LIONSGATE REPORTS FISCAL 2014 FULL YEAR REVENUE OF $2.63 BILLION, RECORD ADJUSTED EBITDA OF $370.8 MILLION, ADJUSTED NET INCOME OF $217.9 MILLION OR $1.58 ADJUSTED BASIC EPS AND NET INCOME OF $152.0 MILLION OR $1.11 BASIC EPS

LIONSGATE REPORTS FISCAL 2014 FULL YEAR REVENUE OF $2.63 BILLION, RECORD ADJUSTED EBITDA OF $370.8 MILLION, ADJUSTED NET INCOME OF $217.9 MILLION OR $1.58 ADJUSTED BASIC EPS AND NET INCOME OF $152.0 MILLION OR $1.11 BASIC EPS

Results Driven by Contributions from Worldwide Theatrical Box Office, Strong Filmed Entertainment Library Performance, Lower Theatrical Marketing Costs and Decreased Interest Expense

SANTA MONICA, Calif. and VANCOUVER, British Columbia, May 29, 2014 /PRNewswire/ -- Lionsgate (NYSE: LGF) today reported revenue of $2.63 billion, adjusted EBITDA of $370.8 million, adjusted net income of $217.9 million or $1.58 adjusted basic net income per share and net income of $152.0 million or $1.11 basic net income per share for the full year fiscal 2014 (fiscal year ended March 31, 2014). Revenue for the fourth quarter (quarter ended March 31, 2014) was $721.9 million with adjusted EBITDA of $92.0 million, adjusted net income of $63.5 million or $0.46 adjusted basic EPS and net income of $49.2 million or $0.35 basic EPS.

The Company set all-time highs in adjusted EBITDA and adjusted net income in the fiscal year, with adjusted EBITDA gains driven by record margins, the global box office performance of a theatrical slate led by the blockbusters The Hunger Games: Catching Fire and Now You See Me as well as strong results from the Company's filmed entertainment library and lower theatrical marketing costs. The Company's share of income from equity investments also increased due to continued strong gains at EPIX, its partnership with Viacom and MGM, and improved performance at TVGN, its 50/50 partnership with CBS. Adjusted net income benefitted further from decreased interest expense and a lower effective tax rate compared to the prior year.

"Our strong operating momentum, the diversity of our portfolio of businesses and the continued enhancement of our capital structure all contributed to another year of outstanding financial results," said Lionsgate Chief Executive Officer Jon Feltheimer. "The trajectory of our business, the depth of our content pipelines and the ongoing generation of predictable income from our film franchises, television properties and filmed entertainment library continue to give us excellent long-term visibility."

Revenue of $2.63 billion for the fiscal year compared to $2.71 billion in the prior year reflecting a domestic theatrical slate of 13 wide releases compared to 19 in the prior year, partially offset by revenue gains in the Company's television production and international businesses.

Revenue contributors during the year included the global blockbuster The Hunger Games: Catching Fire, which grossed $865 million at the worldwide box office on its way to becoming the 10(th) highest-grossing domestic release of all time. The hits Now You See Me, which grossed more than $350 million at the worldwide box office, and Divergent, which launched only 10 days before the end of the fiscal year, also made strong revenue contributions. Lionsgate's television production operations achieved record revenue of $447.4 million in the fiscal year, international operations set an all-time revenue high of $397.1 million and the Company's filmed entertainment library reached an all-time revenue best of $496 million.

Adjusted EBITDA of $370.8 million for the fiscal year compared to adjusted EBITDA of $329.7 million in the prior year.

Adjusted net income of $217.9 million or $1.58 adjusted basic net income per share compared to adjusted net income of $136.5 million or $1.01 adjusted basic net income per share in the prior year.

Net income for the fiscal year was $152.0 million or $1.11 basic net income per share on 137.5 million weighted average number of common shares outstanding compared to $232.1 million or $1.73 basic net income per share on 134.5 million weighted average number of common shares outstanding during the prior year. Net income in the fiscal year reflected $39.6 million in pre-tax costs associated with the early extinguishment of debt (compared to $24.1 million in the prior year) and net income in the prior year included an income tax benefit of $141.1 million from changes in the valuation allowance.

The Company continued to strengthen its balance sheet in the fiscal year and reduced the principal amount outstanding on its $800 million revolving credit facility to $97.6 million on March 31, 2014 and zero on May 29, 2014. Cash-based interest expense in the fiscal year was $49.0 million compared to $75.3 million in the prior year.

During the quarter, the Company declared its second quarterly dividend of $0.05 per common share payable on May 30, 2014 to shareholders of record as of March 31, 2014.

The Company noted that, since the December 17, 2013 increase in its share repurchase authorization to $300 million, it has repurchased a total of 3,436,017 common shares for an aggregate price of $90.5 million.

Lionsgate's filmed entertainment backlog, or already contracted future revenue not yet recorded, rose to $1.2 billion at March 31, 2014, compared to $1.1 billion at March 31, 2013.

Overall Motion Picture segment revenue for the fiscal year was $2.183 billion compared to $2.329 billion in the prior fiscal year. Within the Motion Picture segment, theatrical revenue declined 2% to $524.7 million due to fewer releases as discussed above.

Lionsgate's home entertainment revenue from both motion pictures and television was $863.9 million for the fiscal year compared to $964.1 million for the prior year due primarily to fewer releases, partially offset by 20% growth in home entertainment revenue from Managed Brands.

Television revenue included in the Motion Picture segment was $225.3 million in the fiscal year compared to $277.9 million in the prior year. The prior year included the pay TV window for the first Hunger Games film and television revenue from three Twilight Saga titles released prior to Lionsgate's January 2012 acquisition of Summit Entertainment.

International Motion Picture segment revenue (excluding Lionsgate U.K.) increased 7% to a record $397.1 million in the fiscal year driven by the stellar international box office performances of The Hunger Games: Catching Fire, Now You See Me, Red 2 and Escape Plan and strong carryover performance from the prior year release of The Twilight Saga: Breaking Dawn - Part II.

Lionsgate U.K. posted revenue of $146.3 million for the fiscal year compared to $147.7 million in the prior year.

Revenue for the Television Production segment increased 18% to a record $447.4 million in the fiscal year with strong gains in both domestic and international television. Domestic television deliveries in the fiscal year totaled 176 episodes and 122 hours of television content, including Seasons 1 and 2 of Orange is the New Black, Seasons 1 and 2 of Nashville, Seasons 6 and 7 of Mad Men, Season 6 of Nurse Jackie and Anger Management.

Lionsgate senior management will hold its analyst and investor conference call to discuss its fiscal 2014 financial results at 9:00 A.M. ET/6:00 A.M. PT on Friday, May 30, 2014. Interested parties may participate live in the conference call by calling 1-800-230-1059 (612-234-9959 outside the U.S. and Canada). A full digital replay will be available from Friday morning, May 30 through Friday, June 6 by dialing 1-800-475-6701 (320-365-3844 outside the U.S. and Canada) and using access code 326366.

ABOUT LIONSGATE

Lionsgate 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, new channel platforms and international distribution and sales. Lionsgate currently has over 30 television shows on more than 20 networks spanning its primetime production, distribution and syndication businesses, including such critically-acclaimed hits as the multiple Emmy Award-winning Mad Men and Nurse Jackie, the comedy Anger Management, the network series Nashville, the syndication success The Wendy Williams Show and the critically-acclaimed hit series Orange is the New Black.

Its feature film business has been fueled by such recent successes as the blockbuster first two installments of The Hunger Games franchise, the first installment of the recently-launched Divergent franchise, Now You See Me, Kevin Hart: Let Me Explain, Warm Bodies, The Expendables 2, The Possession, Sinister, Roadside Attractions' Mud and Pantelion Films' breakout hit 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. Lionsgate handles a prestigious and prolific library of approximately 15,000 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 Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on May 29, 2014, 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.



CONSOLIDATED BALANCE SHEETS


March March
31, 31,
2014 2013
---- ----

(Amounts in
thousands,

except share
amounts)

ASSETS

Cash and cash equivalents $25,692 $62,363

Restricted cash 8,925 10,664

Accounts receivable, net of
reserves for returns and
allowances of $106,680
(March 31, 2013 -
$103,418) and provision
for doubtful accounts of
$4,876 (March 31, 2013 -
$4,494) 885,571 787,150

Investment in films and
television programs, net 1,274,573 1,244,075

Property and equipment, net 14,552 8,530

Equity method investments 181,941 169,450

Goodwill 323,328 323,328

Other assets 71,067 72,619

Deferred tax assets 65,983 82,690
------ ------

Total assets $2,851,632 $2,760,869
======= =======

LIABILITIES

Senior revolving credit
facility $97,619 $338,474

Senior secured second-
priority notes 225,000 432,277

July 2013 7-Year Term Loan 222,753 -

Accounts payable and
accrued liabilities 332,457 313,620

Participations and
residuals 469,390 409,763

Film obligations and
production loans 499,787 569,019

Convertible senior
subordinated notes 131,788 87,167

Deferred revenue 288,300 254,023
------- -------

Total liabilities 2,267,094 2,404,343
--------- ---------

Commitments and contingencies

SHAREHOLDERS' EQUITY

Common shares, no par
value, 500,000,000 shares
authorized, 141,007,461
shares issued (March 31,
2013 -135,882,899 shares) 743,788 672,915

Accumulated deficit (157,875) (309,912)

Accumulated other
comprehensive loss (1,375) (6,477)
------ ------

Total shareholders' equity 584,538 356,526
------- -------

Total liabilities and
shareholders' equity $2,851,632 $2,760,869
======= =======





LIONS GATE ENTERTAINMENT CORP.



ANNUAL CONSOLIDATED STATEMENTS OF OPERATIONS


Year Ended March 31,
--------------------

2014 2013 2012
---- ---- ----

(Amounts in thousands,
except per share
amounts)

Revenues $2,630,254 $2,708,141 $1,587,579

Expenses:

Direct
operating 1,369,381 1,390,569 908,402

Distribution
and
marketing 739,461 817,862 483,513

General
and
administration 254,925 218,341 168,864

Gain
on
sale
of
asset
disposal
group - - (10,967)

Depreciation
and
amortization 6,539 8,290 4,276
----- ----- -----

Total
expenses 2,370,306 2,435,062 1,554,088
--------- --------- ---------

Operating
income 259,948 273,079 33,491
------- ------- ------

Other expenses
(income):

Interest
expense

Contractual
cash
based
interest 48,960 75,322 62,430

Amortization
of
debt
discount
and
deferred
financing
costs 17,210 18,258 15,681
------ ------ ------

Total
interest
expense 66,170 93,580 78,111

Interest
and
other
income (6,030) (4,036) (2,752)

Loss
on
extinguishment
of
debt 39,572 24,089 967
------ ------ ---

Total
other
expenses,
net 99,712 113,633 76,326
------ ------- ------

Income
(loss)
before
equity
interests
and
income
taxes 160,236 159,446 (42,835)

Equity
interests
income
(loss) 24,724 (3,075) 8,412
------ ------ -----

Income
(loss)
before
income
taxes 184,960 156,371 (34,423)

Income
tax
provision
(benefit) 32,923 (75,756) 4,695
------ ------- -----

Net
income
(loss) $152,037 $232,127 $(39,118)
======== ======== =======


Basic
Net
Income
(Loss)
Per
Common
Share $1.11 $1.73 $(0.30)
===== ===== ======

Diluted
Net
Income
(Loss)
Per
Common
Share $1.04 $1.61 $(0.30)
===== ===== ======

Weighted
average
number of
common shares
outstanding:

Basic 137,468 134,514 132,226

Diluted 154,415 149,370 132,226


Dividends
declared
per
common
share $0.10 $ - $ -





LIONS GATE ENTERTAINMENT CORP.



FOURTH QUARTER CONSOLIDATED STATEMENTS OF INCOME


Three Months
Ended

March 31,
---------

2014 2013
---- ----

(Amounts in
thousands,

except per
share
amounts)

Revenues $721,858 $785,708

Expenses:

Direct operating 403,625 419,187

Distribution and marketing 188,964 192,658

General and administration 68,805 75,067

Depreciation and amortization 1,773 2,050
----- -----

Total expenses 663,167 688,962
------- -------

Operating income 58,691 96,746
------ ------

Other expenses (income):

Interest expense

Contractual cash based
interest 9,278 15,520

Amortization of debt discount
and deferred financing costs 4,332 4,511
----- -----

Total interest expense 13,610 20,031

Interest and other income (1,280) (978)

Loss on extinguishment of
debt 2,919 278
----- ---

Total other expenses, net 15,249 19,331
------ ------

Income before equity
interests and income taxes 43,442 77,415

Equity interests income
(loss) 11,566 (1,173)
------ ------

Income before income taxes 55,008 76,242

Income tax provision
(benefit) 5,856 (86,726)
----- ------

Net income $49,152 $162,968
===== =====


Basic Net Income Per Common
Share $0.35 $1.20
===== =====

Diluted Net Income Per Common
Share $0.33 $1.10
===== =====

Weighted average number of common
shares outstanding:

Basic 138,599 135,406

Diluted 155,081 150,350


Dividends declared per common
share $0.10 $ -





LIONS GATE ENTERTAINMENT CORP.



ANNUAL CONSOLIDATED STATEMENTS OF CASH FLOWS


Year Ended March 31,
--------------------

2014 2013 2012
---- ---- ----

Operating
Activities: (Amounts in thousands)

Net
income
(loss) $152,037 $232,127 $(39,118)

Adjustments to
reconcile net
income (loss) to
net cash provided
by (used in)
operating
activities:

Depreciation
of
property
and
equipment
and
amortization
of
intangible
assets 6,539 8,290 4,276

Amortization
of films
and
television
programs 921,289 966,027 603,660

Amortization
of debt
discount
and
deferred
financing
costs 17,210 18,258 15,681

Non-cash
stock-
based
compensation 60,492 35,838 9,957

Dividend
payment
from
equity
method
investee 16,079 - -

Gain on
sale of
asset
disposal
group - - (10,967)

Loss on
extinguishment
of debt 39,572 24,089 967

Equity
interests
(income)
loss (24,724) 3,075 (8,412)

Deferred
income
taxes
(benefit) 15,913 (87,899) 1,256

Changes in
operating assets
and liabilities:

Restricted
cash 1,775 1,241 37,636

Accounts
receivable,
net (93,503) (4,948) (256,208)

Investment
in films
and
television
programs (948,082) (890,276) (690,304)

Other
assets (3,768) (2,682) 1,298

Accounts
payable
and
accrued
liabilities 17,628 (50,154) 28,302

Participations
and
residuals 59,207 (6,875) 19,813

Film
obligations (19,187) 1,920 37,081

Deferred
revenue 34,035 28,088 30,969


Net Cash
Flows
Provided
By (Used
In)
Operating
Activities 252,512 276,119 (214,113)
------- ------- -------

Investing
Activities:

Purchases
of
investments - (2,022) -

Proceeds
from the
sale of
investments - 6,354 -

Proceeds
from the
sale of
a
portion
of
equity
method
investee 9,000 - -

Purchase
of
Summit
Entertainment,
net of
unrestricted
cash
acquired
of
$315,932 - - (553,732)

Proceeds
from the of
sale of $3,943
asset
disposal
group,
net of
transaction
costs,
and cash
disposed - - 9,119

Investment
in
equity
method
investees (17,250) (1,530) (1,030)

Dividends
from
equity
method
investee
in excess
of
earnings 4,169 - -

Increase
in loans
receivable - - (4,671)

Repayment
of loans
receivable 4,275 4,274 -

Purchases
of
property
and
equipment (8,799) (2,581) (1,885)


Net Cash
Flows
Provided
By (Used
In)
Investing
Activities (8,605) 4,495 (552,199)
------ ----- -------

Financing
Activities:

Senior
revolving for the
credit year
facility ended
- March
borrowings, 31, 2013
net of
deferred
financing
costs of
$15,804 872,220 1,144,620 390,650

Senior
revolving
credit
facility
-
repayments (1,113,075) (921,700) (360,650)

Senior
secured
second-
priority
notes -
consent
fee - (3,270) -

Senior
secured net of and
second- deferred $12,383
priority financing for the
notes costs of year
and July $6,860 ended
2013 7- for the March
Year year 31, 2012
Term ended
Loan - March
borrowings, 440,640 - 201,955

Senior
secured
second-
priority
notes -
repurchases
and
redemptions (470,584) - (9,852)

Summit
Term financing
Loan - costs of
borrowings, $16,350
net of
debt
discount
of
$7,500
and
deferred - - 476,150

Summit
Term
Loan -
repayments - (484,664) (15,066)

Convertible
senior
subordinated
notes -
borrowings 60,000 - 45,000

Convertible
senior
subordinated
notes -
repurchases - (7,639) (46,059)

Production
loans -
borrowings 532,416 378,510 381,856

Production
loans -
repayments (517,874) (371,069) (238,725)

Pennsylvania
Regional
Center
credit
facility
-
repayments (65,000) (500) -

Repurchase
of
common
shares - - (77,088)

Dividends
paid (6,900) - -

Exercise
of stock
options 11,972 2,897 3,520

Tax
withholding
required
on
equity
awards (23,077) (15,995) (4,320)

Other
financing
obligations
-
repayments - (3,710) -


Net Cash
Flows
Provided
By (Used
In)
Financing
Activities (279,262) (282,520) 747,371
-------- ------- -------

Net
Change
In Cash
And Cash
Equivalents (35,355) (1,906) (18,941)

Foreign
Exchange
Effects
on Cash (1,316) (29) (3,180)

Cash and
Cash
Equivalents
-
Beginning
Of
Period 62,363 64,298 86,419

Cash and
Cash
Equivalents
-End Of
Period $25,692 $62,363 $64,298
======= ======= =======





LIONS GATE ENTERTAINMENT CORP.



FOURTH QUARTER CONSOLIDATED STATEMENTS OF CASH FLOWS


Three Months
Ended

March 31,
---------

2014 2013
---- ----

Operating Activities: (Amounts in
thousands)

Net income $49,152 $162,968

Adjustments to reconcile net income
to net cash provided by operating
activities:

Depreciation of property and
equipment and amortization
of intangible assets 1,773 2,050

Amortization of films and
television programs 284,471 307,152

Amortization of debt discount
and deferred financing costs 4,332 4,511

Non-cash stock-based
compensation 19,448 18,954

Dividend payment from equity
method investee 6,230 -

Loss on extinguishment of
debt 2,919 278

Equity interests (income)
loss (11,566) 1,173

Deferred income taxes
(benefit) 2,641 (87,899)

Changes in operating assets and
liabilities:

Restricted cash 31,529 (6,883)

Accounts receivable, net (47,127) (133,265)

Investment in films and
television programs (255,139) (186,401)

Other assets (2,072) 5,268

Accounts payable and accrued
liabilities 13,423 (11,163)

Participations and residuals 20,971 5,708

Film obligations (30,395) 15,626

Deferred revenue 16,088 (40,217)
------ -------

Net Cash Flows Provided By
Operating Activities 106,678 57,860
------- ------

Investing Activities:

Investment in equity method
investees - (1,530)

Purchases of property and
equipment (2,683) (495)
------ ----

Net Cash Flows Used In
Investing Activities (2,683) (2,025)
------ ------

Financing Activities:

Senior revolving credit
facility -borrowings 90,001 55,500

Senior revolving credit
facility -repayments (186,501) (163,500)

Production loans - borrowings 172,834 115,386

Production loans - repayments (216,489) (49,466)

Change in restricted cash
collateral associated with
financing activities - 12,769

Dividends paid (6,900) -

Exercise of stock options 1,103 -

Tax withholding required on
equity awards (8,701) (11,056)
------ -------

Net Cash Flows Used In
Financing Activities (154,653) (40,367)
------- -------

Net Change In Cash And Cash
Equivalents (50,658) 15,468

Foreign Exchange Effects on
Cash 948 (1,293)

Cash and Cash Equivalents -
Beginning Of Period 75,402 48,188

Cash and Cash Equivalents -
End Of Period $25,692 $62,363
======= =======






LIONS GATE ENTERTAINMENT CORP.



RECONCILIATION OF ANNUAL NET INCOME (LOSS) TO EBITDA AND
EBITDA, AS ADJUSTED


Year Ended March 31,
--------------------

2014 2013 2012
---- ---- ----

(Amounts in
thousands)

Net income
(loss) $152,037 $232,127 $(39,118)

Depreciation
and
amortization 6,539 8,290 4,276

Contractual
cash
based
interest 48,960 75,322 62,430

Noncash
interest
expense 17,210 18,258 15,681

Interest
and other
income (6,030) (4,036) (2,752)

Income tax
provision
(benefit) 32,923 (75,756) 4,695
------ ------ -----

EBITDA $251,639 $254,205 $45,212
===== ===== =======


Gain on
sale of
asset
disposal
group - - (10,967)

Loss on
extinguishment
of debt 39,572 24,089 967

Stock-
based
compensation
(1) 72,119 47,665 25,014

Administrative
proceeding 7,500 - -

Acquisition
related
charges - 2,575 11,957

Corporate
defense
charges
(2) - - (1,726)

Non-risk
prints
and
advertising
expense - 1,155 1,095
--- ----- -----

EBITDA, as
adjusted $370,830 $329,689 $71,552
===== ===== =======



(1) The years
ended
March 31,
2014,
2013 and
2012
include
cash
settled
SARs
expense
of $10.9
million,
$12.0
million,
and $15.3
million,
respectively.


(2) The year
ended
March 31,
2012
includes
a benefit
for
charges
associated
with a
shareholder
activist
matter of
$2.0
million
related
to a
negotiated
settlement
with a
vendor of
costs
incurred
and
recorded
in fiscal
year
2011, and
insurance
recoveries
of
related
litigation
offset by
other
costs.





LIONS GATE ENTERTAINMENT CORP.





RECONCILIATION OF FOURTH QUARTER NET INCOME TO

EBITDA AND EBITDA, AS ADJUSTED


Three Months
Ended

March 31,
---------

2014 2013
---- ----

(Amounts in
thousands)

Net income $49,152 $162,968

Depreciation and amortization 1,773 2,050

Contractual cash based
interest 9,278 15,520

Noncash interest expense 4,332 4,511

Interest and other income (1,280) (978)

Income tax provision
(benefit) 5,856 (86,726)
----- ------

EBITDA $69,111 $97,345
===== =====


Loss on extinguishment of
debt 2,919 278

Stock-based compensation (1) 19,920 22,020

Acquisition related charges - 548

Non-risk prints and
advertising expense - (4,554)
--- ------

EBITDA, as adjusted $91,950 $115,637
===== =====



(1) The three
months
ended
March 31,
2014 and
2013
include
cash
settled
SARs
expense
of $0.5
million
and $9.7
million,
respectively.
EBITDA is defined as earnings before interest, income tax provision or benefit, and depreciation and amortization. EBITDA is a non-GAAP financial measure.

EBITDA, as adjusted represents EBITDA as defined above adjusted for gain on sale of asset disposal group, loss on extinguishment of debt, stock-based compensation, administrative proceeding, acquisition related charges, 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 cash and equity settled stock appreciation rights ("SARs"). Administrative proceeding represents the settlement of an administrative order. Acquisition related charges represent severance and transaction costs associated with the acquisition of Summit Entertainment. 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 months ended March 31, 2013 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. EBITDA, as adjusted is a non-GAAP financial measure.

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 are non-GAAP financial measures 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 important measures of comparative operating performance, they should be considered in addition to, but not as a substitute for, net income (loss) and other measures of financial performance reported in accordance with Generally Accepted Accounting Principles ("GAAP"). 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 measures as presented may not be comparable to similarly-titled measures presented by other companies.




LIONS GATE ENTERTAINMENT CORP.



RECONCILIATION OF ANNUAL FREE CASH FLOW

TO NET CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES


Year Ended March 31,
--------------------

2014 2013 2012
---- ---- ----

(Amounts in thousands)

Net Cash
Flows
Provided
By (Used
In)
Operating
Activities $252,512 $276,119 $(214,113)

Purchases
of
property
and
equipment (8,799) (2,581) (1,885)

Net
borrowings
under
and
(repayment)
of
production
loans 14,542 6,941 143,131

Restricted
cash
held in
trust - - (13,992)
--- --- -------

Free Cash
Flow, as
defined $258,255 $280,479 $(86,859)
===== ===== =======






LIONS GATE ENTERTAINMENT CORP.



RECONCILIATION OF FOURTH QUARTER FREE CASH FLOW

TO NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES


Three Months
Ended

March 31,
---------

2014 2013
---- ----

(Amounts in
thousands)

Net Cash Flows Provided
By Operating Activities $106,678 $57,860

Purchases of property
and equipment (2,683) (495)

Net borrowings under and
(repayment) of
production loans (43,655) 65,920

Free Cash Flow, as
defined $60,340 $123,285
===== =====

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, less the decrease in restricted cash held in a trust for certain obligations until December 31, 2011. 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 GAAP.

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 ANNUAL EBITDA TO FREE CASH FLOW


Year Ended March 31,
--------------------

2014 2013 2012
---- ---- ----

(Amounts in thousands)

EBITDA $251,639 $254,205 $45,212


Plus: Amortization of film and television programs 921,289 966,027 603,660

Less: Cash paid for film and television programs
(1) (952,727) (881,415) (510,092)
-------- -------- --------

Amortization of (cash paid for) film and
television programs in excess of cash paid
(amortization) (31,438) 84,612 93,568


Plus: Non-cash stock-based compensation 60,492 35,838 9,957

Plus: Dividend payment from equity method investee 16,079 - -

Less: Gain on sale of asset disposal group - - (10,967)

Plus: Equity interests (income) loss (24,724) 3,075 (8,412)

Plus: Loss on extinguishment of debt 39,572 24,089 967
------ ------ ---


EBITDA adjusted for items above 311,620 401,819 130,325


Changes in other operating assets and liabilities:

Restricted cash excluding funds held in trust 1,775 1,241 23,644

Accounts receivable, net (93,503) (4,948) (256,208)

