Lionsgate Studios Corp.

Previous wording

Prior to the Starz Separation, as further discussed below, Lions Gate Entertainment Corp. (formerly listed on NYSE: LGF.A, LGF.B) (“Old Lionsgate”) encompassed the motion picture and television studio operations (formerly referred to as the “Studio Business”) and following the Studio Separation, as discussed in Note 3, Lionsgate Studios Corp. (formerly listed on NASDAQ: LION) (“Legacy Lionsgate Studios”) and the STARZ premium global subscription platform.

Current wording

Prior to the Starz Separation, as further discussed below, Lions Gate Entertainment Corp. (formerly listed on the New York Stock Exchange (“NYSE”): LGF.A, LGF.B) (“Old Lionsgate”) encompassed the motion picture and television studio operations (formerly referred to as the “Studio Business”) and the STARZ premium global subscription platform. Following the Studio Separation, as discussed in Note 3 to our unaudited condensed consolidated financial statements, Lionsgate Studios Corp. (formerly listed on the NASDAQ Global Select Market (“NASDAQ”): LION) (“Legacy Lionsgate Studios”) comprises the Studio Business and the STARZ business remained with Lions Gate Entertainment Corp..

Previous wording

Notwithstanding the legal form of the Starz Separation, for accounting and financial reporting purposes, in accordance with United States generally accepted accounting principles (“U.S. GAAP”), due to the relative significance of the Studio Business as compared to the Starz Business and the continued involvement of Old Lionsgate’s senior management with the Company following the completion of the Starz Separation, Old Lionsgate (which holds the Studio Business) is considered the accounting spinnor or divesting entity and Starz (which holds the Starz Business) is considered the accounting spinnee or divested entity. As a result, Old Lionsgate is the accounting predecessor to the Company and the pro rata distribution of the Starz Business has been recorded through equity with no gain or loss recorded. The Starz Business is reflected as discontinued operations in these financial statements following the completion of the Starz Separation. See Note 2 to our unaudited condensed consolidated financial statements for further information.

Current wording

Notwithstanding the legal form of the Starz Separation, for accounting and financial reporting purposes, in accordance with United States generally accepted accounting principles (“U.S. GAAP”), due to the relative significance of the Studio Business as compared to the Starz Business and the continued involvement of Old Lionsgate’s senior management with the Company following the completion of the Starz Separation, Old Lionsgate is considered the accounting spinnor or divesting entity and Starz is considered the accounting spinnee or divested entity. As a result, Old Lionsgate is the accounting predecessor to the Company and the pro rata distribution of the Starz Business has been recorded through equity with no gain or loss recorded. The Starz Business is reflected as discontinued operations in the financial statements following the completion of the Starz Separation. See Note 2 to our unaudited condensed consolidated financial statements for further information.

Previous wording

On May 13, 2024, Old Lionsgate consummated the business combination agreement (the “Business Combination Agreement”) with Screaming Eagle Acquisition Corp., a Cayman Islands exempted company (“SEAC”), SEAC II Corp., a Cayman Islands exempted company and a wholly-owned subsidiary of SEAC (“New SEAC”), LG Sirius Holdings ULC, a British Columbia unlimited liability company and a wholly-owned subsidiary of Old Lionsgate (“Studio HoldCo”), LG Orion Holdings ULC, a British Columbia unlimited liability company and a wholly-owned subsidiary of Old Lionsgate (“StudioCo”) and other affiliates of SEAC (the “Closing”). Pursuant to the terms and conditions of the Business Combination Agreement, the Studio Business was combined with SEAC through a series of transactions, including an amalgamation of StudioCo and New SEAC under a Canadian plan of arrangement (the “Business Combination”). In connection with the closing of the Business Combination, New SEAC changed its name to “Lionsgate Studios Corp.” (referred to as “Legacy Lionsgate Studios”) and continued the existing business operations of StudioCo, which consists of the Studio Business of Old Lionsgate. The “Studio Business” consists of the businesses of Old Lionsgate’s Motion Picture and Television Production segments, together with substantially all of Old Lionsgate’s corporate general and administrative functions and costs. Legacy Lionsgate Studios became a separate publicly-traded company, and its common shares commenced trading on Nasdaq under the symbol “LION” on May 14, 2024.

