Long-Term Debt

12 Months Ended

Dec. 31, 2023

Components of Long-term debt for the fiscal years ended on December 31, 2023 and December 25, 2022 are as follows:


(In millions)	2023			2022
	Carrying Cost		Fair Value	Carrying Cost	Fair Value
3.90% Notes Due 2029	$	900.0	839.8	900.0	808.2
3.55% Notes Due 2026	675.0		641.0	675.0	635.3
3.00% Notes Due 2024	500.0		488.4	500.0	482.2
6.35% Notes Due 2040	500.0		520.1	500.0	498.4
3.50% Notes Due 2027	500.0		472.2	500.0	465.8

5.10% Notes Due 2044	300.0		271.6	300.0	261.1

6.60% Debentures Due 2028	109.9		116.0	109.9	112.1

Variable % Notes Due December 30, 2024 (1)	—		—	310.0	310.0
Production Financing Facilities (2)	—		—	53.2	53.2
Total long-term debt	3,484.9		3,349.1	3,848.1	3,626.3
Less: Deferred debt expenses	19.1		—	23.7	—
Less: Current portion	500.0		—	113.2	—
Long-term debt	$	2,965.8	3,349.1	3,711.2	3,626.3

(1) During the fourth quarter of 2023, the Company paid the remaining principal balance of $250.0 million of the Variable % Notes Due December 30, 2024.

(2) The Company's production financing facilities were assumed by Lionsgate effective upon the closing the sale of the eOne Film and TV business in the fourth quarter of 2023. See note 3 for additional information.

In November 2019, in conjunction with the Company's acquisition of eOne, the Company issued an aggregate of $2.4 billion of senior unsecured debt securities (the "Notes") consisting of the following tranches: $300.0 million of notes due 2022 (the "2022 Notes") that bear interest at a fixed rate of 2.60%, $500.0 million of notes due 2024 (the "2024 Notes") that bear interest at a fixed rate of 3.00%, $675.0 million of notes due 2026 (the "2026 Notes") that bear interest at a fixed rate of 3.55% and $900.0 million of notes due 2029 (the "2029 Notes") that bear interest at a fixed rate of 3.90%. Net proceeds from the issuance of the Notes, after deduction of $20.0 million of underwriting discount and fees, totaled $2.4 billion. These costs are being amortized over the life of the Notes outstanding, which range from five years to ten years from the date of issuance.

The Notes bear interest at the stated rates but may be subject to upward adjustment if the credit rating of the Company is reduced by Moody's or Standard & Poors. The adjustment can be from 0.25% to 2.00% based on the extent of the ratings decrease. The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase, plus (1) 25 basis points (in the case of the 2024 Notes); (2) 30 basis points (in the case of the 2026 Notes); and (3) 35 basis points (in the case of the 2029 Notes). In addition, on and after October 19, 2024 for the 2024 Notes, September 19, 2026 for the 2026 Notes and August 19, 2029 for the 2029 Notes, such series of Notes will be redeemable, in whole at any time or in part from time to time, at the Company's option at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest.

In September 2019, the Company entered into the $1.0 billion Term Loan Agreement consisting of (1) a three-year senior unsecured term loan facility in an aggregate principal amount of $400.0 million (the “Three-Year Tranche”) and (2) a five-year senior unsecured term loan facility in an aggregate principal amount of $600.0 million (the “Five-Year Tranche” and together with the Three-Year Tranche, the “Term Loan Facilities”). The full amount of the Term Loan Facilities were drawn down on December 30, 2019, the closing date of the eOne acquisition. The Three-Year Tranche loan notes were fully repaid as of the Company’s fiscal year ended December 26, 2021.

During 2022, the Company made $50.0 million principal balance and principal amortization payments totaling $37.5 million on the Five-Year Tranche loan notes. During 2023, the Company made principal amortization

payments totaling $60.0 million on the Five-year Tranche loan notes, and repaid the remaining $250.0 million principal balance of the Five-Year Tranche loans using the proceeds received from the sale of eOne Film and TV.

The Company may redeem its 5.10% notes due in 2044 (the "2044 Notes") at its option, at the greater of the principal amount of the notes or the present value of the remaining scheduled payments, discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase.

Current portion of long-term debt at December 31, 2023 of $500.0 million, as shown on the Consolidated Balance Sheet, represents the principal balance of the 3.00% Notes due 2024. All of the Company’s other long-term borrowings have contractual maturities that occur subsequent to 2025.

The Company's long-term borrowings have the following future contractual maturities:


Future long-term borrowings contractual payments	(In millions)
2024	$	500.0
2025	—
2026	675.0
2027	500.0
2028	109.9
2029 and thereafter	1,700.0


	$	3,484.9

The fair values of the Company’s long-term debt are considered Level 3 fair values (see note 14 for further discussion of the fair value hierarchy) and are measured using the discounted future cash flows method. In addition to the debt terms, the valuation methodology includes an assumption of a discount rate that approximates the current yield on a similar debt security. This assumption is considered an unobservable input in that it reflects the Company’s own assumptions about the inputs that market participants would use in pricing the asset or liability. The Company believes that this is the best information available for use in the fair value measurement.

Production Financing

Prior to the sale of the eOne Film and TV business to Lionsgate, the Company used production financing to fund certain of its television and film productions which were arranged on an individual production basis by either special purpose production subsidiaries, each secured by the assets and future revenues of such production subsidiaries, which were non-recourse to the Company's assets, or through a senior revolving credit facility dedicated to production financing.

Production financing facilities typically have maturities of less than two years, while the titles are in production, and are repaid once delivered and all credits, broadcaster pre-sales and international sales have been received. As of December 25, 2022, $195.6 million of production financing facilities was included within Current liabilities in the Company's Consolidated Balance Sheets. Effective upon the closing of the sale of the eOne Film and TV business in the fourth quarter of 2023, the Company's senior revolving credit facility dedicated to production financing and all outstanding individual production loans were assumed by Lionsgate. As such, the Company had no production financing outstanding as of December 31, 2023.

The following table represents the movements in production financing loans during 2023:


(In millions)	Production Financing
December 25, 2022	$	195.6
Drawdowns	117.4
Repayments	(206.7)
Removed with sale of eOne film and TV (1)	(105.8)
Foreign exchange differences	(0.5)
Balance at December 31, 2023	$	—