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Segment Information | 3 Months Ended
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Jun. 30, 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 over-the-top ("OTT") platforms, on a direct-to-consumer basis through the Starz App, and through U.S. multichannel video programming distributors ("MVPDs") including cable operators, satellite television providers and telecommunication companies (collectively, "Distributors") (in the aggregate, the "Starz Domestic Platform"); and (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. The Starz Domestic Platform together with the LIONSGATE+ platforms are referred to as the "Starz 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 is presented in the table below:
|  |  | Three Months Ended
|  |  | June 30,
|  |  |  |  | 2023 |  | 2022
|  |  |  |  | (Amounts in millions)
Segment revenues |  |  |  |  |  |  |
Studio Business: |  |  |  |  |  |  |
Motion Picture |  |  |  |  | $ | 406.5 |  |  | $ | 278.8 |
Television Production |  |  |  |  | 218.5 |  |  | 432.3 |
Total Studio Business |  |  |  |  | 625.0 |  |  | 711.1 |
Media Networks |  |  |  |  | 381.1 |  |  | 381.2 |
Intersegment eliminations |  |  |  |  | (97.5) |  |  | (198.4) |
|  |  |  |  | $ | 908.6 |  |  | $ | 893.9 |
Intersegment revenues |  |  |  |  |  |  |
Studio Business: |  |  |  |  |  |  |
Motion Picture |  |  |  |  | $ | 16.5 |  |  | $ | 3.5 |
Television Production |  |  |  |  | 81.0 |  |  | 194.9 |
Total Studio Business |  |  |  |  | 97.5 |  |  | 198.4 |
Media Networks |  |  |  |  | — |  |  | — |
|  |  |  |  | $ | 97.5 |  |  | $ | 198.4 |
Gross contribution |  |  |  |  |  |  |
Studio Business: |  |  |  |  |  |  |
Motion Picture |  |  |  |  | $ | 98.6 |  |  | $ | 73.1 |
Television Production |  |  |  |  | 35.6 |  |  | 30.7 |
Total Studio Business |  |  |  |  | 134.2 |  |  | 103.8 |
Media Networks |  |  |  |  | 57.7 |  |  | (13.5) |
Intersegment eliminations |  |  |  |  | (7.9) |  |  | (5.1) |
|  |  |  |  | $ | 184.0 |  |  | $ | 85.2 |
Segment general and administration |  |  |  |  |  |  |
Studio Business: |  |  |  |  |  |  |
Motion Picture |  |  |  |  | $ | 29.4 |  |  | $ | 22.6 |
Television Production |  |  |  |  | 12.7 |  |  | 11.1 |
Total Studio Business |  |  |  |  | 42.1 |  |  | 33.7 |
Media Networks |  |  |  |  | 25.8 |  |  | 23.5 |
|  |  |  |  | $ | 67.9 |  |  | $ | 57.2 |
Segment profit (loss) |  |  |  |  |  |  |
Studio Business: |  |  |  |  |  |  |
Motion Picture |  |  |  |  | $ | 69.2 |  |  | $ | 50.5 |
Television Production |  |  |  |  | 22.9 |  |  | 19.6 |
Total Studio Business |  |  |  |  | 92.1 |  |  | 70.1 |
Media Networks |  |  |  |  | 31.9 |  |  | (37.0) |
Intersegment eliminations |  |  |  |  | (7.9) |  |  | (5.1) |
|  |  |  |  | $ | 116.1 |  |  | $ | 28.0 |
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:
|  |  | Three Months Ended
|  |  | June 30,
|  |  |  |  | 2023 |  | 2022
|  |  |  |  | (Amounts in millions)
Company’s total segment profit |  |  |  |  | $ | 116.1 |  |  | $ | 28.0 |
Corporate general and administrative expenses(1) |  |  |  |  | (30.4) |  |  | (23.0) |
Adjusted depreciation and amortization(2) |  |  |  |  | (10.0) |  |  | (10.1) |
Restructuring and other(3) |  |  |  |  | (32.0) |  |  | (8.0) |
COVID-19 related benefit (charges) included in direct operating expense(4) |  |  |  |  | (0.2) |  |  | 1.0 |
Adjusted share-based compensation expense(5) |  |  |  |  | (15.9) |  |  | (7.8) |
Purchase accounting and related adjustments(6) |  |  |  |  | (44.4) |  |  | (48.3) |
Operating loss |  |  |  |  | (16.8) |  |  | (68.2) |
Interest expense |  |  |  |  | (62.0) |  |  | (46.1) |
Interest and other income |  |  |  |  | 1.9 |  |  | 1.3 |
Other expense |  |  |  |  | (5.7) |  |  | (5.0) |
Gain (loss) on extinguishment of debt |  |  |  |  | 21.2 |  |  | (1.3) |
Gain on investments |  |  |  |  | — |  |  | 1.8 |
Equity interests income (loss) |  |  |  |  | (0.3) |  |  | 0.9 |
Loss before income taxes |  |  |  |  | $ | (61.7) |  |  | $ | (116.6) |
___________________ (1)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 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
|  |  | June 30,
|  |  |  |  | 2023 |  | 2022
|  |  |  |  | (Amounts in millions)
Depreciation and amortization |  |  |  |  | $ | 44.4 |  |  | $ | 42.4 |
Less: Amount included in purchase accounting and related adjustments |  |  |  |  | (34.4) |  |  | (32.3) |
Adjusted depreciation and amortization |  |  |  |  | $ | 10.0 |  |  | $ | 10.1 |
(3)Restructuring and other includes restructuring and severance costs, certain transaction and other costs, and certain unusual items, when applicable (see Note 12). (4)Amounts represent the incremental costs included in direct operating expense resulting from circumstances associated with the COVID-19 global pandemic, net of insurance recoveries. During the three months ended June 30, 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 12). These charges (benefits) are excluded from segment operating results. (5)The following table reconciles total share-based compensation expense to adjusted share-based compensation expense:
|  |  | Three Months Ended
|  |  | June 30,
|  |  |  |  | 2023 |  | 2022
|  |  |  |  | (Amounts in millions)
Total share-based compensation expense |  |  |  |  | $ | 16.4 |  |  | $ | 8.4 |
Less: |  |  |  |  |  |  |
Amount included in restructuring and other(i) |  |  |  |  | (0.5) |  |  | (0.6) |
Adjusted share-based compensation |  |  |  |  | $ | 15.9 |  |  | $ | 7.8 |
(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. (6)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
|  |  | June 30,
|  |  |  |  | 2023 |  | 2022
|  |  |  |  | (Amounts in millions)
Purchase accounting and related adjustments: |  |  |  |  |  |  |
General and administrative expense(i) |  |  |  |  | $ | 10.0 |  |  | $ | 16.0 |
Depreciation and amortization |  |  |  |  | 34.4 |  |  | 32.3 |
|  |  |  |  | $ | 44.4 |  |  | $ | 48.3 |
(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.
|  |  | Three Months Ended
|  |  | June 30,
|  |  |  |  | 2023 |  | 2022
|  |  |  |  | (Amounts in millions)
Amortization of recoupable portion of the purchase price |  |  |  |  | $ | 1.3 |  |  | $ | 1.9 |
Noncontrolling interest discount amortization |  |  |  |  | — |  |  | 4.9 |
Noncontrolling equity interest in distributable earnings |  |  |  |  | 8.7 |  |  | 9.2 |
|  |  |  |  | $ | 10.0 |  |  | $ | 16.0 |
See Note 8 for revenues by media or product line as broken down by segment for the three months ended June 30, 2023 and 2022. The following table reconciles segment general and administration expense to the Company's total consolidated general and administration expense:
|  |  | Three Months Ended
|  |  | June 30,
|  |  |  |  | 2023 |  | 2022
|  |  |  |  | (Amounts in millions)
General and administration |  |  |  |  |  |  |
Segment general and administrative expenses |  |  |  |  | $ | 67.9 |  |  | $ | 57.2 |
Corporate general and administrative expenses |  |  |  |  | 30.4 |  |  | 23.0 |
Share-based compensation expense included in general and administrative expense |  |  |  |  | 15.3 |  |  | 7.5 |
Purchase accounting and related adjustments |  |  |  |  | 10.0 |  |  | 16.0 |
|  |  |  |  | $ | 123.6 |  |  | $ | 103.7 |
The reconciliation of total segment assets to the Company’s total consolidated assets is as follows:
| June 30, 2023 |  | March 31, 2023
| (Amounts in millions)
Assets |  |  |
Motion Picture | $ | 1,743.4 |  |  | $ | 1,759.4 |
Television Production | 1,989.8 |  |  | 1,949.1 |
Media Networks | 3,033.3 |  |  | 3,120.8 |
Other unallocated assets(1) | 695.7 |  |  | 596.9 |
| $ | 7,462.2 |  |  | $ | 7,426.2 |
_____________________ (1)Other unallocated assets primarily consist of cash, other assets and investments.

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- 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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