Current wording

On May 13, 2024, Old Lionsgate consummated the business combination agreement (the “Business Combination Agreement”) with Screaming Eagle Acquisition Corp., a Cayman Islands exempted company (“SEAC”), SEAC II Corp., a Cayman Islands exempted company and a wholly-owned subsidiary of SEAC (“New SEAC”), LG Sirius Holdings ULC, a British Columbia unlimited liability company and a wholly-owned subsidiary of Old Lionsgate (“Studio HoldCo”), LG Orion Holdings ULC, a British Columbia unlimited liability company and a wholly-owned subsidiary of Old Lionsgate (“StudioCo”) and other affiliates of SEAC (the “Closing”). Pursuant to the terms and conditions of the Business Combination Agreement, the Studio Business was combined with SEAC through a series of transactions, including an amalgamation of StudioCo and New SEAC under a Canadian plan of arrangement (the “Business Combination”). In connection with the closing of the Business Combination, New SEAC changed its name to “Lionsgate Studios Corp.” (referred to as “Legacy Lionsgate Studios”) and continued the existing business operations of StudioCo, which consisted of the Studio Business of Old Lionsgate. The “Studio Business” consists of the businesses of Old Lionsgate’s Motion Picture and Television Production segments, together with substantially all of Old Lionsgate’s corporate general and administrative functions and costs. Legacy Lionsgate Studios became a separate publicly-traded company, and its common shares commenced trading on NASDAQ under the symbol “LION” on May 14, 2024.

Previous wording

Following the transaction, approximately 87.8% of the total shares of Legacy Lionsgate Studios were held by Old Lionsgate, while former SEAC public shareholders and founders and common equity financing investors owned approximately 12.2% of Legacy Lionsgate Studios, including the period immediately following the closing of the Business Combination through immediately prior to the Starz Separation. In addition to establishing Legacy Lionsgate Studios as a standalone publicly-traded entity, the transaction resulted in approximately $330.0 million of gross proceeds to Old Lionsgate. The net proceeds were used to partially pay down amounts outstanding under Old Lionsgate's corporate debt (see Note 7, Other Prior Period Debt Transactions to our unaudited condensed consolidated financial statements).

Current wording

Immediately following the Business Combination through immediately prior to the Starz Separation, approximately 87.8% of the total shares of Legacy Lionsgate Studios were held by Old Lionsgate, while 12.2% were owned by former SEAC public shareholders, SEAC founders and common equity financing investors. In addition to establishing Legacy Lionsgate Studios as a standalone publicly-traded entity, the transaction resulted in approximately $330.0 million of gross proceeds to Old Lionsgate. Net proceeds of $278.2 million, inclusive of transaction costs that remained accrued at March 31, 2025 and which were paid during the six months ended September 30, 2025 totaling $3.5 million, were used to partially pay down amounts outstanding under Old Lionsgate's corporate debt (see Note 7 Other Prior Period Debt Transactions for further detail).

Previous wording

Our revenues are derived from the Motion Picture and Television Production segments, as described below. We refer to our Motion Picture and Television Production segments collectively as our Studio Business. Our revenues are derived from the U.S., Canada, the United Kingdom and other foreign countries. None of the non-U.S. countries individually comprised greater than 10% of total revenues for the three months ended June 30, 2025 and 2024.

Current wording

Our revenues are derived from the Motion Picture and Television Production segments, as described below. Our revenues are derived from the U.S., Canada, the United Kingdom and other foreign countries. None of the non-U.S. countries individually comprised greater than 10% of total revenues for the three and six months ended September 30, 2025 and 2024.

Previous wording

Participation costs represent contingent consideration payable based on the performance of the film or television program to parties associated with the film or television program, including producers, writers, directors or actors. Residuals represent amounts payable to various unions or “guilds” such as the Screen Actors Guild - American Federation of Television and Radio Artists, Directors Guild of America, and Writers Guild of America, based on the performance of the film or television program in certain ancillary markets or based on the individual’s (i.e., actor, director, writer) salary level in the television market.

