Dailystocks.com - Ticker-based level links to all the information for the Stocks you own. Portal for Daytrading and Finance and Investing Web Sites
DailyStocks.com
What's New
Site Map
Help
FAQ
Log In
Home Quotes/Data/Chart Warren Buffett Fund Letters Ticker-based Links Education/Tips Insider Buying Index Quotes Forums Finance Site Directory
OTCBB Investors Daily Glossary News/Edtrl Company Overviews PowerRatings China Stocks Buy/Sell Indicators Company Profiles About Us
Nanotech List Videos Magic Formula Value Investing Daytrading/TA Analysis Activist Stocks Wi-fi List FOREX Quote ETF Quotes Commodities
Make DailyStocks Your Home Page AAII Ranked this System #1 Since 1998 Bookmark and Share


Welcome!
Welcome to the investing community at DailyStocks where we believe we have some of the most intelligent investors around. While we have had an online presence since 1997 as a portal, we are just beginning the forums section now. Our moderators are serious investors with MBA and CFAs with practical experience wwell-versed in fundamental, value, or technical investing. We look forward to your contribution to this community.

Recent Topics
Article by DailyStocks_admin    (02-18-09 09:53 AM)

Filed with the SEC from Feb 5 to Feb 11:

Lions Gate Entertainment (LGF)
Billionaire activist investor Carl Icahn and his affiliates raised their stake to about 12.24 million shares (10.56%) by buying 1.04 million at $4.53 a share.

BUSINESS OVERVIEW

Lions Gate Entertainment Corp. (“Lionsgate,” the “Company,” “we,” “us” or “our”) is a leading next generation filmed entertainment studio with a diversified presence in motion pictures, television programming, home entertainment, family entertainment, video-on-demand and digitally delivered content. We release approximately 18 to 20 motion pictures theatrically per year, which include films we develop and produce in-house, as well as films that we acquire from third parties. We also have produced approximately 76 hours of television programming on average for the last three years, primarily prime time television series for the cable and broadcast networks. Our disciplined approach to acquisition, production and distribution is designed to maximize our profit by balancing our financial risks against the probability of commercial success of each project. We currently distribute our library of approximately 8,000 motion picture titles and approximately 4,000 television episodes and programs directly to retailers, video rental stores, and pay and free television channels in the United States (the “U.S.”), Canada, the United Kingdom (the “UK”) and Ireland, through various digital media platforms, and indirectly to other international markets through our subsidiaries and various third parties.

We own interests in CinemaNow, Inc., an internet video-on-demand provider (“CinemaNow”), Horror Entertainment, LLC, a multiplatform programming and content service provider (“FEARnet”), NextPoint, Inc., an online video entertainment service provider (“Break.com”), Roadside Attractions, LLC, an independent theatrical distribution company (“Roadside”), Elevation Sales Limited, a UK based home entertainment distributor (“Elevation”), and Maple Pictures Corp., a Canadian film, television and home video distributor (“Maple Pictures”).

A key element of our strategy is to acquire individual properties, including films and television programs, libraries, and entertainment studios and companies, to enhance our competitive position and generate significant financial returns. As part of this strategy, we have acquired and integrated into our business the following:


• Mandate Pictures, LLC (“Mandate Pictures”), a worldwide independent film producer, financier and distributor (acquired in September 2007);

• Debmar-Mercury, LLC (“Debmar-Mercury”), a leading independent syndicator of film and television packages (acquired in July 2006);

• Redbus Film Distribution Ltd. and Redbus Pictures (collectively, “Redbus” and currently, Lions Gate UK Ltd. (“Lionsgate UK”)), an independent UK film distributor, which provided us the ability to self-distribute our motion pictures in the UK and Ireland and included the acquisition of the Redbus library of approximately 130 films (acquired in October 2005);

• certain of the film assets and accounts receivable of Modern Entertainment, Ltd., a licensor of film rights to DVD distributors, broadcasters and cable networks (acquired in August 2005);

• Artisan Entertainment, Inc. (“Artisan Entertainment”), a diversified motion picture, family and home entertainment company (acquired in December 2003); and

• Trimark Holdings, Inc., a worldwide distributor of entertainment content (acquired in October 2000).

Our Industry

Motion Pictures

General. According to the Motion Picture Association’s U.S. Theatrical Market: 2007 Statistics , domestic box office grew to approximately $9.6 billion in 2007, compared to approximately $9.2 billion in 2006, a 5.4% increase. Although it fluctuates from year to year, the domestic motion picture exhibition industry has grown in revenues and attendance over the past ten years. In 2007, domestic admissions were approximately $1.4 billion, compared to approximately $1.39 billion in 2006. Additionally, worldwide box office reached an all time high of approximately $26.7 billion in 2007, compared to approximately $25.5 billion in 2006, a 4.9% increase. The total cost for an average “major studio” release (for Motion Picture Association of America member companies) was approximately $106.6 million (average negative costs of $70.8 million and average marketing costs of $35.9 million) in 2007, compared to approximately $100.3 million (average negative costs of $65.8 million and average marketing costs of $34.9 million) in 2006.

Competition. Major studios have historically dominated the motion picture industry. The term “major studios” is generally regarded in the entertainment industry to mean Paramount Pictures, Sony Pictures Entertainment Inc. (“Sony”), Twentieth Century Fox Film Corporation, NBC Universal, Walt Disney Studios Motion Pictures and Warner Bros. Entertainment Inc. These studios have historically produced and distributed the majority of theatrical motion pictures released annually in the U.S.

Competitors less diversified than the “major studios” include DreamWorks Animation SKG and Metro-Goldwyn-Mayer Studios Inc. These “independent” motion picture production companies, however, including many smaller production companies, have also played an important role in the worldwide feature film market. Independent films have gained wider market approval and increased share of overall box office receipts in recent years. Lionsgate is a diversified “mini-major” studio that competes directly with both major studios and independents in its various businesses, although it operates with a different business model and cost structure than the major studios.

Product Life Cycle. In general, the economic life of a motion picture consists of its exploitation in theaters and in ancillary markets such as home video, pay-per-view, pay television, broadcast television, foreign and other markets. Successful motion pictures may continue to play in theaters for more than three months following their initial release. Concurrent with their release in the U.S., motion pictures are generally released in Canada and may also be released in one or more other foreign markets. After the initial theatrical release, distributors seek to maximize revenues by releasing movies in sequential release date windows, which are generally exclusive against other non-theatrical distribution channels:

Home Video

Home video distribution involves the marketing, promotion and sale and/or lease of videocassettes and DVDs to wholesalers and retailers that then sell or rent the videocassettes and DVDs to consumers for private viewing. Growth in the home video sector has been driven by increased DVD penetration. According to estimates from the DVD Entertainment Group (“DEG”), a non-profit trade consortium, of the $23.7 billion in overall home video industry revenues during 2007, about $23.4 billion came from DVD sales and rentals (with the remainder being VHS sales and rentals). Additionally, according to the Motion Picture Association’s US Entertainment Industry: 2007 Market Statistics , DVD players were in 98.0 million U.S. households in 2007, an 86.9% penetration of television households (up from 83.8% in 2006 and 76.2% in 2005). Declining prices of DVD players, enhanced video and audio quality and special features such as inclusion of previously-deleted scenes, film commentaries and “behind the scenes” footage have all helped increase the popularity of the DVD format, sparking increased home video sales and rentals in recent years. Additionally, further growth is anticipated in coming years from the Blu-ray high definition video disk and other technological enhancements.

Television Programming

The market for television programming is composed primarily of the broadcast television networks (such as ABC, CBS, Fox and NBC), syndicators of first-run programming (such as Columbia TriStar Television Distribution and Buena Vista Television) which license programs on a station-by-station basis, and basic and pay cable networks (such as HBO, Showtime and, USA Network). Continued growth in the cable and satellite television markets has driven increased demand for nearly all genres of television programming. Key drivers will include the success of the cable industry’s bundled services, increased average revenue per user, reduced number of participants discontinuing services and accelerated ad spend growth. Increased capacity for channels on upgraded digital cable systems and satellite television has led to the launch of new networks seeking programming to compete with traditional broadcast networks as well as other existing networks.

Digital Technology

Growth in the digital market has been driven, in part, by broadband penetration. According to the Motion Picture Association’s U.S. Theatrical Market: 2007 Statistics , over 60 million American households use broadband to access the Internet. Industry-wide revenue from digital delivery and electronic sell-through is projected to grow dramatically as broadband technology proliferates, consumer acceptance increases, and content distributors refine their models.

The Company

Recent Developments

Joint Venture with Eros International. In May 2008, we announced a joint venture with Eros International Ltd., a London Stock Exchange listed leading Indian filmed entertainment studio with a global distribution network (“Eros”), for distribution of our and other English language content in original as well as dubbed language versions within South Asia including India, across all distribution formats such as cinemas, home entertainment, television and new media. The joint venture will also explore the production of Indian formats and remakes based on our and third-party film catalogues and create crossover films that will tap into India’s booming local language market as well as wider audiences outside of India. We will also acquire North American home entertainment distribution rights to 20 select titles (including Oscar nominated Eklavya and the critically acclaimed Gandhi My Father ) from Eros’s library of over 1,900 film titles.

Premium Television Channel. In April 2008, we announced a joint venture with Viacom Inc. (“Viacom”), its Paramount Pictures unit (“Paramount Pictures”), and Metro-Goldwyn-Mayer Studios Inc. (“MGM”) to create a premium television channel and video on demand service. The new venture will have access to our titles released theatrically on or after January 1, 2009. Viacom Inc. will provide operational support to the venture, including marketing and affiliate services through its MTV Networks division. Upon its expected launch in the fall of 2009, the joint venture will provide us with an additional platform to distribute our library of motion picture titles and television episodes and programs.

Mandate Pictures, LLC. On September 10, 2007, we purchased all of the membership interests of Mandate Pictures, a worldwide independent film producer, financier and distributor, responsible for such recent hits as Juno and The Grudge franchise. The aggregate cost of the acquisition was approximately $128.8 million, including liabilities assumed of $70.2 million, with amounts paid or to be paid to the selling shareholders of $58.6 million, comprised of $46.8 million in cash and 1,282,999 million in our common shares, 169,879 of which have been issued and delivered and the balance to be issued and delivered in September 2008 and March 2009, pursuant to certain holdback provisions. Of the $46.8 million cash portion of the purchase price, $44.3 million was paid at closing, $0.9 million represented estimated direct transaction costs (paid to lawyers, accountants and other consultants), and $1.6 million represented the remaining estimated cash consideration that will be paid within the next six-month period. In addition, immediately prior to the transaction, we loaned Mandate Pictures $2.9 million. The value assigned to the shares for purposes of recording the acquisition was $11.8 million and was based on the closing price of our common shares on the date of the acquisition. In addition, we may be obligated to pay additional amounts should certain films or derivative works meet certain target performance thresholds.

Société Générale de Financement du Québec. On July 30, 2007, we entered into a four-year filmed entertainment slate financing agreement with Société Générale de Financement du Québec (“SGF”), the Québec provincial government’s investment arm. SGF will finance up to 35% of production costs of television and feature film productions produced in Québec for a four-year period for an aggregate investment of up to $140 million, and we will advance all amounts necessary to fund the remaining budgeted costs. The maximum aggregate of budgeted costs over the four-year period will be $400 million, including our portion, but no more than $100 million per year. In connection with this agreement, we and SGF will proportionally share in the proceeds derived from the funded productions after we deduct a distribution fee, recoup all distribution expenses and releasing costs, and pay all applicable participations and residuals. To date, the feature film Punisher: War Zone , slated for a December 2008 release, and the sixth broadcast season of the television series The Dead Zone , have been produced in Montreal, Quebec under the terms of the SGF financing arrangement.

Maple Pictures Corp. Represents the Company’s interest in Maple Pictures, a Canadian film, television and home video distributor. Maple Pictures was formed by a director of the Company, a former Lionsgate executive and a third-party equity investor. Through July 17, 2007, the Company owned 10% of the common shares of Maple Pictures and accounted for its investment in Maple Pictures under the equity method of accounting. For the period from April 1, 2007 through July 17, 2007, the Company recorded 10% of the loss incurred by Maple Pictures amounting to approximately $0.1 million. On July 18, 2007, Maple Pictures repurchased all of the outstanding shares held by a third party investor, which increased the Company’s ownership of Maple Pictures requiring the Company to consolidate Maple Pictures for financial reporting purposes beginning on July 18, 2007.

NextPoint, Inc. On June 29, 2007, we purchased a 42% equity interest or 21,000,000 shares of the Series B Preferred Stock of Break.com. The aggregate purchase price was approximately $21.4 million, which included $0.5 million of transaction costs, by issuing 1,890,189 of our common shares. We have a call option which is exercisable at any time from June 29, 2007 until the earlier of (i) 30 months after June 29, 2007 or (ii) a year after a change of control, as narrowly defined, to purchase all, but not less than all, of the remaining 58% equity interests (excluding any subsequent dilutive events of Break.com), including in-the-money stock options, warrants and other rights, of Break.com for $58 million in cash or common stock, at our option.

Roadside Attractions, LLC. On June 26, 2007, the Company acquired a 43% equity interest in Roadside, an independent theatrical releasing company. The Company has a call option which is exercisable for a period of 90 days commencing on the receipt of certain audited financial statements for the period beginning on January 1, 2010 and ending on the third anniversary of the investment to purchase all of the remaining 57% equity interests of Roadside, at a price representative of the then fair value of the remaining interest.

Theatrical Slate Financing. On May 25, 2007, we closed a theatrical slate funding arrangement, as amended on January 30, 2008. Under this arrangement, Pride Pictures LLC (“Pride”), an unrelated entity, will fund, generally, 50% of our production, acquisition, marketing and distribution costs of theatrical feature films up to an aggregate of approximately $196 million, net of transaction costs. The funds available from Pride were generated from the issuance by Pride of $35 million of subordinated debt instruments, $35 million of equity and $134 million from a senior credit facility, which is subject to a borrowing base. We are not a party to the Pride debt obligations or their senior credit facility, and we provide no guarantee of repayment of these obligations. The percentage of the contribution may vary on certain pictures. Pride will participate in a pro rata portion of the pictures’ net profits or losses similar to a co-production arrangement based on the portion of costs funded. We will continue to distribute the pictures covered by the arrangement with a portion of net profits after all costs and our distribution fee being distributed to Pride based on their pro rata contribution to the applicable costs similar to a back-end participation on a film. To date, nine films have been theatrically released that were included in the Pride fund.

Production

Motion Pictures. Compared to the Motion Picture Association of America (the “MPAA”) major studio average production budget of $70.8 million in 2007, we have historically produced motion pictures with production budgets of $35 million or less. In fact, most of our productions have budgets of $20 million or less. Films intended

for theatrical release are generally budgeted between $5 million and $35 million (although we are willing to consider larger budgets), and films intended for release directly to video or cable television are generally budgeted between $1 million and $5 million. We take a disciplined approach to film production with the goal of producing content that we can distribute to theatrical and ancillary markets, which include home video, pay and free television on-demand services and digital media platforms, both domestically and internationally. In fiscal 2008, we produced, participated in the production of or completed or substantially completed principal photography (the phase of film production during which most of the filming takes place) on the following motion pictures:


Mandate Pictures also maintains a partnership with Ghost House Pictures, formed with filmmakers Sam Raimi and Rob Tapert as a production label dedicated to the financing, development and production of films in the horror/thriller genre. Under this partnership, Mandate Pictures is currently in production on leading filmmaker Sam Raimi’s ( Spider-Man franchise, The Evil Dead ) Drag Me To Hell for Universal Studios, starring Allison Lohman and Justin Long. Films previously released under the Ghost House banner include 30 Days of Night , The Grudge I and II , The Messengers and Boogeyman, all of which opened at number one at the box office. Mandate Pictures’ other filmmaker relationships include production deals with Oscar winner Steven Zaillian’s Film Rites and writer/director Zach Helm’s Gang of Two production company.

International Sales and Distribution. The primary components of our international business are, both on a territory by territory basis through third parties or directly through our international divisions, (i) the licensing and sale of rights in all media of our in-house theatrical titles, (ii) the licensing and sale of catalogue product or libraries of acquired titles (such as those of Artisan Entertainment and Modern Times Group), and (iii) direct distribution.

CEO BACKGROUND

Set forth below is certain information concerning our nominees for director and current directors standing for re-election or that have already been elected.

Name and Place of Residence Position Age(1)

Mark Amin
Vice Chairman and Director 54
Los Angeles, California
Michael Burns
Vice Chairman and Director 45
Los Angeles, California
Drew Craig(2)
Director 45
Calgary, Alberta
Arthur Evrensel(2)
Director 46
North Vancouver, British Columbia
Jon Feltheimer
Chief Executive Officer and Director 52
Los Angeles, California
Morley Koffman(3)(4)
Director 74
Vancouver, British Columbia
André Link
President, Chairman of the Board and Director 72
Montréal, Québec
Harald Ludwig(2)
Vice Chairman of the Board and Director 49
West Vancouver, British Columbia
G. Scott Paterson(3)
Director 40
Toronto, Ontario
Daryl Simm
Nominee for Director 53
New York, New York
Harry Sloan(3)
Director 54
Bel Air, California
Brian V. Tobin(4)
Director 49
Toronto, Ontario


(1) As of July 15, 2004.

(2) Member of Compensation Committee.

(3) Member of Audit Committee.

(4) Member of Corporate Governance and Nominating Committee.

MANAGEMENT DISCUSSION FROM LATEST 10K

Lions Gate Entertainment Corp. (“Lionsgate,” the “Company,” “we,” “us” or “our”) is a leading next generation filmed entertainment studio with a diversified presence in motion pictures, television programming, home entertainment, family entertainment, video-on-demand and digitally delivered content. We release approximately 18 to 20 motion pictures theatrically per year, which include films we develop and produce in-house, as well as films that we acquire from third parties. We also have produced approximately 76 hours of television programming on average for the last three years, primarily prime time television series for the cable and broadcast networks. Our disciplined approach to acquisition, production and distribution is designed to maximize our profit by balancing our financial risks against the probability of commercial success of each project. We currently distribute our library of approximately 8,000 motion picture titles and approximately 4,000 television episodes and programs directly to retailers, video rental stores, and pay and free television channels in the United States (the “U.S.”), Canada, the United Kingdom (the “UK”) and Ireland, through various digital media platforms, and indirectly to other international markets through our subsidiaries and various third parties.

We own interests in CinemaNow, Inc., an internet video-on-demand provider (“CinemaNow”), Horror Entertainment, LLC, a multiplatform programming and content service provider (“FEARnet”), NextPoint, Inc., an online video entertainment service provider (“Break.com”), Roadside Attractions, LLC, an independent theatrical distribution company (“Roadside”), Elevation Sales Limited, a UK based home entertainment distributor (“Elevation”), and Maple Pictures Corp., a Canadian film, television and home video distributor (“Maple Pictures”).

A key element of our strategy is to acquire individual properties, including films and television programs, libraries, and entertainment studios and companies, to enhance our competitive position and generate significant financial returns. As part of this strategy, we have acquired and integrated into our business the following:


• Mandate Pictures, LLC (“Mandate Pictures”), a worldwide independent film producer, financier and distributor (acquired in September 2007);

• Debmar-Mercury, LLC (“Debmar-Mercury”), a leading independent syndicator of film and television packages (acquired in July 2006);

• Redbus Film Distribution Ltd. and Redbus Pictures (collectively, “Redbus” and currently, Lions Gate UK Ltd. (“Lionsgate UK”)), an independent UK film distributor, which provided us the ability to self-distribute our motion pictures in the UK and Ireland and included the acquisition of the Redbus library of approximately 130 films (acquired in October 2005);

• certain of the film assets and accounts receivable of Modern Entertainment, Ltd., a licensor of film rights to DVD distributors, broadcasters and cable networks (acquired in August 2005);

• Artisan Entertainment, Inc. (“Artisan Entertainment”), a diversified motion picture, family and home entertainment company (acquired in December 2003); and

• Trimark Holdings, Inc., a worldwide distributor of entertainment content (acquired in October 2000).

Our revenues are derived from the following business segments:


• Motion Pictures, which includes “Theatrical,” “Home Entertainment,” “Television” and “International Distribution.”

Theatrical revenues are derived from the theatrical release of motion pictures in the U.S. and Canada which are distributed to theatrical exhibitors on a picture by picture basis. The financial terms that we negotiate with our theatrical exhibitors generally provide that we receive a percentage of the box office results and are negotiated on a picture by picture basis.

Home Entertainment revenues are derived primarily from the sale of video and DVD releases of our own productions and acquired films, including theatrical releases and direct-to-video releases, to retail stores and through digital media platforms. In addition, we have revenue sharing arrangements with certain rental stores which generally provide that in exchange for a nominal or no upfront sales price we share in the rental revenues generated by each such store on a title by title basis.

Television revenues are primarily derived from the licensing of our productions and acquired films to the domestic cable, free and pay television markets.

International revenues include revenues from our international subsidiaries from the licensing and sale of our productions, acquired films, our catalog product or libraries of acquired titles and revenue from our direct distribution to international markets on a territory-by-territory basis. Our revenues are derived from the U.S., Canada, UK, Australia and other foreign countries; none of the foreign countries individually comprised greater than 10% of total revenue. (See Note 16 of our accompanying consolidated financial statements.)


• Television Productions, which includes the licensing and syndication to domestic and international markets of one-hour and half-hour drama series, television movies and mini-series and non-fiction programming and revenues from the sale of television production movies or series in other media, including home entertainment and through digital media platforms.

Our primary operating expenses include the following:


• Direct Operating Expenses, which include amortization of production or acquisition costs, participation and residual expenses and provision for doubtful accounts. Participation costs represent contingent consideration payable based on the performance of the film to parties associated with the film, including producers, writers, directors or actors, etc. Residuals represent amounts payable to various unions or “guilds” such as the Screen Actors Guild, Directors Guild of America, and Writers Guild of America, based on the performance of the film in certain ancillary markets or based on the individual’s (i.e., actor, director, writer) salary level in the television market.

• Distribution and Marketing Expenses, which primarily include the costs of theatrical “prints and advertising” and of video and DVD duplication and marketing. Theatrical print and advertising represent the costs of the theatrical prints delivered to theatrical exhibitors and advertising includes the advertising and marketing cost associated with the theatrical release of the picture. Video and DVD duplication represent the cost of the video and DVD product and the manufacturing costs associated with creating the physical products. Video and DVD marketing costs represent the cost of advertising the product at or near the time of its release or special promotional advertising.

• General and Administration Expenses, which include salaries and other overhead.

Our financial results include the results of Artisan Entertainment, Lionsgate UK, Debmar-Mercury and Mandate Pictures from their acquisition dates of December 16, 2003, October 17, 2005, July 3, 2006, and September 10, 2007, respectively, onwards. Our financial results also include the results of Maple Pictures from the date of consolidation of July 18, 2007, onwards. Due to the acquisitions, the Company’s results of operations for the years ended March 31, 2008, 2007, and 2006 and financial positions as at March 31, 2008 and 2007 are not directly comparable to prior reporting periods.

Recent Developments

Mandate Pictures, LLC. On September 10, 2007, the Company purchased all of the membership interests in Mandate Pictures, a worldwide independent film producer and distributor. The Mandate Pictures acquisition brings to the Company additional experienced management personnel working within the motion picture business segment. The aggregate cost of the acquisition was approximately $128.8 million including liabilities assumed of $70.2 million, with amounts paid or to be paid to the selling shareholders of $58.6 million, comprised of $46.8 million in cash and 1,282,999 in the Company’s common shares, 169,879 of which have been issued during the quarter ended March 31, 2008 and delivered and the balance of 1,113,120 to be issued and delivered in September 2008 and March 2009, pursuant to certain holdback provisions. Of the $46.8 million cash portion of the purchase price, $44.3 million was paid at closing, $0.9 million represented estimated direct transaction costs (paid to lawyers, accountants and other consultants), and $1.6 million represented the remaining estimated cash consideration that will be paid within the next six-month period. In addition, immediately prior to the transaction,

the Company loaned Mandate Pictures $2.9 million. The value assigned to the shares for purposes of recording the acquisition was $11.8 million and was based on the closing price of the Company’s common shares on the date of the acquisition. In addition, the Company may be obligated to pay additional amounts pursuant to the purchase agreement should certain films or derivative works meet certain target performance thresholds.

The acquisition was accounted for as a purchase, with the results of operations of Mandate Pictures consolidated from September 10, 2007. Goodwill of $37.1 million represents the excess of purchase price over the preliminary estimate of fair value of the net identifiable tangible and intangible assets acquired.

Société Générale de Financement du Québec. On July 30, 2007, the Company entered into a four-year filmed entertainment slate financing agreement with Société Générale de Financement du Québec (“SGF”), the Québec provincial government’s investment arm. SGF will finance up to 35% of production costs of television and feature film productions produced in Québec for a four-year period for an aggregate investment of up to $140 million, and the Company will advance all amounts necessary to fund the remaining budgeted costs. The maximum aggregate of budgeted costs over the four-year period will be $400 million, including the Company’s portion, but no more than $100 million per year. In connection with this agreement, the Company and SGF will proportionally share in the proceeds derived from the funded productions after the Company deducts a distribution fee, recoups all distribution expenses and releasing costs, and pays all applicable participations and residuals.

Maple Pictures Corp. Represents the Company’s interest in Maple Pictures, a Canadian film, television and home video distributor. Maple Pictures was formed by a director of the Company, a former Lionsgate executive and a third party equity investor. Through July 17, 2007, the Company owned 10% of the common shares of Maple Pictures and accounted for its investment in Maple Pictures under the equity method of accounting. For the period from April 1, 2007 through July 17, 2007, the Company recorded 10% of the loss incurred by Maple Pictures amounting to approximately $0.1 million. On July 18, 2007, Maple Pictures repurchased all of the outstanding shares held by a third party investor, which increased the Company’s ownership of Maple Pictures requiring the Company to consolidate Maple Pictures for financial reporting purposes beginning on July 18, 2007. The Company had been reporting the results of Maple Pictures on a one quarter lag given its December 31 year end and the timing of the availability of its financial information. During the quarter ended March 31, 2008, Maple Pictures changed its year end to March 31 and its financial information is now available on a more timely basis; accordingly, the Company eliminated the lag in reporting the results of Maple Pictures such that the consolidated financial statements for the year ended March 31, 2008 include the results of Maple Pictures on a consolidated basis from July 18, 2007 through March 31, 2008. In accordance with EITF Issue No. 06-09, the Company has applied the change on a retrospective basis and has adjusted the results of the quarters ended December 31, 2007 and September 30, 2007, as presented in the unaudited quarterly data (see Note 20 of our accompanying consolidated financial statements) to eliminate the lag in reporting the results of Maple Pictures. For the periods prior to the quarter ended September 30, 2007, Maple Pictures was accounted for under the equity method and the impact of eliminating the lag was not material to the prior periods.

NextPoint, Inc. On June 29, 2007, the Company purchased a 42% equity interest or 21,000,000 shares of the Series B Preferred Stock of NextPoint, Inc. (“Break.com”), an online video entertainment service provider operating under the branding of “Break.com.” The aggregate purchase price was approximately $21.4 million, which included $0.5 million of transaction costs, by issuing 1,890,189 of the Company’s common shares. The Company has a call option which is exercisable at any time from June 29, 2007 until the earlier of (i) 30 months after June 29, 2007 or (ii) a year after a change of control, as narrowly defined, to purchase all, but not less than all, of the remaining 58% equity interests (excluding any subsequent dilutive events of Break.com), including in-the-money stock options, warrants and other rights, of Break.com for $58 million in cash or common stock, at the Company’s option. The Company is recording its share of the Break.com results on a one quarter lag and, accordingly, during the year ended March 31, 2008, the Company recorded 42% of the loss incurred by Break.com from the date of investment through December 31, 2007.

Roadside Attractions, LLC. Represents the Company’s 43% equity interest acquired on July 26, 2007 in Roadside Attractions, LLC (“Roadside”), an independent theatrical releasing company. The Company has a call option which is exercisable for a period of 90 days commencing on the receipt of certain audited financial statements for a period ending on the third anniversary of the investment to purchase all of the remaining 57% equity interests of Roadside, at a price representative of the then fair value of the remaining interest. The Company is recording its share of the Roadside results on a one quarter lag and, accordingly, during the year ended March 31, 2008, the Company recorded 43% of the loss incurred by Roadside from the date of investment through December 31, 2007.

Theatrical Slate Financing. On May 25, 2007, the Company closed a theatrical slate funding arrangement, as amended on January 30, 2008. Under this arrangement, Pride Pictures LLC (“Pride”), an unrelated entity, will fund, generally, 50% of the Company’s production, acquisition, marketing and distribution costs of theatrical feature films up to an aggregate of approximately $196 million, net of transaction costs. The funds available from Pride were generated from the issuance by Pride of $35 million of subordinated debt instruments, $35 million of equity and $134 million from a senior credit facility, which is subject to a borrowing base. The Company is not a party to the Pride debt obligations or their senior credit facility, and provides no guarantee of repayment of these obligations. The percentage of the contribution may vary on certain pictures. Pride will participate in a pro rata portion of the pictures net profits or losses similar to a co-production arrangement based on the portion of costs funded. The Company continues to distribute the pictures covered by the arrangement with a portion of net profits after all costs and the Company’s distribution fee being distributed to Pride based on their pro rata contribution to the applicable costs similar to a back-end participation on a film. The $134 million senior credit facility is a revolving facility for print and advertising costs, other releasing costs, and direct production and acquisition costs. Funding of direct production and acquisition cost is subject to a borrowing base calculation generally based on 90% of the estimated ultimate amounts due to Pride on previously released films, as defined in the appropriate agreements.

CRITICAL ACCOUNTING POLICIES

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 attached to the estimate. For example, accounting for films and television programs requires the Company to estimate future revenue and expense amounts which, due to the inherent uncertainties involved in making such estimates, are likely to differ to some extent from actual results. For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 2 to our audited consolidated financial statements.

Generally Accepted Accounting Principles (“GAAP”). Our consolidated financial statements have been prepared in accordance with U.S. GAAP.

Accounting for Films and Television Programs. In June 2000, the Accounting Standards Executive Committee of the American Institute of Certified Public Accountants issued Statement of Position 00-2 “Accounting by Producers or Distributors of Films” (“SoP 00-2”). SoP 00-2 establishes accounting standards for producers or distributors of films, including changes in revenue recognition, capitalization and amortization of costs of acquiring films and television programs and accounting for exploitation costs, including advertising and marketing expenses.

We capitalize costs of production and acquisition, including financing costs and production overhead, to investment in films and television programs. These costs are amortized to direct operating expenses in accordance with SoP 00-2. These costs are stated at the lower of unamortized films or television program costs or estimated fair value. These costs for an individual film or television program are amortized and participation and residual costs are accrued in the proportion that current year’s revenues bear to management’s estimates of the ultimate revenue at the beginning of the year expected to be recognized from exploitation, exhibition or sale of such film or television program over a period not to exceed ten years from the date of initial release. For previously released film or television programs acquired as part of a library, ultimate revenue includes estimates over a period not to exceed 20 years from the date of acquisition.

The Company’s management regularly reviews and revises when necessary its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value. The Company’s management estimates the ultimate revenue based on experience with similar titles or title genre, the general public appeal of the cast, actual performance (when available) at the box office or in markets currently being exploited, and other factors such as the quality and acceptance of motion pictures or programs that our competitors release into the marketplace at or near the same time, critical reviews, general economic conditions and other tangible and intangible factors, many of which we do not control and which may change. In the normal course of our business, some films and titles are more successful than anticipated and some are less successful. Accordingly, we update our estimates of ultimate revenue and participation costs based upon the actual results achieved or new information as to anticipated revenue performance such as (for home video revenues) initial orders and demand from retail stores when it becomes available. An increase in the ultimate revenue will generally result in a lower amortization rate while a decrease in the ultimate revenue will generally result in a higher amortization rate and periodically results in an impairment requiring a write down of the film cost to the title’s fair value. These write downs are included in amortization expense within direct operating expenses in our consolidated statements of operations.

Revenue Recognition. Revenue from the sale or licensing of films and television programs is recognized upon meeting all recognition requirements of SoP 00-2. Revenue from the theatrical release of feature films is recognized at the time of exhibition based on the Company’s participation in box office receipts. Revenue from the sale of videocassettes and DVDs in the retail market, net of an allowance for estimated returns and other allowances, is recognized on the later of receipt by the customer or “street date” (when it is available for sale by the customer). Under revenue sharing arrangements, rental revenue is recognized when the Company is entitled to receipts and such receipts are determinable. Revenues from television licensing are recognized when the feature film or television program is available to the licensee for telecast. For television licenses that include separate availability “windows” during the license period, revenue is allocated over the “windows.” Revenue from sales to international territories are recognized when access to the feature film or television program has been granted or delivery has occurred, as required under the sales contract, and the right to exploit the feature film or television program has commenced. For multiple media rights contracts with a fee for a single film or television program where the contract provides for media holdbacks (defined as contractual media release restrictions), the fee is allocated to the various media based on management’s assessment of the relative fair value of the rights to exploit each media and is recognized as each holdback is released. For multiple-title contracts with a fee, the fee is allocated on a title-by-title basis, based on management’s assessment of the relative fair value of each title.

Cash payments received are recorded as deferred revenue until all the conditions of revenue recognition have been met. Long-term, non-interest bearing receivables are discounted to present value.

Reserves. Revenues are recorded net of estimated returns and other allowances. We estimate reserves for video returns based on previous returns and our estimated expected future returns related to current period sales on a title-by-title basis in each of the video businesses. Factors affecting actual returns include limited retail shelf space at various times of the year, success of advertising or other sales promotions, the near term release of competing titles, among other factors. We believe that our estimates have been materially accurate in the past; however, due to the judgment involved in establishing reserves, we may have adjustments to our historical estimates in the future.

We estimate provisions for accounts receivable based on historical experience and relevant facts and information regarding the collectability of the accounts receivable. In performing this evaluation, significant judgments and estimates are involved, including an analysis of specific risks on a customer-by-customer basis for our larger customers and an analysis of the length of time receivables have been past due. The financial condition of a given customer and its ability to pay may change over time and could result in an increase or decrease to our allowance for doubtful accounts, which, when the impact of such change is material, is disclosed in our discussion on direct operating expenses elsewhere in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Income Taxes. The Company is subject to federal and state income taxes in the U.S., and in several foreign jurisdictions in which we operate. We account for income taxes according to Statement of Financial Accounting Standards (“SFAS”) No. 109, “Accounting for Income Taxes” (“SFAS” No. 109”). SFAS No. 109 requires the recognition of deferred tax assets, net of applicable reserves, related to net operating loss carryforwards and certain temporary differences. The standard requires recognition of a future tax benefit to the extent that realization of such benefit is more likely than not or a valuation allowance is applied. Because of our historical operating losses, we have provided a valuation allowance against our net deferred tax assets. When we have a history of profitable operations sufficient to demonstrate that it is more likely than not that our deferred tax assets will be realized, the valuation allowance will be reversed. However, this assessment of our planned use of our deferred tax assets is an estimate which could change in the future depending upon the generation of taxable income in amounts sufficient to realize our deferred tax assets.

Goodwill. Goodwill is reviewed annually for impairment within each fiscal year or between the annual tests if an event occurs or circumstances change that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value. The Company performs its annual impairment test as of December 31 in each fiscal year. The Company performed its annual impairment test on its goodwill as of December 31, 2007. No goodwill impairment was identified in any of the Company’s reporting units. Determining the fair value of reporting units requires various assumptions and estimates. The estimates of fair value include consideration of the future projected operating results and cash flows of the reporting unit. Such projections could be different than actual results. Should actual results be significantly less than estimates, the value of our goodwill could be impaired in the future.

Business Acquisitions. The Company accounts for its business acquisitions as a purchase, whereby the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair value. The excess of the purchase price over estimated fair value of the net identifiable assets is allocated to goodwill. Determining the fair value of assets and liabilities requires various assumptions and estimates. These estimates and assumptions are refined with adjustments recorded to goodwill as information is gathered and final appraisals are completed over the allocation period allowed under SFAS No. 141, “Business Combinations.” The changes in these estimates could impact the amount of assets, including goodwill and liabilities, ultimately recorded on our balance sheet as a result of an acquisition and could impact our operating results subsequent to such acquisition. We believe that our estimates have been materially accurate in the past.

Recent Accounting Pronouncements

Statement of Financial Accounting Standards No. 123(R). Effective April 1, 2006, the Company adopted the fair value recognition provisions of SFAS No. 123(R) using the modified-prospective transition method. Under such transition method, compensation cost recognized in the years ended March 31, 2008 and 2007 includes: (a) compensation cost for all stock options granted prior to, but not yet vested as of, April 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all share-based payments granted on or after April 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No. 123(R). See Note 11 for further discussion of the Company’s stock-based compensation in accordance with SFAS No. 123(R).

FASB Issued Interpretation No. 48. On July 13, 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109” (“FIN No. 48”). FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in an entity’s financial statements in accordance with SFAS No. 109, and prescribes a recognition threshold and measurement attributes for financial statement disclosure of tax positions taken or expected to be taken on a tax return. Under FIN No. 48, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, FIN No. 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN No. 48 is effective for fiscal years beginning after December 15, 2006. The Company adopted the provisions of FIN 48 effective April 1, 2007. Upon adoption, the Company recognized no adjustment of unrecognized tax benefits.

Statement of Financial Accounting Standards No. 157. In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. The changes to current practice resulting from the application of this statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. The Company will be required to adopt the provisions on SFAS No. 157 on April 1, 2008. The Company is currently evaluating the impact of adopting the provisions of SFAS No. 157 but does not believe that the adoption of SFAS No. 157 will materially impact its financial position, cash flows, or results of operations.

MANAGEMENT DISCUSSION FOR LATEST QUARTER

Lions Gate Entertainment Corp. (“Lionsgate,” the “Company,” “we,” “us” or “our”) is a leading next generation filmed entertainment studio with a diversified presence in the production and distribution of motion pictures, television programming, home entertainment, family entertainment, video-on-demand and digitally delivered content. We release approximately 12 to 15 motion pictures theatrically per year, which include films we develop and produce in-house, as well as films that we acquire from third parties. We also have produced approximately 76 hours of television programming on average for the last three years, primarily prime time television series for the cable and broadcast networks. We currently distribute our library of approximately 8,000 motion picture titles and approximately 4,000 television episodes and programs directly to retailers, DVD rental stores, and pay and free television channels in the United States (the “U.S.”), Canada, the United Kingdom (the “UK”) and Ireland, through various digital media platforms, and indirectly to other international markets through our subsidiaries and various third parties.

We own interests in Horror Entertainment, LLC, a multiplatform programming and content service provider of horror genre films (“FEARnet”), NextPoint, Inc., an online home entertainment service provider (“Break.com”), Roadside Attractions, LLC, an independent theatrical releasing company (“Roadside”), Elevation Sales Limited, a UK based home entertainment distributor (“Elevation”), Maple Pictures Corp., a Canadian film, television and home entertainment distributor (“Maple Pictures”), and Studio 3 Partners, LLC, a premium television channel (“EPIX”).

Our revenues are derived from the following business segments:


• Motion Pictures, which includes “Theatrical,” “Home Entertainment,” “Television,” “International Distribution” and “Mandate Pictures.”


Theatrical revenues are derived from the theatrical release of motion pictures in the U.S. and Canada which are distributed to theatrical exhibitors on a picture by picture basis. The financial terms that we negotiate with our theatrical exhibitors generally provide that we receive a percentage of the box office results and are negotiated on a picture by picture basis.

Home Entertainment revenues consist of sale or rental of packaged media (i.e., DVD and Blu-Ray) and electronic media (“EST”) of our own productions and acquired films, including theatrical releases and direct-to-video releases, to retail stores and through digital media platforms. In addition, we have revenue sharing arrangements with certain rental stores which generally provide that in exchange for a nominal or no upfront sales price we share in the rental revenues generated by each such store on a title by title basis.

Television revenues are primarily derived from the licensing of our productions and acquired films to the domestic cable, free and pay television markets.

International revenues include revenues from our international subsidiaries from the licensing and sale of our productions, acquired films, our catalog product or libraries of acquired titles and revenue from our direct distribution to international markets on a territory-by-territory basis. Our revenues are derived from the U.S., Canada, UK, Australia and many other foreign countries; none of the foreign countries individually comprised greater than 10% of total revenue.

Mandate Pictures revenues include revenue from the sales and licensing of domestic and worldwide rights of titles developed or acquired by Mandate Pictures to third-party distributors as well as various titles sold by Mandate International, LLC, one of the Company’s international divisions, to international sub-distributors.


• Television Productions, which includes the licensing and syndication to domestic and international markets of one-hour and half-hour drama series, television movies and mini-series and non-fiction programming and revenues from the sale of home entertainment product (i.e., packaged media and EST) consisting of television production movies or series.

Our primary operating expenses include the following:


• Direct Operating Expenses, which include amortization of production or acquisition costs, participation and residual expenses and provision for doubtful accounts. Participation costs represent contingent consideration payable based on the performance of the film to parties associated with the film, including producers, writers, directors or actors, etc. Residuals represent amounts payable to various unions or “guilds” such as the Screen Actors Guild, Directors Guild of America, and Writers Guild of America, based on the performance of the film in certain ancillary markets or based on the individual’s (i.e., actor, director, writer) salary level in the television market.

• Distribution and Marketing Expenses, which primarily include the costs of theatrical “prints and advertising” and of DVD duplication and marketing. Theatrical print and advertising represent the costs of the theatrical prints delivered to theatrical exhibitors and advertising includes the advertising and marketing cost associated with the theatrical release of the picture. DVD duplication represent the cost of the DVD product and the manufacturing costs associated with creating the physical products. DVD marketing costs represent the cost of advertising the product at or near the time of its release or special promotional advertising.

• General and Administration Expenses, which include salaries and other overhead.

Recent Developments

Studio 3 Partners, LLC. In April 2008, the Company formed a joint venture with Viacom Inc. (“Viacom”), its Paramount Pictures unit (“Paramount Pictures”) and Metro-Goldwyn-Mayer Studios Inc. (“MGM”) to create a premium television channel and subscription video-on-demand service named “EPIX”. The new venture will have access to the Company’s titles released theatrically on or after January 1, 2009. Viacom will provide operational support to the venture, including marketing and affiliate services through its MTV Networks division. Upon its expected launch in the fall of 2009, the joint venture will provide the Company with an additional platform to distribute its library of motion picture titles and television episodes and programs. The Company has invested $10.3 million as of December 31, 2008, which represents 28.57% or its proportionate share of investment in the joint venture. The Company has a mandatory commitment of $31.4 million increasing to $42.9 million if certain performance targets are achieved. The Company recorded its share of the joint venture results on a one quarter lag, in the current quarter.

Amended Credit Facility. In July 2008, the Company entered into an amended credit facility, which provides for a $340 million secured revolving credit facility, of which $30 million may be utilized by two of the Company’s wholly owned foreign subsidiaries. The amended credit facility expires July 25, 2013 and bears interest at 2.25% over the “Adjusted LIBOR” rate. At December 31, 2008, the Company had no borrowings (March 31, 2008 — nil) under the credit facility. The availability of funds under the credit facility is limited by a borrowing base and also reduced by outstanding letters of credit, which amounted to $22.7 million at December 31, 2008. At December 31, 2008, there was $317.3 million available under the amended credit facility. The Company is required to pay a monthly commitment fee based upon 0.50% per annum on the total credit facility of $340 million less the amount drawn. This amended credit facility amends and restates the Company’s original $215 million credit facility. Obligations under the credit facility are secured by collateral (as defined in the credit agreement) granted by the Company and certain subsidiaries of the Company, as well as a pledge of equity interests in certain of the Company’s subsidiaries. The amended credit facility contains a number of affirmative and negative covenants that, among other things, require the Company to satisfy certain financial covenants and restrict the ability of the Company to incur additional debt, pay dividends and make distributions, make certain investments and acquisitions, repurchase its stock and prepay certain indebtedness, create liens, enter into agreements with affiliates, modify the nature of its business, enter into sale-leaseback transactions, transfer and sell material assets and merge or consolidate.

TV Guide Purchase Agreement. In January 2009, the Company entered into an Equity Purchase Agreement (the “Equity Purchase Agreement”) with Gemstar-TV Guide International, Inc. (“Gemstar”), TV Guide Entertainment Group, Inc. (“TVGE”), its parent company, UV Corporation and Macrovision Solutions Corporation (“Macrovision”), the ultimate parent company of Gemstar, TVGE and UV Corporation, for the purchase by the Company from UV Corporation of all of the issued and outstanding equity interests of TVGE for approximately $255 million in cash and assumed liabilities, subject to working capital and other indebtedness adjustments, to be measured at closing, which is expected to be on or about February 28, 2009. In connection with the transaction, Gemstar will also transfer, assign and license to the Company certain assets related to the TV Guide Network and the TV Guide Online (tvguide.com) business. The Company anticipates funding this acquisition through cash on hand and available funds.

CRITICAL ACCOUNTING POLICIES

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 attached to the estimate. For example, accounting for films and television programs requires the Company to estimate future revenue and expense amounts which, due to the inherent uncertainties involved in making such estimates, are likely to differ to some extent from actual results. For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 2 to our March 31, 2008 audited consolidated financial statements.

Generally Accepted Accounting Principles (“GAAP”). Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP.

Accounting for Films and Television Programs. We capitalize costs of production and acquisition, including financing costs and production overhead, to investment in films and television programs. These costs are amortized to direct operating expenses in accordance with Statement of Position 00-2, Accounting by Producers or Distributors of Films (“SoP 00-2”). These costs are stated at the lower of unamortized films or television program costs or estimated fair value. These costs for an individual film or television program are amortized and participation and residual costs are accrued in the proportion that current year’s revenues bear to management’s estimates of the ultimate revenue at the beginning of the year expected to be recognized from exploitation, exhibition or sale of such film or television program over a period not to exceed ten years from the date of initial release. For previously released film or television programs acquired as part of a library, ultimate revenue includes estimates over a period not to exceed 20 years from the date of acquisition.

The Company’s management regularly reviews and revises, when necessary, its ultimate revenue and cost estimates, which may result in a change in the rate of amortization of film costs and participations and residuals and/or write-down of all or a portion of the unamortized costs of the film or television program to its estimated fair value. The Company’s management estimates the ultimate revenue based on experience with similar titles or title genre, the general public appeal of the cast, actual performance (when available) at the box office or in markets currently being exploited, and other factors such as the quality and acceptance of motion pictures or programs that our competitors release into the marketplace at or near the same time, critical reviews, general economic conditions and other tangible and intangible factors, many of which we do not control and which may change. In the normal course of our business, some films and titles are more successful than anticipated and some are less successful. Accordingly, we update our estimates of ultimate revenue and participation costs based upon the actual results achieved or new information as to anticipated revenue performance such as (for home entertainment revenues) initial orders and demand from retail stores when it becomes available. An increase in the ultimate revenue will generally result in a lower amortization rate while a decrease in the ultimate revenue will generally result in a higher amortization rate and periodically results in an impairment requiring a write down of the film cost to the title’s fair value. These write downs are included in amortization expense within direct operating expenses in our consolidated statements of operations.

Revenue Recognition. Revenue from the sale or licensing of films and television programs is recognized upon meeting all recognition requirements of SoP 00-2. Revenue from the theatrical release of feature films is recognized at the time of exhibition based on the Company’s participation in box office receipts. Revenue from the sale of DVDs in the retail market, net of an allowance for estimated returns and other allowances, is recognized on the later of receipt by the customer or “street date” (when it is available for sale by the customer). Under revenue sharing arrangements, rental revenue is recognized when the Company is entitled to receipts and such receipts are determinable. Revenues from television licensing are recognized when the feature film or television program is available to the licensee for telecast. For television licenses that include separate availability “windows” during the license period, revenue is allocated over the “windows.” Revenue from sales to international territories are recognized when access to the feature film or television program has been granted or delivery has occurred, as required under the sales contract, and the right to exploit the feature film or television program has commenced. For multiple media rights contracts with a fee for a single film or television program where the contract provides for media holdbacks (defined as contractual media release restrictions), the fee is allocated to the various media based on management’s assessment of the relative fair value of the rights to exploit each media and is recognized as each holdback is released. For multiple-title contracts with a fee, the fee is allocated on a title-by-title basis, based on management’s assessment of the relative fair value of each title.

Cash payments received are recorded as deferred revenue until all the conditions of revenue recognition have been met. Long-term, non-interest bearing receivables are discounted to present value.

Reserves. Revenues are recorded net of estimated returns and other allowances. We estimate reserves for DVD returns based on previous returns and our estimated expected future returns related to current period sales on a title-by-title basis in each of the DVD businesses. Factors affecting actual returns include limited retail shelf space at various times of the year, success of advertising or other sales promotions, the near term release of competing titles, among other factors. We believe that our estimates have been materially accurate in the past; however, due to the judgment involved in establishing reserves, we may have adjustments to our historical estimates in the future.

We estimate provisions for accounts receivable based on historical experience and relevant facts and information regarding the collectability of the accounts receivable. In performing this evaluation, significant judgments and estimates are involved, including an analysis of specific risks on a customer-by-customer basis for our larger customers and an analysis of the length of time receivables have been past due. The financial condition of a given customer and its ability to pay may change over time and could result in an increase or decrease to our allowance for doubtful accounts, which, when the impact of such change is material, is disclosed in our discussion on direct operating expenses elsewhere in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Income Taxes. The Company is subject to federal and state income taxes in the U.S., and in several foreign jurisdictions. We account for income taxes according to Statement of Financial Accounting Standards (“SFAS”) SFAS No. 109, Accounting for Income Taxes (“SFAS No. 109”). SFAS No. 109 requires the recognition of deferred tax assets, net of applicable reserves, related to net operating loss carryforwards and certain temporary differences. The standard requires recognition of a future tax benefit to the extent that realization of such benefit is more likely than not or a valuation allowance is applied. Because of our historical operating losses, we have provided a full valuation allowance against our net deferred tax assets. When we have a history of profitable operations sufficient to demonstrate that it is more likely than not that our deferred tax assets will be realized, the valuation allowance will be reversed. However, this assessment of our planned use of our deferred tax assets is an estimate which could change in the future depending upon the generation of taxable income in amounts sufficient to realize our deferred tax assets.

Goodwill. Goodwill is reviewed annually for impairment within each fiscal year or between the annual tests if an event occurs or circumstances change that indicate it is more likely than not that the fair value of a reporting unit is less than its carrying value. The Company performs its annual impairment test as of December 31 in each fiscal year. The Company performed its annual impairment test on its goodwill as of December 31, 2007 and will be updating its assessment as of December 31, 2008. No goodwill impairment was identified in any of the Company’s reporting units. Determining the fair value of reporting units requires various assumptions and estimates. The estimates of fair value include consideration of the future projected operating results and cash flows of the reporting unit. Such projections could be different than actual results. Should actual results be significantly less than estimates, the value of our goodwill could be impaired in the future.

Business Acquisitions. The Company accounts for its business acquisitions as a purchase, whereby the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair value. The excess of the purchase price over estimated fair value of the net identifiable assets is allocated to goodwill. Determining the fair value of assets and liabilities requires various assumptions and estimates. These estimates and assumptions are refined with adjustments recorded to goodwill as information is gathered and final appraisals are completed over the allocation period allowed under SFAS No. 141. The changes in these estimates could impact the amount of assets, including goodwill and liabilities, ultimately recorded in our balance sheet and could impact our operating results subsequent to such acquisition. We believe that our estimates have been materially accurate in the past.

CONF CALL

Peter D. Wilkes

Thank you for joining us. Jon Feltheimer, our CEO and the rest of the management team will have opening remarks and then we’ll open the call to your questions. The matters discussed on this call include forward-looking statements. 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 risk factors as set forth in Lionsgate's quarterly report on Form 10-Q filed with the SEC on November 9, 2007, and Lionsgate's annual report on Form 10-K filed with the SEC May 30, 2007.

The company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. Jon.

Jon Feltheimer

Good morning, everyone. I am joined here this morning by Michael Burns, our Vice Chairman; Steve Beeks, our President and Co-Chief Operating Officer; Jim Keegan, our Chief Financial Officer; and Rick Prell, our Chief Accounting Officer. I would also like to welcome Joe Drake, who has joined Lionsgate as President of our Motion Picture Group and Co-Chief Operating Officer, and who is joining our call from New York this morning. Good morning, Joe.

Joe Drake

Good morning, everyone.

Jon Feltheimer

Okay, Joe will have some comments later on in the call. Operationally, this was a very strong quarter for all of our businesses. We not only had the strong theatrical run we forecast, but our DVD over-performance in the quarter on films that under-performed in theaters earlier in the year has made up a lot of lost ground.

On our last analyst call, we projected that in order to stay on track for our financial targets, we would need our next five wide releases to collectively gross $175 million at the box office.

With the strong performances of War, 3:10 to Yuma, Good Luck Chuck, Tyler Perry’s Why Did I Get Married?, and Saw IV, these films will gross about $230 million at the box office in aggregate. Over the past two months, Lionsgate has been the number one studio at the domestic box office with an 18% market share and three of our last four films have debuted at number one.

But in terms of our financials, the price of success is sometimes inverse. Our marketing spend on 3:10 to Yuma, for example, will increase from $27.5 million to $38 million in success, including our Oscar campaign. As a result, it will have a great negative impact in the current fiscal year but it will be more profitable for us on an ultimate basis.

Ultimate profitability is obviously a key benchmark of success for us. Here is how we look at the financial contribution from our film business. In order to achieve our target of more than $100 million in free cash flow every year, we expect our motion picture slate to contribute a minimum of $100 million in ultimate profit each year.

If our films for the rest of the year perform as anticipated, this year’s slate should contribute approximately $120 million in ultimate profit, 10% to 20% more than last year’s slate.

Over the long term, this positions us well for our goals of continued revenue growth, consistent free cash flow and increasing long-term shareholder value. Over the short term, it made for the strongest revenue quarter in Lionsgate's history. We reported more than $343 million at the top line in the second quarter, on our way to over $1.1 billion in overall revenue. And this growth was achieved according to the Lionsgate business model -- all singles and doubles without swinging for the fences.

With the continued expansion of our slate, we also had and expensed our largest quarterly theatrical P&A spend ever -- approximately $120 million, even though we had a partner, Pride Pictures, who shared $84 million of that on a 50-50 basis.

Our P&A spend covered our four wide releases in the quarter, as well as some of the advanced P&A on Tyler Perry’s Why Did I Get Married? and Saw IV.

Over the next two quarters, our marketing spend will even out and our earnings performance will swing to positive, as is typically the case with our back-loaded fiscal years. We expect to finish our fiscal year in strong fashion, over-performing our key metrics of free cash flow and revenue with our balance sheet in its strongest position ever at fiscal year end.

Michael will now give you more color on our films in the last quarter and into fiscal ’09.

Michael Burns

Thank you, Felt. Before I get into the strength of our recent and upcoming slate, I would like to update you on our investment and recent results at break.com. Break has proven itself an invaluable platform for integrating Lionsgate's content and advertising, attracting a record-breaking $18.4 million unique monthly visitors and attaching new advertisers to the site, Break has achieved impressive third quarter growth of 90% over Q2. We have also recently enjoyed similar success with the investment we made in Roadside Attractions, which just had a solid success with the platform release of Bella, which had a stellar opening weekend, earning $1.3 million at the box office in just 165 theaters.

As Jon noted, the five films that constituted the core of our release scheduled, 3:10 to Yuma, War, Good Luck Chuck, and Why Did I Get Married?, as well as Saw IV, performed well relative to our expectations. Even as we ramp up our award campaign for the acclaimed 3:10 to Yuma, there is more to come.

As we told you a few months ago, our theatrical slate financing has helped allow us to spread our release schedule over the full 12-month calendar year, allowing us to capitalize on competitive opportunities and release dates that crop up throughout the year, including the January to March quarter. In fact, for the first time in our history, we have a minimum of three wide releases slate for our fiscal fourth quarter.

Felt already noted that this year’s slate is expected to contribute approximately $120 million in [EBITDA] profitability. Our box office after two quarters currently stands at slightly over $300 million, meaning that with an additional cumulative $100 million from our three upcoming wide releases, we will reach our goal of $400 million in North American box office for the full year.

That said, we certainly anticipate doing better than a $33 million average box office for the following three upcoming films: in January, Rambo is back with a vengeance. Starring and directed by Sylvester Stallone, we expect Rambo to join our growing roster of recent hit action films. The initial reaction to the Rambo trailer playing in theaters in front of Saw and all over the web, including break.com, has been terrific.

After starring for us in Good Luck Chuck, Jessica Alba returns as a lead in the thriller The Eye, slated for a February 1st release. We have a great marketing campaign for the film launching as we speak and we are delighted to have Jessica back again in the Lionsgate family.

Coming on the heels of his $55 million North American box office hit, Why Did I Get Married?, we will release Tyler Perry’s Meet the Browns on March 21st. Tyler continues to be incredibly prolific, generating two feature films every year for us.

Fiscal ’09 is shaping up to be equally exciting. As an example of our continuing commitment to deliver diverse product offerings, I am happy to report that we were thrilled with our first look at the action-packed adventure movie Forbidden Kingdom, featuring the formidable pairing of Jet Li and Jackie Chan. On the comedy front, we will be releasing My Best Friend’s Girl in fiscal ’09 as well. The lovely Kate Hudson stars in this very edgy comedy with Dane Cook who, as you know, has a great history with our company with a string of very profitable pictures.

We have already staked out a January 2009 release date for The Spirit from director Frank Miller of Sin City fame. The Spirit has a truly star-studded ensemble of players, including Samuel Jackson, Gabrielle Macht, Eva Mendes, and Scarlett Johansson.

We are pleased to announce that we have two more films from Tyler Perry in fiscal ’09 after Meet the Browns, including a film based on his most popular Madea play of all, Madea Goes to Jail.

The next Publisher film from the Lionsgate/Marvel partnership is currently shooting in Montreal and The Game, an intense action film that is a Lakeshore co-production with us starring 300’s Gerry Butler is now shooting in New Mexico and is being directed by the team that gave us the hit Crank last year. Both the new Punisher and The Game should prove to be an important fiscal ’09 release for us, while continuing our momentum in the action arena.

And finally, what late October would be complete without another bloodletting from Lionsgate, so look forward to Saw V arriving again at Halloween.

For those of you concerned about the impact of the writers’ strike, I hope you can see now, in the words of our head of motion pictures production, Mike Pasternak, we are locked and loaded with the vast majority of our fiscal ’09 theatrical release slate already in place.

Besides the strong portfolio of films wrapped or currently in production, in the event of a prolonged strike we remain in a competitively strong position because of our nearly 12,000 title library throwing out significant evergreen income, our filmed entertainment backlog near its all-time high at $340 million, and an extremely robust and un-levered balance sheet.

We are not changing our game plan and continue to stick closely to our model of mitigating risk, efficient production, targeted marketing, repeat talent relationships, and teaming with strong creative and financial partners. Jon.

Jon Feltheimer

Thank you, Michael. We not only see substantial growth in our North American motion picture business, but in all of our other businesses as well, including international. We’ve just opened an office in Australia where we have established motion picture, television and home entertainment businesses operating under the Lionsgate brand in conjunction with three very strong strategic partners: Hoyts, Sony, and the Movie Network.

We kicked off our new distribution alliance there with the release of Saw IV a few weeks ago, marking the second-highest opening for our partner Hoyts, which has been serving the Australian market for more than 30 years. We are also distributing video product under the Lionsgate brand with Sony as our partner, and we have just formed a pay television deal with The Movie Network for our films and several of our television series.

Our entry into Australia, coupled with our successfully growing Lionsgate U.K. operations and our alliance with Maple Pictures in Canada gives us a strong presence in the world’s our largest English-speaking territories.

The films that we self-distribute through Lionsgate U.K. continue to over-index their North American box office performance by nearly two-to-one on a per capita basis, just like Good Luck Chuck, which was number one at the U.K. box office this weekend. We have focused our self-distribution initiative there on our strength in action, teen comedy and genre movies and the films that we have been releasing have been significantly more profitable than when we sold our films to third party competitors.

In addition to our strength and presence in English speaking territories worldwide, we are also building on our momentum in the English and Spanish language marketplace, with our new strategic relationship with Televisa, the largest Spanish language media company in the world.

We will co-produce feature films and television programming with Televisa, both here and Mexico, always taking into account Televisa’s prior contractual commitments. We are delighted that they have chosen Lionsgate to help them access the English language U.S. market, just as they are helping to open the Latin American market to us. You’ll be hearing more about this partnership from us in the months to come.

Mandate is yet another example of our international growth strategy. We acquired Mandate in part because they operate one of the strongest third-party feature film businesses in the international marketplace. But like Lionsgate, they also operate with an entrepreneurial business model that has made them a profitable and consistent supplier of films to all the studios. We believe that their addition to the Lionsgate family brings a whole new dimension of growth potential to our motion picture business and a new profit center to our company.

I’d like to ask Joe, who’s returned to Lionsgate as President of our Motion Picture Group and Co-Chief Operating Officer, to briefly describe the strategic potential of the Lionsgate/Mandate combination. Joe.

Joe Drake

Thank you, Jon. It’s a pleasure to be part of the Lionsgate family again. My decision to join Lionsgate was made with a specific view towards the potential synergies that could be achieved and the value that could be unlocked through an alignment of Mandate Pictures and Lionsgate.

Now that I’ve been aboard for eight weeks and had the opportunity to see Lionsgate in action, I am even more excited about the growth we can create together. I would like to touch briefly this morning on the Mandate business model, how we operate and fit into Lionsgate, as well as to share a few thoughts on some of the areas of focus and growth going forward.

Mandate does two things; it acquires, develops, packages, and licenses broad appeal commercial films for worldwide consumption and it is one of the premier international sales organizations in the business today.

The fundamental difference between Lionsgate and Mandate is that Mandate does not self-distribute the films it makes. Its primary customers in North America are the major studios and internationally, it licenses its films on a territory-by-territory basis to the major studios and major independent distributors.

Although at first glance it may appear counter-intuitive, post acquisition Mandate is continuing to develop and product is movies, not for Lionsgate but for its studio partners such as Sony, Fox, New Line and others.

The idea is simple. In addition to Lionsgate's 18 to 20 films a year, we are adding four to six Mandate pictures per year to the combined business. By distributing these through third-party major studios instead of Lionsgate, we are effectively expanding Lionsgate's distribution reach to as many as 24 films annually without adding infrastructure, overhead, or P&A exposure.

This innovative approach is a win-win for everybody. We are also, of course, adding four to six pictures each year to the Mandate library, which already holds more than 20 titles -- I’m sorry, 200 titles. Mandate has two branded production operations -- Mandate Pictures and Ghost House Pictures.

Ghost House is a 50-50 joint venture between Mandate and Sam Raimi, the highly acclaimed director of the Spider-man movies, and his partner, Rob Tapert. This company was formed solely for the creation and distribution of horror content and to date has achieved five consecutive number one box office releases with The Grudge franchise, Boogeyman, Messengers, and most recently, 30 Days of Night, which opened October 19th of this year.

Then there is the Mandate brand, which has been responsible for Mark Forrester’s Stranger Than Fiction, starring Will Ferrell; Harold and Kumar Go To White Castle; and an exciting upcoming slate, which includes Mr. Magorum’s Wonder Emporium, starring Natalie Portman and Dustin Hoffman, which will be release by Fox Walden this coming Friday; Juno, starring Michael Cera of Superbad and acclaimed young actress Ellen Paige which is slated for a December 15th release through Fox Searchlight; Passenger, starring the Devil Wears Prada’s Anne Hathaway, to be released by Columbia Pictures in 2008; and the eagerly anticipated sequel to Harold and Kumar, which will be released on February 8th of next year.

To date, the combined Mandate/Ghost House slate has achieved a worldwide box office of more than $0.5 billion with a lot more to come.

In addition to its production operations, Mandate is one of the top international sales organizations in the business. The international sales business, and in particular the third party representation business, is one of a number of areas where we felt we could unlock significant value by combining operations with Lionsgate, and in this area specifically we’ve already seen results.

Upon closing the acquisition, we immediately consolidated the Lionsgate and Mandate international sales businesses under the Mandate name and appointed an exceptional executive, [Helen Lee Kim], to run the operation. In just six weeks of working together, this new team was able to attract three new high profile properties for third-party representation: a broad romantic comedy starring Renée Zellweger; a supernatural thriller starring Kevin Costner; and a big budget adventure fantasy starring Heath Ledger.

One week ago, we took these three new films to the American film market, along with two films from Lionsgate's slate, Brothers, starring Jake Gyllenhaal, Tobey Maguire, and Natalie Portman; and a romantic comedy, My Best Friend’s Girl, starring Kate Hudson and Dane Cook. The results were fantastic.

Our newly combined effort resulted in the single biggest market that either Lionsgate or Mandate has ever achieved, with gross sales of just under $60 million.

With time and focus, we believe that there is still significant growth to be had from this third-party representation business.

Another area where we believe there will be value creation is through the sharing of our broad but largely distinct set of creative and business relationships. We are already working to monetize the expanded palette of relationships available to both our companies. As an example, Lionsgate Television, run by Kevin Beggs, is currently recognized by the creative community as one of the most interesting and innovative places to create television content, largely due to such cutting edge series as Weeds and Madmen.

The ability to offer a Lionsgate Television opportunity to our Mandate talent relationships is a blue chip calling card for the Mandate team and should result in opportunity for Lionsgate Television as well. We believe the same opportunity exists to drive value through Mandate relationships at the Lionsgate Home Entertainment business, and although Lionsgate and Mandate are running their respective feature businesses as separate entities with separate business models, we suspect that we’ll be able to pool our talent relationships in this area as well.

Finally, I would like to touch on Lionsgate's theatrical acquisition production and distribution operations. At Mandate, we had the opportunity to work very closely with all of the major studios and to gain an in-depth view of how each of them operates.

In the short time that I’ve been at Lionsgate, I’ve been able to watch the domestic theatrical operation release three number one box office hits, stand as the market leader for two months in a row, and at any given time occupy as many as 20% of the quality screens in the country. Frankly, I’ve been amazed at the real capability this company has to compete head-to-head with the major studios on any given weekend with a fraction of the overhead.

The company’s domestic theatrical business was already performing well before I arrived, so I see my primary job in this area as enhancing rather than changing our operations. What we need to do now is focus rigorously on the product mix and the deal mix.

With this theatrical team, I am sure that we will find ways to unlock even more value for each theatrical slot without taking on undue risk or increasing our P&A exposure.

Now that we’ve completed our heavy fall release schedule, we’re planning an offsite strategy session for early December so that we can have the opportunity to get more granular about the fiscal 2009 slate. I look forward to updating you on our thinking on the next call. Jon.

Jon Feltheimer

Thank you, Joe. As usual, our home entertainment group has continued to perform extremely well with its full array of products, including new releases, catalog exploitation, and direct to video. Steve Beeks will take you through the quarter and provide a view of the current video and digital marketplace. Steve.

Steven Beeks

Thanks, Jon. This was a strong quarter for the home entertainment division for both packaged media and digital delivery, driven by new releases that continue to over-index on DVD and our ability to generate revenue and margin from our library better than any company in the business.

We are again on track to generate approximately $250 million of library revenue, translating into $90 million in free cash flow with steady wholesale prices and strong, stable margins.

In our new release business, the Q2 results are a good example of what we consider to be our core strength, which is extracting maximum value from our products. All of the theatrical releases we released on DVD during the quarter over-indexed their box office performance and three pictures, Pride, Delta Farce, and The Condemned, had extraordinary results.

We told you on our last analyst call that the under-performing films in the first quarter would ultimately lose approximately $15 million in aggregate. But the DVD results of those pictures are so good that we now expect that our under-performing Q1 films will lose in aggregate less than $5 million, and may even reach profitability on an ultimate basis.

Not only is our business strong, but we are operating in a more stable market environment than expected as recently as a year or two ago. Even though consumer spend for packaged media in the first half of the calendar year was down about 4%, that was mostly a function of the product coming to market, not broader industry trends, and we remain confident that the full year for the industry will end up essentially even with last year.

We’ve already seen significant improvement in calendar Q3, which was flat compared to last year, and the total box office of releases coming to the DVD market in calendar Q4 is 17% greater than in Q4 last year, which we expect to translate into Q4 growth in DVD revenue.

This performance reflects only the first revenues from high-definition DVD, which is a market that will be large, will operate at higher margins, and will serve as a big growth driver in the future.

While we still don’t have one unified format for the industry, all the available trends seem to confirm that we made the right choice in selecting Blu-Ray. In addition to offering superior content capacity and copy protection, a major benefit in an environment where digital piracy has become such a concern, it is still outselling HD DVD two-to-one, despite the defection of one of the other studios.

We expect to see Blu-Ray hardware prices coming down soon, which should further boost growth in the market and substantially higher margins than standard DVD.

Strength and stability in our packaged media business is complemented by the long anticipated spike upwards in accretive digital revenues. Digital delivery is becoming a much more important and profitable part of our business. To give you an example of how much the conventional VOD and pay-per-view business is changing for us, we would have budgeted 3% to 4% of box office for our anticipated VOD and pay-per-view revenue for a particular title in the recent past. Today, releases such as Employee of the Month, Larry the Cable Guy, An American Haunting, and Crank are generating between 12% and 16% of box office in their VOD and pay-per-view windows.

Overall VOD revenues climbed from $12 million in fiscal ’06 to $24 million last year and we have already achieved $20 million in VOD revenue in the first six months of fiscal ’08.

Our broadband electronic sell-through revenue also continues to grow. We’ve had over 2.5 million downloads of our films and television shows to date, with that business expanding in virtually every corner and generating significant revenue from our library. It is worth noting that all of our digital delivery business is done with no supply chain and very little overhead support.

The new high-definition DVD format coupled with digital delivery will stimulate continued growth for our home entertainment business at least as far out as 2011, the longest timeframe from which we can project with a reasonably high level of confidence.

Every aspect of our business is solid -- catalog exploitation, new theatrical titles on DVD, direct to video product, and digital delivery. As we leverage our content into new entertainment technologies, distribution platforms, and market niches, we expect our home entertainment revenues and cash flow to continue to grow and blended margins from our mix of packaged media and exciting new digital applications to increase over time.

Now back to Jon.

Jon Feltheimer

Thank you, Steve. Our television business also performed very well in the second quarter, generating revenues of $109 million and keeping us on track for our anticipated television production revenue of approximately $200 million for the year.

Weeds has been renewed for a fourth season, bringing our total to 52 episodes and keeping it well-positioned for syndication next year or the year after. AMC has picked up a second season of Madmen, which we will release on video May 2008. Just like Weeds, we expect it to do very well on DVD and bring fresh eyeballs to this critical favorite.

We recently sold 13 episodes of our new horror anthology series, Fear Itself, to NBC. Concurrent with its network airing, the show will also be available as fresh programming for Fear Net, strengthening both the Lionsgate and Fear Net brands.

Fear Itself is a prime example of our ability to cross promote new content on our recently launched digital media distribution platforms.

We are also launching 26 episodes of our Speed Racer television series on Nickelodeon’s Nicktoons Networks, with movies culled from the television episodes showing on Nickelodeon itself.

Our series will debut one week before the major Warner Brothers motion picture produced by Joel Silver, and Speed Racer is already turning out to be a licensing bonanza. We have over 25 licenses covering all categories of merchandise, with the latest being a deal with Toys R Us with a retail exclusive to launch the brand.

We are seeing increasing contributions from our Debmar-Mercury syndication business. Ira Bernstein and Mort Marcus have assembled a powerful and diverse portfolio of product for syndication, including House of Payne, Family Feud, South Park, The Surreal Life, and six seasons of our own paranormal thriller, The Dead Zone.

Debmar also recently announced the syndication launch of two series off Discovery Channel: American Chopper and Deadliest Catch, as well as acquiring worldwide rights to Trivial Pursuit: America Plays, for syndication, cable, and perhaps network distribution. We believe that this is another important property and Debmar will distribute it worldwide through their newly created international arm.

Another of our recent investments, Fear Net Channel, has just completed a very successful first year. It has emerged as the number one horror website in America for both uniques and registered users, and it streamed over 100 million videos on web and VOD since its Halloween 2006 launch, including 10 million views on VOD this past month.

With the addition of original programming such as the Fear Itself television series, we expect that both its viewership and cross-promotional opportunities will continue to grow.

We are pleased especially to announce that as of Today, Cox Broadcasting has become the latest major cable operator to carry Fear Net. With a growing roster of carriage agreements with Cox, Comcast, [Bresnen] and Verizon, Fear Net is now available in over 16 million VOD-enabled homes, and we believe that it is well on its way to becoming a fully distributed digital network.

We’ve already told you about recent initiatives on the Break, Debmar, Mandate, Lionsgate U.K., and Lionsgate Australia fronts. Viewed together, these initiatives show that we are doing exactly what we should be doing as a growth company -- significantly growing our top line, reinvesting our generated cash into new businesses, maintaining a healthy balance sheet, emphasizing long-term value creation, and capitalizing on all of the opportunities provided by new technologies, new platforms, and new audiences.
I’ll now open up for questions.

SHARE THIS PAGE:  Add to Delicious Delicious  Share    Bookmark and Share



 
Icon Legend Permissions Topic Options
You can comment on this topic
Print Topic

Email Topic

2238 Views