XML 35 R24.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Segment Information | 9 Months Ended
--- | ---
Dec. 31, 2018
Segment Reporting [Abstract] |
Segment Information | Segment Information The Company’s reportable segments have been determined based on the distinct nature of their operations, the Company's internal management structure, and the financial information that is evaluated regularly by the Company's chief operating decision maker. The Company has three reportable business segments: (1) Motion Picture, (2) Television Production and (3) Media Networks. Segment Reorganization. During the quarter ended June 30, 2018, the Company reorganized its operational reporting of the Television Production segment to include the production and licensing to Starz Networks of Starz original series (previously produced by and included in the Media Networks segment) and the ancillary market distribution of Starz original productions and licensed product (also previously included in the Media Networks segment). This reorganization aligns the segment presentation of the Starz original product to be consistent with the Company's other television productions included in the Television Production segment. This alignment of operational reporting and business operations will allow our chief operating decision maker to review all of the Company's television production related activity in a consistent manner, and as part of one segment (i.e., the Television Production segment). The changes resulting from the segment reorganization are as follows: (i) the Television Production segment includes licensing revenues from the licensing of Starz original series productions to Starz Networks which are eliminated in consolidation as intersegment transactions; and (ii) the Television Production segment now includes the associated ancillary market distribution of Starz original productions and licensed product that were previously included in Content and Other within the Media Networks segment. As a result of the segment reorganization, the Company has presented prior period segment data in a manner that conforms to the current period presentation. Motion Picture. Motion Picture consists of the development and production of feature films, acquisition of North American and worldwide distribution rights, North American theatrical, home entertainment and television distribution of feature films produced and acquired, and worldwide licensing of distribution rights to feature films produced and acquired. Television Production. Television Production consists of the development, production and worldwide distribution of television productions including television series, television movies and mini-series, and non-fiction programming. As described under the Segment Reorganization section above, as of April 1, 2018, Television Production now includes the licensing of Starz original series productions to Starz Networks and the ancillary market distribution of Starz original productions and licensed product. Additionally, the results of operations of 3 Arts Entertainment is included in the Television Production segment from the acquisition date of May 29, 2018 (see Note 2). Media Networks. Media Networks consists of (i) Starz Networks, which includes the licensing of premium subscription video programming to Distributors, and on a direct-to-consumer basis and (ii) Streaming Services, which represents the Lionsgate legacy start-up direct to consumer streaming services on its SVOD platforms. In the ordinary course of business, the Company's reportable segments enter into transactions with one another. The most common types of intersegment transactions include licensing motion pictures or television programming (including Starz original productions) from the Motion Picture and Television Production segments to the Media Networks segment. While intersegment transactions are treated like third-party transactions to determine segment performance, the revenues (and corresponding expenses, assets, or liabilities recognized by the segment that is the counterparty to the transaction) are eliminated in consolidation and, therefore, do not affect consolidated results. Segment information by business unit is presented in the table below:
| Three Months Ended |  | Nine Months Ended
| December 31, |  | December 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (Amounts in millions)
Segment revenues |  |  |  |  |  |  |
Motion Picture | $ | 362.6 |  |  | $ | 539.1 |  |  | $ | 1,106.9 |  |  | $ | 1,397.0 |
Television Production | 216.5 |  |  | 266.2 |  |  | 648.1 |  |  | 738.7 |
Media Networks | 366.8 |  |  | 353.5 |  |  | 1,099.0 |  |  | 1,057.8 |
Intersegment eliminations | (12.7 | ) |  | (16.1 | ) |  | (87.1 | ) |  | (104.7 | )
| $ | 933.2 |  |  | $ | 1,142.7 |  |  | $ | 2,766.9 |  |  | $ | 3,088.8 |
Intersegment revenues |  |  |  |  |  |  |
Motion Picture | $ | 3.2 |  |  | $ | 2.3 |  |  | $ | 7.6 |  |  | $ | 8.4 |
Television Production | 9.5 |  |  | 13.2 |  |  | 79.4 |  |  | 95.4 |
Media Networks | — |  |  | 0.6 |  |  | 0.1 |  |  | 0.9 |
| $ | 12.7 |  |  | $ | 16.1 |  |  | $ | 87.1 |  |  | $ | 104.7 |
Gross contribution |  |  |  |  |  |  |
Motion Picture | $ | 69.2 |  |  | $ | 82.1 |  |  | $ | 186.3 |  |  | $ | 230.9 |
Television Production | 32.6 |  |  | 36.4 |  |  | 79.4 |  |  | 117.8 |
Media Networks | 157.2 |  |  | 147.8 |  |  | 418.7 |  |  | 390.0 |
Intersegment eliminations | (1.2 | ) |  | 0.5 |  |  | (3.4 | ) |  | (8.0 | )
| $ | 257.8 |  |  | $ | 266.8 |  |  | $ | 681.0 |  |  | $ | 730.7 |
Segment general and administration |  |  |  |  |  |  |
Motion Picture | $ | 25.7 |  |  | $ | 27.8 |  |  | $ | 78.6 |  |  | $ | 81.1 |
Television Production | 11.4 |  |  | 8.6 |  |  | 32.9 |  |  | 28.3 |
Media Networks | 23.1 |  |  | 25.4 |  |  | 73.3 |  |  | 75.5 |
| $ | 60.2 |  |  | $ | 61.8 |  |  | $ | 184.8 |  |  | $ | 184.9 |
Segment profit |  |  |  |  |  |  |
Motion Picture | $ | 43.5 |  |  | $ | 54.3 |  |  | $ | 107.7 |  |  | $ | 149.8 |
Television Production | 21.2 |  |  | 27.8 |  |  | 46.5 |  |  | 89.5 |
Media Networks | 134.1 |  |  | 122.4 |  |  | 345.4 |  |  | 314.5 |
Intersegment eliminations | (1.2 | ) |  | 0.5 |  |  | (3.4 | ) |  | (8.0 | )
| $ | 197.6 |  |  | $ | 205.0 |  |  | $ | 496.2 |  |  | $ | 545.8 |
Segment profit is defined as gross contribution (segment revenues, less segment direct operating and distribution and marketing expense) less segment general and administration expenses. Segment direct operating expenses, distribution and marketing expenses and general and administrative expenses exclude share-based compensation, other than annual bonuses granted in stock, and include annual bonuses paid in cash. Segment profit excludes purchase accounting and related adjustments. The reconciliation of total segment profit to the Company’s income (loss) before income taxes is as follows:
| Three Months Ended |  | Nine Months Ended
| December 31, |  | December 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (Amounts in millions)
Company’s total segment profit | $ | 197.6 |  |  | $ | 205.0 |  |  | $ | 496.2 |  |  | $ | 545.8 |
Corporate general and administrative expenses | (26.2 | ) |  | (27.4 | ) |  | (79.2 | ) |  | (78.1 | )
Adjusted depreciation and amortization(1) | (10.1 | ) |  | (9.8 | ) |  | (30.4 | ) |  | (29.2 | )
Restructuring and other(2) | (16.5 | ) |  | (21.4 | ) |  | (42.1 | ) |  | (35.8 | )
Adjusted share-based compensation expense(3) | (11.1 | ) |  | (24.2 | ) |  | (41.3 | ) |  | (71.6 | )
Purchase accounting and related adjustments(4) | (46.9 | ) |  | (42.0 | ) |  | (139.2 | ) |  | (130.8 | )
Operating income | 86.8 |  |  | 80.2 |  |  | 164.0 |  |  | 200.3 |
Interest expense | (45.3 | ) |  | (46.3 | ) |  | (152.2 | ) |  | (147.3 | )
Shareholder litigation settlements(5) | — |  |  | — |  |  | (114.1 | ) |  | — |
Interest and other income | 2.9 |  |  | 2.2 |  |  | 9.0 |  |  | 7.7 |
Other expense | (1.8 | ) |  | — |  |  | (1.8 | ) |  | — |
Loss on extinguishment of debt | — |  |  | (6.2 | ) |  | — |  |  | (24.2 | )
Gain (loss) on investments | (6.2 | ) |  | (29.2 | ) |  | (43.2 | ) |  | 171.8 |
Equity interests loss | (11.0 | ) |  | (13.8 | ) |  | (28.8 | ) |  | (34.8 | )
Income (loss) before income taxes | $ | 25.4 |  |  | $ | (13.1 | ) |  | $ | (167.1 | ) |  | $ | 173.5 |
___________________
(1) | Adjusted depreciation and amortization represents depreciation and amortization as presented on our unaudited condensed consolidated statements of operations less the depreciation and amortization related to the non-cash fair value adjustments to property and equipment and intangible assets acquired in recent acquisitions which are included in the purchase accounting and related adjustments line item above, as shown in the table below:
| Three Months Ended |  | Nine Months Ended
| December 31, |  | December 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (Amounts in millions)
Depreciation and amortization | $ | 41.0 |  |  | $ | 39.7 |  |  | $ | 122.1 |  |  | $ | 119.0 |
Less: Amount included in purchase accounting and related adjustments | (30.9 | ) |  | (29.9 | ) |  | (91.7 | ) |  | (89.8 | )
Adjusted depreciation and amortization | $ | 10.1 |  |  | $ | 9.8 |  |  | $ | 30.4 |  |  | $ | 29.2 |
(2) | Restructuring and other includes restructuring and severance costs, certain transaction and related costs, and certain unusual items, when applicable (see Note 14).
