XML 43 R24.htm IDEA: XBRL DOCUMENT v3.23.1
Segment Information
 12 Months Ended
Mar. 31, 2023
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. We refer to our Motion Picture and Television Production segments collectively as our Studio Business.
Studio Business:
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. Television Production includes the licensing of Starz original series productions to Starz Networks and LIONSGATE+, and the ancillary market distribution of Starz original productions and licensed product. Additionally, the Television Production segment includes the results of operations of 3 Arts Entertainment.
Media Networks Business:
Media Networks. Media Networks consists of the following product lines (i) Starz Networks, which includes the domestic distribution of STARZ branded premium subscription video services through OTT platforms, on a direct-to-consumer basis through the Starz App, and through Distributors (ii) LIONSGATE+, which represents revenues primarily from the OTT distribution of the Company's STARZ branded premium subscription video services outside of the U.S. Through March 31, 2021, Media Networks also included Other Streaming Services, which represented primarily the Company's formerly majority owned premium Spanish language streaming services business, Pantaya. The Company sold its interest in Pantaya on March 31, 2021 (see Note 2).
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 is presented in the table below:
Year Ended
March 31,
202320222021
 (Amounts in millions)
Segment revenues
Studio Business:
Motion Picture$1,323.7 $1,185.3 $1,081.1 
Television Production1,760.1 1,531.0 831.8 
Total Studio Business3,083.8 2,716.3 1,912.9 
Media Networks1,546.5 1,536.2 1,562.7 
Intersegment eliminations(775.5)(648.2)(204.1)
$3,854.8 $3,604.3 $3,271.5 
Intersegment revenues
Studio Business:
Motion Picture$44.2 $38.0 $19.8 
Television Production731.3 610.2 184.3 
Total Studio Business775.5 648.2 204.1 
Media Networks— — — 
$775.5 $648.2 $204.1 
Gross contribution
Studio Business:
Motion Picture$386.3 $356.0 $401.8 
Television Production185.3 124.1 126.3 
Total Studio Business571.6 480.1 528.1 
Media Networks203.2 243.2 383.4 
Intersegment eliminations(35.7)(2.7)(14.1)
$739.1 $720.6 $897.4 
Segment general and administration
Studio Business:
Motion Picture$109.8 $93.1 $106.2 
Television Production51.9 40.2 42.7 
Total Studio Business161.7 133.3 148.9 
Media Networks96.4 88.0 93.9 
$258.1 $221.3 $242.8 
Segment profit
Studio Business:
Motion Picture$276.5 $262.9 $295.6 
Television Production133.4 83.9 83.6 
Total Studio Business409.9 346.8 379.2 
Media Networks106.8 155.2 289.5 
Intersegment eliminations(35.7)(2.7)(14.1)
$481.0 $499.3 $654.6 

The Company's primary measure of segment performance is segment profit. Segment profit is defined as gross contribution (revenues, less direct operating and distribution and marketing expense) less segment general and administration expenses. Segment profit excludes, when applicable, corporate general and administrative expense, restructuring and other
costs, share-based compensation, certain programming and content charges as a result of changes in management and/or programming and content strategy, certain charges related to the COVID-19 global pandemic, charges related to Russia's invasion of Ukraine, and purchase accounting and related adjustments. The Company believes the presentation of segment profit is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by the Company's management and enables them to understand the fundamental performance of the Company's businesses.

The reconciliation of total segment profit to the Company’s loss before income taxes is as follows:
 
Year Ended
March 31,
202320222021
 (Amounts in millions)
Company’s total segment profit$481.0 $499.3 $654.6 
Corporate general and administrative expenses(1)
(122.9)(97.1)(113.7)
Gain on sale of Pantaya— — 44.1 
Adjusted depreciation and amortization(2)
(40.2)(43.0)(44.3)
Restructuring and other(411.9)(16.8)(24.7)
Goodwill impairment(1,475.0)— — 
COVID-19 related benefit (charges) included in direct operating expense and distribution and marketing expense(3)
11.6 3.4 (67.5)
Programming and content charges(4)
(7.0)(36.9)— 
Charges related to Russia's invasion of Ukraine(5)
— (5.9)— 
Adjusted share-based compensation expense(6)
(97.8)(100.0)(85.5)
Purchase accounting and related adjustments(7)
(195.5)(194.0)(192.4)
Operating income (loss)(1,857.7)9.0 170.6 
Interest expense(221.2)(176.0)(181.5)
Interest and other income6.4 30.8 5.8 
Other expense(26.9)(10.9)(6.7)
Gain (loss) on extinguishment of debt57.4 (28.2)— 
Gain on investments44.0 1.3 0.5 
Equity interests income (loss)0.5 (3.0)(6.1)
Loss before income taxes$(1,997.5)$(177.0)$(17.4)
___________________
(1)The types of amounts included in corporate general and administrative expenses include certain corporate executive expense (such as salaries and wages for the office of the Chief Executive Officer, Chief Financial Officer, General Counsel and other corporate officers), investor relations costs, costs of maintaining corporate facilities, and other unallocated common administrative support functions, including corporate accounting, finance and financial reporting, internal and external audit and tax costs, corporate and other legal support functions, and certain information technology and human resources expense.
(2)Adjusted depreciation and amortization represents depreciation and amortization as presented on our 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:
Year Ended
March 31,
202320222021
 (Amounts in millions)
Depreciation and amortization$180.3 $177.9 $188.5 
Less: Amount included in purchase accounting and related adjustments(140.1)(134.9)(144.2)
Adjusted depreciation and amortization$40.2 $43.0 $44.3 
(3)Amounts represent the incremental costs included in direct operating expense and distribution and marketing expense resulting from circumstances associated with the COVID-19 global pandemic, net of insurance recoveries. During the fiscal years ended March 31, 2023 and 2022, the Company has incurred a net benefit in direct operating expense due to insurance recoveries in excess of the incremental costs expensed in the period (see Note 15). These charges (benefits) are excluded from segment operating results.
(4)Programming and content charges represent certain charges included in direct operating expense in the consolidated statements of operations, and excluded from segment operating results (see Note 3 and Note 15 for further information).
(5)Amounts represent charges related to Russia's invasion of Ukraine, primarily related to bad debt reserves for accounts receivable from customers in Russia, included in direct operating expense in the consolidated statements of operations, and excluded from segment operating results.
(6)The following table reconciles total share-based compensation expense to adjusted share-based compensation expense:
Year Ended
March 31,
202320222021
 (Amounts in millions)
Total share-based compensation expense$102.0 $100.0 $89.0 
Less:
Amount included in restructuring and other(i)
(4.2)— (3.5)
Adjusted share-based compensation$97.8 $100.0 $85.5 
(i)Represents share-based compensation expense included in restructuring and other expenses reflecting the impact of the acceleration of vesting schedules for equity awards pursuant to certain severance arrangements.
(7)Purchase accounting and related adjustments primarily represent the amortization of non-cash fair value adjustments to certain assets acquired in recent acquisitions. The following sets forth the amounts included in each line item in the financial statements:
Year Ended
March 31,
202320222021
 (Amounts in millions)
Purchase accounting and related adjustments:
Direct operating$0.7 $0.4 $1.0 
General and administrative expense(i)
54.7 58.7 47.2 
Depreciation and amortization140.1 134.9 144.2 
$195.5 $194.0 $192.4 
(i)These adjustments include the non-cash charge for the accretion of the noncontrolling interest discount related to Pilgrim Media Group and 3 Arts Entertainment, the non-cash charge for the amortization of the recoupable portion of the purchase price and the expense associated with the noncontrolling equity interests in the distributable earnings related to 3 Arts Entertainment, all of which are accounted for as compensation and are included in general and administrative expense, as presented in the table below. The noncontrolling equity interest in the distributable earnings of 3 Arts Entertainment are reflected as an expense rather than noncontrolling interest in the consolidated statement of operations due to the relationship to continued employment.
Year Ended
March 31,
202320222021
 
Amortization of recoupable portion of the purchase price$7.7 $7.7 $7.7 
Noncontrolling interest discount amortization13.2 22.7 22.7 
Noncontrolling equity interest in distributable earnings33.8 28.3 16.8 
$54.7 $58.7 $47.2 
See Note 12 for revenues by media or product line as broken down by segment for the fiscal years ended March 31, 2023, 2022, and 2021.


The following table reconciles segment general and administration to the Company’s total consolidated general and administration expense:
Year Ended
March 31,
202320222021
(Amounts in millions)
General and administration
Segment general and administrative expenses$258.1 $221.3 $242.8 
Corporate general and administrative expenses122.9 97.1 113.7 
Share-based compensation expense included in general and administrative expense95.4 98.3 82.9 
Purchase accounting and related adjustments 54.7 58.7 47.2 
$531.1 $475.4 $486.6 

The reconciliation of total segment assets to the Company’s total consolidated assets is as follows:
 
March 31,
2023		March 31,
2022
 (Amounts in millions)
Assets
Motion Picture$1,759.4 $1,622.6 
Television Production1,949.1 1,978.9 
Media Networks3,120.8 4,706.7 
Other unallocated assets(1)
596.9 683.0 
$7,426.2 $8,991.2 
_____________________
(1)Other unallocated assets primarily consist of cash, other assets and investments.
The following table sets forth acquisition of investment in films and television programs and program rights, as broken down by segment for the years ended March 31, 2023, 2022 and 2021:
Year Ended
March 31,
202320222021
(Amounts in millions)
Acquisition of investment in films and television programs and program rights
Motion Picture$483.6 $465.0 $339.8 
Television Production1,082.0 1,287.0 856.1 
Media Networks1,173.0 1,134.6 625.1 
Intersegment eliminations(759.4)(674.9)(204.3)
$1,979.2 $2,211.7 $1,616.7 
The following table sets forth capital expenditures, as broken down by segment for the years ended March 31, 2023, 2022 and 2021:
Year Ended
March 31,
202320222021
(Amounts in millions)
Capital expenditures
Motion Picture$— $— $— 
Television Production0.3 0.4 0.4 
Media Networks42.5 27.0 24.9 
Corporate(1)
6.2 5.7 9.7 
$49.0 $33.1 $35.0 
_____________________
(1)Represents unallocated capital expenditures primarily related to the Company's corporate headquarters.

Revenue by geographic location, based on the location of the customers, with no other foreign country individually comprising greater than 10% of total revenue, is as follows:
Year Ended
March 31,
202320222021
 (Amounts in millions)
Revenue
Canada$63.1 $56.8 $43.3 
United States3,129.8 3,016.8 2,863.3 
Other foreign661.9 530.7 364.9 
 $3,854.8 $3,604.3 $3,271.5 
Long-lived assets by geographic location are as follows:
March 31, 2023March 31, 2022
 (Amounts in millions)
Long-lived assets(1)
United States$3,023.5 $3,101.3 
Other foreign182.9 164.2 
 $3,206.4 $3,265.5 
_____________
(1)Long-lived assets represents total assets less the following: current assets, investments, long-term receivables, interest rate swaps, intangible assets, goodwill and deferred tax assets.

For the year ended March 31, 2023, the Company had revenue from one individual customer which represented greater than 10% of consolidated revenues, amounting to $766.6 million, primarily related to the Company's Media Networks and Motion Picture segments (2022 - revenue from one individual customer which represented greater than 10% of consolidated revenues, amounting to $639.2 million, primarily related to the Company's Media Networks and Motion Picture segments; 2021 - revenue from one individual customer which represented greater than 10% of consolidated revenues, amounting to $638.8 million, primarily related to the Company's Media Networks and Motion Picture segments).

As of March 31, 2023 and 2022, the Company did not have any accounts receivable due from customers which individually represented greater than 10% of total consolidated accounts receivable.