UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-K

(Mark One)

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended March 31, 2011
		OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from                                         to

British Columbia, Canada		N/A
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

1055 West Hastings Street, Suite 2200		2700 Colorado Avenue, Suite 200
Vancouver, British Columbia V6E 2E9		Santa Monica, California 90404
(877) 848-3866		(310) 449-9200

Title of Each Class		Name of Each Exchange on Which Registered
Common Shares, without par value		New York Stock Exchange

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No þ

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934. Yes o No þ

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non accelerated filer o		Smaller reporting company o
				(Do not check if a smaller reporting company)

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No þ

     The aggregate market value of the voting stock held by non-affiliates of the registrant as of September 30, 2010 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $681,521,451, based on the closing sale price as reported on the New York Stock Exchange.

     As of May 20, 2011, 137,003,312 shares of the registrant’s no par value common shares were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A and relating to the registrant’s 2011 annual meeting of shareholders are incorporated by reference into Part III.

 

 

		Page
PART I
Item 1. Business			4
Item 1A. Risk Factors			24
Item 1B. Unresolved Staff Comments			39
Item 2. Properties			39
Item 3. Legal Proceedings			39
Item 4. Removed and Reserved			40
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			41
Item 6. Selected Financial Data			45
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			46
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			88
Item 8. Financial Statements and Supplementary Data			89
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure			89
Item 9A. Controls and Procedures			89
Item 9B. Other Information			93
PART III
Item 10. Directors, Executive Officers and Corporate Governance			93
Item 11. Executive Compensation			93
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			93
Item 13. Certain Relationships and Related Transactions, and Director Independence			93
Item 14. Principal Accounting Fees and Services			93
PART IV
Item 15. Exhibits, Financial Statement Schedules			93
EX-10.7
EX-21.1
EX-23.1
EX-23.2
EX-31.1
EX-31.2
EX-32.1
EX-99.1
EX-99.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

FORWARD-LOOKING STATEMENTS

This report includes statements that are, or may deemed to be, “forward looking statements” within the meaning of Section 27A of the Securities Act, as amended (the “Securities Act”), and Section 21E of the Exchange Act, as amended (the “Exchange Act”). These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “potential,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “forecasts,” “may,” “will,” “could,” “would” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this report and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those discussed under Part I, Item 1A. “Risk factors”. These factors should not be construed as exhaustive and should be read with the other cautionary statements and information in the report.

We caution you that forward-looking statements made in this report or anywhere else are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially and adversely from those made in or suggested by the forward looking statements contained in this report as a result of various important factors, including, but not limited to, the substantial investment of capital required to produce and market films and television series, increased costs for producing and marketing feature films and television series, budget overruns, limitations imposed by our credit facilities and notes, unpredictability of the commercial success of our motion pictures and television programming, risks related to our acquisition strategy and integration of acquired businesses, the effects of dispositions of businesses or assets, including individual films or libraries, the cost of defending our intellectual property, difficulties in integrating acquired businesses, technological changes and other trends affecting the entertainment industry, and the other risks and uncertainties discussed under Part I, Item 1.A. “Risk Factors”. In addition, even if

our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward looking statements contained in this report, those results or developments may not be indicative of results or developments in subsequent periods.

Any forward-looking statements, which we make in this report, speak only as of the date of such statement, and we undertake no obligation to update such statements. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

     Unless otherwise indicated, all references to the “Company,” “Lionsgate,” “we,” “us,” and “our” include reference to our subsidiaries as well.

PART I

ITEM 1. BUSINESS.

Overview

Lions Gate Entertainment Corp. (“Lionsgate,” the “Company,” “we,” “us” or “our”) is a leading global entertainment company with a strong and diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, family entertainment, digital distribution and new channel platforms.

We released approximately 14 motion pictures theatrically per year for the last three fiscal years, which included films that we developed and produced in-house, films that we developed and produced with our partners and films that we acquired from third parties. In fiscal 2012 (i.e., the twelve-month period ending March 31, 2012), we currently intend to release approximately 11 to 13 motion pictures theatrically.

We have also delivered, on average, approximately 76 hours of original television programming for the last three fiscal years, which include primarily prime time television series for the cable and broadcast networks. In fiscal 2012, we currently intend to deliver approximately 56 hours of television programming.

We distribute our library of approximately 13,000 motion picture titles and television episodes and programs directly to retailers, rental kiosks, and pay and free television channels in the United States (the “U.S.”), Canada, the United Kingdom (the “U.K.”) and Ireland, through various digital media platforms, and indirectly to other international markets through our subsidiaries and various third parties. We also distribute our library through the following joint ventures:

	•		TV Guide Network, TV Guide Network On Demand and TV Guide Online (www.tvguide.com) (collectively, “TV Guide Network”), our joint ventures with One Equity Partners (“OEP”), the global private equity investment arm of JPMorgan Chase & Co.;
	•		Studio 3 Partners LLC (“EPIX”), our joint venture with Viacom Inc. (“Viacom”), Paramount Pictures Corporation (“Paramount Pictures”) and Metro-Goldwyn-Mayer Studios Inc. (“MGM”);
	•		Tiger Gate Entertainment Limited (“Tiger Gate”), our joint venture with Saban Capital Group, Inc. (“SCG”); and
	•		Horror Entertainment, LLC (“FEARnet”), our joint venture with Sony Pictures Television (“Sony”) and Comcast Corporation (“Comcast”).

In order to maximize our profit, we attempt to maintain a disciplined approach to acquisition, production and distribution of projects, including films and television programs, by balancing our financial risks against the probability of commercial success for each project. We also attempt to maintain the same disciplined approach to investments in, or acquisitions of, libraries or other assets complementary to our business, entertainment studios and companies that we believe will enhance our competitive position in the industry, generate significant long-term returns, represent an optimal use of our capital and build a diversified foundation for future growth. Historically, we have made numerous acquisitions that are significant to our business and we may continue to make such acquisitions in the future. For example, we have acquired, integrated and/or consolidated into our business the following:

	•		Mandate Pictures LLC (“Mandate Pictures”), a worldwide independent film producer, financier and distributor (acquired in September 2007);
	•		Maple Pictures Corp. (“Maple Pictures”), a Canadian film, television and home video distributor (consolidated effective July 2007);
	•		Debmar-Mercury, LLC (“Debmar-Mercury”), a leading media company specializing in syndication, network, cable and ancillary markets (acquired in July 2006);
	•		Redbus Film Distribution Ltd. and Redbus Pictures (collectively, “Redbus” and currently, Lions Gate UK Limited (“Lionsgate UK”), an independent film distributor, which provides us the ability to self-distribute our motion pictures in the U.K. 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).

As part of this strategy, we also have ownership interests in the following:

	•		Pantelion Films (a 49% interest), a joint venture designed to produce and distribute a slate of English and Spanish language feature films to target Hispanic moviegoers in the U.S. (entered into in July 2010);
	•		Tiger Gate (a 45.5% interest), an operator of pay television channels and a distributor of television programming and action and horror films across Asia (entered into in April 2010);
	•		TV Guide Network (acquired in February 2009 and a 49% interest sold to OEP in May 2009);
	•		EPIX (a 31.2% interest), a joint venture entered into to create a premium television channel and subscription video-on-demand (“VOD”) service (entered into in April 2008);
	•		Elevation Sales Limited (“Elevation”) (a 50% interest), a U.K. based home entertainment distributor (interest acquired in July 2007);
	•		Roadside Attractions, LLC (“Roadside”) (a 43.0% interest), an independent theatrical distribution company (interest acquired in July 2007);
	•		NextPoint, Inc. (“Break Media”) (a 42.0% interest), an online video entertainment service provider (interest acquired in June 2007); and
	•		FEARnet (a 34.5% interest), a multiplatform programming and content service provider (interest acquired in October 2006).

Our investments and acquisitions support our strategy of diversifying our company in an attempt to create a multiplatform global industry leader in entertainment. As a corollary to the disciplined approach that we apply to our investments and acquisitions, we are also constantly evaluating our existing properties, libraries and other assets and businesses in order to determine whether they continue to enhance our competitive position in the industry, have the potential to generate significant long-term returns, represent an optimal use of our capital and are aligned with our goal to create a multiplatform global industry leader in entertainment. Consequently, on occasion, we discuss potential strategic transactions with third parties for purchase of our properties, libraries or other assets or businesses that we factor into these evaluations. As a result of our evaluations, we may, from time to time, determine to sell individual properties, libraries or other assets or businesses. From time to time, we may also enter into additional joint ventures, strategic transactions and similar arrangements for individual properties, libraries or other assets or businesses.

As of May 20, 2011, three of our shareholders, Carl C. Icahn, Mark H. Rachesky, M.D. and Capital Research Global Investors and their respective affiliates, beneficially owned approximately 32.7%, 29.4% and 9.2%, respectively, of our outstanding common shares. From time to time, we may consider significant transactions proposed to us by these shareholders and their affiliates and we may undertake such transactions if we believe them to be in our best interests and in the best interests of our shareholders.

Our Industry

Motion Pictures

General. According to the Motion Picture Association of America’s U.S. Theatrical Market Statistics 2010, domestic box office (which includes the U.S. and Canada) repeated its peak 2009 performance, reaching $10.6 billion in 2010, up 15% over the past five years. As in 2009, the 3-D market was again a key growth driver — 21% of 2010 box office, or $2.2 billion, came from 3-D showings, nearly double the 2009 total. Worldwide box office also reached an all time high of approximately $31.8 billion in 2010, compared to approximately $29.4 billion in 2009, an 8% increase. International box office ($21.2 billion) made up 67% of the 2010 worldwide total, while domestic box office ($10.6 billion) made up 33% of the 2010 worldwide total, a proportion consistent with the last several years. As a result of significant growth in Asia Pacific (21%), in 2010, for the first time, Europe, the Middle East

and Africa represented less than half (49%) of total international box office value. Domestic theatrical admissions, or tickets sold, however, declined 5% to 1.3 billion in 2010, which was equivalent to the 2008 level.

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, Twentieth Century Fox Film Corp., Universal Pictures, Walt Disney Studios Motion Pictures and Warner Bros. Entertainment, Inc. All of these companies are owned by media conglomerates with a variety of operations, including studios, television networks, cable channels and distribution divisions, including the major studios and independent production companies. 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, Inc., Summit Entertainment, LLC, The Weinstein Company and MGM. These “independent” motion picture production companies, 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 leading global entertainment company 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 entertainment, pay-per-view, VOD, electronic-sell-through (“EST”), digital rentals, 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:

Typical Film Release Windows*

		Months After
Release Period		Initial Release
Theatrical			—
Premium VOD		2-3 months
Home entertainment (DVD/Blu-ray/EST), VOD, pay-per-view		4-7 months
Pay television		9-15 months**
Subscription VOD		9-15 months
Network (free and basic)		27-30 months
Licensing and merchandising		Concurrent
All international releasing		Concurrent

International theatrical distribution (outside of the U.S. and Canada) generally follows the same cycle as domestic theatrical distribution. Historically, the international distribution cycle begins a few months after the start of the domestic distribution cycle. However, the increasing sophistication of film piracy operations in international markets, as well as the ease with which the DVD format can be copied has resulted in a much higher percentage of films being released simultaneously to the U.S. and international markets.

Home Entertainment

Home entertainment distribution involves the marketing, promotion and sale and/or lease of DVDs and Blu-ray discs to wholesalers and retailers who then sell or rent the DVDs and Blu-ray discs to consumers for private viewing, and increasingly through a broad range of various digital media platforms.

Although calendar 2010 marked a year of declining consumer spend for home entertainment, the decline was smaller than that in 2009 due to increased Blu-ray penetration, growth in on-demand platforms and growth in digital distribution, which partially offset the decline in packaged media. Generally, weakness in the overall economy and the anticipated maturation of the North American DVD market have been cited as reasons for the continued decline in, as well as continued migration towards, lower priced rental formats. According to the Digital Entertainment Group (the “DEG”), home entertainment spend, including on-demand, declined by about 3.3% in 2010 to about $18.8 billion. Specifically, the industry has been experiencing a decline in DVD sales both domestically and internationally as a result of several factors, including advances in technologies and new methods of product delivery and storage.

Past growth in the home entertainment sector has been driven in part, by increased Blu-ray penetration. Similarly, the 2010 home entertainment market continued to be bolstered by the steady growth of Blu-ray, as sales rose 68% in 2010 compared to 2009. Moreover, on the rental front, despite challenging market conditions, Blu-ray was up 34% in brick and mortar outlets. Indeed, according to the NPD Group’s recent “Entertainment Trends in America” report, while digital home video options are gaining in popularity, more than three quarters of U.S. consumers continue to view movies on DVD and Blu-ray. Additionally, the DEG estimates that the number of Blu-ray playback devices in U.S. households soared to 27.5 million in 2010, up 62% from the previous year.

Recently, digital distribution (which includes EST and VOD) has become a growing factor in the home entertainment market. Indeed, consumer spending on digital distribution grew 19% in 2010, making a notable contribution to the overall home entertainment mix. Growth in digital distribution is expected in the future as well and continued growth of higher-margin digital businesses will tend to exert pressure on home entertainment growth margins.

Digital Media

Digital distribution typically involves delivering content by streaming or downloading to consumer devices such as televisions, personal computers and mobile devices. Indeed, digital media is beginning to gain scale as consumers are watching less traditional television and, instead, are watching content on personal computers and mobile devices, and hooking devices to their televisions and streaming video directly to their television. According to the DEG, digital distribution contributed materially to the home entertainment sector in 2010, with consumer spending on VOD and EST up a combined 19% to $2.5 billion. Specifically, VOD brought in $1.8 billion, up 20.8% for the year, while broadband EST grew 15.7% to $683 million. Further, VOD significantly offset the decline of the entire rental category in 2010. Without VOD, rental was down 2% for the year — with VOD, the category was back to growth, up 2% to $7.8 billion. For the first quarter of calendar year 2011, EST spending was up nearly 11% percent and consumer spending on VOD up 9%. In total, digital movie transactions were up approximately 10% percent over the same period last year. Such growth in digital distribution is expected in the future as well

Television Programming

The market for television programming is composed primarily of the broadcast television networks (such as ABC, CBS, CW, Fox and NBC), pay and basic cable networks (such as AMC, HBO, MTV, Showtime, Starz, TV Guide Network, VH1 and USA Network) and syndicators of first-run programming (such as Sony Pictures Television, CBS Paramount Distribution and ABC Studios) which license programs on a station-by-station basis. Continued growth in the cable and satellite television markets has driven increased demand for nearly all genres of television programming. We expect key drivers to include the success of the cable industry’s bundled services, increased average revenue per user and accelerated advertising spend growth. Additionally, 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.

Cable and Satellite Television Distribution

The cable and satellite television industry is comprised primarily of cable and satellite multi system operators that provide cable and satellite television service to their subscribers, and cable and satellite channels that provide programming content to the system operators for distribution to their subscribers. The operators generally pay a per subscriber carriage fee for the right to distribute a channel to their systems with the highest fees going to those

channels with the most viewers. Operators seek to create a mix of channels that will be attractive to their subscriber base to gain new subscribers and to reduce subscriber turnover. Cable and satellite channels are generally more clearly branded than broadcast networks and provide content that reflects those brands. Branding helps the channels target a more specific demographic so that they can better attract advertisers seeking to reach that audience.

