LIONS GATE ENTERTAINMENT CORP. (USA) Revenue is $670.5 Million; Net Income Attributable to Lionsgate Shareholders is $40.7 Million or EPS of $0.27; Adjusted EBITDA is $53.6 Million
Free Cash Flow Increases to $73.9 Million
Company Pays Quarterly Cash Dividend of $0.09 per Common Share
SANTA MONICA, Calif. and VANCOUVER, British Columbia, Feb. 4, 2016 /PRNewswire/ -- Lionsgate (NYSE: LGF) today reported revenue of $670.5 million, adjusted EBITDA of $53.6 million, adjusted net income attributable to Lionsgate shareholders of $66.8 million or adjusted EPS of $0.45, and net income attributable to Lionsgate shareholders of $40.7 million or EPS of $0.27 for the fiscal 2016 third quarter ended December 31, 2015. Free cash flow in the quarter rose to $73.9 million.
http://photos.prnewswire.com/prnvar/20130919/LA83194LOGO
"While the performance of our theatrical film slate resulted in softer than anticipated results, our other businesses performed strongly in the quarter," said Lionsgate Chief Executive Officer Jon Feltheimer. "With our television business continuing its robust topline and margin growth, a deeper and more diversified film slate with lower costs and contributions anticipated from recently launched businesses, we have a clear path to resume our strong and sustainable financial trajectory in fiscal 2017."
Adjusted net income attributable to Lionsgate shareholders of $66.8 million or $0.45 adjusted EPS for the quarter compared to adjusted net income attributable to Lionsgate shareholders of $110.0 million or adjusted EPS of $0.79 in the prior year quarter. Adjusted EBITDA of $53.6 million compared to adjusted EBITDA of $146.8 million in the prior year quarter.
Net income attributable to Lionsgate shareholders for the quarter was $40.7 million or EPS of $0.27 on 149.5 million weighted average number of common shares outstanding compared to net income attributable to Lionsgate shareholders of $98.2 million or EPS of $0.70 on 140.0 million weighted average number of common shares outstanding during the prior year quarter.
Free cash flow of $73.9 million in the quarter increased from negative free cash flow of $4.6 million in the prior year quarter.
Revenue of $670.5 million for the quarter compared to revenue of $751.3 million in the prior year quarter.
Revenue, adjusted EBITDA and EPS in the quarter declined from the prior year quarter due to the performance of the theatrical film slate. Although The Hunger Games: Mockingjay 2 grossed over $650 million at the global box office, ranking it among the highest-grossing films of the year, its box office performance declined from Mockingjay 1 with higher Mockingjay 2 production costs also impacting its profitability.
During the quarter, the Company declared a quarterly cash dividend of $0.09 per common share payable on February 5, 2016 to shareholders of record as of December 31, 2015.
Lionsgate's filmed entertainment backlog, or already contracted future revenue not yet recorded, was approximately $1.3 billion at December 31, 2015, increasing from $1.2 billion at September 30, 2015.
Overall Motion Picture segment revenue for the quarter was $505.8 million compared to $590.1 million in the prior year quarter. Although theatrical revenue of $183.1 million was comparable to $186.4 million in the prior year quarter, margins were lower due in part to theatrical P&A expenses associated with four wide film releases in the quarter compared to two wide film releases in the prior year quarter.
Lionsgate's home entertainment revenue from motion picture and television production for the quarter was $142.0 compared to $183.1 million in the prior year quarter, reflecting the composition and timing of the slate of wide release theatrical titles. This offset increased home entertainment revenue from television production in the quarter.
Television revenue included in the Motion Picture segment of $48.6 million in the quarter compared to $82.9 million in the prior year quarter due to timing of titles with television windows opening in the period. The Hunger Games opened in its network television window in the prior year quarter.
International Motion Picture segment revenue of $140.1 million for the quarter compared to $142.1 million in the prior year quarter.
