XML 53 R22.htm IDEA: XBRL DOCUMENT
v3.24.1.1.u2

Income Taxes | 12 Months Ended
--- | ---
Mar. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of pretax income (loss), net of intercompany eliminations, are as follows:
| Year Ended March 31,
| 2024 |  | 2023 |  | 2022
| (Amounts in millions)
United States | $ | (1,389.9) |  |  | $ | (2,218.6) |  |  | $ | (359.2) |
International | 208.6 |  |  | 221.1 |  |  | 182.2 |
| $ | (1,181.3) |  |  | $ | (1,997.5) |  |  | $ | (177.0) |
The Company's U.S. pre-tax losses and international pre-tax income are primarily driven by non-operating, intercompany items resulting from the Company's internal capital structure. The Company's capital structure generally provides foreign affiliate dividends to its Canadian parent company (i.e., Lionsgate) and interest-related tax deductions to its U.S. companies. The Company's international pre-tax income may be significantly impacted by these foreign affiliate dividends related to its internal capital structure. The Company’s current and deferred income tax provision (benefits) are as follows:
| Year Ended March 31,
| 2024 |  | 2023 |  | 2022
Current provision (benefit): | (Amounts in millions)
Federal | $ | (62.5) |  |  | $ | 11.9 |  |  | $ | 11.0 |
States | 1.7 |  |  | (0.4) |  |  | 10.7 |
International | 14.3 |  |  | 15.1 |  |  | 8.4 |
Total current provision (benefit) | $ | (46.5) |  |  | $ | 26.6 |  |  | $ | 30.1 |
Deferred provision (benefit): |  |  |  |  |
Federal | $ | (6.6) |  |  | $ | (7.7) |  |  | $ | 0.9 |
States | (11.9) |  |  | (0.1) |  |  | (2.6) |
International | — |  |  | 2.5 |  |  | — |
Total deferred provision (benefit) | (18.5) |  |  | (5.3) |  |  | (1.7) |
Total provision (benefit) for income taxes | $ | (65.0) |  |  | $ | 21.3 |  |  | $ | 28.4 |
Although the Company is incorporated under Canadian law, the majority of its global operations are currently subject to tax in the U.S. As a result, the Company believes it is more appropriate to use the U.S. federal statutory income tax rate of 21% in its reconciliation of the statutory rate to its reported income tax provision (benefit). The Company's income tax provision (benefit) differs from the 21% U.S. federal statutory income tax rate applied to income (loss) before taxes due to the mix of earnings generated across the various jurisdictions in which operations are conducted, in addition to the tax deductions generated through the Company's capital structure. The Company's income tax provision (benefit) can be affected by many factors, including the overall level of pre-tax income, the mix of pre-tax income generated across the various jurisdictions in which the Company operates, changes in tax laws and regulations in those jurisdictions, changes in uncertain tax positions, changes in valuation allowances on its deferred tax assets, tax planning strategies available to the Company, and other discrete items. The differences between income taxes expected at U.S. statutory income tax rates and the income tax provision are as set forth below:
| Year Ended March 31,
| 2024 |  | 2023 |  | 2022
| (Amounts in millions)
Income taxes computed at Federal statutory rate | $ | (248.1) |  |  | $ | (419.5) |  |  | $ | (37.2) |
Foreign affiliate dividends | (27.3) |  |  | (35.4) |  |  | (35.2) |
Foreign operations subject to different income tax rates | 41.2 |  |  | 48.2 |  |  | 50.0 |
State income tax | (9.6) |  |  | (0.5) |  |  | 8.1 |
Nondeductible goodwill impairment | 101.9 |  |  | 304.3 |  |  | — |
Remeasurements of originating deferred tax assets and liabilities | (78.3) |  |  | 13.6 |  |  | (1.3) |
Permanent differences | 1.0 |  |  | 2.3 |  |  | 0.8 |
Nondeductible share based compensation | 2.5 |  |  | 2.3 |  |  | (3.3) |
Nondeductible officers compensation | 7.7 |  |  | 9.8 |  |  | 5.6 |
Non-controlling interest in partnerships | 18.6 |  |  | 1.8 |  |  | 3.7 |
Uncertain tax benefits | (70.0) |  |  | 5.3 |  |  | 3.6 |
Other | (0.9) |  |  | 1.9 |  |  | 1.2 |
Changes in valuation allowance | 196.3 |  |  | 87.2 |  |  | 32.4 |
Total provision for income taxes | $ | (65.0) |  |  | $ | 21.3 |  |  | $ | 28.4 |
For the fiscal years ended March 31, 2024, 2023 and 2022, our income tax provision (benefit) includes certain foreign affiliate dividends that can be received in our Canadian jurisdiction without being subject to income tax under local law. As a result of an internal capital restructuring during a prior fiscal year, the Company generated a net operating loss carryforward under local income tax law in another foreign jurisdiction which was offset by a valuation allowance based on the Company’s assessment, and which is being absorbed by taxable income annually. The income tax effects of temporary differences between the book value and tax basis of assets and liabilities are as follows:
| March 31, 2024 |  | March 31, 2023
| (Amounts in millions)
Deferred tax assets: |  |  |
Net operating losses | $ | 624.4 |  |  | $ | 450.4 |
Foreign tax credits | 64.9 |  |  | 73.0 |
Investment in film and television programs | 34.2 |  |  | 67.1 |
Accrued compensation | 54.3 |  |  | 63.2 |
Operating leases - liabilities | 99.0 |  |  | 41.4 |
Other assets | 57.7 |  |  | 22.6 |
Reserves | 22.9 |  |  | 9.0 |
Interest | 201.0 |  |  | 104.6 |
Total deferred tax assets | 1,158.4 |  |  | 831.3 |
Valuation allowance | (808.3) |  |  | (455.7) |