According to In-Stat, the total number of paid television subscribers around the world was up over 6% in 2010, compared to 2009. The total U.S. pay television subscribers remained flat during 2010, growing by only some 148,000, a 0.15% annual growth rate (indeed, cable operators lost 2.5 million subscribers, but satellite and telcom operators made up the difference). However, according to SNL Kagan, total U.S. multi-channel television, satellite and telecom subscribers have increased over the past five years, from approximately 93.7 million in 2005 to 101.8 million in 2010, and is expected to grow approximately 5% by 2015.

The Company

Production

Motion pictures. The motion picture industry is generally composed of two major business segments: production and distribution. Production consists of “greenlighting” and financing motion pictures, as well as the development of a screenplay, the actual filming activities and post-filming editing/post-production process. 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. We have historically produced motion pictures with production budgets of $35 million or less. Films intended for theatrical release are generally budgeted between $10 million and $35 million. From time to time, we consider smaller or larger budgets. In March 2011, we announced a microbudget production initiative, which is focused exclusively on producing up to ten films per year with budgets under $2 million. Additionally, films intended for release directly to video or cable television are generally budgeted between $1 million and $5 million.

In fiscal 2011, we produced, participated in the production of, completed or substantially completed principal photography (the phase of film production during which most of the filming takes place) of the following motion pictures:

	•		For Colored Girls—Based on the 1974, Ntozake Shange’s choreopoem “For Colored Girls Who Have Considered Suicide When The Rainbow Is Enuf,” the film weaves together the stories of nine different women — Jo, Tangie, Crystal, Gilda, Kelly, Juanita, Yasmine, Nyla and Alice — as they move into and out of one another’s existences; some are well known to one another, others are as yet strangers. Crises, heartbreaks and crimes will ultimately bring these nine women fully into the same orbit where they will find commonality and understanding. Each will speak her truth as never before. And each will know that she is complete as a human being, glorious and divine in all her colors (released in November 2010).
	•		Tyler Perry’s Madea’s Big Happy Family—Madea, everyone’s favorite wise-cracking, take-no-prisoners grandma, jumps into action when her niece, Shirley, receives distressing news about her health. All Shirley wants is to gather her three adult children around her and share the news as a family. But Tammy, Kimberly and Byron are too distracted by their own problems: Tammy can’t manage her unruly children or her broken marriage; Kimberly is gripped with anger and takes it out on her husband; and Byron, after spending two years in jail, is under pressure to deal drugs again. It’s up to Madea, with the help of the equally rambunctious Aunt Bam, to gather the clan together and make things right the only way she knows how: with a lot of tough love, laughter...and the revelation of a long-buried family secret (released in April 2011).
	•		Conan The Barbarian—The most legendary Barbarian of all time is back. Having thrived and evolved for eight consecutive decades in the public imagination — in prose and graphics, on the big screen and small, in games and properties of all kinds — Conan’s exploits in the Hyborian Age now come alive like never before in a colossal 3-D action-adventure film. A quest that begins as a personal vendetta for the fierce Cimmerian warrior soon turns into an epic battle against hulking rivals, horrific monsters,

			and impossible odds, as Conan realizes he is the only hope of saving the great nations of Hyboria from an encroaching reign of supernatural evil.
	•		Abduction—For as long as he can remember, Nathan Harper has had the uneasy feeling that he’s living someone else’s life. When he stumbles upon an image of himself as a little boy on a missing persons website, all of Nathan’s darkest fears come true: he realizes his parents are not his own and his life is a lie, carefully fabricated to hide something more mysterious and dangerous than he could have ever imagined. Just as he begins to piece together his true identity, Nathan is targeted by a team of trained killers, forcing him on the run with the only person he can trust, his neighbor, Karen. Every second counts as Nathan and Karen race to evade an army of assassins and federal operatives. But as his opponents close in, Nathan realizes that the only way he’ll survive — and solve the mystery of his elusive biological father — is to stop running and take matters into his own hands.
	•		Norm of the North—A 3-D animated film about a polar bear who comes to New York and becomes a wildly successful mascot for a multinational corporation. He makes appearances on talk shows, does publicity stunts at iconic New York locations, stars in commercials and, of course, has all the amenities one would expect for someone of his stature. However, he soon discovers that without the natural beauty of his arctic ice, being an entertainment icon isn’t all that it’s cracked up to be.

The following motion pictures, of which we are producing or participating in the production of, are currently in or slated for production in fiscal 2012:

	•		The Possession — Inspired by true events, this is the terrifying story of how one family must unite in order to survive the wrath of an unspeakable evil. Clyde and Stephanie Brenek see little cause for alarm when their youngest daughter, Em, becomes oddly obsessed with an antique wooden box she purchased at a yard sale. But as Em’s behavior becomes increasingly erratic, the couple fears the presence of a malevolent force in their midst, only to discover that the box was built to contain a dibbuk — a dislocated spirit that inhabits and ultimately devours its human host.
	•		Hunger Games — Every year in the ruins of what was once North America, the nation of Panem forces each of its twelve districts to send a teenage boy and girl to compete in the Hunger Games. Part twisted entertainment, part government intimidation tactic, the Hunger Games are a nationally televised event in which “Tributes” must fight with one another until one survivor remains. Pitted against highly-trained Tributes who have prepared for these Games their entire lives, Katniss is forced to rely upon her sharp instincts as well as the mentorship of drunken former victor Haymitch Abernathy. If she’s ever to return home to District 12, Katniss must make impossible choices in the arena that weigh survival against humanity and life against love.
	•		Good Deeds — Wesley Deeds, a successful, soon-to-be-married businessman, begins to question his predictable life when he offers help to — and eventually falls in love with — a down-on-her-luck single mother struggling to make ends meet.
	•		Pride and Prejudice and Zombies — An expanded edition of the beloved Jane Austen classic retells the timeless story of love and independence amidst the ghastly threat of the undead. A mysterious plague has fallen upon England, and the dead are returning to life. Feisty heroine Elizabeth Bennet courageously battles the zombie menace, but is distracted in her efforts to preserve England by the arrival of the arrogant Mr. Darcy. As the feelings between Elizabeth and Darcy erupt in sharp barbs and civilized sparring, it is the blood-soaked combat with zombies on the battlefield that unites them.
	•		What To Expect (When You’re Expecting) — Based on the best-selling book, this wildly original romantic comedy follows the relationships of seven couples as they experience the thrills, terrors, surprises, aches, and pains of preparing to embark on life’s biggest journey: parenthood.

Our production team attempts to produce films with disciplined budgets that have commercial potential. First, our production division reviews hundreds of scripts, looking for material that will attract top talent (primarily actors and

directors). We then actively develop such scripts, working with the major talent agencies and producers to recruit talent that appeals to the film’s target audience. We believe the commercial and/or critical success of our films should enhance our reputation and continue to give us access to top talent, scripts and projects. We often develop films in targeted niche markets in which we can achieve a sustainable competitive advantage, as evidenced by the successes of our horror films, including the Saw franchise, and our urban films, including the Tyler Perry franchise.

The decision whether to “greenlight” (or proceed with production of) a film is a diligent process that involves many of our key executives. Generally, the production division presents projects to a committee comprised of the heads of our production, theatrical distribution, home entertainment, international distribution, legal and finance departments. In this process, scripts are evaluated for both artistic merit and commercial viability. The committee considers the entire package, including the script, the talent that may be attached or pursued and the production division’s initial budget. They also discuss talent and story elements that could make the project more successful. Next, the heads of domestic and international distribution prepare estimates of projected revenues and the costs of marketing and distributing the film. Our finance and legal professionals then review the projections and financing options, and the committee decides whether the picture is worth pursuing by balancing the risk of a production against its potential for financial success or failure. The final “greenlight” decision is made by our corporate senior management team, headed by the President of our Motion Picture Group and our Chief Executive Officer.

We typically seek to mitigate the financial risk associated with film production by negotiating co-production agreements (which provide for joint efforts and cost-sharing between us and one or more third-party production companies) and pre-selling international distribution rights on a selective basis (which refers to licensing the rights to distribute a film in one or more media, in one or more specific territories prior to completion of the film). We often attempt to minimize our production exposure by structuring agreements with talent that provide for them to participate in the financial success of the motion picture in exchange for reducing guaranteed amounts to be paid, regardless of the film’s success (which we refer to as “up-front payments”).

In addition, many states and foreign countries have implemented incentive programs designed to attract film production to their jurisdiction as a means of economic development. Government incentives typically take the form of sales tax refunds, transferable tax credits, refundable tax credits, low interest loans, direct subsidies or cash rebates, which are calculated based on the amount of money spent in the particular jurisdiction in connection with the production. Each jurisdiction determines the regulations that must be complied with, as well as the conditions that must be satisfied, in order for a production to qualify for the rebate. We use certain Canadian tax credits, German tax structures, U.K. subsidy programs, domestic state tax incentives and/or programs (in such states as Georgia, New Mexico, Massachusetts and Pennsylvania) and other structures that may help reduce our financial risk.

Television. Our television business consists of the development, production and worldwide distribution of television productions including television series, television movies and mini-series and non-fiction programming. Television revenues are primarily derived from the licensing of our productions and acquired films to the domestic cable, free and pay television markets. As with film production, we use similar tax credits, structures, subsidies, incentives and programs for television production in order to employ fiscally responsible deal structures.

Since 2000, our television programming has earned 77 Emmy^® Award nominations, has won 17 Emmy^® Awards, and has been nominated and won numerous Golden Globe^® Awards and Screen Actors Guild Awards^®. We currently have 15 shows on more than 10 networks spanning our prime time production, distribution and syndication businesses.

Series. Domestic television programming may include one-hour and half-hour dramas, mini-series, animated series and reality and non-fiction programming. In fiscal 2011, we delivered the following episodes of domestic television programming:

	•		13 episodes of the fourth season of the award-winning series Mad Men, a one-hour drama for AMC;
	•		13 episodes of the sixth season of the award-winning series Weeds, a half-hour comedy for Showtime;
	•		12 episodes of the third season of the award-winning series Nurse Jackie, a half-hour comedy for Showtime;
	•		13 episodes of the second season of Blue Mountain State, a half-hour comedy for Spike TV;
	•		13 episodes of the first season of Running Wilde, a half-hour comedy for Fox; and

•

8 episodes of Scream Queens Season 2, a one-hour reality competition show for VH1.

In fiscal 2012, we expect to deliver the following episodes of domestic television programming:

	•		13 episodes of the fifth season of Mad Men;
	•		13 episodes of the seventh season of Weeds;
	•		12 episodes of the fourth season of Nurse Jackie;
	•		13 episodes of the third season of Blue Mountain State;
	•		8 episodes of the first season of Boss for Starz Entertainment; and
	•		Other various proposed pilots and television series that may be delivered in the fiscal year.

Animation. We are involved in the development, acquisition, production and distribution of a number of animation projects for full theatrical release, television and DVD release.

DVD production—In the past several years, we have released several direct-to-video animated movies with Marvel Entertainment Inc. (“Marvel”) including Ultimate Avengers, Ultimate Avengers 2, The Invincible Iron Man, Doctor Strange, Next Avengers: Heroes of Tomorrow, Hulk vs. Thor/ Wolverine and Planet Hulk. We also released Thor, Tales of Asgard in May 2012.

Television production—In 2009, we delivered 26 half-hours and five films of a comedic action adventure series titled Speed Racer: The Next Generation (based on the well-known franchise Speed Racer) to Nickelodeon Networks, which was produced by Animation Collective of New York City. All 26 episodes aired in fiscal 2009. A second 26 half-hour season of the adventure series was ordered, six episodes of which were delivered in fourth quarter fiscal 2011, and the balance of which are expected to be delivered in fiscal 2012. The second season is being produced by Toonz Entertainment, Kick Start Productions and Animation Collective, and has already begun airing on Nickelodeon Networks Nick Toons. Additionally, the first DVD of Speed Racer, The Next Generation was released in the first quarter of fiscal 2009, the second DVD was released in the third quarter of 2009 and the third DVD was released in the second quarter of fiscal 2010. We are overseeing merchandising and licensing as well as distributing this adventure series on DVD.

Theatrical films—In September 2010, we released Alpha and Omega, a 3-D animated film starring Justin Long, Hayden Panettiere, Christina Ricci, Danny Glover and Dennis Hopper, with our partner, Crest Animation. The film is the first picture developed under a co-finance deal with Crest Animation and is from the creator of Open Season, a Sony Pictures Animation CGI film. Building on our relationship with Crest Animation, in February 2010, we announced our second production in a multi-picture deal, Norm of the North. We anticipate delivery of this 3-D animated movie by the end of 2012, which we will be distributing domestically.

Television movies, mini-series and specials. From time to time, we also are involved in the development, acquisition, production and distribution of television content in the movie-of-the week, mini-series and reality special formats.

Music. Our music department creatively oversees music for our theatrical and television slate, as well as the music needs of other areas within our company. Our music strategy is to service the creative division’s music needs, while building a business that focuses on healthy growth areas of the music business, specifically, music publishing assets and improving soundtrack distribution. Unlike music publishers, whose revenue has historically been dependent upon royalties generated by record sales, our publishing revenue derives primarily from performance royalties generated by the theatrical exhibition of our films and the television broadcast of our productions.

Music released for our theatrical slate includes overseeing scores and soundtracks for all of our productions, co-productions and acquisitions. In fiscal 2011, we released Danny Elfman’s score to The Next Three Days, soundtracks to Rabbit Hole, For Colored Girls Who and The Expendables, and the song/score soundtrack to our first animated feature, Alpha & Omega. In fiscal 2012, we expect to release soundtracks for Abduction, The Devil’s Double, Conan the Barbarian and Warrior, and will continue our artist outreach by hosting a music component of the Sundance Film Festival, “A Celebration of Music in Film.”

Music released for our television slate in fiscal 2011 included Mad Men After Dark, our best-selling score-only album to date, and Nurse Jackie‘s opening music, which garnered a 2010 Emmy^® Award for Best Main Title Theme Music. Additionally, we implemented musical logos for Debmar-Mercury and our other television programming that is heard during the closing credits of such broadcasts, which help define our brands and earn performance royalties from The American Society of Composers, Authors and Publishers and Broadcast Music, Inc. In fiscal 2012, we intend to release new soundtracks for Mad Men, Nurse Jackie, and Blue Mountain State, as well as develop a music destination for horror-themed music for FEARnet.com.

Distribution

Domestic theatrical distribution. “Distribution” refers to the marketing and commercial or retail exploitation of motion pictures. We distribute motion pictures directly to U.S. movie theaters. Generally, distributors and exhibitors (theater owners) will enter into agreements whereby the exhibitor retains a portion of the “gross box office receipts,” which are the admissions paid at the box office. The balance (i.e., gross film rentals) is remitted to the distributor.