Other assets (3,768) (2,682) 1,298

Accounts payable and accrued liabilities 17,628 (50,154) 28,302

Participations and residuals 59,207 (6,875) 19,813

Deferred revenue 34,035 28,088 30,969
------ ------ ------

15,374 (35,330) (152,182)


Purchases of property and equipment (8,799) (2,581) (1,885)

Interest, taxes and other (2) (59,940) (83,429) (63,117)


Free Cash Flow, as defined $258,255 $280,479 $(86,859)
======== ======== =======

_________________________

(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 $(948,082) $(890,276) $(690,304)

Change in film obligations (19,187) 1,920 37,081

Production loans - borrowings 532,416 378,510 381,856

Production loans - repayments (517,874) (371,569) (238,725)

Total cash paid for film and television programs $(952,727) $(881,415) $(510,092)
======= ======= =======

_________________________

(2) Interest, taxes and other consists of the following:

Contractual cash based interest $(48,960) $(75,322) $(62,430)

Interest and other income 6,030 4,036 2,752

Current income tax provision (17,010) (12,143) (3,439)
------- ------- ------

Total interest, taxes and other $(59,940) $(83,429) $(63,117)
======= ======= =======






LIONS GATE ENTERTAINMENT CORP.



RECONCILIATION OF FOURTH QUARTER EBITDA TO FREE CASH FLOW


Three Months
Ended

March 31,
---------

2014 2013
---- ----

(Amounts in
thousands)

EBITDA $69,111 $97,345


Plus: Amortization of film and television programs 284,471 307,152

Less: Cash paid for film and television programs
(1) (329,189) (104,855)
-------- --------

Amortization of (cash paid for) film and
television programs in excess of cash paid
(amortization) (44,718) 202,297


Plus: Non-cash stock-based compensation 19,448 18,954

Plus: Dividend payment from equity method investee 6,230 -

Plus: Equity interests (income) loss (11,566) 1,173

Plus: Loss on extinguishment of debt 2,919 278
----- ---

EBITDA adjusted for items above 41,424 320,047


Changes in other operating assets and liabilities:

Restricted cash 31,529 (6,883)

Accounts receivable, net (47,127) (133,265)

Other assets (2,072) 5,268

Accounts payable and accrued liabilities 13,423 (11,163)

Participations and residuals 20,971 5,708

Deferred revenue 16,088 (40,217)
------ -------

32,812 (180,552)


Purchases of property and equipment (2,683) (495)

Interest, taxes and other (2) (11,213) (15,715)


Free Cash Flow, as defined $60,340 $123,285
======= ========

_________________________

(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 $(255,139) $(186,401)

Change in film obligations (30,395) 15,626

Production loans - borrowings 172,834 115,386

Production loans - repayments (216,489) (49,466)

Total cash paid for film and television programs $(329,189) $(104,855)
======= =======

_________________________

(2) Interest, taxes and other consists of the following:

Contractual cash based interest $(9,278) $(15,520)

Interest and other income 1,280 978

Current income tax benefit (provision) (3,215) (1,173)
------ ------

Total interest, taxes and other $(11,213) $(15,715)
======= =======

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 ANNUAL INCOME (LOSS) BEFORE INCOME TAXES, NET

INCOME (LOSS), BASIC AND DILUTED EPS TO ADJUSTED INCOME (LOSS) BEFORE

INCOME TAXES, ADJUSTED NET INCOME (LOSS), AND ADJUSTED BASIC AND DILUTED EPS


Year Ended March 31, 2014
-------------------------

Income Net Diluted
before income EPS*
income
taxes Basic

EPS*
---

(Amounts in thousands,
except per share amounts)


As reported $184,960 $152,037 $1.11 $1.04

Stock-based compensation (1) 72,119 45,435 0.33 0.29

Loss on extinguishment of debt (2) 39,572 24,930 0.18 0.16

Administrative proceeding (3) 7,500 7,500 0.05 0.05

Tax valuation allowance (4) - (12,030) (0.09) (0.08)

As adjusted for stock-based compensation, loss on
extinguishment of debt, administrative proceeding
and valuation allowance $304,151 $217,872 $1.58 $1.47
====== ====== ===== =====



Year Ended March 31, 2013
-------------------------

Income Net Diluted
before income EPS*
income
taxes Basic
EPS*
---

(Amounts in thousands,
except per share amounts)


As reported $156,371 $232,127 $1.73 $1.61

Stock-based compensation (1) 47,665 30,186 0.22 0.20

Loss on extinguishment of debt (2) 24,089 15,255 0.11 0.10

Tax valuation allowance (4) - (141,087) (1.05) (0.94)

