Consolidating Financial Information — Senior Secured Second-Priority Notes

In October 2009, the Company issued $236.0 million aggregate principal amount of the Senior Notes, and in May 2011, the Company issued an additional $200.0 million aggregate principal amount of the Senior Notes, in a private offering conducted pursuant to Rule 144A and Regulation S under the Securities Act through LGEI.

The Company has agreed to make available to the trustee and the holders of the Senior Notes the following tables which present condensed consolidating financial information as of September 30, 2012 and March 31, 2012, and for the six months ended September 30, 2012, and 2011 for (1) the Company, on a stand-alone basis, (2) LGEI, on a stand-alone basis, (3) the guarantor subsidiaries of the Company (including the subsidiaries of LGEI), on a combined basis (4) the non-guarantor subsidiaries of the Company (including the subsidiaries of LGEI), on a combined basis and (5) the Company, on a consolidated basis.



	As of
	September 30, 2012
	Lions Gate Entertainment Corp.		Lions Gate Entertainment Inc.
						Other Subsidiaries						Consolidating Adjustments			Lions Gate Consolidated
						Guarantors			Non-guarantors			Consolidating Adjustments			Lions Gate Consolidated
	(Amounts in thousands)
BALANCE SHEET
Assets
Cash and cash equivalents	$	1,036	$	8,983		$	1,007		$	43,373		$	—		$	54,399
Restricted cash	—		2,789			—			3,845			—			6,634
Accounts receivable, net	509		7,787			510,577			182,481			—			701,354
Investment in films and television programs, net	254		6,391			816,801			530,073			(2,847		)	1,350,672
Property and equipment, net	—		6,768			103			1,857			—			8,728
Equity method investments	—		8,935			65,358			99,559			(1,246		)	172,606
Goodwill	10,173		—			192,830			123,001			—			326,004
Other assets	49,201		56,125			8,021			25,619			(49,000		)	89,966
Subsidiary investments and advances	86,056		266,617			(223,514		)	(164,468		)	35,309			—
	$	147,229	$	364,395		$	1,371,183		$	845,340		$	(17,784	)	$	2,710,363
Liabilities and Shareholders’ Equity (Deficiency)
Senior revolving credit facility	$	—	$	268,724		$	—		$	—		$	—		$	268,724
Senior secured second-priority notes	—		431,881			—			—			—			431,881
Term loan	—		—			—			294,929			—			294,929
Accounts payable and accrued liabilities	747		81,343			205,351			80,443			37			367,921
Participations and residuals	192		3,411			288,316			125,911			717			418,547
Film obligations and production loans	75		—			348,887			88,617			—			437,579
Convertible senior subordinated notes and other financing obligations	—		83,704			—			49,000			(49,000		)	83,704
Deferred revenue	—		17,039			158,095			85,729			—			260,863
Shareholders’ equity (deficiency)	146,215		(521,707		)	370,534			120,711			30,462			146,215
	$	147,229	$	364,395		$	1,371,183		$	845,340		$	(17,784	)	$	2,710,363



	Six Months Ended
	September 30, 2012
	Lions Gate Entertainment Corp.			Lions Gate Entertainment Inc.
							Other Subsidiaries						Consolidating Adjustments			Lions Gate Consolidated
							Guarantors			Non-guarantors
	(Amounts in thousands)
STATEMENT OF OPERATIONS
Revenues	$	—		$	7,660		$	1,008,467		$	234,123		$	(71,462	)	$	1,178,788
EXPENSES:
Direct operating	—			1,166			515,467			146,947			(94,532		)	569,048
Distribution and marketing	(1		)	1,084			360,231			53,837			—			415,151
General and administration	902			57,149			32,013			6,564			(254		)	96,374
Depreciation and amortization	—			905			168			3,147			—			4,220
Total expenses	901			60,304			907,879			210,495			(94,786		)	1,084,793
OPERATING INCOME (LOSS)	(901		)	(52,644		)	100,588			23,628			23,324			93,995
Other expenses (income):
Interest expense	—			35,184			2,467			13,624			(500		)	50,775
Interest and other income	(6		)	(1,735		)	(506		)	(232		)	500			(1,979		)
Loss on extinguishment of debt	—			633			367			8,159			—			9,159
Total other expenses (income)	(6		)	34,082			2,328			21,551			—			57,955
INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES	(895		)	(86,726		)	98,260			2,077			23,324			36,040
Equity interests income (loss)	32,224			118,254			12,166			(8,394		)	(152,640		)	1,610
INCOME (LOSS) BEFORE INCOME TAXES	31,329			31,528			110,426			(6,317		)	(129,316		)	37,650
Income tax provision (benefit)	—			2,392			783			3,146			—			6,321
NET INCOME (LOSS)	31,329			29,136			109,643			(9,463		)	(129,316		)	31,329
Foreign currency translation adjustments	1,061			2,358			511			(51		)	(2,801		)	1,078
Net unrealized gain on foreign exchange contracts	—			—			78			7			(102		)	(17		)
COMPREHENSIVE INCOME (LOSS)	$	32,390		$	31,494		$	110,232		$	(9,507	)	$	(132,219	)	$	32,390



	Six Months Ended
	September 30, 2012
	Lions Gate Entertainment Corp.			Lions Gate Entertainment Inc.
							Other Subsidiaries						Consolidating Adjustments		Lions Gate Consolidated
							Guarantors			Non-guarantors
	(Amounts in thousands)
STATEMENT OF CASH FLOWS
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	4,433		$	(136,699	)	$	89,650		$	184,751		$	—	$	142,135
INVESTING ACTIVITIES:
Repayment of loans receivable	—			—			4,274			—			—		4,274
Purchases of property and equipment	—			(932		)	(11		)	(33		)	—		(976		)
NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES	—			(932		)	4,263			(33		)	—		3,298
FINANCING ACTIVITIES:
Exercise of stock options	52			—			—			—			—		52
Tax withholding requirements on equity awards	(4,005		)	—			—			—			—		(4,005		)
Borrowings under senior revolving credit facility	—			681,424			—			—			—		681,424
Repayments of borrowings under senior revolving credit facility	—			(512,450		)	—			—			—		(512,450		)
Deferred financing costs associated with the amended and restated senior revolving credit facility	—			(15,198		)	—			—			—		(15,198		)
Borrowings under individual production loans	—			—			107,618			1,330			—		108,948
Repayment of individual production loans	—			—			(163,181		)	(19,749		)	—		(182,930		)
Production loan borrowings under film credit facility	—			—			3,897			—			—		3,897
Production loan repayments under film credit facility	—			—			(39,055		)	—			—		(39,055		)
Repayments of borrowings under Term Loan associated with the acquisition of Summit	—			—			—			(185,504		)	—		(185,504		)
Repurchase of convertible senior subordinated notes	—			(7,639		)	—			—			—		(7,639		)
Repayment of other financing obligations	—			—			(3,710		)	—			—		(3,710		)
NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES	(3,953		)	146,137			(94,431		)	(203,923		)	—		(156,170		)
NET CHANGE IN CASH AND CASH EQUIVALENTS	480			8,506			(518		)	(19,205		)	—		(10,737		)
FOREIGN EXCHANGE EFFECTS ON CASH	(5		)	—			—			843			—		838
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD	561			477			1,525			61,735			—		64,298
CASH AND CASH EQUIVALENTS — END OF PERIOD	$	1,036		$	8,983		$	1,007		$	43,373		$	—	$	54,399



	As of
	March 31, 2012
	Lions Gate Entertainment Corp.		Lions Gate Entertainment Inc.
						Other Subsidiaries						Consolidating Adjustments			Lions Gate Consolidated
						Guarantors			Non-guarantors			Consolidating Adjustments			Lions Gate Consolidated
	(Amounts in thousands)
BALANCE SHEET
Assets
Cash and cash equivalents	$	561	$	477		$	1,525		$	61,735		$	—		$	64,298
Restricted cash	—		7,169			—			4,767			—			11,936
Accounts receivable, net	498		11,046			482,003			290,983			—			784,530
Investment in films and television programs, net	2		6,391			710,459			612,548			(347		)	1,329,053
Property and equipment, net	—		7,236			121			2,415			—			9,772
Equity method investments	—		11,598			52,889			108,255			(1,480		)	171,262
Goodwill	10,173		—			192,830			123,630			—			326,633
Other assets	49,198		48,923			6,414			34,976			(49,000		)	90,511
Subsidiary investments and advances	30,136		98,990			(7,532		)	(310,562		)	188,968			—
	$	90,568	$	191,830		$	1,438,709		$	928,747		$	138,141		$	2,787,995
Liabilities and Shareholders’ Equity (Deficiency)
Senior revolving credit facility	$	—	$	99,750		$	—		$	—		$	—		$	99,750
Senior secured second-priority notes	—		431,510			—			—			—			431,510
Term loan	—		—			—			477,514			—			477,514
Accounts payable and accrued liabilities	520		88,065			202,535			79,903			69			371,092
Participations and residuals	189		3,411			272,780			144,037			(92		)	420,325
Film obligations and production loans	74		—			481,359			79,717			—			561,150
Convertible senior subordinated notes and other financing obligations	—		104,498			3,718			49,060			(49,000		)	108,276
Deferred revenue	—		17,798			166,292			44,503			—			228,593
Shareholders’ equity (deficiency)	89,785		(553,202		)	312,025			54,013			187,164			89,785
	$	90,568	$	191,830		$	1,438,709		$	928,747		$	138,141		$	2,787,995



	Six Months Ended
	September 30, 2011
	Lions Gate Entertainment Corp.			Lions Gate Entertainment Inc.
							Other Subsidiaries						Consolidating Adjustments			Lions Gate Consolidated
							Guarantors			Non-guarantors
							(Amounts in thousands)
STATEMENT OF OPERATIONS
Revenues	$	—		$	20,342		$	564,367		$	59,871		$	(25,240	)	$	619,340
EXPENSES:
Direct operating	457			141			327,983			29,614			(12,493		)	345,702
Distribution and marketing	—			(126		)	176,084			30,496			(66		)	206,388
General and administration	686			27,135			23,250			6,404			(125		)	57,350
Gain on sale of asset disposal group	(10,967		)	—			—			—			—			(10,967		)
Depreciation and amortization	—			1,656			52			207			—			1,915
Total expenses	(9,824		)	28,806			527,369			66,721			(12,684		)	600,388
OPERATING INCOME (LOSS)	9,824			(8,464		)	36,998			(6,850		)	(12,556		)	18,952
Other expenses (income):
Interest expense	—			30,801			2,963			555			(415		)	33,904
Interest and other income	(66		)	(1,451		)	(163		)	(105		)	415			(1,370		)
Loss on extinguishment of debt	—			967			—			—			—			967
Total other expenses (income)	(66		)	30,317			2,800			450			—			33,501
INCOME (LOSS) BEFORE EQUITY INTERESTS AND INCOME TAXES	9,890			(38,781		)	34,198			(7,300		)	(12,556		)	(14,549		)
Equity interests income (loss)	(24,908		)	14,918			8,223			(3,055		)	6,671			1,849
INCOME (LOSS) BEFORE INCOME TAXES	(15,018		)	(23,863		)	42,421			(10,355		)	(5,885		)	(12,700		)
Income tax provision (benefit)	(46		)	1,093			935			290			—			2,272
NET INCOME (LOSS)	(14,972		)	(24,956		)	41,486			(10,645		)	(5,885		)	(14,972		)
Foreign currency translation adjustments	(3,697		)	8,975			21,268			(2,303		)	(28,602		)	(4,359		)
Net unrealized gain on foreign exchange contracts	—			—			94			568			—			662
COMPREHENSIVE INCOME (LOSS)	$	(18,669	)	$	(15,981	)	$	62,848		$	(12,380	)	$	(34,487	)	$	(18,669	)



	Six Months Ended
	September 30, 2011
	Lions Gate Entertainment Corp.			Lions Gate Entertainment Inc.
							Other Subsidiaries						Consolidating Adjustments		Lions Gate Consolidated
							Guarantors			Non-guarantors
							(Amounts in thousands)
STATEMENT OF CASH FLOWS
NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	73,947		$	(129,504	)	$	(32,388	)	$	(52,617	)	$	—	$	(140,562	)
INVESTING ACTIVITIES:
Proceeds from the sale of asset disposal group, net of transaction costs and cash disposed of $3,943	9,119			—			—			—			—		9,119
Investment in equity method investees	(828		)	—			—			—			—		(828		)
Increase in loans receivable	—			(1,500		)	—			—			—		(1,500		)
Purchases of property and equipment	—			(1,253		)	—			—			—		(1,253		)
NET CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES	8,291			(2,753		)	—			—			—		5,538
FINANCING ACTIVITIES:
Tax withholding requirements on equity awards	(1,932		)	—			—			—			—		(1,932		)
Repurchase of common shares	(77,088		)	—			—			—			—		(77,088		)
Borrowings under senior revolving credit facility	—			153,650			—			—			—		153,650
Repayments of borrowings under senior revolving credit facility	—			(200,400		)	—			—			—		(200,400		)
Borrowings under individual production loans	—			—			132,847			2,023			—		134,870
Repayment of individual production loans	—			—			(120,391		)	(2,495		)	—		(122,886		)
Production loan borrowings under film credit facility	—			—			33,002			—			—		33,002
Production loan repayments under film credit facility	—			—			(9,187		)	—			—		(9,187		)
Change in restricted cash collateral associated with financing activities	—			—			(3,043		)	—			—		(3,043		)
Proceeds from sale of senior secured second-priority notes, net of deferred financing costs	—			201,955			—			—			—		201,955
Repurchase of senior secured second-priority notes	—			(9,852		)	—			—			—		(9,852		)
Repurchase of convertible senior subordinated notes	—			(19,476		)	—			—			—		(19,476		)
NET CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES	(79,020		)	125,877			33,228			(472		)	—		79,613
NET CHANGE IN CASH AND CASH EQUIVALENTS	3,218			(6,380		)	840			(53,089		)	—		(55,411		)
FOREIGN EXCHANGE EFFECTS ON CASH	451			—			—			(1,933		)	—		(1,482		)
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD	795			6,451			696			78,477			—		86,419
CASH AND CASH EQUIVALENTS — END OF PERIOD	$	4,464		$	71		$	1,536		$	23,455		$	—	$	29,526