(3) | The following table reconciles total share-based compensation expense to adjusted share-based compensation expense:
| Three Months Ended |  | Nine Months Ended
| December 31, |  | December 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
|  |  |  |  | (Amounts in millions)
Total share-based compensation expense | $ | 13.5 |  |  | $ | 27.1 |  |  | $ | 43.7 |  |  | $ | 74.5 |
Less: Amount included in restructuring and other(i) | (2.4 | ) |  | (2.9 | ) |  | (2.4 | ) |  | (2.9 | )
Adjusted share-based compensation | $ | 11.1 |  |  | $ | 24.2 |  |  | $ | 41.3 |  |  | $ | 71.6 |
(i) | Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of certain vesting schedules for equity awards pursuant to certain severance arrangements.
(4) | Purchase accounting and related adjustments primarily represent the amortization of non-cash fair value adjustments to certain assets acquired in recent acquisitions. These adjustments include the accretion of the noncontrolling interest discount related to Pilgrim Media Group and 3 Arts Entertainment, the amortization of the recoupable portion of the purchase price and the expense associated with the earned distributions related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense. The following sets forth the amounts included in each line item in the financial statements:
| Three Months Ended |  | Nine Months Ended
| December 31, |  | December 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (Amounts in millions)
Purchase accounting and related adjustments: |  |  |  |  |  |  |
Direct operating | $ | 2.9 |  |  | $ | 10.4 |  |  | $ | 16.5 |  |  | $ | 36.5 |
General and administrative expense | 13.1 |  |  | 1.7 |  |  | 31.0 |  |  | 4.5 |
Depreciation and amortization | 30.9 |  |  | 29.9 |  |  | 91.7 |  |  | 89.8 |
| $ | 46.9 |  |  | $ | 42.0 |  |  | $ | 139.2 |  |  | $ | 130.8 |
(5) | Shareholder litigation settlements of $114.1 million in the nine months ended December 31, 2018 includes the following: (i) $54.8 million for the net expense recorded for the settlement of the Fiduciary Litigation (representing the settlement amount of $92.5 million, net of aggregate insurance reimbursement of $37.8 million and (ii) $59.3 million related to the Appraisal Litigation, representing the amount by which the settlement amount of approximately $964 million exceeds the previously accrued dissenting shareholders' liability including interest through the date agreed in the settlement. See Note 16.
See Note 10 for revenues by media or product line as broken down by segment for the three and nine months ended December 31, 2018 and 2017. The following table reconciles segment general and administration expense to the Company's total consolidated general and administration expense:
| Three Months Ended |  | Nine Months Ended
| December 31, |  | December 31,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (Amounts in millions)
General and administration |  |  |  |  |  |  |
Segment general and administrative expenses | $ | 60.2 |  |  | $ | 61.8 |  |  | $ | 184.8 |  |  | $ | 184.9 |
Corporate general and administrative expenses | 26.2 |  |  | 27.4 |  |  | 79.2 |  |  | 78.1 |
Share-based compensation expense included in general and administrative expense | 10.5 |  |  | 23.3 |  |  | 40.2 |  |  | 69.9 |
Purchase accounting and related adjustments | 13.1 |  |  | 1.7 |  |  | 31.0 |  |  | 4.5 |
| $ | 110.0 |  |  | $ | 114.2 |  |  | $ | 335.2 |  |  | $ | 337.4 |
The reconciliation of total segment assets to the Company’s total consolidated assets is as follows:
| December 31, 2018 |  | March 31, 2018
| (Amounts in millions)
Assets |  |  |
Motion Picture | $ | 1,774.8 |  |  | $ | 1,757.4 |
Television Production | 1,476.5 |  |  | 1,400.5 |
Media Networks | 4,902.5 |  |  | 5,166.5 |
Other unallocated assets(1) | 426.5 |  |  | 643.2 |
| $ | 8,580.3 |  |  | $ | 8,967.6 |
_____________________
(1) | Other unallocated assets primarily consist of cash, other assets and investments.

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

X
- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration