XML 53 R34.htm IDEA: XBRL DOCUMENT
v3.19.1

Merger and Acquisitions (Tables) | 12 Months Ended
--- | ---
Mar. 31, 2019
Business Acquisition [Line Items] |
Summary of Estimated Purchase Consideration | The following table summarizes the components of the estimated purchase consideration, inclusive of Lions Gate’s previously existing ownership of Starz common stock and Starz’s share-based equity awards outstanding as of December 8, 2016:
|  |  | (Amounts in millions)
Market value, as of December 8, 2016, of Starz Series A and Series B common stock already owned by Lionsgate(1) |  |  | $ | 179.3 |
Cash consideration paid to Starz stockholders |  |  |
Starz Series A common stock at $18.00 | $ | 1,123.3 |  |  |
Starz Series B common stock at $7.26 | 52.8 |  |  |
|  |  | 1,176.1 |
Fair value of Lionsgate voting and non-voting shares issued to Starz's stockholders |  |  |
Starz Series A common stock at exchange ratio of 0.6784 Lionsgate non-voting shares | $ | 1,088.0 |  |  |
Starz Series B common stock at exchange ratio of 0.6321 Lionsgate voting shares | 121.6 |  |  |
Starz Series B common stock at exchange ratio of 0.6321 Lionsgate non-voting shares | 118.1 |  |  |
|  |  | 1,327.7 |
Replacement of Starz share-based payment awards(2) |  |  | 186.5 |
Liability for dissenting shareholders(3) |  |  | 797.3 |
Total purchase consideration |  |  | $ | 3,666.9 |
(1)The difference between the fair value ($179.3 million) and the original cost ($158.9 million) of the available-for-sale investment in equity securities of Starz held by Lionsgate on the date of the Starz Merger (December 8, 2016), amounting to $20.4 million, was reflected in the gain (loss) on investments line item in the consolidated statement of operations for the fiscal year ended March 31, 2017. (2)Upon the closing of the merger, each outstanding share-based equity award (i.e., stock options, restricted stock, and restricted stock units) of Starz was replaced by a Lions Gate non-voting share-based equity award (“Lions Gate replacement award”) with terms equivalent to the existing awards based on the exchange ratio set forth in the Merger Agreement. Each Starz outstanding award was measured at fair value on the date of acquisition and the portion attributable to pre-combination service was recorded as part of the purchase consideration. The fair value of the Lions Gate replacement award measured on the date of acquisition in excess of the fair value of the Starz award attributed to and recorded as part of the purchase consideration was attributed to post-combination services and is being recognized as share-based compensation expense over the remaining post-combination service period. The estimated aggregate fair value of the Lions Gate replacement awards recorded as part of the purchase consideration was $186.5 million, and the estimated remaining aggregate fair value totaling $43.3 million is being recognized in accordance with each respective award’s vesting terms. The fair value of the Lions Gate replacement restricted stock and restricted stock unit awards was determined based on the value estimated for the Class A voting shares and Class B non-voting shares as of the acquisition date as discussed above. The fair value of Lions Gate replacement stock option awards was determined using the Black-Scholes option valuation model using the estimated fair value of the Class B non-voting shares underlying the replacement stock options. For purposes of valuing the Lions Gate replacement awards, the following weighted-average applicable assumptions were used in the Black-Scholes option valuation model:
Weighted average assumptions: |
Risk-free interest rate | 0.39% - 1.83%
Expected option lives (years) | 0.01 - 5.50 years
Expected volatility | 35%
Expected dividend yield | 0%
The risk-free rate assumed in valuing the options is based on the U.S. Treasury Yield curve in effect applied against the expected term of the option at the time of the grant. The expected option lives represents the period of time that options are expected to be outstanding. Expected volatilities are based on implied volatilities from traded options on Lions Gate’s stock, historical volatility of Lions Gate’s stock and other factors. The expected dividend yield was zero since the combined company had suspended the quarterly dividend. (3)In connection with the Starz Merger, Starz received demands for appraisal from purported holders of approximately 22.5 million shares of Starz Series A common stock, and the Company recorded a dissenting shareholders' liability at the time of acquisition for the value of the original merger consideration attributable to the dissenting shareholders. As of March 31, 2018, the Company had not paid the merger consideration for the shares that had demanded appraisal but had recorded a liability of $869.3 million that was included in current dissenting shareholders' liability on the consolidated balance sheet for the estimated value of the merger consideration that would have been payable for such shares, plus interest accrued at the Federal Reserve discount rate plus 5%, compounded quarterly. In November 2018 a settlement agreement was reached and the dissenting shareholders' liability was paid. See Note 17 for further information.
Fair Value Assumptions in Replacement Awards | Upon the closing of the merger, each outstanding share-based equity award (i.e., stock options, restricted stock, and restricted stock units) of Starz was replaced by a Lions Gate non-voting share-based equity award (“Lions Gate replacement award”) with terms equivalent to the existing awards based on the exchange ratio set forth in the Merger Agreement. Each Starz outstanding award was measured at fair value on the date of acquisition and the portion attributable to pre-combination service was recorded as part of the purchase consideration. The fair value of the Lions Gate replacement award measured on the date of acquisition in excess of the fair value of the Starz award attributed to and recorded as part of the purchase consideration was attributed to post-combination services and is being recognized as share-based compensation expense over the remaining post-combination service period. The estimated aggregate fair value of the Lions Gate replacement awards recorded as part of the purchase consideration was $186.5 million, and the estimated remaining aggregate fair value totaling $43.3 million is being recognized in accordance with each respective award’s vesting terms. The fair value of the Lions Gate replacement restricted stock and restricted stock unit awards was determined based on the value estimated for the Class A voting shares and Class B non-voting shares as of the acquisition date as discussed above. The fair value of Lions Gate replacement stock option awards was determined using the Black-Scholes option valuation model using the estimated fair value of the Class B non-voting shares underlying the replacement stock options. For purposes of valuing the Lions Gate replacement awards, the following weighted-average applicable assumptions were used in the Black-Scholes option valuation model:
Weighted average assumptions: |
Risk-free interest rate | 0.39% - 1.83%
Expected option lives (years) | 0.01 - 5.50 years
Expected volatility | 35%
Expected dividend yield | 0%
The risk-free rate assumed in valuing the options is based on the U.S. Treasury Yield curve in effect applied against the expected term of the option at the time of the grant. The expected option lives represents the period of time that options are expected to be outstanding. Expected volatilities are based on implied volatilities from traded options on Lions Gate’s stock, historical volatility of Lions Gate’s stock and other factors. The expected dividend yield was zero since the combined company had suspended the quarterly dividend.
Purchase Price Allocation | Allocation of Purchase Consideration. The Company has made an allocation of the purchase price of Starz to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair value as follows:
| (Amounts in millions)
Cash and cash equivalents | $ | 73.5 |
Accounts receivable | 254.9 |
Investment in films and television programs and program rights | 851.9 |
Property and equipment | 121.4 |
Investments | 12.1 |
Intangible assets | 2,071.0 |
Other assets | 139.9 |
Accounts payable and accrued liabilities | (143.1 | )
Corporate debt and capital lease obligations | (1,013.1 | )
Deferred tax liabilities | (713.6 | )
Other liabilities | (165.0 | )
Fair value of net assets acquired | 1,489.9 |
Goodwill | 2,177.0 |
Total purchase consideration | $ | 3,666.9 |
Starz |
Business Acquisition [Line Items] |
Pro Forma Statement of Operations Information | The following unaudited pro forma condensed consolidated statements of operations information presented below illustrates the results of operations of the Company as if the Starz Merger and related debt financing (see Note 7) occurred on April 1, 2016.
|  | Year Ended
|  | March 31,
|  | 2017
|  | (Amounts in millions, except per share amounts)
Revenues |  | $ | 4,323.7 |
Net income attributable to Lions Gate Entertainment Corp. shareholders |  | $ | 148.4 |
Basic Net Income Per Common Share attributable to Lions Gate Entertainment Corp. shareholders |  | $ | 0.74 |
Diluted Net Income Per Common Share attributable to Lions Gate Entertainment Corp. shareholders |  | $ | 0.71 |
The unaudited pro forma condensed consolidated statement of operations information does not include adjustments for any operating efficiencies or cost savings, and exclude $70.9 million of acquisition-related costs that were expensed in restructuring and other expenses during the year ended March 31, 2017.

X
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. + References No definition available. + Details
Name: | us-gaap_BusinessAcquisitionLineItems
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of pro forma results of operations for a material business acquisition or series of individually immaterial business acquisitions that are material in the aggregate. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(2) -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1392-128463 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(3) -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1392-128463 + Details
Name: | us-gaap_BusinessAcquisitionProFormaInformationTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1486-128463 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=79982066&loc=d3e1392-128463 + Details
Name: | us-gaap_ScheduleOfBusinessAcquisitionsByAcquisitionTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=84161108&loc=d3e4845-128472 + Details
Name: | us-gaap_ScheduleOfRecognizedIdentifiedAssetsAcquiredAndLiabilitiesAssumedTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the significant assumptions used during the year to estimate the fair value of employee stock purchase plans, including, but not limited to: (a) expected term, (b) expected volatility of the entity's shares, (c) expected dividends, (d) risk-free rate(s), and (e) discount for post-vesting restrictions. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (f)(2) -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5070-113901 + Details
Name: | us-gaap_ScheduleOfShareBasedPaymentAwardEmployeeStockPurchasePlanValuationAssumptionsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_BusinessAcquisitionAxis=lgfa_StarzMember
Namespace Prefix: |
Data Type: | na
Balance Type: |
Period Type: |