Current wording

Participation costs represent consideration payable based on the performance of the film or television program to parties associated with the film or television program, including producers, writers, directors and actors. Residuals represent amounts payable to various unions or “guilds” such as the Screen Actors Guild - American Federation of Television and Radio Artists, Directors Guild of America, and Writers Guild of America, based on the performance of the film or television program in certain ancillary markets or based on the individual’s (i.e., actor, director, writer) salary level in the television market.

Previous wording

The preparation of our financial statements in conformity with accounting principles generally accepted in the U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The application of the following accounting policies, which are important to our financial position and results of operations, requires significant judgments and estimates on the part of management. As described more fully below, these estimates bear the risk of change due to the inherent uncertainty of the estimate. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management's most difficult, subjective and complex judgments. For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 1 to the audited consolidated financial statements and related notes included as Exhibit 99.1 to the Legacy Lionsgate Studios Corp.s’ Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on May 30, 2025 (the “Form 10-K”).

Current wording

The preparation of our financial statements in conformity with accounting principles generally accepted in the U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The application of the following accounting policies, which are important to our financial position and results of operations, requires significant judgments and estimates on the part of management. As described more fully below, these estimates bear the risk of change due to the inherent uncertainty of the estimate. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. We believe that the following discussion addresses our most critical accounting policies, which are those that are most important to the portrayal of our financial condition and results of operations and require management's most difficult, subjective and complex judgments. For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 1 to the audited consolidated financial statements and related notes included as Exhibit 99.1 to the Legacy Lionsgate Studios Annual Report on Form 10-K for the fiscal year ended March 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on May 30, 2025 (the “Form 10-K”).

Previous wording

Capitalized costs for films or television programs are predominantly monetized individually.

Current wording

Film and Television Costs. Capitalized costs for films or television programs are predominantly monetized individually.

Previous wording

Estimate of Fair Value. The fair value is determined based on a discounted cash flow analysis of the cash flows directly attributable to the title. For motion pictures intended for theatrical release, the discounted cash flow analysis used in the impairment evaluation prior to theatrical release is subjective and the key inputs include estimates of future anticipated revenues, estimates of box office performance, which may differ from future actual results. These estimates are based in part on the historical performance of similar films, test audience results when available, information regarding competing film releases, and critic reviews. For television programs, the discounted cash flow analysis used in the impairment evaluation includes key inputs such as estimates of future anticipated revenue, as discussed above. See further discussion of Valuation Assumptions below.

Current wording

Estimate of Fair Value. The fair value is determined based on a discounted cash flow analysis of the cash flows directly attributable to the title. For motion pictures intended for theatrical release, the discounted cash flow analysis used in the impairment evaluation prior to theatrical release is subjective and the key inputs include estimates of future anticipated revenues and estimates of box office performance, which may differ from future actual results. These estimates are based in part on the historical performance of similar films, test audience results when available, information regarding competing film releases, and critic reviews. For television programs, the discounted cash flow analysis used in the impairment evaluation includes key inputs such as estimates of future anticipated revenue, as discussed above. See further discussion of Valuation Assumptions below.

Previous wording

Revenue from the theatrical release of feature films are treated as sales or usage-based royalties and recognized starting at the exhibition date and based on our participation in box office receipts of the theatrical exhibitor.

Current wording

Revenue from the theatrical release of feature films is treated as sales or usage-based royalties and recognized starting at the exhibition date and based on our participation in box office receipts of the theatrical exhibitor.

Previous wording

Revenue from commissions are recognized as such services are provided.

Current wording

Revenue from commissions is recognized as such services are provided.

Previous wording

Goodwill. At June 30, 2025, the carrying value of goodwill was $844.1 million. Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (component level). Reporting units are determined by the discrete financial information available for the component and whether that information is regularly reviewed by segment management. Components are aggregated into a single reporting unit if they share similar economic characteristics. Our reporting units for purposes of goodwill impairment testing, along with their respective goodwill balances at June 30, 2025, were Motion Picture (goodwill of $396.9 million), our Television (goodwill of $318.6 million) and Talent Management (goodwill of $128.6 million) businesses, both of which are part of our Television Production segment.