Deferred tax assets, net of valuation allowance | 350.1 |  |  | 375.6 |
Deferred tax liabilities: |  |  |
Intangible assets | (222.4) |  |  | (317.0) |
Operating leases - assets | (88.9) |  |  | (34.6) |
Other | (52.1) |  |  | (55.8) |
Total deferred tax liabilities | $ | (363.4) |  |  | $ | (407.4) |
Net deferred tax liabilities | $ | (13.3) |  |  | $ | (31.8) |
The Company has recorded valuation allowances for certain deferred tax assets, which are primarily related to U.S. and foreign net operating loss carryforwards, U.S. foreign tax credit carryforwards, and carryforwards of U.S. interest expenses limited in their deduction under the Internal Revenue Code and similar state and local statutes. In its assessment, the Company has concluded there to be sufficient uncertainty regarding the future realization of these deferred tax assets. At March 31, 2024, the Company had U.S. net operating loss carryforwards ("NOLs") of approximately $1,330.6 million available to reduce future federal income taxes, certain of which expire beginning in 2037 through 2042. At March 31, 2024, the Company had state NOLs of approximately $1,203.9 million available to reduce future state income taxes which expire in varying amounts beginning in 2025. At March 31, 2024, the Company had Canadian loss carryforwards of $361.6 million which will expire beginning in 2030. At March 31, 2024, the Company had Luxembourg loss carryforwards of $504.3 million which will expire beginning in 2036, U.K. loss carryforwards of $95.1 million with no expiration, and Spanish loss carryforwards of $96.1 million which will expire beginning in 2036. At March 31, 2024, the Company had other foreign jurisdiction loss carryforwards of $24.6 million which will expire beginning in 2028. In addition, at March 31, 2024, the Company had U.S. credit carryforwards related to foreign taxes paid of approximately $64.9 million to offset future federal income taxes that will expire beginning in 2025. The unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year are classified as "other liabilities" in the consolidated balance sheets. As of March 31, 2024 and 2023, the total amount of gross unrecognized tax benefits, exclusive of interest and penalties, was $12.1 million and $64.9 million, respectively, which, if recognized, would favorably impact the Company's effective tax rate. The aggregate changes in the Company's gross amount of unrecognized tax benefits, exclusive of interest and penalties, are summarized as follows:
| Amounts in millions
Gross unrecognized tax benefits at March 31, 2021 (liability as of March 31, 2021) | $ | 68.0 |
Increases related to current year tax position | — |
Increases related to prior year tax positions | 2.6 |
Decreases related to prior year tax positions | — |
Settlements | — |
Lapse in statute of limitations | (0.4) |
Gross unrecognized tax benefits at March 31, 2022 (liability as of March 31, 2022) | 70.2 |
Increases related to current year tax position | — |
Increases related to prior year tax positions | 0.2 |
Decreases related to prior year tax positions | — |
Settlements | (4.3) |
Lapse in statute of limitations | (1.2) |
Gross unrecognized tax benefits at March 31, 2023 (liability as of March 31, 2023) | 64.9 |
Increases related to current year tax position | — |
Increases related to prior year tax positions | 8.9 |
Decreases related to prior year tax positions | — |
Settlements | (60.7) |
Lapse in statute of limitations | (1.0) |
Gross unrecognized tax benefits at March 31, 2024 (liability as of March 31, 2024) | $ | 12.1 |
The Company records interest and penalties on unrecognized tax benefits as part of its income tax provision (benefit). For the years ended March 31, 2024, 2023, and 2022, the Company recognized as a charge or (benefit) to the tax provision (benefit) for interest and penalties related to uncertain tax positions of $(8.9) million, $5.0 million, and $6.0 million, respectively. The liability for accrued interest amounted to $7.0 million and $16.7 million as of March 31, 2024 and 2023, respectively. During the year ended March 31, 2024, the Company settled a prior year refund claim and recognized a corresponding income tax benefit of $70 million, which was inclusive of accrued interest and penalties of approximately $10 million. The Company estimates that it is reasonably possible that the liability for unrecognized tax benefits will further decrease in the next twelve months by $8.1 million, inclusive of interest and penalties, as a result of projected audit settlements in certain jurisdictions. The Company is subject to taxation in the U.S. and various state, local, and foreign jurisdictions. To the extent allowed by law, the taxing authorities may have the right to examine prior periods where NOLs were generated and carried forward and make adjustments up to the amount of the NOLs. Currently, audits are occurring in various state and local tax jurisdictions for tax years ended in 2012 through 2020. Additionally, positions taken by the Company in certain amended filings are subject to current review. The Company's Canadian tax returns are also under examination for the years ended March 31, 2018 through March 31, 2019.

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

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration