Additional Financial Information

3 Months Ended

Jun. 30, 2023

Additional Financial Information [Abstract]

The following tables present supplemental information related to the unaudited condensed consolidated financial statements.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the unaudited condensed consolidated balance sheet to the total amounts reported in the unaudited condensed consolidated statement of cash flows at June 30, 2023 and March 31, 2023. At June 30, 2023 and March 31, 2023, restricted cash represents primarily amounts related to required cash reserves for interest payments associated with the Production Tax Credit Facility, IP Credit Facility, Backlog Facility, and Distribution Loans.


	June 30, 2023		March 31, 2023
	(Amounts in millions)
Cash and cash equivalents	$	322.7	$	272.1
Restricted cash included in other current assets	51.7		27.9
Restricted cash included in other non-current assets	19.7		13.0
Total cash, cash equivalents and restricted cash	$	394.1	$	313.0

Other Assets

The composition of the Company’s other assets is as follows as of June 30, 2023 and March 31, 2023:


	June 30, 2023		March 31, 2023
	(Amounts in millions)
Other current assets
Prepaid expenses and other	$	50.5	$	43.3
Restricted cash	51.7		27.9
Contract assets	53.5		63.5
Tax credits receivable	122.0		129.5
	$	277.7	$	264.2
Other non-current assets
Prepaid expenses and other	$	9.1	$	8.4
Restricted cash	19.7		13.0
Accounts receivable	27.8		37.8
Contract assets	6.6		5.1
Tax credits receivable	348.5		341.7
Operating lease right-of-use assets	158.6		169.0
Interest rate swap assets	59.0		41.1
	$	629.3	$	616.1

Accounts Receivable Monetization

Under the Company's accounts receivable monetization programs, the Company has entered into (1) individual agreements to monetize certain of its trade accounts receivable directly with third-party purchasers and (2) a revolving agreement to monetize designated pools of trade accounts receivable with various financial institutions, as further described below. Under these programs, the Company transfers receivables to purchasers in exchange for cash proceeds, and the Company continues to service the receivables for the purchasers. The Company accounts for the transfers of these receivables as a sale, removes (derecognizes) the carrying amount of the receivables from its balance sheets and classifies the proceeds received as cash flows from operating activities in the statements of cash flows. The Company records a loss on the sale of these receivables reflecting the net proceeds received (net of any obligations incurred), less the carrying amount of the receivables transferred. The loss is reflected in the "other expense" line item on the unaudited condensed consolidated statements of operations. The Company receives fees for servicing the accounts receivable for the purchasers, which represent the fair value of the services and were immaterial for the three months ended June 30, 2023 and 2022.

Individual Monetization Agreements. The Company enters into individual agreements to monetize trade accounts receivable. The third-party purchasers have no recourse to other assets of the Company in the event of non-payment by the customers. The following table sets forth a summary of the receivables transferred under individual agreements or purchases during the three months ended June 30, 2023 and 2022:


	Three Months Ended
	June 30,
		2023		2022
		(Amounts in millions)
Carrying value of receivables transferred and derecognized		$	341.3	$	337.3
Net cash proceeds received		336.6		333.7
Loss recorded related to transfers of receivables		4.7		3.6

At June 30, 2023, the outstanding amount of receivables derecognized from the Company's unaudited condensed consolidated balance sheets, but which the Company continues to service, related to the Company's individual agreements to monetize trade accounts receivable was $500.2 million (March 31, 2023 - $520.4 million).

Pooled Monetization Agreement. In December 2019, the Company entered into a revolving agreement, as amended in July 2023 to transfer up to $100.0 million of certain receivables to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred, which expires the earlier of October 1, 2023 or the date of the separation of the Company's Starz Business (i.e., Media Networks segment) and Studio Business (i.e., Motion Picture and Television Production segments). As customers pay their balances, the Company transfers additional receivables into the program. The transferred receivables are fully guaranteed by a bankruptcy-remote wholly-owned subsidiary of the Company, which holds additional receivables in the amount of $62.5 million as of June 30, 2023 that are pledged as collateral under this agreement. The third-party purchasers have no recourse to other assets of the Company in the event of non-payment by the customers.

The following table sets forth a summary of the receivables transferred under the pooled monetization agreement during the three months ended June 30, 2023 and 2022:


	Three Months Ended
	June 30,
		2023		2022
		(Amounts in millions)
Gross cash proceeds received for receivables transferred and derecognized		$	5.8	$	60.8
Less amounts from collections reinvested under revolving agreement		(2.9)		(24.1)
Proceeds from new transfers		2.9		36.7
Collections not reinvested and remitted or to be remitted		0.5		(16.8)
Net cash proceeds received (paid or to be paid)(1)		$	3.4	$	19.9

Carrying value of receivables transferred and derecognized (2)		$	5.8	$	59.1
Obligations recorded		$	1.1	$	3.0
Loss recorded related to transfers of receivables		$	1.0	$	1.3

___________________

(1)In addition, during the three months ended June 30, 2022, the Company repurchased $20.9 million of receivables previously transferred, as separately agreed upon with the third-party purchasers, in order to monetize such receivables under the individual monetization program discussed above without being subject to the collateral requirements under the pooled monetization program.

(2)Receivables net of unamortized discounts on long-term, non-interest bearing receivables.

At June 30, 2023, the outstanding amount of receivables derecognized from the Company's unaudited condensed consolidated balance sheet, but which the Company continues to service, related to the pooled monetization agreement was approximately $45.3 million (March 31, 2023 - $52.3 million).

Content related payables

Content related payables 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.

Other Accrued Liabilities

Other accrued liabilities include employee related liabilities (such as accrued bonuses and salaries and wages) of $142.5 million and $128.7 million at June 30, 2023 and March 31, 2023, respectively.

Accumulated Other Comprehensive Income

The following table summarizes the changes in the components of accumulated other comprehensive income, net of tax. During the three months ended June 30, 2023 and 2022, there was no income tax expense or benefit reflected in other comprehensive income due to the income tax impact being offset by changes in the Company’s deferred tax valuation allowance.


	Foreign currency translation adjustments		Net unrealized gain (loss) on cash flow hedges		Total
	(Amounts in millions)
March 31, 2023	$	(21.6)	$	142.5	$	120.9
Other comprehensive income	0.8		24.5		25.3
Reclassifications to net loss(1)	—		(7.6)		(7.6)
June 30, 2023	$	(20.8)	$	159.4	$	138.6

March 31, 2022	$	(19.7)	$	49.0	$	29.3
Other comprehensive income (loss)	(3.0)		36.3		33.3
Reclassifications to net loss(1)	—		12.6		12.6
June 30, 2022	$	(22.7)	$	97.9	$	75.2

___________________

(1)Represents a gain of $0.4 million included in direct operating expense and a gain of $7.2 million included in interest expense on the unaudited condensed consolidated statement of operations in the three months ended June 30, 2023 (three months ended June 30, 2022 - loss of $0.9 million included in direct operating expense and loss of $11.7 million included in interest expense) (see Note 15).

Supplemental Cash Flow Information

Significant non-cash transactions during the three months ended June 30, 2023 and 2022 include certain interest rate swap agreements, which are discussed in Note 15, "Derivative Instruments and Hedging Activities".

There were no significant non-cash financing or investing activities for the three months ended June 30, 2023 and 2022.