Film Related and Other Obligations

3 Months Ended

Jun. 30, 2022


	June 30, 2022		March 31, 2022
	(Amounts in millions)
Program rights and film obligations	$	327.8	$	278.4

Film related financing and other obligations:
Production Loans	1,135.0		966.3
Production Tax Credit Facility	233.7		224.0
Programming Notes	56.2		96.4
Backlog Financing Facility and Other	243.6		—
IP Credit Facility	114.0		123.5
Total film related financing and other obligations	1,782.5		1,410.2
Unamortized debt issuance costs	(11.4)		(8.5)
Total film related financing and other obligations, net	1,771.1		1,401.7

Less current portion	(1,090.3)		(951.1)
Total non-current film related and other obligations	$	1,008.6	$	729.0

Program Rights and Film Obligations

Program rights and film obligations include minimum guarantees and accrued licensed program rights obligations, which represent amounts payable for film or television rights that the Company has acquired or licensed.

Film Related Financing and Other Obligations

Film related financing and other obligations include production loans, programming notes, the Company's Production Tax Credit Facility, IP Credit Facility, Backlog Financing Facility and other.

Production Loans. Production loans represent individual loans for the production of film and television programs that the Company produces. The majority of the Company's production loans have contractual repayment dates either at or near the expected completion date, with the exception of certain loans containing repayment dates on a longer term basis, and incur primarily LIBOR and SOFR-based interest at a weighted average rate of 3.61% (before the impact of interest rate swaps, see Note 16 for interest rate swaps).

Programming Notes. Programming notes represent individual loans for the licensing of film and television programs that the Company licenses. The Company's programming notes have contractual repayment dates in July 2022, and incur primarily LIBOR and SOFR-based interest at a weighted average rate of 4.57% (before the impact of interest rate swaps, see Note 16 for interest rate swaps).

Production Tax Credit Facility. In January 2021, as amended on March 31, 2021 and March 29, 2022, the Company entered into a non-recourse senior secured revolving credit facility (the "Production Tax Credit Facility") based on collateral consisting of certain of the Company’s tax credit receivables. The maximum principal amount of the Production Tax Credit Facility is $235.0 million, subject to the amount of collateral available, which is based on specified percentages of amounts payable to the Company by governmental authorities pursuant to the tax incentive laws of certain eligible jurisdictions that arise from the production or exploitation of motion pictures and television programming in such jurisdiction. Advances under the Production Tax Credit Facility bear interest at a rate equal to SOFR plus 0.10% to 0.25% depending on the SOFR term (i.e., one, three or six months), plus 1.50% per annum or the base rate plus 0.50% per annum (effective interest rate of 3.29% at June 30, 2022). The Production Tax Credit Facility matures on January 27, 2025. As of June 30, 2022, there was $233.7 million outstanding under the Production Tax Credit Facility, and there were no material amounts available under the Production Tax Credit Facility (March 31, 2022 - $224.0 million outstanding).

IP Credit Facility. In July 2021, as amended on September 30, 2021, certain subsidiaries of the Company entered into a senior secured amortizing term credit facility (the "IP Credit Facility") based on the collateral consisting solely of certain of the Company’s rights in certain library titles, including the Spyglass and other recently acquired libraries. The maximum principal amount of the IP Credit Facility is $140.0 million, subject to the amount of collateral available, which is based on the valuation of cash flows from the libraries. The cash flows generated from the exploitation of the rights will be applied to repay the IP Credit Facility subject to cumulative minimum guaranteed payment amounts as set forth below:

Cumulative Period Through:

Cumulative Minimum Guaranteed Payment Amounts

Payment Due Date

(in millions)

September 30, 2022

$26.3

November 14, 2022

September 30, 2023

$52.5

November 14, 2023

September 30, 2024

$78.8

November 14, 2024

September 30, 2025

$105.0

November 14, 2025

July 30, 2026

$140.0

July 30, 2026

Advances under the IP Credit Facility bear interest at a rate equal to, at the Company’s option, LIBOR plus 2.25% per annum (with a LIBOR floor of 0.25%) or the base rate plus 1.25% per annum (effective interest rate of 4.04% at June 30, 2022). The IP Credit Facility matures on July 30, 2026. As of June 30, 2022, there was $114.0 million outstanding under the IP Credit Facility.

Backlog Financing Facility and Other:

Backlog Financing Facility. In March 2022, as amended in August 2022, certain subsidiaries of the Company entered into a committed secured revolving credit facility (the "Backlog Financing Facility") based on collateral consisting of certain of the Company's fixed fee or minimum guarantee contracts where cash will be received in the future. The maximum principal amount of the Backlog Financing Facility as of June 30, 2022 was $125.0 million, subject to the amount of eligible collateral contributed to the facility. In August 2022, the Company amended its Backlog Financing Facility and increased the maximum principal amount of the Backlog Financing Facility from $125.0 million to $175.0 million (see Note 18 - Subsequent Events). Advances under the Backlog Financing Facility bear interest at a rate equal to Term SOFR plus 0.10% to 0.25% depending on the SOFR term (i.e., one, three or six months), plus an applicable margin amounting to 1.15% per annum at June 30, 2022. The applicable margin is subject to a potential increase to either 1.25% or 1.50% based on the weighted average credit quality rating of the collateral contributed to the facility (effective interest rate of 2.94% at June 30, 2022). The Backlog Financing Facility revolving period finishes on May 16, 2025, at which point cash collections from the underlying collateral is used to repay the facility. The facility maturity date is up to 2 years, 90 days after the revolving period ends, currently August 14, 2027. As of June 30, 2022, there was $125.0 million outstanding under the Backlog Financing Facility, and there were no amounts available under the Backlog Financing Facility (March 31, 2022 - no amounts outstanding).

Other. On June 28, 2022, the Company borrowed $118.6 million under a loan agreement which is secured by contracted receivables which are not yet recognized as revenue under certain licensing agreements (the "Distribution Loan Agreement"). The loan agreement matures on December 28, 2025. Outstanding loan balances must be repaid with any cash collections from the underlying collateral if and when received by the Company, and may be voluntarily repaid at any time without prepayment penalty fees. Borrowings bear interest at a rate equal to Term SOFR plus 0.11%, plus an applicable margin amounting to 1.50% per annum (effective interest rate of 3.30% at June 30, 2022).