon certain increases to net first lien leverage ratios, as defined in the Amended Credit Agreement. The margin as of March 31, 2019 is 2.00% (effective interest rate of 4.49% as of March 31, 2019, before the impact of interest rate swaps).
• | Term Loan B: As of March 22, 2018, pursuant to the Amended Credit Agreement described below, the Term Loan B bears interest at a rate per annum equal to LIBOR plus 2.25% margin, with a LIBOR floor of zero (or an alternative base rate plus 1.25% margin) (effective interest rate of 4.74% as of March 31, 2019, before the impact of interest rate swaps).
Required Principal Payments:
• | Term Loan A: Quarterly principal payments, at quarterly rates of 1.25% beginning June 30, 2019, 1.75% beginning June 30, 2020, and 2.50% beginning June 30, 2021 through December 31, 2022, with the balance payable at maturity.
• | Term Loan B: Quarterly principal payments, at a quarterly rate of 0.25%, with the balance payable at maturity.
The Term Loan A and Term Loan B also require mandatory prepayments in connection with certain asset sales, subject to certain significant exceptions, and the Term Loan B is subject to additional mandatory repayment from specified percentages of excess cash flow, as defined in the Amended Credit Agreement. Optional Prepayment:
• | Revolving Credit Facility & Term Loan A: The Company may voluntarily prepay the Revolving Credit Facility and Term Loan A at any time without premium or penalty.
• | Term Loan B: The Company may voluntarily prepay the Term Loan B at any time.
Security. The Senior Credit Facilities are guaranteed by the Guarantors (as defined in the Amended Credit Agreement) and are secured by a security interest in substantially all of the assets of Lionsgate and the Guarantors (as defined in the Amended Credit Agreement), subject to certain exceptions. Covenants. The Senior Credit Facilities contain representations and warranties, events of default and affirmative and negative covenants that are customary for similar financings and which include, among other things and subject to certain significant exceptions, restrictions on the ability to declare or pay dividends, create liens, incur additional indebtedness, make investments, dispose of assets and merge or consolidate with any other person. In addition, a net first lien leverage maintenance covenant and an interest coverage ratio maintenance covenant apply to the Revolving Credit Facility and the Term Loan A and are tested quarterly. As of March 31, 2019, 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. 5.875% Senior Notes and 6.375% Senior Notes Interest:
• | 5.875% Senior Notes: Bears interest at 5.875% annually (payable semi-annually on May and November 1 of each year).
• | 6.375% Senior Notes: Bears interest at 6.375% annually (payable semi-annually in arrears on February 1 and August 1 of each year, commencing on August 1, 2019).
Maturity Date:
• | 5.875% Senior Notes: November 1, 2024.
• | 6.375% Senior Notes: February 1, 2024.
Optional Redemption:
• | 5.875% Senior Notes:
(i) | Prior to November 1, 2019, the 5.875% Senior Notes are redeemable under certain circumstances (as defined in the indenture governing the 5.875% Senior Notes), in whole at any time or in part from time to time, at a price equal to 100% of the principal amount, plus the Applicable Premium (as defined in the indenture governing the 5.875% Senior Notes). The Applicable Premium is the greater of (i) 1.0% of the principal amount redeemed and (ii) the excess of the present value of the redemption amount at November 1, 2019 (see below) of the notes redeemed plus interest through the redemption date (discounted at the treasury rate on the redemption date plus 50 basis points) over the principal amount of the notes redeemed on the redemption date.
(ii) | On and after November 1, 2019, redeemable by the Company, in whole or in part, at the redemption prices set forth as follows (as a percentage of the principal amount redeemed), plus accrued and unpaid interest to the redemption date: (i) on or after November 1, 2019 - 104.406%; (ii) on or after November 1, 2020 - 102.938%; (iii) on or after November 1, 2021 - 101.439%; and (iv) on or after November 1, 2022 - 100%.
• | 6.375% Senior Notes:
(i) | Prior to February 1, 2021, the 6.375% Senior Notes are redeemable under certain circumstances (as defined in the indenture governing the 6.375% Senior Notes), in whole at any time, or in part from time to time, at a price equal to 100% of the principal amount of the Notes to be redeemed plus the Applicable Premium (as defined in the indenture governing the 6.375% Senior Notes). The Applicable Premium is the greater of (i) 1.0% of the principal amount redeemed and (ii) the excess of the present value of the redemption amount at February 1, 2021 (see below) of the notes redeemed plus interest through the redemption date (discounted at the treasury rate on the redemption date plus 50 basis point) over the principal amount of the notes redeemed on the redemption date.
(ii) | On and after February 1, 2021, redeemable by the Company, in whole or in part, at the redemption prices set forth as follows (as a percentage of the principal amount redeemed), plus accrued and unpaid interest to the redemption date: (i) on or after February 1, 2021 - 103.188%; (ii) on or after February 1, 2022 - 101.594%; (iii) on or after February 1, 2023 - 100%.
Security. The 5.875% Senior Notes and 6.375% Senior Notes are unsubordinated, unsecured obligations of the Company. Covenants. The 5.875% Senior Notes and 6.375% 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 March 31, 2019, the Company was in compliance with all applicable covenants. Change in Control. The occurrence of a change of control will be a triggering event requiring the Company to offer to purchase from holders all of the 5.875% Senior Notes and 6.375% Senior Notes, at a price equal to 101% of the principal amount, plus accrued and unpaid interest, if any, to the date of purchase. In addition, certain asset dispositions will be triggering events that may require the Company to use the excess proceeds from such dispositions to make an offer to purchase the 5.875% Senior Notes and 6.375% Senior Notes at 100% of their principal amount, plus accrued and unpaid interest, if any to the date of purchase. Capacity to Pay Dividends At March 31, 2019, the capacity to pay dividends under the Senior Credit Facilities, the 5.875% Senior Notes and the 6.375% Senior Notes significantly exceeded the amount of the Company's retained earnings or net loss, and therefore the Company's net loss of $299.6 million and retained earnings of $208.7 million were deemed free of restrictions at March 31, 2019. Debt Transactions Fiscal 2019: 6.375% Senior Notes Issuance. On February 4, 2019, the Company issued $550.0 million aggregate principal amount of 6.375% Senior Notes. The Company used the proceeds of the 6.375% Senior Notes to pay down outstanding amounts under its Revolving Credit Facility and for working capital purposes. Convertible Senior Subordinated Notes Repayment. On April 15, 2018, the 1.25% convertible senior subordinated notes due April 2018 (the "April 2013 1.25% Notes") matured, and upon maturity, the Company repaid the outstanding principal amount, together with accrued and unpaid interest. Term Loan Prepayments. During the year ended March 31, 2019, the Company made voluntary prepayments totaling $130.0 million in principal outstanding under the Term Loan B, together with accrued and unpaid interest. Fiscal 2018: March 2018 Senior Credit Facilities Refinancing. On March 22, 2018, the Company entered into an amendment to the Credit Agreement (as amended, the "Amended Credit Agreement") to refinance its Previous Revolving Credit Facility, Previous Term Loan A and Previous Term Loan B, all as defined below. In connection with the amendment, the Company repaid in full the then outstanding principal amounts of $950.0 million under the Previous Term Loan A and $825.0 million under the Previous Term Loan B, and terminated all commitments under the Previous Revolving Credit Facility. In addition, the Company incurred a new five-year Term Loan A in aggregate principal amount of $750.0 million (the "Term Loan A"), incurred a new seven-year Term Loan B in aggregate principal amount of $1,250.0 million (the "Term Loan B"), and obtained a new $1.5 billion five-year revolving credit facility (the "Revolving Credit Facility", and together with the Term Loan A and Term Loan B, the "Senior Credit Facilities"). December 2017 Previous Term Loan B Refinancing. On December 11, 2017, the Company entered into an amendment to the Credit Agreement to reduce the interest rate on the Previous Term Loan B and prepaid $25.0 million of principal outstanding under the Previous Term Loan B. Term Loan Prepayments. In addition to the prepayments in connection with the amendments described above, during the year ended March 31, 2018, the Company made other voluntary prepayments totaling $740.0 million in principal outstanding under the Previous Term Loan B, together with accrued and unpaid interest. Fiscal 2017: Debt Issuances and Redemptions or Repayments Associated with the Starz Merger. On December 8, 2016, Lions Gate Entertainment Corp. entered into a credit and guarantee agreement (the "Credit Agreement") which provided for a $1.0 billion five-year revolving credit facility (the "Previous Revolving Credit Facility") (ii) a $1.0 billion five-year term loan A facility (the "Previous Term Loan A") and (iii) a $2.0 billion seven-year term loan B facility (the "Previous Term Loan B"). In addition, on October 27, 2016, Lions Gate Entertainment Corp. issued $520.0 million aggregate principal amount of 5.875% senior notes due 2024 (the "5.875% Senior Notes"). The Company used the proceeds of the 5.875% Senior Notes, the Previous Term Loan A, the Previous Term Loan B, and a portion of the Previous Revolving Credit Facility (amounting to $50.0 million) to finance a portion of the consideration and transaction costs for the Starz Merger and the associated transactions. Term Loan Prepayments. During the year ended March 31, 2017, the Company made other voluntary prepayments totaling $400.0 million in principal outstanding under the Previous Term Loan B, together with accrued and unpaid interest. Loss on Extinguishment of Debt Accounting for the Debt Redemption and Repayment Transactions Discussed Above: Revolving Credit Facilities. Any fees paid to creditors or third parties related to the issuance of the new revolving credit facility were capitalized and are being amortized over the term of the new revolving credit facility. To the extent the borrowing capacity, measured as the amount available under the revolving credit facility multiplied by the remaining term, on a creditor by creditor basis, was more than under the previous revolving credit facility, any prior unamortized debt issuance costs were capitalized and are being amortized over the term of the new revolving credit facility. To the extent the borrowing capacity on a creditor by creditor basis was less than under the previous credit facility the prior unamortized debt issuance costs were written off as a loss on extinguishment of debt in proportion to the decrease in borrowing capacity under the former revolving credit facility. Term Loans and Senior Notes. In accounting for each contemporaneous issuance and repayment or redemption transaction discussed above, a portion of the prepayment and issuance was considered a modification of terms with creditors who participated in both the prepaid or redeemed debt and the new issuance, and a portion was considered a debt extinguishment. The previously incurred unamortized deferred financing costs, debt discount, call premiums (if any) and any fees or other amounts paid to creditors, on the prepaid or redeemed debt will be amortized over the life of the new issuance, to the extent the prepayment and issuance was considered a modification of terms, and expensed as a loss on extinguishment of debt to the extent considered an extinguishment. The new debt issuances associated with the existing creditors whose prior loans were prepaid were considered a modification of terms and therefore the new issuance costs associated with such issuances were expensed as a loss on extinguishment of debt. All costs and expenses associated with new creditors are capitalized and amortized over the life of the new issuance. Debt issuance costs and any debt discount are amortized using the effective interest method. Loss on Extinguishment of Debt. The following tables summarize the accounting for the debt issuance costs incurred and the related loss on extinguishment of debt recorded in the years ended March 31, 2018 and March 31, 2017 associated with the debt transactions discussed above. During the year ended March 31, 2019, the Company recorded a loss on extinguishment of debt of $1.9 million related to early repayments on the Term Loan B.
| Year Ended March 31, 2018
| Loss on Extinguishment of Debt |  | Capitalized & Amortized Over Life of New Issuances |  | Total
| (Amounts in millions)
New debt issuance costs | $ | 11.0 |  |  | $ | 11.6 |  |  | $ | 22.6 |
Previously incurred debt issuance costs or unamortized discount | 24.7 |  |  |  |  |
Total | $ | 35.7 |  |  |  |  |
| Year Ended March 31, 2017
| Loss on Extinguishment of Debt |  | Capitalized & Amortized Over Life of New Issuances |  | Total
| (Amounts in millions)
New debt issuance costs and call premium | $ | 20.6 |  |  | $ | 115.0 |  |  | $ | 135.6 |
Previously incurred debt issuance costs or unamortized discount | 19.8 |  |  |  |  |
Total | $ | 40.4 |  |  |  |  |
Capital Lease Obligations Capital lease obligations represent lease agreements acquired in the Starz Merger. As of March 31, 2019, these obligations include a ten-year commercial lease for a building, with four successive five-year renewal periods at the Company's option, with an imputed annual interest rate of 7.2%, and a capital lease arrangement for Starz's transponder capacity that expires in February 2021 and has an imputed annual interest rate of 7.0%. Interest Expense The table below sets forth the composition of the Company’s interest expense for the years ended March 31, 2019, 2018 and 2017:
| Year Ended
| March 31,
| 2019 |  | 2018 |  | 2017
Interest expense |  |  |  |  |
Cash interest | $ | 152.0 |  |  | $ | 122.9 |  |  | $ | 86.8 |
Amortization of debt discount and financing costs | 11.6 |  |  | 14.3 |  |  | 12.9 |
| 163.6 |  |  | 137.2 |  |  | 99.7 |
Interest on dissenting shareholders' liability (see Note 17) | 35.3 |  |  | 56.5 |  |  | 15.5 |
Total interest expense | $ | 198.9 |  |  | $ | 193.7 |  |  | $ | 115.2 |

X
- References No definition available. + Details
Name: | us-gaap_DebtDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
Name: | us-gaap_DebtDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration