Financial Analysis

Contingencies From time to time, the Company is involved in certain claims and legal proceedings arising in the normal course of business. The Company establishes an accrued liability for claims and legal proceedings when the Company determines that a loss is both probable and the amount of the loss can be reasonably estimated. Once established, accruals are adjusted from time to time, as appropriate, in light of additional information. The amount of any loss ultimately incurred in relation to matters for which an accrual has been established may be higher or lower than the amounts accrued for such matters. The Company expenses legal fees as incurred. Claims and legal proceedings may be brought against the Company without merit, are inherently uncertain, are difficult to predict, and the Companys view on these matters may change as events unfold. Reasonably possible losses, if any, are not estimable, however, based on our current understanding and evaluation of the relevant facts and circumstances, as of September 30, 2025, the Company is not a party to any pending claims or legal proceedings for which management believes the resolution would have a material adverse effect on the Companys financial position, results of operations or cash flows, and is not aware of any other claims that it believes could, individually or in the aggregate, have a material adverse effect on the Company's financial position, results of operations or cash flows. For additional detail regarding cer …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Debt Debt is summarized as follows: September 30, 2025 March 31, 2025 (Amounts in millions) Corporate debt: Term Loan A $ 300.0 $ 5.5% Senior Notes (1) 325.1 715.0 Unamortized debt issuance costs (12.6) (15.1) Total debt, net 612.5 699.9 Less current portion of debt (2) (3.8) Non-current portion of debt $ 608.7 $ 699.9 _______________ (1) Amounts as of September 30, 2025 and March 31, 2025 include the $325.1 million of the 5.5% Senior Notes not exchanged as discussed below, and amounts as of March 31, 2025 also include $389.9 million of the Exchange Notes. In connection with the Separation, a wholly owned subsidiary of New Lionsgate assumed the Exchange Notes in exchange for cash consideration and the initial Starz issuer was released and discharged from all obligations thereunder. See Changes Upon Completion of the Separation below. (2) Amount includes the current portion of the $300.0 million senior secured term loan credit facility (""Term Loan A"") recorded within Current portion of debt in the unaudited condensed consolidated balance sheet as of September 30, 2025. Starz Credit Agreement On May 6, 2025, in connection with the consummation of the Separation, Starz entered into a new credit agreement with Starz Capital Holdings LLC, as borrower (the Borrower), the guarantors referred to therein, the lenders referred to therein and JPMorgan Chase Bank, N.A., as administrative agent. The Starz Credit Agreement provides for (i) a $300.0 million senior secured term loan credi …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

Revenue by segment is as follows: Three Months Ended Six Months Ended September 30, September 30, 2025 2024 2025 2024 (Amounts in millions) (Amounts in millions) Revenue Starz Networks $ 320.9 $ 342.9 $ 640.6 $ 688.2 International (1) 4.0 6.3 $ 320.9 $ 346.9 $ 640.6 $ 694.5 _____________________ (1) Includes the operations in India and Southeast Asia for the six months ended September 30, 2024. …

DisaggregationOfRevenueTableTextBlock · excerpt; the full note is in the filing

"Capital Stock Common Shares The Company has an unlimited number of authorized common shares as of September 30, 2025. Share-based compensation expense from continuing operations, by expense category, consisted of the following: Three Months Ended Six Months Ended September 30, September 30, 2025 2024 2025 2024 (Amounts in millions) (Amounts in millions) Share-based compensation expense: Other operating expense $ 0.7 $ 1.1 $ 1.6 $ 1.9 General and administration 3.0 3.0 7.3 7.4 Restructuring and other 0.2 0.3 2.4 0.3 $ 3.9 $ 4.4 $ 11.3 $ 9.6 During the six months ended September 30, 2025, the Compensation Committee of the Company's Board of Directors approved a modification of equity awards in connection with the Separation. In June 2025, the Compensation Committee of the Company's Board of Directors approved a cash payment of $18 million in lieu of share issuance for the restricted share units vesting during the three months ended September 30, 2025. For the three months ended September 30, 2024, share-based compensation expense reflects the impact of the accelerated vesting schedules for certain equity awards pursuant to severance arrangements. The Company granted 176,695 restricted share units (""RSUs"") at a weighted average grant date fair value of $14.64 during the six months ended September 30, 2025."

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Fair Value Measurements Fair Value Accounting guidance and standards about fair value define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair Value Hierarchy Fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instruments categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The accounting guidance and standards establish three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities. The following table sets forth the carrying values and fair values of the Companys outstanding debt, programming notes, production loans and der …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Income Taxes The income tax provision for the six months ended September 30, 2025 was calculated by estimating the Companys annual effective tax rate (estimated annual tax provision divided by estimated annual income before income taxes), and then applying the effective tax rate to income (loss) before income taxes for the period, plus or minus the tax effects of items that relate discretely to the period, if any. The Starz Businesss U.S. operations and certain of its non-U.S. operations historically have been included in the income tax returns of Lionsgate or its subsidiaries that may not be part of the Starz Business. For the six months ended September 30, 2024, income taxes were calculated as if the Starz Business files income tax returns on a standalone basis, including assumptions regarding the allocation of consolidated tax attributes. The Companys income tax provision differs from the federal statutory income tax rate applied to income (loss) before taxes due to the mix of earnings generated across the various jurisdictions in which operations are conducted. The Companys income tax provision for the six months ended September 30, 2025 and 2024 were impacted by changes in the valuation allowances against certain U.S. and foreign deferred tax assets, net of applicable deferred tax liabilities. The Companys income tax provision can be affected by many factors, including the overall level of pre-tax income, the mix of pre-tax income generated across the various jurisdictio …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Recent Accounting Pronouncements Internal-Use Software : In September 2025, the FASB issued ASU 2025-06, which modernizes the accounting guidance for internal-use software under ASC 350-40. The update eliminates the previous project stage model and introduces a principles-based framework that better aligns with contemporary software development practices. Under the new guidance, entities may begin capitalizing internal-use software costs when two conditions are met: (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used for its intended purpose (the probable-to-complete threshold). The ASU also consolidates website development cost guidance into ASC 350-40 and clarifies disclosure requirements for capitalized software costs. This guidance is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures. Income Taxes: In December 2023, the FASB issued guidance which expanded income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Additionally, this guidance required all public business entities to disaggregate disclosures by …

NewAccountingPronouncementsPolicyPolicyTextBlock · excerpt; the full note is in the filing

Due To/From LG Studios Business Certain Transactions with Old Lionsgate As described in Note 1, prior to the Studio Separation, Old Lionsgate utilized a centralized approach to cash management. Cash generated by the Company or borrowed under certain debt obligations was routinely transferred into accounts managed by Old Lionsgates centralized treasury function which was then transferred to the Company or the LG Studios Business to fund operating activities when needed. Because of this centralized approach to cash management, financial transactions for cash movement, except for cash settlement of specific payables with Old Lionsgate, were accounted for through the net parent investment account. Settlement of payables and receivables with Old Lionsgate when due were also accounted for through the net parent investment account. Net parent investment is presented in the accompanying unaudited condensed consolidated statements of equity. Settlements of amounts receivable and accounts payable when due through the net parent investment account are reflected as cash payments or receipts for the applicable operating transaction within operating activities in the accompanying unaudited condensed consolidated statements of cash flows, with the net change in parent net investment included within financing activities in the accompanying unaudited condensed consolidated statements of cash flows. Intercompany Revolver : On May 13, 2024, LGAC International LLC, a Delaware limited liability c …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

Restructuring and Other Restructuring and other includes restructuring costs, and certain transaction-related and other expenses. During the three and six months ended September 30, 2025 and 2024, the Company also incurred certain other unusual charges and benefits. The following table sets forth restructuring and other and these other unusual charges: Three Months Ended Six Months Ended September 30, September 30, 2025 2024 2025 2024 (Amounts in millions) (Amounts in millions) Restructuring and other: Transaction and other costs $ 4.8 $ 2.9 $ 9.3 $ 2.9 Content recoveries (4.3) (0.3) (4.9) Share-based compensation 0.2 0.3 2.4 0.3 $ 5.0 $ (1.1) $ 11.4 $ (1.7) …

RestructuringAndRelatedActivitiesDisclosureTextBlock · excerpt; the full note is in the filing

Revenue Revenue by segment is as follows: Three Months Ended Six Months Ended September 30, September 30, 2025 2024 2025 2024 (Amounts in millions) (Amounts in millions) Revenue Starz Networks $ 320.9 $ 342.9 $ 640.6 $ 688.2 International (1) 4.0 6.3 $ 320.9 $ 346.9 $ 640.6 $ 694.5 _____________________ (1) Includes the operations in India and Southeast Asia for the six months ended September 30, 2024. Remaining Revenue Performance Obligations Remaining revenue performance obligations represent deferred revenue included on the balance sheet. Revenue expected to be recognized in the future related to performance obligations that are unsatisfied as of September 30, 2025 are as follows: Rest of Year Ending December 31, Year Ending December 31, 2025 2026 2027 Thereafter Total (Amounts in millions) Remaining revenue performance obligations $ 27.8 13.7 $ 41.5 The above table does not include estimates of variable consideration for transactions involving sales or usage-based royalties in exchange for licenses of intellectual property. Accounts Receivable and Deferred Revenue The timing of revenue recognition, billings and cash collections affects the recognition of accounts receivable and deferred revenue. See the accompanying unaudited condensed consolidated balance sheets or Note 14, Additional Financial Information , for accounts receivable and deferred revenue balances at September 30, 2025 and 2024. Accounts Receivable. Accounts receivable is presented net of a provision for cr …

RevenueFromContractWithCustomerTextBlock · excerpt; the full note is in the filing

"Segment Information The Companys reportable segments have been determined based on the distinct nature of their operations, the Company's internal management structure, and the financial information that is evaluated regularly by the Company's chief operating decision maker (""CODM"") in deciding how to allocate resources to an individual segment and in assessing performance. Our Chief Executive Officer (""CEO"") is the CODM. As described in Note 1, as of September 30, 2025, the Company has one reportable segment: Starz Networks, which includes our operations in the U.S. and Canada. The continuing operations outside the U.S. and Canada , which through March 31, 2025 included operations in India and Southeast Asia, is reported as International and is disclosed to provide a reconciliation of segment amounts to amounts appearing in the accompanying financial statements. As described in Note 1, and effective April 1, 2025, we transferred our operations in India and Southeast Asia to New Lionsgate. Segment information is presented in the table below: Three Months Ended September 30, 2025 2024 Starz Networks Starz Networks International Total (Amounts in millions) Revenue OTT revenue $ 222.8 $ 229.9 $ 2.3 $ 232.2 Linear and other revenue 98.1 113.0 1.7 114.7 Total revenue 320.9 342.9 4.0 346.9 Operating expenses: Programming amortization 156.8 179.5 2.6 182.1 Payroll expense (1) 32.0 28.6 0.5 29.1 Advertising and marketing 78.4 75.2 0.3 75.5 Other (2) 35.6 36.8 0.3 37.1 Depreciati …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Subsequent Events There were no subsequent events that occurred after September 30, 2025, through the date of this filing that would require disclosure in the unaudited condensed consolidated financial statements.

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