Current wording

Goodwill. As of September 30, 2025, the carrying value of goodwill was $845.2 million. Goodwill is allocated to our reporting units, which are our operating segments or one level below our operating segments (component level). Reporting units are determined by the discrete financial information available for the component and whether that information is regularly reviewed by segment management. Components are aggregated into a single reporting unit if they share similar economic characteristics. Our reporting units for purposes of goodwill impairment testing, along with their respective goodwill balances as of September 30, 2025, were Motion Picture (goodwill of $396.9 million), our Television (goodwill of $355.3 million) and Talent Management (goodwill of $93.0 million) businesses, both of which are part of our Television Production segment.

Previous wording

During the three months ended June 30, 2025, there were no events or circumstances that rose to the level that would indicate that it is more-likely-than not that the fair value of a reporting unit is less than its carrying value.

Current wording

During the three and six months ended September 30, 2025, there were no events or circumstances that rose to the level that would indicate that it is more-likely-than not that the fair value of a reporting unit is less than its carrying value.

Previous wording

Income Taxes. We are subject to federal and state income taxes in the U.S., and in several foreign jurisdictions. We record deferred tax assets related to net operating loss carryforwards and certain temporary differences, net of applicable reserves in these jurisdictions. We recognize a future tax benefit to the extent that realization of such benefit is more likely than not on a jurisdiction-by-jurisdiction basis; otherwise, a valuation allowance is applied. In order to realize the benefit of our deferred tax assets, we will need to generate sufficient taxable income in the future in each of the jurisdictions which have these deferred tax assets. However, the assessment as to whether there will be sufficient taxable income in a jurisdiction to realize our net deferred tax assets in that jurisdiction is an estimate which could change in the future depending primarily upon the actual performance of our Company. We will be required to continually evaluate the more likely than not assessment that our net deferred tax assets will be realized, and if operating results deteriorate in a particular jurisdiction, we may need to record a valuation allowance for all or a portion of our deferred tax assets through a charge to our income tax benefit (provision). As of June 30, 2025, we had a valuation allowance of $1,510.4 million against certain U.S. and foreign deferred tax assets that may not be realized on a more likely than not basis.

Current wording

Income Taxes. We are subject to federal and state income taxes in the U.S., and in several foreign jurisdictions. We record deferred tax assets related to net operating loss carryforwards and certain temporary differences, net of applicable reserves in these jurisdictions. We recognize a future tax benefit to the extent that realization of such benefit is more likely than not on a jurisdiction-by-jurisdiction basis; otherwise, a valuation allowance is applied. In order to realize the benefit of our deferred tax assets, we will need to generate sufficient taxable income in the future in each of the jurisdictions which have these deferred tax assets. However, the assessment as to whether there will be sufficient taxable income in a jurisdiction to realize our net deferred tax assets in that jurisdiction is an estimate which could change in the future depending primarily upon the actual performance of our Company. We will be required to continually evaluate the more likely than not assessment that our net deferred tax assets will be realized, and if operating results deteriorate in a particular jurisdiction, we may need to record a valuation allowance for all or a portion of our deferred tax assets through a charge to our income tax benefit (provision). As of September 30, 2025, we had a valuation allowance of $1,536.4 million against certain U.S. and foreign deferred tax assets that may not be realized on a more likely than not basis.

Previous wording

The following table sets forth our unaudited condensed consolidated results of operations from continuing operations for the three months ended June 30, 2025 and 2024:

Current wording

The following table sets forth our unaudited condensed consolidated results from continuing operations for the three months ended September 30, 2025 and 2024:

Previous wording

(1) During the first quarter of fiscal 2026, the Company began reflecting the results of operations of the streaming platform in India within Motion Picture as such operations are not a part of the disposal group of the Starz Business. Accordingly, the following amounts were reclassified from the former Media Networks segment to the Motion Picture segment in the three months ended June 30, 2024 to conform to the current period presentation: (i) revenue of $2.3 million; (ii) direct operating expense of $1.8 million; (iii) distribution and marketing expense of $0.7 million; and (iv) general and administration expense of $0.7 million, which resulted in gross contribution of $0.2 million and segment loss of $0.9 million reclassified.

Current wording

(1) During the first quarter of fiscal 2026, the Company began reflecting the results of operations of its streaming platform in India within the Motion Picture segment as such operations are not a part of the disposal group of the Starz Business. Accordingly, the following amounts were reclassified from the former Media Networks segment to the Motion Picture segment in the three months ended September 30, 2024 to conform to the current period presentation: (i) revenue of $2.3 million; (ii) direct operating expense of $1.8 million; (iii) distribution and marketing expense of $0.7 million; and (iv) general and administration expense of $0.7 million, which resulted in gross contribution loss of $0.2 million and segment loss of $0.9 million reclassified.

Previous wording

Distribution and marketing expenses increased in the three months ended June 30, 2025, primarily due to higher Motion Picture theatrical P&A and Premium VOD expense associated with the theatrical slate releases in the current quarter. See further discussion in the Segment Results of Operations section below.

Current wording

Distribution and marketing expenses decreased in the three months ended September 30, 2025, primarily due to lower Motion Picture theatrical P&A and Premium VOD expense associated with the theatrical slate releases in the current quarter. See further discussion in the Segment Results of Operations section below.

Previous wording

(1) Motion Picture general and administrative expenses in the three months ended June 30, 2024 reflect the reclassification of $0.7 million from the former Media Networks segment to conform to the current period presentation.

Current wording

(1) Motion Picture general and administrative expenses in the three months ended September 30, 2024 reflect the reclassification of $2.7 million from the former Media Networks segment to conform to the current period presentation.

Previous wording

Depreciation and Amortization Expense. Depreciation and amortization of $4.4 million for the three months ended June 30, 2025 decreased $0.2 million from $4.6 million in the three months ended June 30, 2024 due to lower amortization of intangible assets expense of $0.2 million.

Current wording

Depreciation and Amortization Expense. Depreciation and amortization of $4.4 million for the three months ended September 30, 2025 increased by $0.2 million from $4.2 million in the three months ended September 30, 2024.

Previous wording

Restructuring and Other. Restructuring and other decreased $22.9 million in the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, and includes restructuring and severance costs and certain transaction and other costs, when applicable. Restructuring and other costs were as follows for the three months ended June 30, 2025 and 2024 (see Note 15 to our unaudited condensed consolidated financial statements):

Current wording

Restructuring and Other. Restructuring and other increased $21.0 million in the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, and includes restructuring and severance costs and certain transaction and other costs, when applicable. Restructuring and other costs were as follows for the three months ended September 30, 2025 and 2024 (see Note 15 to our unaudited condensed consolidated financial statements):

Previous wording

(2)Other interest expense includes payments associated with certain film related obligations (Production Tax Credit Facility, Film Library Facility, Backlog Facility and other, see Note 8 to our unaudited condensed consolidated financial statements), interest expense associated with our 3 Arts Entertainment Credit Facility and payments and receipts associated with the Company's interest rate swaps (see Note 18 to our unaudited condensed consolidated financial statements).

Current wording

(2)Other interest expense includes payments associated with certain film related obligations (Production loans, Production Tax Credit Facility, Film Library Facility, Backlog Facility and other - see Note 8 to our unaudited condensed consolidated financial statements), interest expense associated with our 3 Arts Entertainment Credit Facility, payments and receipts associated with interest rate swaps along with the noncash amortization of unrealized gains in accumulated other comprehensive income related to dedesignated interest rate swaps which are being amortized to interest expense (see Note 18 to our unaudited condensed consolidated financial statements), and noncash amortization of debt issuance costs.

Previous wording

Other Losses, net. Other losses, net of $17.0 million for the three months ended June 30, 2025 increased as compared to other losses, net of $1.4 million for the three months ended June 30, 2024. The increase was due to losses related to foreign currency during the three months ended June 30, 2025 as compared to gains related to foreign currency during the three months ended June 30, 2024, partially offset by a decrease in losses related to our monetization of accounts receivable programs (see Note 19 to our unaudited condensed consolidated financial statements).

Current wording

Other Gain (Losses), net. Other gain (losses) was a net gain of $3.2 million for the three months ended September 30, 2025 as compared to a net loss of $13.8 million for the three months ended September 30, 2024. The change was due to gains related to foreign currency during the three months ended September 30, 2025 as compared to losses related to foreign currency during the three months ended September 30, 2024, partially offset by a decrease in losses related to our monetization of accounts receivable programs (see Note 19 to our unaudited condensed consolidated financial statements).

Previous wording

Equity Interests Income (Loss). Equity interests loss of $1.2 million in the three months ended June 30, 2025 compared to equity interests income of $0.9 million in the three months ended June 30, 2024 is due to higher losses recognized during the current quarter.

Current wording

Equity Interests Loss. Equity interests loss of $1.9 million increased in the three months ended September 30, 2025 compared to equity interests loss of $0.1 million in the three months ended September 30, 2024 due to greater losses generated by our equity method investees.

Previous wording

Income Tax Provision. We had an income tax provision of $6.4 million in the three months ended June 30, 2025, compared to an income tax provision of $5.6 million in the three months ended June 30, 2024. Our income tax provision differs from the U.S. federal statutory income tax rate of 21% multiplied by income (loss) before taxes due to the mix of our earnings across the various jurisdictions in which our operations are conducted, changes in valuation allowances against our deferred tax assets, and certain minimum income and foreign withholding taxes.

Current wording

Income Tax Provision. We had an income tax provision of $1.8 million in the three months ended September 30, 2025, compared to an income tax provision of $3.9 million in the three months ended September 30, 2024. Our income tax provision differs from the U.S. federal statutory income tax rate of 21% multiplied by income (loss) before taxes due to the mix of our earnings across the various jurisdictions in which our operations are conducted, changes in valuation allowances against our deferred tax assets, and certain minimum income and foreign withholding taxes.

Previous wording

Net Loss Attributable to Lionsgate Studios Corp. Shareholders. Net loss attributable to our shareholders for the three months ended June 30, 2025 was $108.9 million, or basic and diluted net loss per common share of $0.40 on 272.3 million weighted average common shares outstanding. This compares to net loss attributable to our shareholders for the three months ended June 30, 2024 of $59.4 million, or basic and diluted net loss per common share of $0.24 on 245.6 million weighted average common shares outstanding.

Current wording

Net Loss Attributable to Lionsgate Studios Corp. Shareholders. Net loss attributable to our shareholders for the three months ended September 30, 2025 was $113.5 million, or basic and diluted net loss per common share of $0.39 on 289.2 million weighted average common shares outstanding. This compares to net loss attributable to our shareholders for the three months ended September 30, 2024 of $163.3 million, or basic and diluted net loss per common share of $0.66 on 249.3 million weighted average common shares outstanding.

Previous wording

International revenue increased $10.7 million, or 15.2%, in the three months ended June 30, 2025, as compared to the three months ended June 30, 2024 due to an increase from Lionsgate Original Releases of $16.0 million due to higher revenue generated from our theatrical slate titles released in the current quarter for Ballerina: From the World of John Wickand Shadow Force. The increase was partially offset by a decrease in revenue from our acquired library titles.

Current wording

International revenue decreased $74.1 million, or 49.3%, in the three months ended September 30, 2025, as compared to the three months ended September 30, 2024 due to a decrease from Lionsgate Original Releases of $71.7 million due to higher revenue generated from our theatrical slate titles released in the prior year’s quarter for Borderlandsand The Killer’s Games. The decrease was partially offset by revenue generated by the release of Ballerina: From the World of John Wick in the current quarter.

Previous wording

Direct Operating Expense. The decrease in direct operating expenses was due to lower Motion Picture revenue. The increase in direct operating expenses as a percentage of revenue is driven by the performance and costs of the titles released during the three months ended June 30, 2025. There were no write-downs in investments in film included in Motion Picture segment direct operating expense in the three months ended June 30, 2025, as compared to $0.3 million in the three months ended June 30, 2024.

Current wording

Direct Operating Expense. The decrease in direct operating expenses was due to lower Motion Picture revenue. The decrease in direct operating expenses as a percentage of revenue is driven by the performance and costs of the titles released during the three months ended September 30, 2025. There were no write-downs in investments in film included in Motion Picture segment direct operating expense in the three months ended September 30, 2025, as compared to $18.3 million in the three months ended September 30, 2024.

Previous wording

Distribution and Marketing Expense. The increase in distribution and marketing expense in the three months ended June 30, 2025 was due to higher theatrical P&A and Premium VOD expense associated with the theatrical slate releases in the current quarter. In the three months ended June 30, 2025 approximately $12.3 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $15.3 million in the three months ended June 30, 2024 in the Motion Picture segment.

Current wording

Distribution and Marketing Expense. The decrease in distribution and marketing expense in the three months ended September 30, 2025 was primarily due to lower theatrical P&A and Premium VOD expense associated with the theatrical slate releases in the current quarter. In the three months ended September 30, 2025 approximately $21.0 million of P&A and Premium VOD expense was incurred in advance for films to be released in subsequent quarters, compared to approximately $16.2 million in the three months ended September 30, 2024 in the Motion Picture segment.

Previous wording

Gross Contribution. Gross contribution of the Motion Picture segment for the three months ended June 30, 2025 decreased as compared to the three months ended June 30, 2024 as a result of lower Motion Picture revenue and higher distribution and marketing expenses, partially offset by lower Motion Picture direct operating expenses.

Current wording

Gross Contribution. Gross contribution of the Motion Picture segment for the three months ended September 30, 2025 increased as compared to the three months ended September 30, 2024 as a result of lower Motion Picture direct operating expenses and lower distribution and marketing expenses, partially offset by lower Motion Picture revenue.

Previous wording

The primary component of Television Production revenue is domestic television revenue. Domestic television revenue increased in the three months ended June 30, 2025 due to a greater number of television episodes delivered.

Current wording

The primary component of Television Production revenue is domestic television revenue. Domestic television revenue decreased in the three months ended September 30, 2025 due to a decrease in the number of television episodes delivered.

Previous wording

Direct Operating Expense. Direct operating expense of the Television Production segment in the three months ended June 30, 2025 increased $37.6 million, or 18.6% due to the increase in Television Production revenues. Direct operating expenses as a percentage of television production revenue slightly decreased primarily due to the mix of titles generating revenue in the current quarter as compared to the prior year’s quarter.

Current wording

Direct Operating Expense. Direct operating expense of the Television Production segment in the three months ended September 30, 2025 decreased $207.8 million, or 56.6% due to the decrease in Television Production revenues. Direct operating expenses as a percentage of television production revenue decreased primarily due to the mix of titles generating revenue in the current quarter as compared to the prior year’s quarter.

Previous wording

Gross Contribution. Gross contribution of the Television Production segment for the three months ended June 30, 2025 increased as compared to the three months ended June 30, 2024, due to increased television production revenue, partially offset by higher direct operating expenses.

Current wording

Gross Contribution. Gross contribution of the Television Production segment for the three months ended September 30, 2025 decreased as compared to the three months ended September 30, 2024, primarily due to lower Television Production revenue, partially offset by lower direct operating expenses.

Previous wording

(1) During the first quarter of fiscal 2026, the Company began reflecting the results of operations of its streaming platform in India within the Motion Picture segment as such operations are not a part of the disposal group of the Starz Business. Accordingly, revenue of $2.3 million was reclassified from the former Media Networks segment to the Motion Picture segment in the three months ended June 30, 2024 to conform to the current period presentation.

Current wording

(1) During the first quarter of fiscal 2026, the Company began reflecting the results of operations of its streaming platform in India within the Motion Picture segment as such operations are not a part of the disposal group of the Starz Business. Accordingly, revenue of $4.6 million was reclassified from the former Media Networks segment to the Motion Picture segment in the six months ended September 30, 2024 to conform to the current period presentation.

Previous wording

Revenues. Consolidated revenues increased $39.0 million in the three months ended June 30, 2025 reflecting lower intersegment eliminations of $73.9 million and an increase of $47.4 million from Television Productions, offset by a decrease of $82.3 million from Motion Picture. Intersegment eliminations relate to the licensing of products from our Studio Business to the former Media Networks segment prior to the Starz Separation.

Current wording

Revenues. Consolidated revenues decreased $89.9 million in the six months ended September 30, 2025 reflecting lower intersegment eliminations of $295.8 million and a decrease of $214.9 million and $170.8 million from Motion Picture and Television Productions, respectively. Intersegment eliminations relate to the licensing of products from our Studio Business to the former Media Networks segment prior to the Starz Separation.

Previous wording

Motion Picture revenue decreased $82.3 million due to lower television revenue, digital media home entertainment revenue and theatrical revenue, partially offset by increased international revenue.

Current wording

Motion Picture revenue decreased $214.9 million due to lower television revenue, digital media home entertainment revenue and international revenue.

Previous wording

Television Production revenue increased $47.4 million due to increased home entertainment digital revenue, international revenue, and domestic television revenue, which was offset by decreases from other revenue.

Current wording

Television Production revenue decreased $170.8 million due to lower domestic television revenue, international revenue and other revenue.

Previous wording

The decrease in intersegment eliminations of $73.9 million is due to lower Motion Picture and Television Production intersegment revenues from licenses of motion pictures and original series to the former Media Networks segment prior to the Starz Separation as discussed above. Following the Starz Separation, revenue from licenses to Starz are not eliminated from the Company’s consolidated results from continuing operations. See further discussion in the Segment Results of Operations section below.

Current wording

The increase in intersegment eliminations of $295.8 million is due to lower Motion Picture and Television Production intersegment revenues from licenses of motion pictures and original series to the former Media Networks segment prior to the Starz Separation as discussed above. Following the Starz Separation, revenue from licenses to Starz are not eliminated from the consolidated results from continuing operations. See further discussion in the Segment Results of Operations section below.

Previous wording

Direct operating expenses increased in the three months ended June 30, 2025, primarily due to higher direct operating expenses for our Television Production segment, lower intersegment eliminations, and increased other direct operating expense, partially offset by a decrease in direct operating expense for our Motion Picture segment. The decrease in intersegment eliminations is primarily due to lower Motion Picture and Television Production intersegment revenue from licenses of motion pictures and original series, respectively, to the former Media Networks segment prior to the Starz Separation, as discussed above. The increase of expenses for the Television Production segment was due to increased Television Production revenues. See further discussion in the Segment Results of Operations section below.

Current wording

Direct operating expenses decreased in the six months ended September 30, 2025, primarily due to lower direct operating expenses for our Television Production and Motion Picture segment and a decrease in intersegment eliminations. The decrease of expenses for the Television Production and Motion Picture segments was due to decreased revenue generated in each segment. The decrease in intersegment eliminations is primarily due to lower Motion Picture and Television Production intersegment revenue from licenses of motion pictures and original series, respectively, to the former Media Networks segment prior to the Starz Separation, as discussed above. See further discussion in the Segment Results of Operations section below.

Previous wording

Other. Other direct operating expense in the three months ended June 30, 2025 and 2024 includes rent cost for production facilities that were unutilized as a result of the industry strikes amounting to $5.4 million and $5.2 million, respectively, which was not allocated to the segments, and is included in direct operating expense. In addition, other direct operating expense in the three months ended June 30, 2024 includes a benefit from insurance recoveries on COVID related charges.

Current wording

Other. Other direct operating expense in the six months ended September 30, 2025 and 2024 includes rent cost for production facilities that were unutilized as a result of the industry strikes amounting to $11.5 million and $10.5 million, respectively, which was not allocated to the segments, and is included in direct operating expense. In addition, the six months ended September 30, 2024 includes a benefit from insurance recoveries on COVID related charges.

Previous wording

General and administrative expenses decreased in the three months ended June 30, 2025, resulting from decreased share-based compensation expense and Studio Business general and administrative expenses. See further discussion in the Segment Results of Operations section below.

Current wording

General and administrative expenses decreased in the six months ended September 30, 2025, resulting from decreased Studio Business and Corporate general and administrative expenses and share-based compensation expense. See further discussion in the Segment Results of Operations section below.