Television production segment revenue of $164.7 million increased from $161.2 million in the prior year quarter. Margins in the Company's television business continued their growth trajectory in the quarter. Domestic television revenues were affected by timing of deliveries in the quarter. Deliveries of the critically-acclaimed hit series Orange is the New Black, Nashville and The Royals are expected to drive strong growth in the fourth quarter along with the first full quarter of results from Pilgrim Studios, in which Lionsgate acquired a majority stake in November 2015.
Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2016 third quarter financial results at 9:00 A.M. ET/6:00 A.M. PT tomorrow, Friday, February 5. Interested parties may participate live in the conference call by calling 1-800-288-8974 (612-332-1213 outside the U.S. and Canada). A full digital replay will be available from Friday morning, February 5, through Friday, February 12, by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 383600.
ABOUT LIONSGATE
Lionsgate is a premier next generation global content leader with a strong and diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, digital distribution, new channel platforms, video games and international distribution and sales. The Company currently has 80 television shows on 40 different networks spanning its primetime production, distribution and syndication businesses, including such critically-acclaimed hits as Orange is the New Black, the broadcast network series Nashville, the syndication success The Wendy Williams Show, the breakout comedy The Royals and the Golden Globe-nominated dramedy Casual.
Its feature film business has been fueled by such successes as the blockbuster Hunger Games franchise, the first two installments of the Divergent franchise, Sicario, John Wick, Now You See Me, CBS Films/Lionsgate's The Duff, Roadside Attractions' Love & Mercy and Mr. Holmes and Pantelion Films' Instructions Not Included, the highest-grossing Spanish-language film ever released in the U.S.
Lionsgate's home entertainment business is an industry leader in box office-to-DVD and box office-to-VOD revenue conversion rate. The Company handles a prestigious and prolific library of approximately 16,000 motion picture and television titles that is an important source of recurring revenue and serves as the foundation for the growth of the Company's core businesses. The Lionsgate and Summit brands remain synonymous with original, daring, quality entertainment in markets around the world.
For further information, please contact:
Peter D. Wilkes
310-255-3726
pwilkes@lionsgate.com
The matters discussed in this press release include forward-looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results in the future could differ materially and adversely from those described in the forward-looking statements as a result of various important factors, including the substantial investment of capital required to produce and market films and television series, increased costs for producing and marketing feature films and television series, budget overruns, limitations imposed by our credit facility and notes, unpredictability of the commercial success of our motion pictures and television programming, the cost of defending our intellectual property, difficulties in integrating acquired businesses, risks related to our acquisition strategy and integration of acquired businesses, the effects of disposition of businesses or assets, technological changes and other trends affecting the entertainment industry, and the risk factors as set forth in Lionsgate's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the "SEC") on February 4, 2016, which risk factors are incorporated herein by reference. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances.
LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, March 31,
2015 2015
---- ----
(Amounts in thousands,
except share amounts)
ASSETS
Cash and cash equivalents $88,292 $102,697
Restricted cash 2,650 2,508
Accounts receivable, net of
reserves for returns and
allowances of $52,613
(March 31, 2015 -$64,362)
and provision for doubtful
accounts of $5,245 (March
31, 2015 -$4,120) 943,998 891,880
Investment in films and
television programs, net 1,561,968 1,381,829
Property and equipment, net 41,914 26,651
Investments 475,109 438,298
Goodwill 534,143 323,328
Other assets 84,822 74,784
Deferred tax assets 105,503 50,114
------- ------
Total assets $3,838,399 $3,292,089
========== ==========
LIABILITIES
Senior revolving credit
facility $ - $ -
5.25% Senior Notes 225,000 225,000
Term Loan 400,000 375,000
Accounts payable and
accrued liabilities 327,828 332,473
Participations and
residuals 549,985 471,661
Film obligations and
production loans 895,558 656,755
Convertible senior
subordinated notes 99,508 114,126
Deferred revenue 295,971 274,787
------- -------
Total liabilities 2,793,850 2,449,802
--------- ---------
Commitments and contingencies
Redeemable noncontrolling
interest 89,175 -
SHAREHOLDERS' EQUITY
Common shares, no par
value, 500,000,000 shares
authorized, 150,252,445
shares issued (March 31,
2015 -145,532,978 shares) 951,360 830,786
Retained earnings 7,673 13,720
Accumulated other
comprehensive loss (3,659) (2,219)
------ ------
Total shareholders' equity 955,374 842,287
------- -------
Total liabilities and
shareholders' equity $3,838,399 $3,292,089
========== ==========
LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(Amounts in thousands, except per share amounts)
Revenues $670,522 $751,299 $1,556,222 $1,753,558
Expenses:
Direct operating 404,068 400,576 927,188 945,840
Distribution and marketing 203,121 171,439 428,185 421,637
General and administration 70,083 61,407 198,372 186,975
Depreciation and amortization 2,970 1,708 7,320 4,685
Total expenses 680,242 635,130 1,561,065 1,559,137
Operating income (loss) (9,720) 116,169 (4,843) 194,421
------ ------- ------ -------
Other expenses (income):
Interest expense
Cash interest 11,833 10,567 32,561 29,546
Amortization of debt discount and
deferred financing costs 2,336 2,984 6,863 10,048
----- ----- ----- ------
Total interest expense 14,169 13,551 39,424 39,594
Interest and other income (521) (623) (1,676) (2,188)
Loss on extinguishment of debt - 690 - 1,276
--- --- --- -----
Total other expenses, net 13,648 13,618 37,748 38,682
------ ------ ------ ------
Income (loss) before equity interests
and income taxes (23,368) 102,551 (42,591) 155,739
Equity interests income 10,826 10,898 29,363 37,353
------ ------ ------ ------
Income (loss) before income taxes (12,542) 113,449 (13,228) 193,092
Income tax provision (benefit) (45,140) 15,264 (44,441) 30,865
------- ------ ------- ------
Net income 32,598 98,185 31,213 162,227
Less: Net loss attributable to
noncontrolling interest 8,119 - 8,119 -
Net income attributable to Lions Gate
Entertainment Corp. shareholders $40,717 $98,185 $39,332 $162,227
======= ======= ======= ========
Per share information attributable to Lions Gate
Entertainment Corp. shareholders:
Basic net income per common share $0.27 $0.70 $0.26 $1.17
===== ===== ===== =====
Diluted net income per common share $0.26 $0.65 $0.26 $1.10
===== ===== ===== =====
Weighted average number of common shares outstanding:
Basic 149,480 139,963 148,484 138,618
Diluted 159,412 151,713 154,412 151,716
Dividends declared per common share $0.09 $0.07 $0.25 $0.19
LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(Amounts in thousands)
Operating Activities:
Net income $32,598 $98,185 $31,213 $162,227
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation and amortization 2,970 1,708 7,320 4,685
Amortization of films and
television programs 293,998 280,380 655,288 639,472
Amortization of debt discount
and deferred financing costs 2,336 2,984 6,863 10,048
Non-cash share-based
compensation 13,416 15,142 47,399 48,691
Other non-cash items 681 - 681 -
Distribution from equity
method investee - - - 7,788
Loss on extinguishment of debt - 690 - 1,276
Equity interests income (10,826) (10,898) (29,363) (37,353)
Deferred income taxes (52,121) 1,927 (54,733) 11,243
Changes in operating assets and liabilities:
Restricted cash (142) 27 (142) 1,417
Accounts receivable, net (48,670) (178,397) (36,663) (94,803)
Investment in films and
television programs (235,785) (176,450) (771,255) (815,469)
Other assets (426) (520) (2,254) (1,416)
Accounts payable and accrued
liabilities 26,282 26,290 (8,018) (52,700)
Participations and residuals 32,490 (28,640) 77,428 (6,070)
Film obligations (19,028) 4,960 (30,176) (33,953)
Deferred revenue 20,284 7,508 (4,139) (8,124)
Net Cash Flows Provided By
(Used In) Operating
Activities 58,057 44,896 (110,551) (163,041)
------ ------ -------- --------
Investing Activities:
Proceeds from the sale of
equity method investees - - - 14,575
Investment in equity method
investees (295) (2,100) (3,954) (14,750)
Purchase of Pilgrim Studios,
net of cash acquired of
$15,816 (126,892) - (126,892) -
Purchases of other investments (750) - (750) (2,000)
Purchases of property and
equipment (6,800) (6,798) (13,680) (11,293)
Net Cash Flows Used In
Investing Activities (134,737) (8,898) (145,276) (13,468)
-------- ------ -------- -------
Financing Activities:
Senior revolving credit
facility -borrowings 190,000 314,000 238,000 681,500
Senior revolving credit
facility -repayments (190,000) (293,000) (238,000) (618,619)
Term Loan -borrowings, net of
deferred financing costs of
$964 - - 24,036 -
Convertible senior
subordinated notes -
repurchases - - (5) (16)
Production loans - borrowings 138,624 148,075 509,569 533,781
Production loans - repayments (128,091) (196,433) (240,565) (261,868)
Repurchase of common shares - (3,455) - (129,859)
Dividends paid (13,364) (9,590) (33,927) (23,536)
Excess tax benefits on equity-
based compensation awards - 5,617 - 6,767
Exercise of stock options 1,554 2,741 6,007 4,404
Tax withholding required on
equity awards (3,888) (2,803) (22,871) (14,939)
Net Cash Flows Provided By
(Used In) Financing
Activities (5,165) (34,848) 242,244 177,615
------ ------- ------- -------
Net Change In Cash And Cash
Equivalents (81,845) 1,150 (13,583) 1,106
Foreign Exchange Effects on
Cash (280) 1,467 (822) 2,088
Cash and Cash Equivalents -
Beginning Of Period 170,417 26,269 102,697 25,692
Cash and Cash Equivalents -
End Of Period $88,292 $28,886 $88,292 $28,886
======= ======= ======= =======
LIONS GATE ENTERTAINMENT CORP.
USE OF NON-GAAP FINANCIAL MEASURES
This earnings release presents EBITDA, Adjusted EBITDA, free cash flow, adjusted net income (loss) attributable to Lions Gate Entertainment Corp. (the "Company," "we," "us" or "our") shareholders, and adjusted earnings (loss) per share, all of which are important financial measures for the Company but are not financial measures defined by GAAP.
These measures are non-GAAP financial measures as defined in Regulation G promulgated by the Securities and Exchange Commission (the "SEC") and are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP").
We believe these non-GAAP measures to be meaningful indicators of our performance that provide useful information to investors regarding our financial condition and results of operations and cash flows before non-operating items. These non-GAAP measures are commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. However, not all companies calculate these measures in the same manner and the measures as presented may not be comparable to similarly titled measures presented by other companies.
These measures should be reviewed in conjunction with the relevant GAAP financial measures and are not presented as alternative measures of operating income, cash flow, net income, or earnings (loss) per share as determined in accordance with GAAP. Definitions and reconciliations of the adjusted metrics utilized to their corresponding GAAP metrics are provided below.
EBITDA and Adjusted EBITDA
EBITDA is defined as earnings before interest, income tax provision or benefit, and depreciation and amortization.
Adjusted EBITDA represents EBITDA as defined above adjusted for stock-based compensation, purchase accounting and related adjustments, restructuring and other items, start-up losses of new business initiatives, loss on extinguishment of debt, and backstopped prints and advertising expense.
Free Cash Flow
Free cash flow is defined as net cash flows provided by (used in) operating activities, less purchases of property and equipment, plus or minus the net increase or decrease in production loans, plus or minus excess tax benefits on equity-based compensation awards if applicable and excluding the cash used by our new business initiatives and the one-time transactional costs of Pilgrim Studios attributable to the noncontrolling shareholder. The adjustment for the production loans is made because the GAAP based cash flows from operations reflects a non-cash reduction of cash flows for the cost of films and television programs associated with production loans prior to the time the Company actually pays for the film or television program. The Company believes that it is more meaningful to reflect the impact of the payment for these films and television programs in its free cash flow when the payments are actually made. Cash used by our new business initiatives includes the cash used in operating activities plus the cash used in the purchase of property and equipment related to our consolidated subscription video-on-demand platforms.
Adjusted Net Income (Loss) Attributable to Lions Gate Entertainment Corp. Shareholders, and Adjusted Earnings (Loss) Per Share
Adjusted net income (loss) attributable to Lions Gate Entertainment Corp. shareholders is defined as net income (loss) attributable to Lions Gate Entertainment Corp. shareholders, adjusted for stock-based compensation, purchase accounting and related adjustments, restructuring and other items, start-up losses of new business initiatives, loss on extinguishment of debt, and backstopped prints and advertising expense, net of taxes at the applicable statutory rate and net of the amounts attributable to noncontrolling interest.
Adjusted earnings (loss) per share is defined as adjusted net income (loss) attributable to Lions Gate Entertainment Corp. shareholders per weighted average shares outstanding.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF NET INCOME TO EBITDA AND ADJUSTED EBITDA
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014**
---- ---- ---- -----
(Amounts in thousands)
Net income $32,598 $98,185 $31,213 $162,227
Depreciation and
amortization 2,970 1,708 7,320 4,685
Cash interest 11,833 10,567 32,561 29,546
Noncash interest expense 2,336 2,984 6,863 10,048
Interest and other income (521) (623) (1,676) (2,188)
Income tax provision
(benefit) (45,140) 15,264 (44,441) 30,865
------- ------ ------- ------
EBITDA $4,076 $128,085 $31,840 $235,183
====== ======== ======= ========
Stock-based
compensation(1) 13,235 15,132 47,506 48,875
Restructuring and other
items(2) 13,398 766 17,605 7,008
Purchase accounting and
related adjustments(3) 4,241 - 4,241 -
Start-up losses of new
business initiatives(4) 6,909 - 10,387 -
Loss on extinguishment of
debt - 690 - 1,276
Backstopped prints and
advertising expense(5) 11,755 2,100 4,942 2,100
Adjusted EBITDA $53,614 $146,773 $116,521 $294,442
======= ======== ======== ========
** In the quarter ended March 31, 2015, the
definition of Adjusted EBITDA was revised to
include the gains or losses from the sale of
equity method investments. Accordingly,
Adjusted EBITDA for the nine months ended
December 31, 2014 has been revised to include
the $11.4 million gain on the sale of the
Company's interest in FEARnet which occurred
April 2014. Prior to the sale of FEARnet, the
Company recognized cumulative equity interest
losses before income taxes of approximately
(1) Represents stock-based
compensation expenses for the
applicable periods.
(2) Restructuring and other items
includes restructuring and
severance costs, certain
transaction related costs, and
certain unusual items, when
applicable. Amounts in the three
and nine months ended December
31, 2015 represent professional
fees associated with certain
strategic transactions including,
among others, the acquisition of
a majority interest in Pilgrim
Media Group, LLC ("Pilgrim
Studios") and certain shareholder
transactions, the costs related
to the move of our international
sales and distribution
organization to the United
Kingdom, and certain
transactional costs of $7.7
million of Pilgrim Studios
attributable to the
noncontrolling shareholder.
Pursuant to the profit sharing
provisions in the Pilgrim Studios
operating agreement, the
transactional costs of $7.7
million are included in net loss
attributable to noncontrolling
interest in the unaudited
condensed consolidated statement
of income and thus does not
impact earnings per share
attributable to Lions Gate
Entertainment Corp. shareholders.
In addition, amounts in the nine
months ended December 31, 2015
include pension withdrawal costs
of $2.7 million related to an
underfunded multi-employer
pension plan in which the Company
is no longer participating.
Amounts in the three and nine
months ended December 31, 2014
primarily represent costs related
to the move of our international
sales and distribution
organization to the United
Kingdom. In addition, amounts in
the nine months ended December
31, 2014 include severance costs
associated with the integration
of the marketing operations of
the Company's Lionsgate and
Summit film labels, of which
approximately $1.2 million are
non-cash charges resulting from
the acceleration of vesting of
stock awards.
(3) Purchase accounting and related
adjustments represent the
incremental amortization expense
associated with the non-cash
fair value adjustments on
television assets of $3.6 million
included in direct operating
expense resulting from the
application of purchase
accounting and the charge of $0.7
million included in general and
administrative expense related to
the accretion of the
noncontrolling interest discount.
(4) Start-up losses of new business
initiatives represent losses
associated with the Company's
direct to consumer initiatives
including its subscription video-
on-demand platforms and Atom
Tickets, the first-of-its-kind
theatrical mobile ticketing
platform and app. For the three
and nine months ended December
31, 2015, $1.3 million represents
the gross contribution (i.e.,
revenue less direct operating and
distribution and marketing
expenses) of the consolidated
business, $2.6 million and $3.0
million, respectively, is
included in the Company's
consolidated general and
administrative expense and $3.0
million and $6.1 million,
respectively, is included in
equity interests income.
(5) Backstopped prints and advertising
expense ("P&A") represents the
amount of theatrical marketing
expense for third party titles
that the Company funded and
expensed for which a third party
provides a first dollar loss
guarantee (subject to a cap) that
such expense will be recouped
from the performance of the film
(which results in minimal risk of
loss to the Company). The amount
represents the P&A expense
incurred net of the impact of
expensing the P&A cost over the
revenue streams similar to a
participation expense (i.e., the
P&A under these arrangements are
being expensed similar to a
participation cost for purposes
of the adjusted measure).
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FREE CASH FLOW TO
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(Amounts in thousands)
Net Cash Flows Provided
By (Used In) Operating
Activities $58,057 $44,896 $(110,551) $(163,041)
Purchases of property
and equipment (6,800) (6,798) (13,680) (11,293)
Net borrowings under and
(repayment) of
production loans 10,533 (48,358) 269,004 271,913
Cash used by new
business initiatives 4,377 - 4,614 -
One-time transactional
costs of Pilgrim
Studios attributable to
the noncontrolling
shareholder 7,689 - 7,689 -
Excess tax benefits on
equity-based
compensation awards - 5,617 - 6,767
--- ----- --- -----
Free Cash Flow, as
defined $73,856 $(4,643) $157,076 $104,346
======= ======= ======== ========
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF EBITDA TO FREE CASH FLOW
Three Months Ended Nine Months Ended
December 31, December 31,
------------ ------------
2015 2014 2015 2014
---- ---- ---- ----
(Amounts in thousands)
EBITDA $4,076 $128,085 $31,840 $235,183
Plus: Amortization of
film and television
programs 293,998 280,380 655,288 639,472
Less: Cash paid for film
and television
programs(1) (244,280) (219,848) (532,427) (577,509)
-------- -------- -------- --------
Amortization of film and
television programs in
excess of cash paid 49,718 60,532 122,861 61,963
Plus: Non-cash stock-
based compensation 13,416 15,142 47,399 48,691
Plus: Other non-cash
items 681 - 681 -
Plus: Distribution from
equity method investee - - - 7,788
Less: Equity interests
income (10,826) (10,898) (29,363) (37,353)
Plus: Loss on
extinguishment of debt - 690 - 1,276
Plus: Cash used by new
business initiatives 4,377 - 4,614 -
Plus: One-time
transactional costs of
Pilgrim Studios
attributable to the
noncontrolling
shareholder 7,689 - 7,689 -
EBITDA adjusted for
items above 69,131 193,551 185,721 317,548
Changes in other operating assets and
liabilities:
Restricted cash (142) 27 (142) 1,417
Accounts receivable, net (48,670) (178,397) (36,663) (94,803)
Other assets (426) (520) (2,254) (1,416)
Accounts payable and
accrued liabilities 26,282 26,290 (8,018) (52,700)
Participations and
residuals 32,490 (28,640) 77,428 (6,070)
Deferred revenue 20,284 7,508 (4,139) (8,124)
------ ----- ------ ------
29,818 (173,732) 26,212 (161,696)
Purchases of property
and equipment (6,800) (6,798) (13,680) (11,293)
Interest, taxes and
other(2) (18,293) (17,664) (41,177) (40,213)
Free Cash Flow, as
defined $73,856 $(4,643) $157,076 $104,346
======= ======= ======== ========
(1) Cash paid for film and television programs is calculated using the following amounts as presented in our consolidated statement of cash flows:
Change in investment in
film and television
programs $(235,785) $(176,450) $(771,255) $(815,469)
Change in film
obligations (19,028) 4,960 (30,176) (33,953)
Production loans -
borrowings 138,624 148,075 509,569 533,781
Production loans -
repayments (128,091) (196,433) (240,565) (261,868)
-------- -------- -------- --------
Total cash paid for film
and television programs $(244,280) $(219,848) $(532,427) $(577,509)
========= ========= ========= =========
(2) Interest, taxes and other consists of
the following:
Cash interest $(11,833) $(10,567) $(32,561) $(29,546)
Interest and other
income 521 623 1,676 2,188
Current income tax
provision (6,981) (13,337) (10,292) (19,622)
Excess tax benefits on
equity-based
compensation awards - 5,617 - 6,767
Total interest, taxes
and other $(18,293) $(17,664) $(41,177) $(40,213)
======== ======== ======== ========
This reconciliation is provided to illustrate the difference between our EBITDA and free cash flow which are both separately reconciled to their corresponding GAAP metrics.
LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO LIONS GATE ENTERTAINMENT CORP. SHAREHOLDERS, AND BASIC AND DILUTED EPS TO ADJUSTED NET INCOME ATTRIBUTABLE TO LIONS GATE ENTERTAINMENT CORP. SHAREHOLDERS, AND ADJUSTED BASIC AND DILUTED EPS
Three Months Ended December 31, 2015
------------------------------------
(Amounts in thousands, except per share amounts)
Income (loss) Net income
before income attributable to
taxes Lions Gate
Entertainment
Corp.
Net income (1) shareholders (2) Basic EPS* Diluted EPS*
-------------- ------------- ---------------- --------- -----------
As reported $(12,542) $32,598 $40,717 $0.27 $0.26
Stock-based compensation 13,235 8,382 8,382 0.06 0.05
Purchase accounting and
related adjustments(3) 4,604 3,549 1,823 0.01 0.01
Restructuring and other
items(4) 13,398 11,672 3,983 0.03 0.02
Start-up losses of new
business initiatives(5) 7,049 4,464 4,464 0.03 0.03
Backstopped prints and
advertising expense 11,755 7,444 7,444 0.05 0.05
As adjusted for items
above $37,499 $68,109 $66,813 $0.45 $0.42
======= ======= ======= ===== =====
Three Months Ended December 31, 2014
------------------------------------
(Amounts in thousands, except per share amounts)
Income before Net income
income taxes attributable to
Lions Gate
Entertainment
Corp.
Net income(1) shareholders (2) Basic EPS* Diluted EPS*
-------------- ------------ ---------------- --------- -----------
As reported $113,449 $98,185 $98,185 $0.70 $0.65
Stock-based compensation 15,132 9,585 9,585 0.07 0.06
Restructuring and other
items(4) 766 485 485 - -
Loss on extinguishment of
debt 690 437 437 - -
Backstopped prints and
advertising expense 2,100 1,330 1,330 0.01 0.01
As adjusted for items
above $132,137 $110,022 $110,022 $0.79 $0.73
======== ======== ======== ===== =====
Nine Months Ended December 31, 2015
-----------------------------------
(Amounts in thousands, except per share amounts)
Income (loss) Net income
before income attributable to
taxes Lions Gate
Entertainment
Corp.
Net income (1) shareholders (2) Basic EPS* Diluted EPS*
-------------- ------------- ---------------- --------- -----------
As reported $(13,228) $31,213 $39,332 $0.26 $0.26
Stock-based compensation 47,506 30,086 30,086 0.20 0.20
Purchase accounting and
related adjustments(3) 4,604 3,549 1,823 0.01 0.01
Restructuring and other
items(4) 17,605 14,422 6,733 0.05 0.04
Start-up losses of new
business initiatives(5) 10,527 6,667 6,667 0.04 0.04
Backstopped prints and
advertising expense 4,942 3,130 3,130 0.02 0.02
As adjusted for items
above $71,956 $89,067 $87,771 $0.59 $0.57
======= ======= ======= ===== =====
Nine Months Ended December 31, 2014**
------------------------------------
(Amounts in thousands, except per share amounts)
Income before Net income
income taxes attributable to
Lions Gate
Entertainment
Corp.
Net income (1) shareholders (2) Basic EPS* Diluted EPS*
-------------- ------------- ---------------- --------- -----------
As reported $193,092 $162,227 $162,227 $1.17 $1.10
Stock-based compensation 48,875 30,957 30,957 0.22 0.20
Restructuring and other
items(4) 7,008 4,439 4,439 0.03 0.03
Loss on extinguishment of
debt 1,276 808 808 0.01 0.01
Backstopped prints and
advertising expense 2,100 1,330 1,330 0.01 0.01
----- ----- ----- ---- ----
As adjusted for items
above $252,351 $199,761 $199,761 $1.44 $1.35
======== ======== ======== ===== =====
______________________________________
* Basic and Diluted EPS amounts may not add precisely due to rounding
** In the quarter ended March 31, 2015, the definition of adjusted net income
attributable to Lions Gate Entertainment Corp. shareholders and adjusted earnings per
share was revised to include the gains or losses from the sale of equity method
investments. Accordingly, adjusted net income attributable to Lions Gate
Entertainment Corp. shareholders for the nine months ended December 31, 2014 has been
revised to include the gain on the April 2014 sale of the Company's interest in
FEARnet of $11.4 million ($7.2 million after income taxes) and representing adjusted
basic and diluted earnings per share of $0.05 for the nine months ended December 31,
2014. Prior to the sale of FEARnet, the Company recognized cumulative equity interest
losses before income taxes of approximately $11.7 million from the Company's interest
in FEARnet.
(1) Represents amounts net of the tax impact calculated using the statutory tax rate
applicable to each adjustment.
(2) Represents the net income amount adjusted for the portion attributable to noncontrolling
interest, if any.
(3) Purchase accounting and related adjustments include amounts presented in Adjusted EBITDA,
plus $0.4 million of incremental depreciation and amortization expense associated with
the non-cash fair value adjustments to property and equipment and intangible assets
resulting from the application of purchase accounting related to the acquisition of
Pilgrim Studios.
(4) Restructuring and other items include amounts presented in Adjusted EBITDA. Pursuant to
the profit sharing provisions in the Pilgrim Studios operating agreement, the
transactional costs of $7.7 million of Pilgrim Studios, are included in net loss
attributable to noncontrolling interest in the unaudited condensed consolidated
statement of income and thus do not impact earnings per share attributable to Lions Gate
Entertainment Corp. shareholders.
(5) Start-up losses of new business initiatives include amounts presented in Adjusted
EBITDA, plus $0.1 million for the depreciation expense associated with these entities.
Logo - http://photos.prnewswire.com/prnh/20130919/LA83194LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/lionsgate-reports-results-for-third-quarter-2016-300215601.html
SOURCE Lionsgate
