EX-99.1 2 v58624exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(LIONSGATE LOGO)
LIONSGATE REPORTS REVENUE OF $422.9 MILLION AND ADJUSTED EBITDA
OF $28.9 MILLION FOR THIRD QUARTER OF FISCAL 2011
NET LOSS IS $6.0 MILLION FOR THIRD QUARTER
Basic Net Loss Per Common Share Is $0.04 For Fiscal 2011 Third Quarter Compared To Basic
Net Loss Per Common Share of $0.55 In Prior Year’s Third Quarter
 
SANTA MONICA, CA, and VANCOUVER, BC, February 9, 2010 — Lionsgate (NYSE: LGF) today reported revenue of $422.9 million and adjusted EBITDA of $28.9 million for the third quarter of fiscal year 2011 (quarter ended December 31, 2010).
Revenue increased 24% compared to the prior year’s third quarter driven primarily by increases in home entertainment and international film and TV revenue as well as a slight increase in theatrical revenue.
The Company reported adjusted EBITDA of $28.9 million in the third quarter compared to negative $9.5 million for the prior year’s third quarter. Net loss was $6.0 million in the quarter compared to net loss of $65.3 million in the prior year’s third quarter. The gain in quarter-to-quarter comparisons was attributable primarily to strong gains in the Company’s home entertainment operations, driven by the DVD and digital performance of THE EXPENDABLES, robust international performance, gains in television production and syndication and lower theatrical marketing costs in the quarter despite three wide release films.
Net loss of $6.0 million in the quarter included non-cash equity interest losses of $13.1 million ($11.1 million attributable to Lionsgate’s interest in Epix) and $7.9 million in corporate defense and associated costs related to shareholder activist activities.
Basic net loss per common share for the quarter was $0.04 on 136.7 million weighted average common shares outstanding, compared to basic net loss per common share of $0.55 on 117.7 million weighted average common shares outstanding in the prior year’s third quarter.
“We had a strong revenue and EBITDA performance in the quarter driven by contributions from our home entertainment, television and international film and TV businesses as well as our filmed entertainment library, despite a challenging environment for packaged media conversion,” said Lionsgate Co-Chairman and Chief Executive Officer Jon Feltheimer. “We continue to execute a long-term business plan designed to balance our key priorities — strengthening our balance sheet, maximizing EBITDA and free cash flow and creating long-term value.”
Overall motion picture revenue for the third quarter of fiscal 2011 was $326.7 million, an increase of 30% from the third quarter of the prior year. Within the motion picture segment, theatrical revenue

 


 

was $53.8 million, an increase of 9% from the prior year’s third quarter, attributable to the box office performance of the films THE NEXT THREE DAYS, FOR COLORED GIRLS and SAW 3D.
Lionsgate’s home entertainment revenue from both motion pictures and television was $174.4 million in the third quarter, a 63% increase from the third quarter of the prior year, driven by a strong performance from the theatrical title THE EXPENDABLES as well as contributions from a diversified slate including the stage play TYLER PERRY’S MADEA’S BIG HAPPY FAMILY, the theatrical titles KILLERS and KICK ASS, sister company Roadside Attractions’ Academy Award-nominated WINTER’S BONE and the television series MAD MEN SEASON 3.
Television revenue included in motion picture revenue was $49.7 million in the third quarter, a decrease of 9% from the prior year’s third quarter.
International motion picture revenue of $21.4 million (excluding Lionsgate U.K.) in the third quarter increased 31% from the prior year’s third quarter as the slate of SAW 3D, THE NEXT THREE DAYS and ALPHA AND OMEGA compared favorably to the slate in the prior year’s third quarter.
Lionsgate U.K. revenue also increased in the third quarter, growing 42% to $30.0 million, reflecting the continued strength of Lionsgate titles such as THE EXPENDABLES and KILLERS as well as SAW 3D, newly released in the quarter.
Mandate Pictures’ revenue of $11.3 million in the third quarter declined 12% from the prior year’s third quarter due to a smaller slate.
Television production revenue was $96.2 million in the third quarter, an increase of 5% from the prior year’s third quarter. Domestic series licensing from Debmar-Mercury increased 52% in the third quarter due to increased revenue from deliveries of the television series “Tyler Perry’s House of Payne,” its spinoff “Meet The Browns,” “Are We There Yet?,” “The Wendy Williams Show” and “Weeds Seasons 3, 4 and 5” (into syndication on TV Guide Network). Domestic series licensing from Lionsgate Television decreased 32% in the third quarter due to timing of deliveries, which included 12 episodes of “Blue Mountain State Season 2” (Spike), nine episodes of “Running Wilde” (Fox), two episodes of “Mad Men Season 4” (AMC) and one episode of “Nurse Jackie Season 3” (Showtime).
Lionsgate’s filmed entertainment backlog was $459.0 million at December 31, 2010. Filmed entertainment backlog represents the amount of future revenue not yet recorded from contracts for the licensing of films and television product for television exhibition and in international markets.
Lionsgate G&A expenses in the quarter were $27.8 million, excluding stock-based compensation and corporate defense costs related to shareholder activist activities. G&A as a percentage of revenue, excluding stock-based compensation and corporate defense costs, declined to 6.6% in the third quarter of fiscal year 2011 compared to 7.6% in the prior year third quarter.
Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal year 2011 third quarter financial results at 9:00 A.M. ET/6:00 A.M. PT on Thursday, February 10, 2011. Interested parties may participate live in the conference call by calling 1-800-230-1766 (612-332-0228 outside the U.S. and Canada). A full digital replay will be available from Thursday morning, February 10, through Thursday, February 17, by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 191239.

 


 

About Lionsgate
Lionsgate (NYSE: LGF) is a leading global entertainment company with a strong and diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, family entertainment, digital distribution and new channel platforms. The Company has built a strong television presence in production of prime time cable and broadcast network series, distribution and syndication of programming through Debmar-Mercury and an array of channel assets. Lionsgate currently has 15 shows on more than 10 networks spanning its prime time production, distribution and syndication businesses, including such critically-acclaimed hits as “Mad Men”, “Weeds” and “Nurse Jackie” along with the popular comedy “Blue Mountain State” and the syndication successes “Tyler Perry’s House Of Payne”, its spinoff “Meet The Browns,” “The Wendy Williams Show” and “Are We There Yet?”.
Its feature film business has generated more than half a billion dollars at the North American box office in the past year, fueled by such hits as THE EXPENDABLES, SAW 3D, THE LAST EXORCISM, TYLER PERRY’S WHY DID I GET MARRIED TOO?, KICK ASS and the critically-acclaimed PRECIOUS, which won two Academy Awards(R) last year. The Company’s home entertainment business has grown to more than 7% market share and is an industry leader in box office-to-DVD revenue conversion rate. Lionsgate handles a prestigious and prolific library of approximately 13,000 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 brand remains synonymous with original, daring, quality entertainment in markets around the world.
***
www.lionsgate.com
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, budget overruns, limitations imposed by our credit facilities, unpredictability of the commercial success of our motion pictures and television programming, the cost of defending our intellectual property, difficulties in integrating acquired businesses, technological changes and other trends affecting the entertainment industry, and the risk factors as set forth in Lionsgate’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on June 1, 2010, 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,  
    2010     2010  
    (Amounts in thousands,  
    except share amounts)  
ASSETS
Cash and cash equivalents
  $ 69,578     $ 69,242  
Restricted cash
    19,322       4,123  
Restricted investments
          6,995  
Accounts receivable, net of reserve for returns and allowances of $84,357 (March 31, 2010 — $87,978) and provision for doubtful accounts of $7,685 (March 31, 2010 — $7,676)
    400,001       292,924  
Investment in films and television programs, net
    682,775       661,105  
Property and equipment, net
    10,020       12,414  
Equity method investments
    159,212       179,071  
Goodwill
    239,254       239,254  
Other assets
    49,457       62,027  
 
           
Total assets
  $ 1,629,619     $ 1,527,155  
 
           
 
               
LIABILITIES
Senior revolving credit facility
  $ 224,250     $ 17,000  
Senior secured second-priority notes
    226,005       225,155  
Accounts payable and accrued liabilities
    269,873       253,745  
Participations and residuals
    281,605       302,677  
Film obligations and production loans
    278,347       351,769  
Subordinated notes and other financing obligations
    108,740       192,036  
Deferred revenue
    164,180       130,851  
 
           
Total liabilities
    1,553,000       1,473,233  
 
           
 
               
Commitments and contingencies
               
 
               
SHAREHOLDERS’ EQUITY
 
               
Common shares, no par value, 500,000,000 shares authorized, 136,713,477 and 117,951,754 shares issued at December 31, 2010 and March 31, 2010, respectively
    641,471       521,164  
Accumulated deficit
    (560,375 )     (460,631 )
Accumulated other comprehensive loss
    (4,477 )     (6,611 )
 
           
Total shareholders’ equity
    76,619       53,922  
 
           
Total liabilities and shareholders’ equity
  $ 1,629,619     $ 1,527,155  
 
           

 


 

LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 
    Three Months     Three Months     Nine Months     Nine Months  
    Ended     Ended     Ended     Ended  
    December 31,     December 31,     December 31,     December 31,  
    2010     2009     2010     2009  
    (Amounts in thousands, except per share amounts)  
 
                               
Revenues
  $ 422,905     $ 342,584     $ 1,205,805     $ 1,087,859  
Expenses:
                               
Direct operating
    204,691       200,265       600,480       600,298  
Distribution and marketing
    158,978       156,371       461,480       339,951  
General and administration
    35,938       30,215       134,335       97,766  
Depreciation and amortization
    1,409       2,322       4,485       10,616  
 
                       
Total expenses
    401,016       389,173       1,200,780       1,048,631  
 
                       
Operating income (loss)
    21,889       (46,589 )     5,025       39,228  
 
                       
Other expenses (income):
                               
Interest expense
                               
Contractual cash based interest
    9,974       7,464       29,679       17,588  
Amortization of debt discount and deferred financing costs
    3,389       6,081       12,056       15,764  
 
                       
Total interest expense
    13,363       13,545       41,735       33,352  
Interest and other income
    (329 )     (413 )     (1,082 )     (1,207 )
Loss (gain) on extinguishment of debt
          1,783       14,505       (5,675 )
 
                       
Total other expenses, net
    13,034       14,915       55,158       26,470  
 
                       
Income (loss) before equity interests and income taxes
    8,855       (61,504 )     (50,133 )     12,758  
Equity interests loss
    (13,144 )     (5,509 )     (45,566 )     (9,701 )
 
                       
Income (loss) before income taxes
    (4,289 )     (67,013 )     (95,699 )     3,057  
Income tax provision (benefit)
    1,728       (1,754 )     4,045       251  
 
                       
Net income (loss)
  $ (6,017 )   $ (65,259 )   $ (99,744 )   $ 2,806  
 
                       
 
                               
Basic Net Income (Loss) Per Common Share
  $ (0.04 )   $ (0.55 )   $ (0.77 )   $ 0.02  
 
                       
Diluted Net Income (Loss) Per Common Share
  $ (0.04 )   $ (0.55 )   $ (0.77 )   $ 0.02  
 
                       
Weighted average number of common shares outstanding:
                               
Basic
    136,661       117,745       129,338       117,381  
Diluted
    136,661       117,745       129,338       117,579  

 


 

LIONS GATE ENTERTAINMENT CORP.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 
    Three Months     Three Months     Nine Months     Nine Months  
    Ended     Ended     Ended     Ended  
    December 31,     December 31,     December 31,     December 31,  
    2010     2009     2010     2009  
    (Amounts in thousands)  
Operating Activities:
                               
Net income (loss)
  $ (6,017 )   $ (65,259 )   $ (99,744 )   $ 2,806  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
                               
Depreciation of property and equipment
    1,201       1,229       3,595       6,172  
Amortization of intangible assets
    208       1,093       890       4,444  
Amortization of films and television programs
    138,095       133,910       400,583       409,904  
Amortization of debt discount and deferred financing costs
    3,389       6,082       12,056       15,764  
Non-cash stock-based compensation
    2,039       4,055       26,391       11,741  
Loss (gain) on extinguishment of debt
          1,783       14,505       (5,675 )
Equity interests loss
    13,144       5,508       45,566       9,701  
Changes in operating assets and liabilities:
                           
Restricted cash
    (1,716 )     9,190       (18,699 )     9,350  
Accounts receivable, net
    (58,669 )     (21,217 )     (105,039 )     (23,605 )
Investment in films and television programs
    (107,485 )     (115,595 )     (421,148 )     (438,020 )
Other assets
    (1,024 )     1,841       (1,458 )     2,411  
Accounts payable and accrued liabilities
    2,471       67,537       32,375       (31,717 )
Participations and residuals
    (9,527 )     (17,686 )     (21,169 )     (85,802 )
Film obligations
    (9,826 )     16,882       (17,572 )     (20,019 )
Deferred revenue
    12,866       1,906       33,232       (5,513 )
 
                       
Net Cash Flows Provided By (Used In) Operating Activities
    (20,851 )     31,259       (115,636 )     (138,058 )
 
                       
Investing Activities:
                               
Purchases of restricted investments
    (7,000 )     (6,995 )     (13,993 )     (13,994 )
Proceeds from the sale of restricted investments
    13,994       6,998       20,989       13,985  
Buy-out of the earn-out associated with the acquisition of Debmar-Mercury, LLC
                (15,000 )      
Investment in equity method investees
    (2,000 )     (26,418 )     (24,677 )     (41,342 )
Increase in loans receivable
          (362 )           (362 )
Repayment of loans receivable
    1,000             8,113       8,333  
Purchases of property and equipment
    (295 )     (371 )     (1,187 )     (2,574 )
 
                       
Net Cash Flows Provided By (Used In Investing) Activities
    5,699       (27,148 )     (25,755 )     (35,954 )
 
                       
Financing Activities:
                               
Tax withholding requirements on equity awards
    (654 )     (390 )     (12,919 )     (1,733 )
Proceeds from the issuance of mandatorily redeemable preferred stock units and common stock units related to the sale of 49% interest in TV Guide Network, net of unrestricted cash deconsolidated
                      109,776  
Borrowings under senior revolving credit facility
    138,750       100,000       481,750       170,000  
Repayments of borrowings under senior revolving credit facility
    (101,500 )     (343,000 )     (274,500 )     (413,000 )
Borrowings under individual production loans
    15,893       6,656       100,203       134,587  
Repayment of individual production loans
    (39,911 )     (9,558 )     (143,297 )     (111,885 )
Production loan borrowings under Pennsylvania Regional Center credit facility
          57,000             57,000  
Production loan borrowings under film credit facility
    12,462       32,217       17,721       32,217  
Production loan repayments under film credit facility
    (29,883 )           (31,507 )      
Decrease in restricted cash collateral requirement under the film credit facility
    11,340             3,087        
Proceeds from sale of senior secured second-priority notes
          216,232             216,232  
Repurchase of subordinated notes
          (75,185 )           (75,185 )
Repayment of other financing obligations
                      (134 )
 
                       
Net Cash Flows Provided By (Used In) Financing Activities
    6,497       (16,028 )     140,538       117,875  
 
                       
Net Change In Cash And Cash Equivalents
    (8,655 )     (11,917 )     (853 )     (56,137 )
Foreign Exchange Effects on Cash
    87       241       1,189       2,352  
Cash and Cash Equivalents — Beginning Of Period
    78,146       96,366       69,242       138,475  
 
                       
Cash and Cash Equivalents — End Of Period
  $ 69,578     $ 84,690     $ 69,578     $ 84,690  
 
                       


 

LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND EBITDA, AS ADJUSTED
                                 
    Three Months     Three Months     Nine Months     Nine Months  
    Ended     Ended     Ended     Ended  
    December 31,     December 31,     December 31,     December 31,  
    2010     2009     2010     2009  
    (Amounts in thousands)  
 
                               
Net income (loss)
  $ (6,017 )   $ (65,259 )   $ (99,744 )   $ 2,806  
Depreciation and amortization
    1,409       2,322       4,485       10,616  
Contractual cash paid interest expense
    9,974       7,464       29,679       17,588  
Noncash interest expense
    3,389       6,081       12,056       15,764  
Interest and other income
    (329 )     (413 )     (1,082 )     (1,207 )
Income tax provision
    1,728       (1,754 )     4,045       251  
Equity interests loss
    13,144       5,509       45,566       9,701  
Loss (gain) on extinguishment of debt
          1,783       14,505       (5,675 )
 
                       
EBITDA
  $ 23,298     $ (44,267 )   $ 9,510     $ 49,844  
 
                       
Stock-based compensation (1)
    191       4,277       29,975       12,565  
EBITDA attributable to TV Guide Network
    2,064       3,708       6,522       6,485  
Corporate defense and related charges
    7,945             20,449       1,012  
Non-risk prints and advertising expense
    (4,595 )     26,798       (25,654 )     28,048  
 
                       
EBITDA, as adjusted
  $ 28,903     $ (9,484 )   $ 40,802     $ 97,954  
 
                       
 
(1)   The nine months ended December 31, 2010 includes $21.9 million in additional compensation expense associated with the immediate vesting of certain equity awards held by certain executive officers as a result of the triggering of “change in control” provisions in their respective employment agreements, which occurred on June 30, 2010.
EBITDA is defined as earnings before interest, income tax provision, depreciation and amortization, equity interests, and gains or losses on extinguishment of debt and the sale of equity securities. EBITDA is a non-GAAP financial measure.
EBITDA, as adjusted represents EBITDA as defined above adjusted for stock-based compensation, EBITDA attributable to TV Guide Network, certain corporate defense and related charges, and non-risk prints and advertising expense. Stock-based compensation represents compensation expenses associated with stock options, restricted share units and stock appreciation rights. EBITDA attributable to TV Guide Network represents the Company’s 51% share of TV Guide Network’s EBITDA for the three and nine months ended December 31, 2010 and 2009. Corporate defense and related charges represent legal fees, other professional fees, and certain other costs associated with a shareholder activist matter. Non-risk prints and advertising expense represents the amount of theatrical marketing expense for third party titles that the Company funded and expensed for which a third party provides a guarantee that such expense will be recouped from the performance of the film (i.e. there is no risk of loss to the company) net of an amount of the estimated amortization of participation expense that would have been recorded if such amount had not been expensed. The amount is subtracted from EBITDA in the three and nine months ended December 31, 2010 because there was no non-risk prints and advertising expense incurred and the amount represents the estimated amortization of participation expense that would have been recorded if such prior period amounts had not been expensed.
Management believes EBITDA and EBITDA, as adjusted to be a meaningful indicator of our performance that provides useful information to investors regarding our financial condition and results of operations. Presentation of EBITDA and EBITDA, as adjusted is a non-GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry to measure operating performance. While management considers EBITDA and EBITDA, as adjusted to be an important measure of comparative operating performance, it should be considered in addition to, but not as a substitute for, net income and other measures of financial performance reported in accordance with Generally Accepted Accounting Principles. EBITDA and EBITDA, as adjusted do not reflect cash available to fund cash requirements. Not all companies calculate EBITDA or EBITDA, as adjusted in the same manner and the measure as presented may not be comparable to similarly-titled measures presented by other companies.


 

LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF FREE CASH FLOW
TO NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES
                                 
    Three Months     Three Months     Nine Months     Nine Months  
    Ended     Ended     Ended     Ended  
    December 31,     December 31,     December 31,     December 31,  
    2010     2009     2010     2009  
            (Amounts in thousands)          
Net Cash Flows Provided By (Used In) Operating Activities
  $ (20,851 )   $ 31,259     $ (115,636 )   $ (138,058 )
Purchases of property and equipment
    (295 )     (371 )     (1,187 )     (2,574 )
Net borrowings under and (repayment) of production loans
    (41,439 )     29,315       (56,880 )     54,919  
Restricted cash held in trust
    (95 )           15,815        
 
                       
Free Cash Flow
  $ (62,680 )   $ 60,203     $ (157,888 )   $ (85,713 )
 
                       
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 including production loan activity under the Company’s Film Credit Facility, plus or minus the net increase or decrease in restricted cash held in a trust to fund the Company’s cash severance obligations that would be due to certain executive officers should their employment be terminated “without cause,” (as defined), in connection with a “change in control” of the Company, (as defined in each of their respective employment contracts). For purposes of the employment agreements with such executive officers, a “change in control” occurred on June 30, 2010 when a certain shareholder became the beneficial owner of 33% or more of the Company’s common shares. 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 associated with production loans prior to the time the Company actually pays for the film. The Company believes that it is more meaningful to reflect the impact of the payment for these films in its free cash flow when the payments are actually made.
Free cash flow is a non-GAAP financial measure as defined in Regulation G promulgated by the Securities and Exchange Commission. This non-GAAP financial measure is in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with Generally Accepted Accounting Principles.
Management believes this non-GAAP measure provides useful information to investors regarding cash that our operating businesses generate whether classified as operating or financing activity (related to the production of our films) within our GAAP based statement of cash flows, before taking into account cash movements that are non-operational. Free cash flow is a non-GAAP financial measure commonly used in the entertainment industry and by financial analysts and others who follow the industry. Not all companies calculate free cash flow in the same manner and the measure as presented may not be comparable to similarly titled measures presented by other companies.

 


 

LIONS GATE ENTERTAINMENT CORP.
RECONCILIATION OF EBITDA
TO FREE CASH FLOW
                                 
    Three Months     Three Months     Nine Months     Nine Months  
    Ended     Ended     Ended     Ended  
    December 31,     December 31,     December 31,     December 31,  
    2010     2009     2010     2009  
            (Amounts in thousands)          
EBITDA
  $ 23,298     $ (44,267 )   $ 9,510     $ 49,844  
 
                               
Plus: Amortization of film and television programs
    138,095       133,910       400,583       409,904  
Less: Cash paid for film and television programs (1)
    (158,750 )     (69,398 )     (495,600 )     (403,120 )
 
                       
Amortization of (cash paid for) film and television programs in excess of cash paid (amortization)
    (20,655 )     64,512       (95,017 )     6,784  
 
                               
Plus: Non-cash stock-based compensation
    2,039       4,055       26,391       11,741  
 
                       
 
                               
EBITDA adjusted for net investment in film and television programs and non-cash stock-based compensation
    4,682       24,300       (59,116 )     68,369  
 
                               
Changes in other operating assets and liabilities:
                               
Restricted cash excluding funds held in trust
    (1,811 )     9,190       (2,884 )     9,350  
Accounts receivable, net
    (58,669 )     (21,217 )     (105,039 )     (23,605 )
Other assets
    (1,024 )     1,841       (1,458 )     2,411  
Accounts payable and accrued liabilities
    2,471       67,537       32,375       (31,717 )
Participations and residuals
    (9,527 )     (17,686 )     (21,169 )     (85,802 )
Deferred revenue
    12,866       1,906       33,232       (5,513 )
 
                       
 
    (55,694 )     41,571       (64,943 )     (134,876 )
 
                               
Purchases of property and equipment
    (295 )     (371 )     (1,187 )     (2,574 )
Interest, taxes and other (2)
    (11,373 )     (5,297 )     (32,642 )     (16,632 )
 
                               
 
                       
Free Cash Flow
  $ (62,680 )   $ 60,203     $ (157,888 )   $ (85,713 )
 
                       
 
(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
  $ (107,485 )   $ (115,595 )   $ (421,148 )   $ (438,020 )
Change in film obligations
    (9,826 )     16,882       (17,572 )     (20,019 )
Borrowings under individual production loans
    15,893       6,656       100,203       134,587  
Repayment of individual production loans
    (39,911 )     (9,558 )     (143,297 )     (111,885 )
Production loan borrowings under film credit facility
    12,462       32,217       17,721       32,217  
Production loan repayments under film credit facility
    (29,883 )           (31,507 )      
 
                       
Total cash paid for film and television programs
  $ (158,750 )   $ (69,398 )   $ (495,600 )   $ (403,120 )
 
                       
(2)   Interest, taxes and other consists of the following:
                                 
Contractual cash based interest
  $ (9,974 )   $ (7,464 )   $ (29,679 )   $ (17,588 )
Interest and other income
    329       413       1,082       1,207  
Income tax provision
    (1,728 )     1,754       (4,045 )     (251 )
 
                       
Total interest, taxes and other
  $ (11,373 )   $ (5,297 )   $ (32,642 )   $ (16,632 )
 
                       
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.