As adjusted for stock-based compensation, loss on
extinguishment of debt and valuation allowance $228,125 $136,481 $1.01 $0.96
====== ====== ===== =====



Year Ended March 31, 2012
-------------------------

Income Net Diluted
(loss) income EPS*
before (loss)
income
taxes Basic
EPS*
---

(Amounts in thousands,
except per share amounts)


As reported $(34,423) $(39,118) $(0.30) $(0.30)

Stock-based compensation (1) 25,014 15,841 0.12 0.12

Loss on extinguishment of debt (2) 967 612 - -

Tax valuation allowance (4) - 9,778 0.07 0.07
--- ----- ---- ----

As adjusted for stock-based compensation, loss on
extinguishment of debt and valuation allowance $(8,442) $(12,887) $(0.10) $(0.10)
====== ====== ==== =====

_________________________

* Basic and Diluted EPS amounts may not add precisely due to rounding





LIONS GATE ENTERTAINMENT CORP.





RECONCILIATION OF FOURTH QUARTER INCOME BEFORE INCOME TAXES, NET

INCOME, BASIC AND DILUTED EPS TO ADJUSTED INCOME BEFORE

INCOME TAXES, ADJUSTED NET INCOME, AND ADJUSTED BASIC AND DILUTED EPS


Three Months Ended March
31, 2014
------------------------

Income Net Diluted
before income EPS*
income
taxes Basic

EPS*
---

(Amounts in thousands,
except per share
amounts)


As reported $55,008 $49,152 $0.35 $0.33

Stock-based compensation (1) 19,920 12,550 0.09 0.08

Loss on extinguishment of debt (2) 2,919 1,839 0.01 0.01

As adjusted for stock-based compensation and loss
on extinguishment of debt $77,847 $63,541 $0.46 $0.42
===== ===== === =====



Three Months Ended March
31, 2013
------------------------

Income Net Diluted
before income EPS*
income
taxes Basic
EPS*
---

(Amounts in thousands,
except per share
amounts)


As reported $76,242 $162,968 $1.20 $1.10

Stock-based compensation (1) 22,020 13,945 0.10 0.09

Loss on extinguishment of debt (2) 278 176 - 0.01

Tax valuation allowance (4) - (87,828) (0.64) (0.59)
--- ------- ---- -----

As adjusted for stock-based compensation, loss on
extinguishment of debt and valuation allowance $98,540 $89,261 $0.66 $0.61
===== ===== === =====

_________________________

* Basic and Diluted EPS amounts may not add precisely due to rounding
Adjusted income (loss) before income taxes, adjusted net income (loss) and adjusted basic and diluted EPS are adjusted for the following items:

(1) Stock-based compensation: Adjustments for stock-based compensation represents compensation expenses associated with stock options, restricted share units, cash and equity settled SARs. The adjustment to net income (loss) is net of the tax impact calculated using the statutory tax rate applicable to each adjustment.

(2) Loss on extinguishment of debt: This adjusts income (loss) before income taxes and net income (loss) to eliminate the loss on extinguishment of debt. The adjustment to net income (loss) is net of the tax impact calculated using the statutory tax rate applicable to each adjustment.

(3) Administrative proceeding: Adjustment for administrative proceeding represents the settlement of an administrative order.

(4) Tax valuation allowance: In order to reflect net income on a comparable basis, we have adjusted all periods to exclude the impact of changes in the valuation allowance from adjusted net income. A substantial portion of the Company's valuation allowance was reversed in the year ended March 31, 2013 due to the expectation of the realization of the related net deferred tax assets in future tax returns. A further reduction in the valuation allowance related to the Company's Canadian net deferred tax assets was reversed in the year ended March 31, 2014.

Management believes that these non-GAAP measures provide useful information to investors regarding the Company's results as compared to historical periods. The Company uses these measures, among other measures, to evaluate the operating performance of the Company. The Company believes that the adjusted results provide relevant and useful information for investors because they clarify the Company's actual operating performance and allow investors to review our operating performance in the same way as our management. Since these measures are not calculated in accordance with generally accepted accounting principles, they should not be considered in isolation of, or as a substitute for income before income taxes, net income, basic and diluted EPS. Not all companies calculate adjusted income before income taxes, adjusted net income, and adjusted basic and diluted EPS in the same manner and the measures as presented may not be comparable to similarly titled measures presented by other companies.

SOURCE Lionsgate

Lionsgate

Web Site: http://www.lionsgate.com


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