Over the past 13 years, our releases have included the following in-house productions or co-productions:

Title		Principal Actors
Akeelah and the Bee		Keke Palmer, Laurence Fishburne, Angela Bassett
Crank		Jason Statham, Amy Smart
Crank: High Voltage		Jason Statham, Amy Smart, Bai Ling
Employee of the Month		Dane Cook, Jessica Simpson, Dax Shepherd
For Colored Girls		Janet Jackson, Loretta Devine, Kimberly Elise, Thandie Newton, Phylicia Rashad, Anika Noni Rose, Tessa Thompson, Kerry Washington, Whoopi Goldberg
Godsend		Robert DeNiro, Greg Kinnear, Rebecca Romijn Stamos
Good Luck Chuck		Jessica Alba, Dane Cook
Grizzly Man		Documentary
Killers		Katherine Heigl, Ashton Kutcher, Tom Selleck, Catherine O’Hara
Monster’s Ball		Halle Berry, Billy Bob Thornton
My Best Friend’s Girl		Kate Hudson, Dane Cook
My Bloody Valentine 3-D		Jensen Ackles, Jamie King
Pride		Bernie Mac, Terrence Howard
Punisher: War Zone		Ray Stevenson, Julie Benz, Dominic West
The Eye		Jessica Alba
The Next Three Days		Russell Crowe, Elizabeth Banks, Liam Neeson
The Punisher		John Travolta, Thomas Jane
The Spirit		Gabriel Macht, Samuel Jackson, Scarlett Johansson, Eva Mendes
The U.S. vs. John Lennon		Documentary
Saw II		Donnie Wahlberg, Tobin Bell, Shawnee Smith
Saw III		Tobin Bell, Shawnee Smith, Bahar Soomekh, Angus MacFayden
Saw IV		Tobin Bell
Saw V		Tobin Bell, Scott Patterson
Saw VI		Tobin Bell, Betsy Russell, Costas Mandylor, Shawnee Smith
Saw 3-D		Tobin Bell, Cary Elwes, Costas Mandylor
Tyler Perry’s Daddy’s Little Girls		Gabrielle Union, Idris Elba, Tracee Ellis Ross, Malinda Williams, Terri Vaughn, Lou Gossett Jr.
Tyler Perry’s Diary of a Mad Black Woman		Tyler Perry, Steve Harris, Shemar Moore
Tyler Perry’s I Can Do Bad All By Myself		Taraji P. Henson, Janet Jackson, Louis Gossett Jr.
Tyler Perry’s Madea’s Big Happy Family		Tyler Perry
Tyler Perry’s Madea’s Family Reunion		Tyler Perry
Tyler Perry’s Madea Goes To Jail		Tyler Perry, Keke Palmer, Keisha Knight Pulliam, Derek Luke
Tyler Perry’s Meet The Browns		Tyler Perry, Angela Bassett
Tyler Perry’s Why Did I Get Married?		Tyler Perry, Janet Jackson
Tyler Perry’s Why Did I Get Married Too?		Tyler Perry, Janet Jackson, Tasha Smith
Tyler Perry’s The Family That Preys		Tyler Perry, Alfre Woodard, Kathie Bates
War		Jet Li, Jason Statham

Motion pictures that we have acquired and distributed in this same time period include the following:

Title		Principal Actors
3:10 to Yuma		Russell Crowe, Christian Bale
Bangkok Dangerous		Nicolas Cage
Brothers		Jake Gyllenhaal, Natalie Portman, Tobey Maguire
Crash		Don Cheadle, Sandra Bullock, Matt Dillon, Brendan Fraser
Daybreakers		Ethan Hawke, Willem Dafoe, Sam Neill
Dogma		Ben Affleck, Matt Damon, Chris Rock
Fahrenheit 9/11		Documentary
From Paris With Love		John Travolta, Jonathan Rhys Meyers
Gamer		Gerard Butler, John Leguizamo, Milo Ventimiglia, Kyra Sedgwick
Girl With A Pearl Earring		Scarlett Johannson, Colin Firth
Hard Candy		Patrick Wilson, Ellen Page
Kick-Ass		Nicolas Cage, Christopher Mintz-Plasse, Aaron Johnson, Chloe Moretz
Lord of War		Nicolas Cage, Ethan Hawke, Jared Leto, Bridget Moynahan
More Than A Game		LeBron James
New In Town		Renee Zellwegger, Harry Connick Jr.
The Bank Job		Jason Statham
The Cooler		Alec Baldwin, William H. Macy, Maria Bello
The Descent		Shauna Macdonald, Natalie Jackson Mendoza, Alex Reid, Saskia Mulder
The Expendables		Sylvester Stallone, Jet Li and Jason Statham
The Lincoln Lawyer		Matthew McConaughey, Marisa Tomei
The Last Exorcism		Patrick Fabian, Ashley Bell
The Forbidden Kingdom		Jet Li, Jackie Chan
The Haunting In Connecticut		Virginia Madsen
O		Julia Stiles, Mekhi Phifer
Open Water		Blanchard Ryan, Daniel Travis
Precious		Gabourey Sidibe, Mo’Nique, Paula Patton, Maria Carey
Rambo		Sylvester Stallone
Religulous		Bill Maher
Saw		Danny Glover, Monica Potter, Cary Elwes
Sicko		Documentary
The Spy Next Door		Jackie Chan, George Lopez, Billy Ray Cyrus
Transporter 3		Jason Statham
W		Josh Brolin, Elizabeth Banks, Ellen Burstyn, James Cromwell, Thandie Newton

In the last 13 years, films we have distributed have earned 53 Academy Award^® nominations and 16 Academy Awards^®, and have been nominated and won numerous Golden Globe^® Awards, Screen Actors Guild Awards^®, BAFTA Awards and Film Independent Spirit Awards.

We have released approximately 14 motion pictures theatrically per year for the last three years, which include films we develop and produce in-house, films that we develop and produce with our partners and films that we acquire from third parties. In fiscal 2012, we currently intend to release approximately 11 to 13 motion pictures theatrically. Our approach to acquiring films for theatrical release is similar to our approach to film production. We generally seek to limit our financial exposure while adding films of quality and commercial viability to our release schedule and our video library. The decision to acquire a motion picture for theatrical release entails a process involving our key executives from the releasing, home entertainment and acquisitions departments, as well as corporate senior management. The team meets to discuss a film’s expected critical reaction, marketability, and potential for commercial success, as well as the cost to acquire the picture, the estimated distribution and marketing expenses (typically called “P&A” or “prints and advertising”) required to maximize the targeted audience and ancillary market potential after its theatrical release. Generally, we release films on a wide basis to more than 2,000 screens nationwide.

We construct release schedules taking into account moviegoer attendance patterns and competition from other studios’ scheduled theatrical releases. We use either wide or limited initial releases, depending on the film. We generally spend significantly less on P&A for a given film than a major studio and we design our marketing plans to cost-effectively reach a large audience.

For fiscal 2012, our proposed theatrical release schedule may include, among others, the following titles:

						Produced
						or		Approximate
Title		Summary		Principal Actors		Acquired*		Release Date
Tyler Perry’s Madea’s Big Happy Family		See summary above.		Tyler Perry, Loretta Devine, Shad “Bow Wow” Moss, David Mann		Produced		April 2011
The Devil’s Double		The year is 1987 and Baghdad is the playground for the rich and infamous- where anything can be bought, for a price. When army lieutenant, Latif Yahia is summoned from the frontline to Saddam’s palace, he is faced with an impossible request — to be Iraq’s notorious Black Prince Uday Hussein’s ‘fiday,’ his body double. With his family’s lives as well as his own on the line, his fate is decided. Latif begins his journey as Uday Hussein, a man as widely hated as he is powerful. As he learns to walk, talk and act like Uday, he experiences the extravagance of a world filled with fast cars, endless money, easy women, and deeply depraved violence. Knowing who to trust becomes a matter of life or death, as he battles to escape from his forced existence alongside Sarrab, Uday’s notorious concubine.		Dominic Cooper, Ludivine Sangier		Acquired		July 2011
Conan The Barbarian		See summary above.		Jason Momoa, Ron Perlman, Rachel Nichols, Stephen Lang, Rose McGowan		Produced		August 2011
Warrior		See summary above.		Joel Edgerton, Tom Hardy, Jennifer Morrison, Nick Nolte		Produced		September 2011
Abduction		See summary above.		Taylor Lautner, Lily Collins, Alfred Molina, Jason Issacs, Maria Bello, Sigourney Weaver		Produced		September 2011
Safe		A former elite agent encounters and rescues a twelve-year-old Chinese girl who’s been abducted by the Triads. Armed with a safe-cracking combination, they find themselves in the middle of a stand-off between Triads, the Russian Mafia and high-level corrupt New York City politicians and police.		Jason Statham, Catherine Chan		Acquired		October 2011
The Possession		See summary above.		Jeffrey Dean Morgan, Kyra Sedgwick		Produced		January 2012
One For The Money		See summary above.		Katherine Heigl		Acquired		January 2012

						Produced
						or		Approximate
Title		Summary		Principal Actors		Acquired*		Release Date
The Hunger Games		See summary above.		Jennifer Lawrence, Stanley Tucci, Wes Bentley, Elizabeth Banks, Woody Harrelson, Josh Hutcherson, Liam Hemsworth, Lenny Kravitz		Produced		March 2012

We may revise the release date of a motion picture as the production schedule changes or in such a manner as we believe is likely to maximize revenues or for other business reasons. Additionally, there can be no assurance that any of the motion pictures scheduled for release will be completed, that completion will occur in accordance with the anticipated schedule or budget, that the film will ever be released, or that the motion pictures will necessarily involve any of the creative talent listed above.

Mandate Pictures. Our wholly-owned subsidiary, Mandate Pictures, is a full-service production and financing company that continues to operate as an independent brand delivering acclaimed commercial and independent films worldwide. In fiscal 2011, Mandate produced The Switch, starring Jennifer Aniston and Jason Bateman, which was released in North America by Miramax in August 2010.

Mandate Pictures’ upcoming film slate includes the following titles:

Title		Summary		Principal Actors		Approximate Release Date/Distributor
50/50		Inspired by personal experiences, this is an original story about friendship, love, survival and finding humor in unlikely places. Joseph Gordon-Levitt and Seth Rogen star as best friends whose lives are changed by a cancer diagnosis.		Joseph Gordon-Levitt, Seth Rogen, Anna Kendrick, Bryce Dallas Howard and Anjelica Huston		September 2011 (Summit Entertainment)
Young Adult		Mavis Gary, a writer of teen literature, returns to her small hometown to relive her glory days and attempt to reclaim her happily married high school sweetheart. When returning home proves more difficult than she thought, Mavis forms an unusual bond with a former classmate who hasn’t quite gotten over high school, either.		Charlize Theron, Patton Oswalt, Patrick Wilson		Fiscal 2012 (Paramount Pictures)
Harold & Kumar 3		The new comedy picks up six years after the duo’s last adventure. After years of growing apart, Harold Lee and Kumar Patel have replaced each other with new best friends and are preparing for their respective Christmas celebrations. But when a mysterious package arrives at Kumar’s door, his attempt to deliver it to Harold’s house ends with him inadvertently burning down Harold’s father-in-law’s prize Christmas tree. With his in-laws out of the house for less than a day, Harold decides to cover his tracks rather than come clean, and reluctantly embarks on another ill-advised but hilarious journey with Kumar, taking them through New York City on Christmas Eve in search of the perfect Christmas tree.		John Cho, Kal Penn, Neil Patrick Harris, Tom Lennon, Danny Trejo, Patton Oswalt, Paula Garces, Daneel Harris		November 2011 (Warner Bros. Pictures)
LOL		In a world connected by YouTube, iTunes and Facebook, Lola and her friends navigate the peer pressures of high school romance and friendship while dodging their sometimes overbearing and confused parents. When Lola’s mom, Anne, “accidentally” reads her teenage daughter’s racy journal, she realizes just how wide their communication gap has grown. Through hilarious and heartfelt moments between mother and daughter, LOL is an authentic coming-of-age story that perfectly captures today’s zeitgeist.		Miley Cyrus, Demi Moore, Ashley Greene, Thomas Jane, Douglas Booth, George Finn, Ashley Hinshaw, Adam Sevani, Lina Esco, Tanz Watson, Marlo Thomas		Fiscal 2012 (Lionsgate)

Mandate Pictures’ current development and production slate includes, among others: Seeking A Friend For The End Of The World, starring Steve Carell and Keira Knightley; Great Hope Springs, a comedy starring Meryl Streep and Steve Carell; a romantic actioner starring Zac Efron; Dogs of Babel, Jamie Linden’s adaptation of the best-selling novel, starring Steve Carell; Dream On, a teen dance movie; The Low Self Esteem of Lizzie Gillespie, a romantic comedy to be written by Brent Forrester and Mindy Kaling; My Dinner with Hervé, written and directed by Sacha Gervasi, a former journalist who conducted the last interview with French actor Herve Villechaize; an untitled comedy to be written by D.V. DeVincentis based on the book “You Are a Miserable Excuse for a Hero” by Bob Powers; and a remake of the highly-acclaimed South Korean action-adventure/epic, Old Boy.

Mandate Pictures also maintains a partnership with Ghost House Pictures (“Ghost House”), formed with filmmakers Sam Raimi (Spider-Man and Evil Dead Franchises) 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 has produced 30 Days of Night: Dark Days, Drag Me To Hell, along with such titles as 30 Days of Night, The Grudge I and II, The Messengers and Boogeyman. Ghost House’s current development and production slate includes, among others, The Possession, which is expected to be released by us in North America in October 2011, Burst 3-D, a horror/thriller project, and Panic Attack, an original idea with YouTube and Uruguayan filmmaker Federico Alvarez. In October 2009, Ghost House established Spooky Pictures, a production label under the Ghost House banner dedicated to the financing, development, production and distribution of scary movies made for the family audience. The first project under the new label will be The Substitute, in collaboration with Sony Pictures and Stars Road Entertainment’s Joshua Donen.

Mandate Pictures continues to foster talent relationships by inking exclusive production deals with top writers and directors. Mandate Pictures recently signed a first-look deal with David Gordon Green, Jody Hill and Danny McBride to produce high concept comedies under the label Rough House Pictures (“Rough House”). Combining their creative filmmaking with Mandate Pictures’ financing and producing expertise, Rough House is establishing itself as a hub for exciting and bold comedic voices. Projects in development through Rough House’s agreement with Mandate Pictures include, among others, Bullies, an action-comedy starring Danny McBride, and an untitled comedy set around the Olympics co-starring Aziz Ansari and Danny MacBride, written by Park & Recreation writer Harris Wittels from an idea by Primetime Emmy^® Award-winning 30 Rock writer Matt Hubbard.

Ancillary markets. In addition to the distribution described above, we also license the right to non-theatrical uses of our films to distributors who, in turn, make a motion picture available to airlines, hotels, schools, oil rigs, public libraries, prisons, community groups, the armed forces, ships at sea and others.

International sales and distribution. The primary components of our international business are, 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 product; (ii) the licensing and sale of third party product on an agency basis; (iii) the licensing and sale of in-house catalog product or libraries of acquired titles (such as those of Miramax, Artisan Entertainment and Modern Times Group); and (iv) direct distribution.

Lionsgate International—We sell or license rights in all media on a territory by territory basis (other than the territories in which Lionsgate UK and Maple Pictures sell and distribute) of (i) our in-house Lionsgate product, as well as titles from Mandate Pictures and Ghost House, (ii) our catalog product or libraries of acquired titles, and (iii) product produced by third parties such as Relativity Media, Gold Circle Films, LLC and other independent producers. We often pre-sell international territories to cover a significant portion of the production budget or acquisition cost on new releases. We also leverage our infrastructure to generate revenue through a sales agency business for third party product. Recent films sold by us include such in-house productions as Abduction, The Next Three Days, starring Russell Crowe, Saw 3-D, 50/50, starring Seth Rogen and Joseph Gordon Levitt, The Possession and The Hunger Games. Recent third party films sold by us include Limitless, starring Bradley Cooper and Robert

DeNiro, and the upcoming Immortals 3-D, starring Henry Cavill, Freida Pinto and Mickey Rourke. In fiscal 2011, we had record-breaking sales of over $100 million at the November 2010 American Film Market, driven by upcoming in-house productions of The Hunger Games and The Possession.

Lionsgate UK—We self-distribute our motion pictures in the U.K. and Ireland through our subsidiary, Lionsgate UK. Lionsgate UK’s fiscal 2011 theatrical slate included such titles as The Expendables, Saw 3-D and The Mechanic, starring Jason Statham. In fiscal 2011, Lionsgate UK also financed and produced its second feature, Salmon Fishing in the Yemen, starring Ewan McGregor and Emily Blunt. International sales were handled by Lionsgate International. In the last three years, Lionsgate UK has also successfully built up a strong third party acquisitions business. Lionsgate UK releases over 40 direct-to-video titles per year, the majority of which are acquired in the open market. Elevation, our joint venture with Optimum Releasing/StudioCanal, handles the joint sales and distribution of DVD product for Lionsgate UK. In fiscal 2012, Lionsgate UK expects to release titles such as Conan The Barbarian, Warrior, and Ralph Fiennes’ directorial debut, Coriolanus, and will begin production on The Professionals, based on the popular 1970s British television series of the same name.

Television—We continue to expand our television business internationally through sales and distribution of original Lionsgate television series, third party television programming and format acquisitions.

Canada—We distribute our motion picture, television and home video product in Canada through Maple Pictures, one of the largest independent distributors in Canada. Maple Pictures also acquires and distributes third party films, including, in fiscal 2010, Academy Award^® winners The Hurt Locker, which won six awards including Best Picture, and The Cove, which won Best Documentary. In fiscal 2011, Maple Pictures distributed acquired films including Winter’s Bone, nominated for several Academy Awards^® including Best Picture, and Biutiful, starring Javier Bardem, nominated for an Academy Award^® for Best Foreign Language Film. Maple Pictures’ fiscal 2012 slate includes Our Idiot Brother, starring Paul Rudd, which played at the 2011 Sundance Film Festival, and Drive, starring Ryan Gosling and Carey Mulligan, which was included in competition at the 2011 Cannes Film Festival. Maple Pictures is supportive of Canadian productions as well which, in fiscal 2011, included Man On The Train, starring Donald Sutherland, and Servitude, produced through the Canadian Film Centre Comedy Lab.

Home video distribution. Home video distribution includes distribution of films to the home entertainment market, including home video, DVD, Blu-ray, VOD, and digital/electronic distribution. Our U.S. video distribution operation aims to exploit our filmed and television content library of approximately 13,000 motion picture titles and television episodes and programs.

In fiscal 2011, we continued to achieve one of the highest box office-to-DVD conversion rates in the industry, maintaining a rate of approximately 26% above that of the normalized industry average. Box office-to-DVD conversion rate is calculated as the ratio of the total first cycle DVD release revenues for such theatrical release compared to the total box-office revenues from a theatrical release. We also achieved a box office-to-VOD conversion rate of approximately 5% to 10% above the industry normalized average in fiscal 2011. Box office-to-VOD conversion rate is calculated as the ratio of total first cycle VOD revenues for such theatrical release compared to the total box-office revenues from a theatrical release.

For calendar year 2010, Blu-ray represented over 22% of new theatrical DVD release revenue from our new theatrical releases. According to data from industry sources, in calendar year 2010, we held an approximately 5% market share of the Blu-ray theatrical feature film market based on revenue. We also maintained our overall market share of combined sell-through and rental consumer spend at approximately 7% for calendar year 2010, compared to calendar year 2009 (and approximately 8% for the first quarter of calendar year 2011).

We distribute or sell our titles directly to mass merchandisers such as Wal-Mart Stores, Inc. (“Wal-Mart”), K-Mart, Best Buy Co. Inc. (“Best Buy”), Target Corporation and Costco Wholesale Corporation, and others who buy large volumes of our DVDs and Blu-ray discs to sell directly to consumers. Sales to Wal-Mart accounted for approximately 35% of net home entertainment packaged media revenue in fiscal 2011. No other customer accounted for more than 10% of our revenues in fiscal 2011.

We also directly distribute our titles to the rental market through Netflix, Inc. (“Netflix”), Redbox Automated Retail, LLC (“Redbox”), Blockbuster, Inc. (“Blockbuster”), and Rentrak Corporation. In April 2011, we announced an exclusive multiyear syndication deal in which we licensed the first four seasons of Mad Men to be watched instantly by Netflix members starting July 27, 2011, with additional seasons (five through seven) to be added annually after they complete airing on their respective seasons on AMC.

In fiscal 2011, we had four theatrical releases on DVD debut at number one with Tyler Perry’s Why Did I Get Married Too?, Kick-Ass, Killers and For Colored Girls. Additionally, in fiscal 2011, we had six titles that debuted at either number one or number two on the Rentrak On-Demand VOD charts with Next Three Days, Expendables, Killers, Tyler Perry’s Why Did I Get Married Too?, Kick-Ass and From Paris with Love. Additionally, our Saw franchise continued as the number one horror franchise in DVD history.

In addition to our theatrical releases each year, we also acquire approximately 65 titles annually that have commercial potential in video and ancillary markets, adding a total of approximately 75 to 80 films to our library each year. We also distribute television product on video, including certain Saturday Night Live product currently in our library (which distribution rights were extended through 2014), the first, second, third and fourth seasons of the Primetime Emmy^® Award-winning AMC series Mad Men, the first, second, third, fourth, fifth and sixth seasons of the Primetime Emmy^® Award-winning Showtime series Weeds, the first season of Blue Mountain State, the first and second seasons of Nurse Jackie, the first season of the Showtime series Secret Diary of A Call Girl, the entire catalog of the comedy series Moonlighting, the entire catalog of the comedy series Will and Grace, the entire catalog of Little House on the Prairie, and certain Disney-ABC Domestic Television series and Comcast series.

In fiscal 2011, we also released several direct-to-video titles including Madea’s Big Happy Family-The Play, Peacock, Burning Bright, The Descent Part 2, Fred the Movie, Tenderness, The Least Among You, The Way Home and The Last Play at Shea, as well as several Spanish language direct-to-video titles including Amor Letra Por Letra, Bluff, Amor Dolor y Viceversa, Crimenes de Lujuria and Oscura Seduccion.

We continue our direct-to-video horror genre with our arrangement with Ghost House Underground, the film acquisitions company that extends the Ghost House brand to home entertainment. In fiscal 2011, we released two titles including Psych 9 and Stag Night.

We remain a leader in distribution of fitness product. For calendar year 2010, we had an approximate 30% market-share in fitness and ranked number two among all studios. We are currently ranked number one among all studios for calendar year 2011 to date, with an approximate 25% market share. Our fitness lineup includes popular series such as Denise Austin, Jillian Michaels, The Biggest Loser and Dancing With The Stars, as well as titles from Billy Blanks Jr., and Jane Fonda. We had the top five fitness releases of the year in fiscal 2011, including 30 Day Shred (the top selling fitness title in the DVD era), Yoga Meltdown, No More Trouble Zones, Banish Fat Boost Metabolism and 6 Week Six Pack.

Our relationship with Tyler Perry, which has been the filmmaker’s home since his breakthrough theatrical box office hit Diary of a Mad Black Woman in February 2005, continues. In fiscal 2010, we released on DVD the theatrical releases of Madea Goes To Jail and I Can Do Bad All By Myself. In fiscal 2011, we released on DVD the theatrical releases of Why Did I Get Married Too?, For Colored Girls, and the direct-to-video release of Tyler Perry’s play, Madea’s Big Happy Family. To date, we have also released on DVD the first through sixth volumes of the TBS television series Tyler Perry’s House of Payne, and expect to release the seventh and eight volumes in fiscal 2012, as well as the first volume of the TBS television series Tyler Perry’s Meet The Browns.In March 2011, we announced that our first look partnership with Tyler Perry was extended through a new multi-year arrangement for films and home entertainment in which we will continue to distribute DVD’s based on his hit films and from his catalog of plays and other material.

Our domestic family entertainment division has established itself as a major home entertainment distributor of children’s product. According to Nielsen Media Research, in calendar year 2010, our children’s non-theatrical DVD share, 18%, was the second highest market-share of all studios. This share was driven by our continued distribution of product from HIT Entertainment, Inc. (“HIT Entertainment”), Aardman Animations Ltd (“Aardman Animations”), LeapFrog Enterprises, Inc. (“LeapFrog”), the Jim Henson Company (“Jim Henson”), Marvell and our catalog of premiere children’s brands including Barbie, Bratz, Care Bears, Clifford the Big Red Dog, Speed

Racer and Teenage Mutant Ninja Turtles. HIT Entertainment’s extensive portfolio of award-winning children’s programming distributed by us includes the children’s DVD preschool franchises Thomas & Friends, Barney, Bob the Builder and Fireman Sam, as well as, beginning in fiscal 2011, Angelina Ballerina, the CGI-animated television series broadcasting on PBS, and Timmy Time, the Shaun the Sheep spin-off preschool television series broadcast on Disney Junior. Additionally, in fiscal 2011, we continued to produce and distribute direct-to-video family-oriented feature films for educational toy maker LeapFrog and distributed new DVD premiere animated movies for Care Bears and Bratz. We also added and relaunched Jim Henson’s Wubbulous World of Dr. Seuss television series on DVD and distributed YouTube star Fred Figglehorn’s first movie, Fred: The Movie.

We continue our distribution agreement with Disney-ABC Domestic Television under which we obtained the home entertainment distribution rights to select prime time series and library titles from ABC Studios, including According to Jim, starring Jim Belushi and Courtney Thorne- Smith, Reaper, Hope & Faith, starring Kelly Ripa and Faith Ford, 8 Simple Rules...for Dating My Teenage Daughter, starring John Ritter and Katey Sagal, Boy Meets World, starring Ben Savage and Rider Strong, My Wife & Kids, starring Damon Wayans and Tisha Campbell, and Dirt Season starring Courtney Cox.

Our first-look partnership continues with Comcast, which operates Comcast’s West Coast entertainment properties, under which we obtained the home entertainment distribution rights to series airing on E! Entertainment Television, The Style Network and G4 including Keeping Up with the Kardashians, Kourtney and Khloe Take Miami, Sunset Tan, Snoop Dogg’s Father Hood, and Kimora: Life In The Fab Lane. We also maintain distribution rights for SyFy’s (formerly known as the Sci-Fi Channel) Alice mini-series.

Recent Developments. In February 2011, we entered into a worldwide home entertainment distribution agreement with Miramax pursuant to which we will distribute more than 550 titles from the Miramax film library via DVD, Blu-ray, EST and internet VOD, in addition to cable VOD internationally. We will partner with leading international distributor Studiocanal to distribute Miramax titles in the U.K. and Europe.

In November 2010, we entered into a home entertainment distribution agreement with Wrekin Hill Entertainment (“Wrekin Hill”) pursuant to which we became the exclusive home entertainment distributor (including DVD, Blu-ray, digital delivery, and VOD) for all Wrekin Hill theatrical releases in the U.S.

In July 2010, we entered into a multi-year home entertainment distribution agreement with Francis Ford Coppola’s Zoetrope Corporation. Under the terms of the arrangement, we obtained the North American DVD, Blu-ray, EST, VOD and broadcast television distribution rights to films including Apocalypse Now, Apocalypse Now Redux and others, as well as the North American DVD, Blu-ray, EST and VOD rights to The Conversation.

In May 2010, we entered into a home entertainment distribution agreement including DVD, Blu-ray, digital delivery, television and VOD for all Exclusive Media Group’s (Exclusive) Newmarket Films theatrical titles in the U.S., as well as its library of 250 titles.

Television syndication. We distribute television programming through our subsidiary, Debmar-Mercury. In fiscal 2011, Debmar-Mercury distributed approximately 1,200 hours and produced approximately 195 hours of television programming. In fiscal 2012, Debmar-Mercury currently intends to distribute approximately 1,400 hours and produce approximately 345 hours of television programming.

Currently, Debmar-Mercury produces and distributes The Wendy Williams Show, distributes Tyler Perry’s House of Payne and its spinoff Meet the Browns, and the strips Hell’s Kitchen, Family Feud, South Park and True Hollywood Story. Debmar-Mercury also distributes Are We There Yet, which premiered on TBS in June 2010 (and is expected to air in syndication beginning in the fall of 2012), as well as a movie library featuring our titles as well as those from Revolution Studios.

In April 2011, Debmar-Mercury announced that TBS ordered ten episodes of the new series Tyler Perry’s For Better or Worse, a sitcom based on Tyler Perry’s hit Why Did I Get Married? films, which is expected to launch in

December 2011. For Better or Worse is Debmar-Mercury’s third syndicated sitcom with Tyler Perry. 362 episodes of Debmar-Mercury’s syndicated sitcoms with Tyler Perry have been ordered to-date.

Moreover, beginning in the fall of 2011, a U.S. version of The Jeremy Kyle Show, a successful talk series in the U.K., will be produced in conjunction with ITV Studios America and distributed by Debmar-Mercury for daytime stripping on television stations across the country. In fiscal 2012, Debmar-Mercury will also be testing a talk show starring Father Albert Cutie in a joint venture with certain Fox television stations.

Pay and free television distribution. We currently have approximately 800 titles in active distribution in the domestic cable, free and pay television markets. Pay television rights include rights granted to cable, direct broadcast satellite and other services paid for by subscribers. We sell our library titles and new product to major cable channels such as Showtime, USA Network, FX, Turner Networks, Starz Entertainment, Family Channel, Disney Channel, Cartoon Network, SyFy, Lifetime, MTV, Comedy Central, OWN and BET. Recently, in May 2010, we licensed 139 of our most prestigious and successful theatrical titles to Rainbow Media, for airing on its IFC, Sundance, AMC and WE networks. We also directly distribute to pay-per-view and VOD to cable, satellite and internet providers such as Comcast, Time Warner Inc., Cox Communications, Inc. thru iN Demand L.L.C., Charter Communications, Inc., AT&T Uverse and Verizon FIOS thru Avail-TVN, Cablevision Systems Corp., DirecTV, Inc. and DISH Network L.L.C. Additionally, in April 2008, we formed a joint venture with Viacom, Paramount Pictures, and MGM and created EPIX. EPIX, which launched in October 2009, provides us with an additional platform to distribute our library of motion picture titles and television episodes and programs.

Electronic distribution. We also deliver our content through a broad spectrum of digital media platforms. We have digital delivery arrangements for first run theatrical films, television series, our movie library, third party product and product not available on DVD. Distribution outlets include, among others, Apple iTunes, Amazon.com, Inc., Microsoft Inc.’s Zune/X-BOX, Sony’s Playstation Network, Netflix, Roxio, Best Buy/CinemaNow, Hulu LLC (“Hulu”), YouTube, mSpot, Inc. and Wal-Mart/Vudu. We currently have over 900 films and television episodes in active distribution through these digital channels.

Through our partnership with EPIX, we offer product via the internet and to multiple devices for consumption “anytime/anywhere” by EPIX subscribers. Recently, in August 2010, EPIX announced an agreement through which Netflix members can instantly watch an array of new releases and library titles from EPIX streamed over the internet from Netflix beginning September 1, 2010. EPIX has subscription pay television rights to new releases and movies from the libraries of its partners and will make these movies available to Netflix 90 days after their premium pay television and subscription on demand debuts. Historically, the rights to distribute these films are pre-sold to pay television for as long as nine years after their theatrical release.

We also operate FEARnet, a branded multiplatform programming and content service provider of horror genre films, in connection with partners Comcast and Sony, and own an interest in Break Media, a leading viral marketing company that creates new opportunities for showcasing our feature films and television programming. Additionally, we have partnered with YouTube to create new branded “Lionsgate” channels which enable us to post full length films and television episodes and to post promotional scenes from our film and television libraries. In addition to sharing advertising revenue from the channel, a banner on the page leads to our online shop, where our films and shows highlighted in the promotional scenes are available for purchase as DVDs or Blu-ray discs in digital form.

Joint Ventures and Partnerships

Pantelion Films. In July 2010, we announced the launch of Pantelion Films, a joint venture with Grupo Televisa, S.A.B., designed to produce and distribute a slate of English and Spanish language feature films to target Hispanic moviegoers in the U.S., one of the fastest-growing segments of the U.S. moviegoer population. Indeed, according to the Motion Picture Association of America’s U.S. Theatrical Market Statistics 2010, although Caucasians currently make up the majority of the U.S. population and moviegoers (141 million), they represent a lower proportion of ticket sales, down to 56% of tickets in 2010, compared to 60% in 2009. In 2010, 43 million Hispanic moviegoers purchased 351 million movie tickets, up from 37 million moviegoers and 300 million tickets in 2009. Moreover, in 2010, Hispanics had the highest moviegoing per capita, attending movies on average seven times per year, compared to closer to four times a year for other ethnicities.

Pantelion Films will release a theatrical slate of eight to ten films per year and will also distribute a steady stream of films through ancillary platforms over the next five years. Of such films, four to five will be produced in-house each year, and others will be acquired. Pantelion Films’ current theatrical slate includes the following titles:

	•		From Prada To Nada — A whimsical fish-out-of-water story of two spoiled sisters whose lives are changed forever when their father unexpectedly dies. Now penniless, Nora and Mary Dominguez move cross-town, but worlds away, to East LA and the home of their estranged Aunt Aurelia. Here they discover that when they embrace their cultural roots they are richer than ever before (released in January 2011);
	•		No Eres Tu Soy Yo — A romantic comedy that tells the hilarious story of Javier, a man who refuses to accept the loss of the woman he loves. In his journey to recovery, he rides an emotional rollercoaster that eventually leads him to his true love (released in April 2011);
	•		Go For It! — An inspirational drama follows Carmen, a young woman living in Chicago, who struggles to overcome her fears and follow her dream to be a dancer (released in May 2011);
	•		Saving Private Perez — In this comedy, a ruthless Mexican crime lord undertakes the most dangerous mission of his life in order to redeem himself with the only authority figure he fears: his mother. With the help of his rag-tag gang of thugs, Julian Perez must travel to Iraq and ensure the safe homecoming of his younger brother, a private fighting for the US army (expected September 2011 release); and
	•		See If I Care— The story of a thirteen year old girl who decides to “play out” every teenage rebellion cliché in an effort to jumpstart herself into adulthood while her young mother does everything possible to avoid growing up (expected calendar year 2011 release).

Tiger Gate. In April 2010, we announced that we had formed a partnership with SCG to operate and manage Tiger Gate, an operator of pay television channels and an originator/distributor of action and horror television programming and films across Asia. Tiger Gate operates KIX, a world-class action channel, and Thrill, a thriller/suspense/horror movie channel, tailor-made for audiences in Asia. Thrill showcases high-end local Asian thriller and horror films and hit television series and also leverages our vast stockpile of horror/thriller content, as well as other studio hits. KIX is a fast-paced, action-packed channel featuring a mix of blockbuster motion pictures, hit television series, cutting-edge reality series, action game shows, anime, extreme sports, mixed martial arts and fight events, and classic martial arts masterpieces, bringing together a broad spectrum of Asian content, as well as international content with an Asian influence. Tiger Gate also operates a production business, focused on content in genres that complement its channels business. Tiger Gate’s strategy looks beyond linear television with plans for additional content-based activities including live events and next generation media/distribution. Tiger Gate’s channels have launched in Indonesia, Hong Kong and Singapore, and are expected to launch in the Philippines and other key Asian territories in 2011.

TV Guide Network. In January 2009, we acquired TV Guide Network, and sold a 49% interest to OEP in May 2009. Committed to buzz-worthy, breakout programming and a rich, multi-platform viewing experience, TV Guide Network is seen in more than 80 million homes nationwide and online at TVGuide.com, a one-stop fan destination reaching more than 21 million unique users per month. TV Guide Network is home to series including Curb Your Enthusiasm, Weeds and Ugly Betty. The network also takes fans behind-the-scenes of Hollywood with original programming that delivers the latest news on entertainment and pop culture, as well as live coverage of the industry’s biggest events such as the red carpet at the Academy Awards^® and Primetime Emmy^® Awards.

EPIX. In April 2008, we formed a joint venture with Viacom, Paramount Pictures, and MGM and created EPIX, a next-generation multiplatform premium entertainment channel, VOD, and online service. Launching with Verizon FiOS in October 2009 and with other distribution partners in subsequent months, EPIX boasts access to more than 15,000 motion pictures spanning the vast libraries of the partner studios. EPIX delivers films from Paramount Pictures, Paramount Vantage, MTV Films and Nickelodeon Movies released theatrically on or after January 1, 2008 and MGM, United Artists and our titles released theatrically on or after January 1, 2009, which is available exclusively to its subscribers. In August 2010, EPIX announced an agreement through which Netflix members can instantly watch an array of new releases and library titles from EPIX streamed over the internet from Netflix beginning September 1, 2010. To date, EPIX has concluded carriage agreements with eight distributors, and is now available to consumers in over 30 million homes.

Break Media. In June 2007, we acquired an interest in Break Media, a leading creator, publisher, and distributor of digital entertainment content including video, editorial, and games. The company’s properties include one of the largest humor sites online, Break.com, as well as MadeMan, GameFront, HolyTaco, ScreenJunkies, CagePotato, AllLeftTurns, Chickipedia, and TuVez. Break Media’s creative lab is an in-house production studio creating original videos that range from award-winning branded entertainment to celebrity-driven web shorts to viral one-offs, and represents hundreds of publishers as one of the largest video advertising networks online. According to comScore Video Metrix, the network operated the third largest video ad network in March 2011.

FEARnet. In October 2006, we formed FEARnet, a branded multiplatform programming and content service provider of thriller-suspence and horror genre films and programming. FEARnet is a premier destination for horror, thriller and suspense, and is a cutting-edge, multi-platform movie network available on linear, on demand and online, 24 hours per day, seven days per week. FEARnet has generated over 550 million on-demand movies views since inception, is the number one free movie VOD network, and is consistently one of the top genre websites. FEARnet launched its traditional cable channel in high definition on October 31, 2010 and is currently available on-demand or linear on AT&T U-Verse, Bresnan, Comcast, Cox Communications, Guadalupe Valley Systems, Insight Communications, Verizon FiOS and Time Warner Cable. According to Rentrak Corporation, FEARnet is the number one free VOD movie service, has been a top 10 VOD network for 49 consecutive months and has been named among “The 15 Best Websites for Movie Fans.”

Intellectual Property

We are currently using a number of trademarks including “LIONS GATE HOME ENTERTAINMENT,” “ARTISAN HOME ENTERTAINMENT,” “FAMILY HOME ENTERTAINMENT,” “DIRTY DANCING,” “THE BLAIR WITCH PROJECT,” “RESERVOIR DOGS” and “MAD MEN” in connection with our domestic home video distribution, “LIONS GATE FILMS,” “LGF FILMS,” “ARTISAN ENTERTAINMENT,” “TRIMARK PICTURES,” “GHOST HOUSE PICTURES,” “GRINDSTONE ENTERTAINMENT GROUP” and “MANDATE PICTURES” in connection with films distributed domestically and licensed internationally and “LIONS GATE TELEVISION,” “TRIMARK TELEVISION” and “DEBMAR/MERCURY” in connection with licenses to free, pay and cable television.

The trademarks “LIONSGATE,” “LIONS GATE HOME ENTERTAINMENT,” “TV GUIDE,” “TV GUIDE NETWORK,” “LIONS GATE SIGNATURE SERIES,” “ARTISAN ENTERTAINMENT,” “FAMILY HOME ENTERTAINMENT,” “TRIMARK PICTURES,” “DIRTY DANCING,” “THE BLAIR WITCH PROJECT,” “RESERVOIR DOGS,” “SAW” and “MAD MEN” among others, are registered with the U.S. Patent and Trademark Office. We regard our trademarks as valuable assets and believe that our trademarks are an important factor in marketing our products.

Copyright protection is a serious problem in the DVD and Blu-ray distribution industry because of the ease with which DVDs and Blu-ray discs may be duplicated. In the past, certain countries permitted video pirating to such an extent that we did not consider these markets viable for distribution. Video piracy continues to be prevalent across the entertainment industry. We and other video distributors have taken legal actions to enforce copyright protection when necessary.

We also hold various domain names relating to our trademarks and service marks including lionsgate.com and tvguide.com.

Competition

Television and motion picture production and distribution are highly competitive businesses. We face competition from companies within the entertainment business and from alternative forms of leisure entertainment, such as travel, sporting events, outdoor recreation, video games, the internet and other cultural and computer-related activities. We compete with the major studios, numerous independent motion picture and television production companies, television networks and pay television systems for the acquisition of literary and film properties, the services of performing artists, directors, producers and other creative and technical personnel and production financing, all of which are essential to the success of our entertainment businesses. In addition, our motion pictures compete for audience acceptance and exhibition outlets with motion pictures produced and distributed by other companies.

Likewise, our television product faces significant competition from independent distributors as well as major studios. As a result, the success of any of our motion pictures and television product is dependent not only on the quality and acceptance of a particular film or program, but also on the quality and acceptance of other competing motion pictures or television programs released into the marketplace at or near the same time.

Legislative and Regulatory Actions

The satellite transmission, cable and telecommunications industries are subject to pervasive federal regulation, including Federal Communications Commission (“FCC”) licensing and other requirements. The industries are also often subject to extensive regulation by local and state authorities. Although most cable and telecommunication industry regulations do not apply directly to TV Guide Network, they affect programming distributors, a primary customer for its products and services. TV Guide Network monitors pending legislation and administrative proceedings to ascertain their relevance, analyze their impact and develop strategic direction relating to regulatory trends and developments within the industry.

Employees

As of May 20, 2011, we had 486 full-time employees in our worldwide operations. We also utilize many consultants in the ordinary course of our business and hire additional employees on a project-by-project basis in connection with the production of our motion pictures and television programming. We believe that our employee and labor relations are good.

Corporate History

We are a corporation organized under the laws of the Province of British Columbia, resulting from the merger of Lions Gate Entertainment Corp. and Beringer Gold Corp. on November 13, 1997. Beringer Gold Corp. was incorporated under the Business Corporation Act (British Columbia) on May 26, 1986 as IMI Computer Corp. Lions Gate Entertainment Corp. was incorporated under the Canada Business Corporations Act using the name 3369382 Canada Limited on April 28, 1997, amended its articles on July 3, 1997 to change its name to Lions Gate Entertainment Corp., and on September 24, 1997, continued under the Business Corporation Act (British Columbia).

Financial Information About Segments and Foreign and Domestic Operations

Financial and other information by reporting segment and geographic area as of March 31, 2011 and 2010 and for each of the three years in the period ended March 31, 2011 is set forth in Note 21 to our audited consolidated financial statements.

Available Information

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of Exchange Act, are available, free of charge, on our website at www.lionsgate.com as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission (the “SEC”). The Company’s Disclosure Policy, Corporate Governance Guidelines, Standards for Director Independence, Code of Business Conduct and Ethics for Directors, Officers and Employees, Code of Ethics for Senior Financial Officers, Policy on Shareholder Communications, Related Person Transaction Policy, Charter of the Audit Committee, Charter of the Compensation Committee and Charter of the Nominating and Corporate Governance Committee and any amendments thereto are also available on the Company’s website, as well as in print to any stockholder who requests them. The information posted on our website is not incorporated into this Annual Report on Form 10-K.

We are filing as exhibits to this Annual Report on Form 10-K certifications required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. We have also filed with the New York Stock Exchange (the “NYSE”) the annual certification of our Chief Executive Officer for fiscal 2011, confirming that we were in compliance with NYSE corporate governance listing standards.

The SEC maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The public may read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

ITEM 1A. RISK FACTORS

You should carefully consider the risks described below as well as other information included in, or incorporated by reference into in this Form 10-K before making an investment decision. The following risks and uncertainties could materially adversely affect our business, results of operations and financial condition. The risks described below are not the only ones facing the Company. Additional risks that we are not presently aware of or that we currently believe are immaterial may also impair our business operations.

We have had losses, and we cannot assure future profitability.

We have reported operating income for fiscal years 2007, 2010 and 2011 and operating losses for fiscal years 2008 and 2009. We have reported net income for fiscal year 2007 and net losses for the fiscal years 2008, 2009, 2010 and 2011. Our accumulated deficit was $514.2 million at March 31, 2011 and $560.4 million at December 31, 2010. We cannot assure you that we will operate profitably in future periods and, if we do not, we may not be able to meet our debt service requirements, working capital requirements, capital expenditure plans, production slate, acquisition and releasing plans or other cash needs. Our inability to meet those needs could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

We face substantial capital requirements and financial risks.

Our business requires a substantial investment of capital. The production, acquisition and distribution of motion pictures and television programs require a significant amount of capital. A significant amount of time may elapse between our expenditure of funds and the receipt of commercial revenues from or government contributions to our motion pictures or television programs. This time lapse requires us to fund a significant portion of our capital requirements from our senior secured credit facility, our revolving film credit facility entered into on October 6, 2009, as amended effective December 31, 2009 and June 22, 2010 (the “Film Credit Facility”), and from other financing sources. Although we intend to continue to reduce the risks of our production exposure through financial contributions from broadcasters and distributors, tax credit programs, government and industry programs, other studios and other sources, we cannot assure you that we will continue to implement successfully these arrangements or that we will not be subject to substantial financial risks relating to the production, acquisition, completion and release of future motion pictures and television programs. In addition, if we increase (through internal growth or acquisition) our production slate or our production budgets, we may be required to increase overhead and/or make larger up-front payments to talent and, consequently, bear greater financial risks. Any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

The costs of producing and marketing feature films have steadily increased and may further increase in the future, which may make it more difficult for a film to generate a profit or compete against other films. The costs of producing and marketing feature films have generally increased from year to year. These costs may continue to increase in the future, which may make it more difficult for our films to generate a profit or compete against other films. Historically, production costs and marketing costs have risen at a higher rate than increases in either the number of domestic admissions to movie theaters or admission ticket prices. A continuation of this trend would leave us more dependent on other media, such as home video, television, international markets and new media for revenue, and the revenues from such sources may not be sufficient to offset an increase in the cost of motion picture production. If we cannot successfully exploit these other media, it could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Budget overruns may adversely affect our business. Our business model requires that we be efficient in the production of our motion pictures and television programs. Actual motion picture and television production costs often exceed their budgets, sometimes significantly. The production, completion and distribution of motion pictures and television productions are subject to a number of uncertainties, including delays and increased expenditures due to creative differences among key cast members and other key creative personnel or other disruptions or events

beyond our control. Risks such as death or disability of star performers, technical complications with special effects or other aspects of production, shortages of necessary equipment, damage to film negatives, master tapes and recordings or adverse weather conditions may cause cost overruns and delay or frustrate completion of a production. If a motion picture or television production incurs substantial budget overruns, we may have to seek additional financing from outside sources to complete production. We cannot make assurances regarding the availability of such financing on terms acceptable to us, and the lack of such financing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

In addition, if a motion picture or television production incurs substantial budget overruns, we cannot assure you that we will recoup these costs, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects. Increased costs incurred with respect to a particular film may result in any such film not being ready for release at the intended time and the postponement to a potentially less favorable time, all of which could cause a decline in box office performance, and, thus, the overall financial success of such film. Budget overruns could also prevent a picture from being completed or released. Any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

We may not be able to generate sufficient cash to service all of our indebtedness, and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make scheduled payments or to refinance our debt obligations depends on our financial and operating performance, which is subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We cannot assure you that we will maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We cannot assure you that we would be able to take any of these actions, that these actions would be successful and permit us to meet our scheduled debt service obligations or that these actions would be permitted under the terms of our existing or future debt agreements, including the senior secured credit facility and the indenture governing our senior secured notes. In the absence of such cash flows or capital resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our debt service and other obligations. Our senior secured credit facility and the indenture governing our senior secured notes restrict our ability to dispose of assets and use the proceeds from such dispositions. We may not be able to consummate those dispositions or to obtain the proceeds which we could realize from them and these proceeds may not be adequate to meet any debt service obligations then due.

If we cannot make scheduled payments on our debt, we will be in default and, as a result:

	•		our debt holders could declare all outstanding principal and interest to be due and payable;
	•		the lenders under our senior secured credit facility could terminate their commitments to lend us money;
	•		the holders of our secured debt could foreclose against the assets securing their borrowings; and
	•		we could be forced into bankruptcy or liquidation.

Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, require us to dedicate substantial capital to servicing our debt obligations, expose us to interest rate risk, limit our ability to pursue strategic business opportunities, react to changes in the economy or our industry and prevent us from meeting our debt obligations.

Historically, we have been highly leveraged and may be highly leveraged in the future. As of March 31, 2011, our consolidated total indebtedness was $713.6 million (carrying value — $674.8 million). Our substantial degree of leverage could have important consequences, including the following:

•

it may limit our ability to obtain additional debt or equity financing for working capital, capital expenditures, motion picture and television development, production and distribution, debt service

			requirements, acquisitions or general corporate or other purposes, or limit our ability to obtain such financing on terms acceptable to us;
	•		a substantial portion of our cash flows from operations will be dedicated to the payment of principal and interest on our indebtedness and will not be available for other purposes, including funding motion picture and television production, development and distribution and other operating expenses, capital expenditures and future business opportunities;
	•		the debt service requirements of our indebtedness could make it more difficult for us to satisfy our financial obligations;
	•		certain of our borrowings, including borrowings under our senior secured credit facility, are at variable rates of interest, exposing us to the risk of increased interest rates;
	•		it may limit our ability to adjust to changing market conditions and place us at a competitive disadvantage compared to our competitors that have less debt;
	•		it may limit our ability to pursue strategic acquisitions and other business opportunities that may be in our best interests; and
	•		we may be vulnerable to a downturn in general economic conditions or in our business, or
	•		we may be unable to carry out capital spending that is important to our growth.

Despite our current indebtedness levels we and our subsidiaries may incur additional debt in the future, which could further exacerbate the risks described above in the foregoing risk factors.

Despite our current indebtedness levels, we and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although each of our senior secured credit facility and the indenture governing our senior secured notes contains covenants that, among other things, limit our ability to incur additional indebtedness, including guarantees, make restricted payments and investments, and grant liens on our assets, the covenants contained in such debt documents provide a number of important exceptions and thus do not prohibit us or our subsidiaries from doing so. Such exceptions will provide us substantial flexibility to incur indebtedness, grant liens and expend funds to operate our business. For example, under the terms of the indenture governing our senior secured notes (i) with few restrictions, we may incur indebtedness in connection with certain film and television financing arrangements, including without limitation, purchasing or acquiring rights in film or television productions or financing print and advertising expenses, and such indebtedness may be secured by liens senior to the liens in respect of our senior secured notes, and (ii) in limited circumstances, we may make investments in assets that are not included in the borrowing base supporting our senior secured notes, in each case, without having to meet the leverage ratio tests for debt incurrence or to fit such investments within the restricted payments “build-up basket” or within other categories of funds applicable to making investments and other restricted payments under the indenture governing our senior secured notes.

In addition, we may incur additional indebtedness through our $340.0 million senior secured credit facility. At March 31, 2011, we have borrowed approximately $69.8 million under our senior secured credit facility and have approximately $15.0 million in letters of credit outstanding. We could borrow some or all of the remaining permitted amount in the future. The amount we have available to borrow under this facility depends upon our borrowing base, which in turn depends on the value of our existing library of films and television programs, as well as accounts receivable and cash held in collateral accounts.

If new debt is added to our and our subsidiaries’ existing high debt levels, this has the potential to magnify the risks discussed above relating to our ability to service our indebtedness and the potential adverse impact our high level of indebtedness could have on us. See “—We may not be able to generate sufficient cash to service all of our indebtedness, and we may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful” and "—Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, require us to dedicate substantial capital to servicing our debt obligations, expose us to interest rate risk, limit our ability to pursue strategic business opportunities, react to changes in the economy or our industry and prevent us from meeting our debt obligations.”

An increase in the ownership of our common shares by certain shareholders could trigger a change in control under the agreements governing our long-term indebtedness.

The agreements governing certain of our long-term indebtedness contain change in control provisions that are triggered when any of our shareholders, directly or indirectly, acquires ownership or control in excess of a certain percentage of our common shares. As of May 20 2011, three of our shareholders, Carl C. Icahn, Mark H. Rachesky, M.D. and Capital Research Global Investors and their respective affiliates, beneficially owned approximately 32.7%, 29.4% and 9.2%, respectively, of our outstanding common shares.

Under certain circumstances, including the acquisition of ownership or control by a person or group in excess of 50% of our common shares, the holders of our senior secured notes and our convertible senior subordinated notes may require us to repurchase all or a portion of such notes upon a change in control and the holders of our convertible senior subordinated notes may be entitled to receive a make whole premium based on the price of our common shares on the change in control date. We may not be able to repurchase these notes upon a change in control because we may not have sufficient funds. Further, we may be contractually restricted under the terms of our senior secured credit facility and the Film Credit Facility, from repurchasing all of the notes tendered by holders upon a change in control. Our failure to repurchase our senior secured notes upon a change in control would cause a default under the indentures governing the senior secured notes and the convertible senior subordinated notes and a cross-default under the senior secured credit facility and the Film Credit Facility.

Our senior secured credit facility and the Film Credit Facility also provide that a change in control, which includes a person or group acquiring ownership or control in excess of 50% of our outstanding common shares, will be an event of default that permits lenders to accelerate the maturity of borrowings thereunder and to enforce security interests in the collateral securing such debt, thereby limiting our ability to raise cash to purchase our outstanding senior secured note and convertible senior subordinated notes s. Any of our future debt agreements may contain similar provisions.

Restrictive covenants may adversely affect our operations.

Our senior secured credit facility and the indenture governing our senior secured notes contain various covenants that, subject to certain exceptions, limit our ability to, among other things:

	•		incur or assume additional debt or provide guarantees in respect of obligations of other persons;
	•		issue redeemable stock and preferred stock;
	•		pay dividends or distributions or redeem or repurchase capital stock;
	•		prepay, redeem or repurchase debt that is junior in right of payment to our senior secured notes;
	•		make loans, investments and capital expenditures;
	•		incur liens;
	•		engage in sale/leaseback transactions;
	•		restrict dividends, loans or asset transfers from our subsidiaries;
	•		sell or otherwise dispose of assets, including capital stock of subsidiaries;
	•		consolidate or merge with or into, or sell substantially all of our assets to, another person;
	•		enter into transactions with affiliates; and
	•		enter into new lines of business.

These covenants may prevent us from raising additional financing, competing effectively or taking advantage of new business opportunities. In addition, the restrictive covenants in our senior secured credit facility require us to maintain specified financial ratios and satisfy other financial condition tests and the indenture governing our senior secured notes, outside of specified exceptions, require us to satisfy certain financial tests in order to engage in activities such as incurring debt or making restricted payments. Our ability to comply with these covenants or meet those financial ratios and tests can be affected by events beyond our control (such as a change of control event), and we cannot assure you that we will meet them. See “—An increase in the ownership of our common shares by certain shareholders could trigger a change in control under the agreements governing our long-term indebtedness.”

Upon the occurrence of an event of default under our senior secured credit facility, the indenture governing our senior secured notes or the agreements governing our other financing arrangements, the holders of such debt could elect to declare all amounts outstanding to be immediately due and payable and the lenders under our senior secured

credit facility could terminate all commitments to extend further credit. Further, the holders of our secured debt that is secured by a first-priority or other senior lien, could proceed against the collateral granted to them to secure that indebtedness, which collateral represents substantially all of our assets. If the holders of our debt accelerate the repayment of borrowings, we cannot assure you that we will have sufficient cash flow or assets to repay our debt, or borrow sufficient funds to refinance such indebtedness. Even if we are able to obtain new financing, it may not be on commercially reasonable terms, or terms that are acceptable to us.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Certain of our borrowings, primarily borrowings under our senior secured credit facility, are, and are expected to continue to be, at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease. The applicable margin with respect to loans under the senior secured credit facility is a percentage per annum equal to 2.50% plus an adjusted rate based on LIBOR. The applicable margin with respect to loans under the Film Credit Facility is a percentage per annum equal to 3.25% over the “LIBO” rate (as defined in the Film Credit Facility). Assuming the senior secured credit facility and the Film Credit Facility are fully drawn, based on the applicable LIBOR in effect as of March 31, 2011, each quarter point change in interest rates would result in a $0.9 million change in annual interest expense on the senior secured credit facility and $0.3 million change in annual interest expense on the Film Credit Facility. In the future, we may enter into interest rate swaps, involving the exchange of floating for fixed rate interest payments, to reduce interest rate volatility.

Our revenues and results of operations may fluctuate significantly.

Revenues and results of operations are difficult to predict and depend on a variety of factors. Our revenues and results of operations depend significantly upon the commercial success of the motion pictures and television programming that we distribute, which cannot be predicted with certainty. Accordingly, our revenues and results of operations may fluctuate significantly from period to period, and the results of any one period may not be indicative of the results for any future periods. Furthermore, largely as a result of these predictive difficulties, among other things, we may not be able to achieve our projected earnings. We have, in the past, revised our projected earnings downward. Future revisions to projected earnings could cause investors to lose confidence in us, which in turn could materially and adversely affect our business, our financial condition and the market value of our securities.

In addition, our revenues and results of operations may be impacted by the success of critically acclaimed and award winning films, including Academy Award^® winners and nominees. We cannot assure you that we will manage the production, acquisition and distribution of future motion pictures as successfully as we have done with these recent critically acclaimed, award winning and/or commercially popular films or that we will produce or acquire motion pictures that will receive similar critical acclaim or perform as well commercially. Any inability to achieve such commercial success could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

We have few output agreements with cable and broadcast channels. In February 2009, we acquired certain assets related to the business of TV Guide Network. Also, certain broadcast channels, including TV Guide Network, exhibit our films, but they license such rights on a film-by-film, rather than an output basis. In April 2008, we formed EPIX, a premium television channel and VOD service, for our theatrical releases after January 1, 2009. EPIX, which launched in October 2009, provides us with an additional platform to distribute our library of motion picture titles and television episodes and programs. To date, EPIX has concluded carriage agreements with eight distributors, including with Verizon FiOS, Cox Communications, Charter Communications, Inc., Mediacom Communications, the National Cable, Telecommunications Cooperative, DISH Network L.L.C., and Suddenlink Communications, and, in August 2010, with Netflix. We cannot assure you that EPIX will enter into additional carriage agreements or that it will be successful altogether. We also cannot assure you that we will be able to secure other output agreements on acceptable terms, if at all. Without multiple output agreements that typically contain guaranteed minimum payments, our revenues may be subject to greater volatility, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

We do not have long-term arrangements with many of our production partners. We typically do not enter into long-term distribution contracts with the creative producers of the films we produce, acquire or distribute. For example, we have a “first-look” arrangement with Tyler Perry that gives us a right to negotiate for the purchase of distribution rights to films if certain criteria are met. However, even if we negotiate for such purchase, this does not guarantee that we will obtain such distribution rights. Further, we have an agreement with the creators of the Saw franchise that gives us the right to compel production through Saw IX under certain contractual conditions and, thereafter, the right to “opt in” under certain economic terms for future Saw films if our partner elects to produce such pictures. Moreover, we generally have certain derivative rights that provide us with distribution rights to, for example, prequels, sequels and remakes of certain films we produce, acquire or distribute. However, there is no guarantee that we will produce, acquire or distribute future films by any creative producer, and a failure to do so could adversely affect our business, financial condition, operating results, liquidity and prospects.

We rely on a few major retailers and distributors for a material portion of our business and the loss of any of those retailers or distributors could reduce our revenues and operating results. Wal-Mart represented approximately 13% of our revenues in fiscal 2011. In addition, a small number of other retailers and distributors account for a significant percentage of our revenues. We do not have long-term agreements with retailers. We cannot assure you that we will continue to maintain favorable relationships with our retailers and distributors or that they will not be adversely affected by economic conditions. If any of these retailers or distributors reduces or cancels a significant order, it could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Our revenues and results of operations are vulnerable to currency fluctuations. We report our revenues and results of operations in U.S. dollars, but a significant portion of our revenues is earned outside of the U.S. Our principal currency exposure is between Canadian dollars, pounds sterling and U.S. dollars. We cannot accurately predict the impact of future exchange rate fluctuations on revenues and operating margins, and fluctuations could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects. From time to time, we may experience currency exposure on distribution and production revenues and expenses from foreign countries, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Accounting practices used in our industry may accentuate fluctuations in operating results. In addition to the cyclical nature of the entertainment industry, our accounting practices (which are standard for the industry) may accentuate fluctuations in our operating results. In accordance with U.S. generally accepted accounting principles (“GAAP”), we amortize film and television programming costs using the “individual-film-forecast” method. Under this accounting method, we amortize film and television programming costs for each film or television program based on the following ratio:

Revenue earned by title in the current period
Estimated total future revenues by title as of the beginning of the year

We regularly review, and revise when necessary, our total revenue estimates on a title-by-title basis. This review may result in a change in the rate of amortization and/or a write-down of the film or television asset to its estimated fair value. Results of operations in future years depend upon our amortization of our film and television costs. Periodic adjustments in amortization rates may significantly affect these results. In addition, we are required to expense film advertising costs as incurred, but are also required to recognize the revenue from any motion picture or television program over the entire revenue stream expected to be generated by the individual picture or television program. Accordingly, our revenues and results of operations may fluctuate significantly from period to period, and the results of any one period may not be indicative of the results for any future period.

Failure to manage future growth may adversely affect our business.

We are subject to risks associated with possible acquisitions, business combinations, or joint ventures. From time to time, we engage in discussions and activities with respect to possible acquisitions, sale of assets, business combinations, or joint ventures intended to complement or expand our business, some of which may be significant transactions for us. For instance, in July 2010, we formed Pantelion Films, in April 2010, we formed Tiger Gate, in February 2009, we acquired TV Guide Network and related assets, and in April 2008, we formed EPIX. We may not

realize the anticipated benefit from any of the transactions we pursue. Regardless of whether we consummate any such transaction, the negotiation of a potential transaction (including associated litigation and proxy contests), as well as the integration of the acquired business, could require us to incur significant costs and cause diversion of management’s time and resources. Any such transaction could also result in impairment of goodwill and other intangibles, development write-offs and other related expenses. Any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

We may be unable to integrate any business that we acquire or have acquired or with which we combine or have combined. Integrating any business that we acquire or have acquired or with which we combine or have combined is distracting to our management and disruptive to our business and may result in significant costs to us. We could face challenges in consolidating functions and integrating procedures, information technology and accounting systems, personnel and operations in a timely and efficient manner. If any such integration is unsuccessful, or if the integration takes longer than anticipated, there could be a material adverse effect on our business, financial condition, operating results, liquidity and prospects. We may have difficulty managing the combined entity in the short term if we experience a significant loss of management personnel during the transition period after the significant acquisition.

Claims against us relating to any acquisition or business combination may necessitate our seeking claims against the seller for which the seller may not indemnify us or that may exceed the seller’s indemnification obligations. There may be liabilities assumed in any acquisition or business combination that we did not discover or that we underestimated in the course of performing our due diligence investigation. Although a seller generally will have indemnification obligations to us under an acquisition or merger agreement, these obligations usually will be subject to financial limitations, such as general deductibles and maximum recovery amounts, as well as time limitations. We cannot assure you that our right to indemnification from any seller will be enforceable, collectible or sufficient in amount, scope or duration to fully offset the amount of any undiscovered or underestimated liabilities that we may incur. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

We may not be able to obtain additional funding to meet our requirements. Our ability to grow through acquisitions, business combinations and joint ventures, to maintain and expand our development, production and distribution of motion pictures and television programs, and to fund our operating expenses depends upon our ability to obtain funds through equity financing, debt financing (including credit facilities) or the sale or syndication of some or all of our interests in certain projects or other assets or businesses. If we do not have access to such financing arrangements, and if other funds do not become available on terms acceptable to us, there could be a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Our dispositions may not aid our future growth. If we determine to sell individual properties, libraries or other assets or businesses, we will benefit from the net proceeds realized from such sales. However, our revenues may suffer in the long term due to the disposition of a revenue-generating asset, which may diminish our ability to service our indebtedness and repay our notes and our other indebtedness at maturity. In addition, the timing of such dispositions may be poor, causing us to fail to realize the full value of the disposed asset, which also may diminish our ability to service our indebtedness and repay our notes and our other indebtedness at maturity. Furthermore, our goal of building a diversified platform for future growth may be inhibited if the disposed asset contributed in a significant way to the diversification of our business platform.

A significant portion of our filmed and television content library revenues comes from a small number of titles.

We depend on a limited number of titles in any given fiscal quarter for the majority of the revenues generated by our filmed and television content library. In addition, many of the titles in our library are not presently distributed and generate substantially no revenue. If we cannot acquire new product and the rights to popular titles through production, distribution agreements, acquisitions, mergers, joint ventures or other strategic alliances, it could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

We are limited in our ability to exploit a portion of our filmed and television content library.

Our rights to the titles in our filmed and television content library vary; in some cases, we have only the right to distribute titles in certain media and territories for a limited term. We cannot assure you that we will be able to renew expiring rights on acceptable terms and that any failure to renew titles generating a significant portion of our revenue would not have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Our success depends on external factors in the motion picture and television industry.

Our success depends on the commercial success of motion pictures and television programs, which is unpredictable. Operating in the motion picture and television industry involves a substantial degree of risk. Each motion picture and television program is an individual artistic work, and inherently unpredictable audience reactions primarily determine commercial success. Generally, the popularity of our motion pictures or programs depends on many factors, including the critical acclaim they receive, the format of their initial release, for example, theatrical or direct-to-video, the actors and other key talent, their genre and their specific subject matter. The commercial success of our motion pictures or television programs also depends upon the quality and acceptance of motion pictures or programs that our competitors release into the marketplace at or near the same time, critical reviews, the availability of alternative forms of entertainment and leisure activities, general economic conditions and other tangible and intangible factors, many of which we do not control and all of which may change. We cannot predict the future effects of these factors with certainty, any of which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

In addition, because a motion picture’s or television program’s performance in ancillary markets, such as home video and pay and free television, is often directly related to its box office performance or television ratings, poor box office results or poor television ratings may negatively affect future revenue streams. Our success will depend on the experience and judgment of our management to select and develop new investment and production opportunities. We cannot make assurances that our motion pictures and television programs will obtain favorable reviews or ratings, that our motion pictures will perform well at the box office or in ancillary markets or that broadcasters will license the rights to broadcast any of our television programs in development or renew licenses to broadcast programs in our library. The failure to achieve any of the foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Global economic turmoil and regional economic conditions in the U.S. could adversely affect our business. The global economic turmoil of recent years has caused a general tightening in the credit markets, lower levels of liquidity, increases in the rates of default and bankruptcy, an unprecedented level of intervention from the U.S. federal government and other foreign governments, decreased consumer confidence, overall slower economic activity and extreme volatility in credit, equity and fixed income markets. While the ultimate outcome of these events cannot be predicted, a decrease in economic activity in the U.S. or in other regions of the world in which we do business could adversely affect demand for our films, thus reducing our revenue and earnings. A decline in economic conditions could reduce performance of our theatrical, television and home entertainment releases. In addition, an increase in price levels generally, could result in a shift in consumer demand away from the entertainment we offer, which could also adversely affect our revenues and, at the same time, increase our costs. Moreover, financial institution failures may cause us to incur increased expenses or make it more difficult either to utilize our existing debt capacity or otherwise obtain financing for our operations, investing activities (including the financing of any future acquisitions), or financing activities. We cannot predict the timing or the duration of this or any other downturn in the economy and we are not immune to the effects of general worldwide economic conditions.

Licensed distributors’ failure to promote our programs may adversely affect our business. Licensed distributors’ decisions regarding the timing of release and promotional support of our motion pictures, television programs and related products are important in determining the success of these pictures, programs and products. We do not control the timing and manner in which our licensed distributors distribute our motion pictures or television programs. Any decision by those distributors not to distribute or promote one of our motion pictures, television programs or related products or to promote our competitors’ motion pictures, television programs or related products to a greater extent than they promote ours could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

We could be adversely affected by strikes or other union job actions. We are directly or indirectly dependent upon highly specialized union members who are essential to the production of motion pictures and television programs. A strike by, or a lockout of, one or more of the unions that provide personnel essential to the production of motion pictures or television programs could delay or halt our ongoing production activities. Such a halt or delay, depending on the length of time, could cause a delay or interruption in our release of new motion pictures and television programs, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

We face substantial competition in all aspects of our business.

We are smaller and less diversified than many of our competitors. As an independent distributor and producer, we constantly compete with major U.S. and international studios. Most of the major U.S. studios are part of large diversified corporate groups with a variety of other operations, including television networks and cable channels that can provide both the means of distributing their products and stable sources of earnings that may allow them better to offset fluctuations in the financial performance of their motion picture and television operations. In addition, the major studios have more resources with which to compete for ideas, storylines and scripts created by third parties as well as for actors, directors and other personnel required for production. The resources of the major studios may also give them an advantage in acquiring other businesses or assets, including film libraries, that we might also be interested in acquiring. Additionally, TV Guide Network faces competition from other entertainment sources. TV Guide Network competes with general entertainment channels for television viewership and carriage on cable and satellite systems. TV Guide Online competes for visitors with general entertainment websites and online search providers, including sites that provide television listings, television-specific information and/or that enable users to locate and view video on the internet. Moreover, each of TV Guide Network and TV Guide Online competes for marketers’ advertising spending with other media outlets. Our inability to compete successfully could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

The motion picture industry is highly competitive and at times may create an oversupply of motion pictures in the market. The number of motion pictures released by our competitors, particularly the major studios, may create an oversupply of product in the market, reduce our share of box office receipts and make it more difficult for our films to succeed commercially. Oversupply may become most pronounced during peak release times, such as school holidays and national holidays, when theater attendance is expected to be highest. For this reason, and because of our more limited production and advertising budgets, we typically do not release our films during peak release times, which may also reduce our potential revenues for a particular release. Moreover, we cannot guarantee that we can release all of our films when they are otherwise scheduled. In addition to production or other delays that might cause us to alter our release schedule, a change in the schedule of a major studio may force us to alter the release date of a film because we cannot always compete with a major studio’s larger promotion campaign. Any such change could adversely impact a film’s financial performance. In addition, if we cannot change our schedule after such a change by a major studio because we are too close to the release date, the major studio’s release and its typically larger promotion budget may adversely impact the financial performance of our film. The foregoing could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

The limited supply of motion picture screens compounds this product oversupply problem. Currently, a substantial majority of the motion picture screens in the U.S. typically are committed at any one time to approximately 10 to 15 films distributed nationally by major studio distributors. In addition, as a result of changes in the theatrical exhibition industry, including reorganizations and consolidations and the fact that major studio releases occupy more screens, the number of screens available to us when we want to release a picture may decrease. If the number of motion picture screens decreases, box office receipts, and the correlating future revenue streams, such as from home video and pay and free television, of our motion pictures may also decrease, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

We must successfully respond to rapid technological changes and alternative forms of delivery or storage to remain competitive.

The entertainment industry in general and the motion picture and television industries in particular continue to undergo significant technological developments. Advances in technologies or new methods of product delivery or storage or certain changes in consumer behavior driven by these or other technologies and methods of delivery and

storage could have a negative effect on our business. For example, the industry has been experiencing a decline in DVD sales both domestically and internationally as a result of several factors, including advances in technologies and new methods of product delivery and storage. Examples of such advances in technologies include VOD, new video formats, including release of titles in high-definition Blu-ray format, and downloading and streaming from the internet. An increase in VOD could decrease home video rentals and DVD sales. In addition, technologies that enable users to fast-forward or skip advertisements, such as digital video recorders, may cause changes in consumer behavior that could affect the attractiveness of our products to advertisers, and could therefore adversely affect our revenues. Similarly, further increases in the use of portable digital devices that allow users to view content of their own choosing while avoiding traditional commercial advertisements could adversely affect our revenues. Other larger entertainment distribution companies will have larger budgets to exploit these growing trends. We cannot predict how we will financially participate in the exploitation of our motion pictures and television programs through these emerging technologies, or whether we have the right to do so for certain of our library titles or whether the revenues we generate through these emerging technologies will offset any future decline in DVD sales. If we cannot successfully exploit these and other emerging technologies, it could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

If TV Guide Network experiences a decline in the distribution of its network or its viewership ratings or its affiliation agreements are terminated or not renewed, its operating results may be materially adversely affected.

Revenues at TV Guide Network consist of affiliate fees and advertising revenues; however since the majority of TV Guide Network’s affiliates are contracted under long-term agreements with only cost-of-living increases available under certain contracts, we do not expect significant growth in affiliate revenues in the future. Accordingly, the results at TV Guide Network are highly dependent upon advertising revenue. Advertising sales are primarily dependent on the extent of distribution of the network, viewership ratings, and the strength of the market for advertising. TV Guide Network’s viewers primarily come from analog cable homes where scroll data is still used for guidance. As multi system operators reclaim analog bandwidth to launch more digital services and government regulations change resulting in less bandwidth for programming services such as TV Guide Network, there may be a decline in the distribution of the analog TV Guide Network and its viewership ratings, which could adversely affect advertising sales. Affiliate fees are dependent on TV Guide Network’s affiliation agreements with cable and satellite operators which in turn distribute it to consumers. These agreements generally provide for the level of carriage that TV Guide Network will receive and for payment of a license fee to TV Guide Network based on the numbers of subscribers that receive the network. If TV Guide Network is unable to renew these affiliation agreements or renew them on terms that are as favorable as those in effect, or if consolidation of the cable and satellite broadcasting industry results in the termination of some of these affiliation agreements, TV Guide Network may experience a decline in affiliate fees. If TV Guide Network experiences a decline in advertising sales or affiliate fees, this may have a material adverse effect on its operating results and our share of TV Guide Network’s operating results.

Limitations on control of joint ventures may adversely impact our operations.

We hold our interests in certain businesses as a joint venture or in partnership with non-affiliated third parties. As a result of such arrangements, we may be unable to control the operations, strategies and financial decisions of such joint venture or partnership entities which could in turn result in limitations on our ability to implement strategies that we may favor. In addition, our ability to transfer our interests in businesses owned with third parties is limited under certain joint venture, partnership or similar agreements.

We face risks from doing business internationally.

We distribute motion picture and television productions outside the U.S., in the U.K. and Ireland through Lionsgate UK, and through third party licensees elsewhere, and derive revenues from these sources. As a result, our business is subject to certain risks inherent in international business, many of which are beyond our control. These risks include:

	•		laws and policies affecting trade, investment and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws;
	•		changes in local regulatory requirements, including restrictions on content;

	•		differing cultural tastes and attitudes;
	•		differing degrees of protection for intellectual property;
	•		financial instability and increased market concentration of buyers in foreign television markets, including in European pay television markets;
	•		the instability of foreign economies and governments;
	•		fluctuating foreign exchange rates;
	•		the spread of communicable diseases in such jurisdictions, which may impact business in such jurisdictions; and
	•		war and acts of terrorism.

Events or developments related to these and other risks associated with international trade could adversely affect our revenues from non-U.S. sources, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Protecting and defending against intellectual property claims may have a material adverse effect on our business.

Our ability to compete depends, in part, upon successful protection of our intellectual property. We do not have the financial resources to protect our rights to the same extent as major studios. We attempt to protect proprietary and intellectual property rights to our productions through available copyright and trademark laws and licensing and distribution arrangements with reputable international companies in specific territories and media for limited durations. Despite these precautions, existing copyright and trademark laws afford only limited practical protection in certain countries. We also distribute our products in other countries in which there is no copyright or trademark protection. As a result, it may be possible for unauthorized third parties to copy and distribute our productions or certain portions or applications of our intended productions, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Litigation may also be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement or invalidity. Any such litigation could result in substantial costs and the diversion of resources and could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects. We cannot assure you that infringement or invalidity claims will not materially adversely affect our business, financial condition, operating results, liquidity and prospects. Regardless of the validity or the success of the assertion of these claims, we could incur significant costs and diversion of resources in enforcing our intellectual property rights or in defending against such claims, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Others may assert intellectual property infringement claims against us.

One of the risks of the film production business is the possibility that others may claim that our productions and production techniques misappropriate or infringe the intellectual property rights of third parties with respect to their previously developed films, stories, characters, other entertainment or intellectual property. We are likely to receive in the future claims of infringement or misappropriation of other parties’ proprietary rights. Any such assertions or claims may materially adversely affect our business, financial condition, operating results, liquidity and prospects. Irrespective of the validity or the successful assertion of such claims, we could incur significant costs and diversion of resources in defending against them, which could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects. If any claims or actions are asserted against us, we may seek to settle such claim by obtaining a license from the plaintiff covering the disputed intellectual property rights. We cannot provide any assurances, however, that under such circumstances a license, or any other form of settlement, would be available on reasonable terms or at all.

Our business involves risks of liability claims for media content, which could adversely affect our business, results of operations and financial condition.

As a distributor of media content, we may face potential liability for:

	•		defamation;
	•		invasion of privacy;
	•		negligence;
	•		copyright or trademark infringement (as discussed above); and
	•		other claims based on the nature and content of the materials distributed.

These types of claims have been brought, sometimes successfully, against producers and distributors of media content. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

Piracy of motion pictures, including digital and internet piracy, may reduce the gross receipts from the exploitation of our films.

Motion picture piracy is extensive in many parts of the world, including South America, Asia, and former Eastern bloc countries, and is made easier by technological advances and the conversion of motion pictures into digital formats. This trend facilitates the creation, transmission and sharing of high quality unauthorized copies of motion pictures in theatrical release on DVDs, Blu-ray discs, from pay-per-view through set top boxes and other devices and through unlicensed broadcasts on free television and the internet. The proliferation of unauthorized copies of these products has had and will likely continue to have an adverse effect on our business, because these products reduce the revenue we receive from our products. Additionally, in order to contain this problem, we may have to implement elaborate and costly security and anti-piracy measures, which could result in significant expenses and losses of revenue. We cannot assure you that even the highest levels of security and anti-piracy measures will prevent piracy.

In particular, unauthorized copying and piracy are prevalent in countries outside of the U.S., Canada and Western Europe, whose legal systems may make it difficult for us to enforce our intellectual property rights. While the U.S. government has publicly considered implementing trade sanctions against specific countries that, in its opinion, do not make appropriate efforts to prevent copyright infringements of U.S. produced motion pictures, there can be no assurance that any such sanctions will be enacted or, if enacted, will be effective. In addition, if enacted, such sanctions could impact the amount of revenue that we realize from the international exploitation of motion pictures. If no embargoes or sanctions are enacted, or if other measures are not taken, we may lose revenue as a result of motion picture piracy.

An investment by non-Canadians in our business is potentially reviewable under the ICA, which could adversely affect our results.

The Investment Canada Act (the “ICA”) is administered by the Minister of Industry of Canada and, in the case of investments in a Canadian business that is a “cultural business”, by the Minister of Canadian Heritage (both referred to herein as the “Minister”). A “cultural business” is a business activity relating to Canada’s cultural heritage or national identity and includes a business engaged in the production, distribution, sale or exhibition of film or video products.

The ICA contains rules, the application of which determines whether an entity (as the term is defined in the ICA) is Canadian-controlled and whether it carries on a Canadian business, including a Canadian business that is a cultural business. An entity that we consolidate operates a Canadian business that is a cultural business for the purposes of the ICA. Under the ICA, the Minister has discretion to determine, after considering any information or evidence submitted by the entity or otherwise made available to the Minister or to the Director of Investments appointed under the ICA (the “Director of Investments”), that an investment by a non-Canadian in a Canadian business that is a cultural business may constitute an acquisition of control by that non-Canadian, notwithstanding the provisions in the ICA that state that certain investments do not or may not constitute an acquisition of control that would require notification or review under the ICA.

If the Minister exercises such discretion and deems an investment by a non-Canadian in a cultural business to be an acquisition of control, the investment is potentially subject to notification and/or review. If the investment is subject to review, the Minister must be satisfied that the investment is likely to be of net benefit to Canada. Such a determination is often accompanied by requests that the non-Canadian provide undertakings supportive of Canadian

cultural policy. These undertakings may, in some circumstances, include a request for financial support of certain initiatives. The determination by the Minister of whether a proposed investment is of net benefit to Canada also includes consideration of sector specific policies of the Canadian federal government, some of which restrict or prohibit investments by non-Canadians in certain types of Canadian cultural businesses, including certain types of businesses in the Canadian film industry.

An acquisition of control may also arise under the ICA if a non-Canadian acquires all or substantially all of the assets used in carrying on a Canadian business, although there is an exemption from the ICA if the acquisition of control is in connection with the realization of security granted for a loan or other financial assistance. However, a subsequent disposition following such realization of security may be subject to the ICA.

Although we believe we are currently a Canadian-controlled entity under the ICA, there can be no assurance that the Minister will not determine that we are not a Canadian-controlled entity under the ICA, or that events beyond our control will not result in our ceasing to be Canadian-controlled pursuant to the ICA. There are currently no transfer restrictions on our common shares as a class, and we accordingly may not be able to prevent an acquisition of control by non-Canadians. In addition, the ICA provides the Minister with discretion to make a determination that an entity engaged in a cultural business is not a Canadian-controlled entity, if the Minister is satisfied, after considering any information or evidence submitted by the entity or otherwise made available to the Minister or the Director of Investments, that the entity is controlled in fact by one or more non-Canadians. The assessment of control in fact may take into account many considerations, including the extent of non-Canadians’ financing and rights or conditions associated with such financing. If we cease to be Canadian-controlled under the ICA, we and the entities that we consolidate, may no longer qualify for or be entitled to access refundable tax credits and other Canadian government and private motion picture industry incentives that are restricted to Canadian-controlled corporations. Such a change in status could also cause us or the entities that we consolidate to be required to repay certain tax credits and other government incentives previously received and default on certain distribution obligations, thereby affecting our financial results since we are required to consolidate the results of operations in our financial statements.

Our success depends on certain key employees.

Our success depends to a significant extent on the performance of a number of senior management personnel and other key employees, including production and creative personnel. We do not currently have significant “key person” life insurance policies for any of our employees. We have entered into employment agreements with our top executive officers and production executives. However, although it is standard in the motion picture industry to rely on employment agreements as a method of retaining the services of key employees, these agreements cannot assure us of the continued services of such employees. In addition, competition for the limited number of business, production and creative personnel necessary to create and distribute our entertainment content is intense and may grow in the future. Our inability to retain or successfully replace where necessary members of our senior management and other key employees could have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

To be successful, we need to attract and retain qualified personnel.

Our success continues to depend to a significant extent on our ability to identify, attract, hire, train and retain qualified professional, creative, technical and managerial personnel. Competition for the caliber of talent required to produce our motion pictures and television programs continues to increase. We cannot assure you that we will be successful in identifying, attracting, hiring, training and retaining such personnel in the future. If we were unable to hire, assimilate and retain qualified personnel in the future, such inability would have a material adverse effect on our business, financial condition, operating results, liquidity and prospects.

While we believe we currently have adequate internal control over financial reporting, we are required to assess our internal control over financial reporting on an annual basis and any future adverse results from such assessment could result in a loss of investor confidence in our financial reports and have an adverse effect on our securities.

Section 404 of the Sarbanes-Oxley Act of 2002 and the accompanying rules and regulations promulgated by the SEC to implement it require us to include in our Annual Report on Form 10-K an annual report by our management regarding the effectiveness of our internal control over financial reporting. The report includes, among other things, an assessment of the effectiveness of our internal control over financial reporting as of the end of our fiscal year. This assessment must include disclosure of any material weaknesses in our internal control over financial reporting identified by management. During this process, if our management identifies one or more material weaknesses in our internal control over financial reporting that cannot be remediated in a timely manner, we will be unable to assert such internal control is effective. While we currently believe our internal control over financial reporting is effective, the effectiveness of our internal controls in future periods is subject to the risk that our controls may become inadequate because of changes in conditions, and, as a result, the degree of compliance of our internal control over financial reporting with the applicable policies or procedures may deteriorate. If we are unable to conclude that our internal control over financial reporting is effective (or if our independent auditors disagree with our conclusion), we could lose investor confidence in the accuracy and completeness of our financial reports, which would have an adverse effect on our securities.

Changes in, or interpretations of, tax rules and regulations, and changes in geographic operating results, may adversely affect our effective tax rates.

We are subject to income taxes in the U.S. and foreign tax jurisdictions. Our future effective tax rates could be affected by changes in tax laws or the interpretation of tax laws, by changes in the amount of revenue or earnings that we derive from international sources in countries with high or low statutory tax rates, or by changes in the valuation of our deferred tax assets and liabilities. Unanticipated changes in our tax rates could affect our future results of operations.

In addition, we may be subject to examination of our income tax returns by federal, state, and foreign tax jurisdictions. We regularly assess the likelihood of outcomes resulting from possible examinations to determine the adequacy of our provision for income taxes. In making such assessments, we exercise judgment in estimating our provision for income taxes. While we believe our estimates are reasonable, we cannot assure you that final determinations from any examinations will not be materially different from that reflected in our historical income tax provisions and accruals. Any adverse outcome from any examinations may have an adverse effect on our business and operating results, which could cause the market price of our securities to decline.

We incur costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could affect our operating results.

We have incurred, and will continue to incur, significant legal, accounting and other expenses associated with corporate governance and public company reporting requirements, including requirements under the Sarbanes-Oxley Act of 2002, as well as rules implemented by the SEC and the NYSE. As long as the SEC requires the current level of compliance for public companies of our size, we expect these rules and regulations to require significant legal and financial compliance costs and to make some activities time-consuming and costly. These rules and regulations may make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage than was previously available. As a result, it may be more difficult for us to attract and retain qualified individuals to serve on our Board of Directors or as our executive officers.

Certain shareholders own a majority of our outstanding common shares.

As of May 20, 2011, three of our shareholders beneficially owned an aggregate of 97,562,201 of our common shares, or approximately 71.3% of the outstanding shares. In addition, one of these shareholders, Mark H. Rachesky, M.D., the beneficial owner of approximately 29.4% of our outstanding common shares, currently serves on our Board of Directors. Accordingly, these three shareholders, collectively, have the power to exercise substantial influence over us and on matters requiring approval by our shareholders, including the election of directors, the approval of mergers and other significant corporate transactions. This concentration of ownership may make it more difficult for other shareholders to effect substantial changes in our company and may also have the effect of delaying, preventing or expediting, as the case may be, a change in control of our company.

Sales of a substantial number of shares of our common shares, or the perception that such sales might occur, could have an adverse effect on the price of our common shares, and therefore our ability to raise additional capital to fund our operations.

As of May 20, 2011, over 70% of our common shares were held beneficially by certain individuals and institutional investors who each had ownership of greater than 5% of our common shares. Sales by such individuals and institutional investors of a substantial number of shares of our common shares into the public market, or the perception that such sales might occur, could have an adverse effect on the price of our common shares, which could materially impair our ability to raise capital through the sale of common shares or debt that is convertible into our common shares.

We have been named in, or brought, three lawsuits related to the 2010 refinancing exchange, and we may be named in or bring, additional lawsuits in the future. This litigation could become time consuming and expensive and could harm our business.

We and members of our Board of Directors were named in two lawsuits brought by Icahn Partners LP, a limited partnership governed by the laws of Delaware and certain entities affiliated with Icahn Partners LP (“Icahn Partners”), one in the Supreme Court of British Columbia (“BC Court”) and one in the New York Supreme Court. In the action brought in the BC Court, Icahn Partners alleged, among other things, that a July 20, 2010 refinancing exchange (as discussed under “Item 7. Management’s discussion and analysis of financial conditions and results of operations—Liquidity and Capital Resources — July 20, 2010 Refinancing Exchange Agreement”), was oppressive to Icahn Partners under British Columbia law. In the action brought in the New York Supreme Court, Icahn Partners alleged, among other things, that the 2010 refinancing exchange and the subsequent issuance of our common shares to Dr. Rachesky’s fund through the conversion of the notes exchanged pursuant to the 2010 refinancing exchange constituted a breach of contract, tortious interference with a contract and tortious interference with prospective business relations. Both lawsuits sought damages and equitable relief, including an order to rescind the 2010 refinancing exchange and the subsequent issuance of our common shares to Dr. Rachesky’s fund through the conversion of the notes exchanged pursuant to the 2010 refinancing exchange. In addition, we filed an action in the U.S. District Court for the Southern District of New York against Carl Icahn, Brett Icahn and various investment vehicles controlled by Carl Icahn alleging violations of the Exchange Act, and certain rules promulgated thereunder, and tortious interference with prospective business relations and seeking damages and injunctive relief. These actions are discussed separately and in more detail in “Item 3. Legal Proceedings.” We have obligations under certain circumstances to indemnify each of the defendant directors against liabilities or obligations of the defendant directors and expenses in relation to claims, actions, proceedings, investigations, or orders by reason of the defendant directors being or having been our directors or any action or omission of the defendant directors acting as our directors. We cannot predict the outcome of these lawsuits, nor can we predict the amount of time and expense that will be required to resolve these lawsuits. If these lawsuits or any future lawsuits become time consuming and expensive, or if there are unfavorable outcomes in any of these cases, our business could be harmed.

An unsolicited offer for our shares could have a material and adverse effect on our business.

In March 2010 and July 2010, Icahn Partners launched unsolicited tender offers, pursuant to which Icahn Partners offered to acquire all of our outstanding shares of common stock, subject to certain conditions. An unsolicited offer for shares of our common shares is, among other things, a distraction for our management and employees, requires the expenditure of significant time and resources by us, could cause our stock price to fluctuate significantly and impair our access to the equity markets and, if it results in the acquisition of ownership or control by a person or group in excess of 50% of our common shares and thus triggers a change in control, could result in a significant change in our business. In addition, if the unsolicited offer results in such a change in control under our senior secured credit facility, the Film Credit Facility, the indentures governing our convertible senior subordinated notes, the indenture governing our senior secured notes and the agreements governing our other indebtedness, we may be required to repurchase our senior secured notes and the outstanding convertible senior subordinated notes, and the maturity of our senior secured credit facility, the Film Credit Facility and our other outstanding indebtedness may be accelerated. We may not have the funds necessary to repurchase or repay such indebtedness and in fact we may be contractually prohibited under the terms of our senior secured credit facility and Film Credit Facility from repurchasing our senior secured notes and the convertible senior subordinated notes. Any unsolicited offer, whether from the Icahn Partners or another party, could subject us to any of the aforementioned concerns, which could harm

our business and have a material and adverse effect on our business and our results of operations. Any unsolicited offer also could cause Lions Gate’s stock price to fluctuate significantly and impair our access to the equity markets.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2. PROPERTIES.

Our corporate head office is located at 1055 West Hastings Street, Suite 2200, Vancouver, British Columbia V6E 2E9. Our principal executive offices are located at 1055 West Hastings Street, Suite 2200 and 2700 Colorado Avenue, Suite 200, Santa Monica, California, 90404. At the Santa Monica address, we occupy approximately 125,000 square feet, including an approximately 4,000 square foot screening room. Our lease expires in August 2015. We also lease a 6,697 square foot space in New York, New York (which leases expire in July 2014) and a 4,389 square foot space in Santa Monica, California (which lease expires in March 2011).

We believe that our current facilities are adequate to conduct our business operations for the foreseeable future. We believe that we will be able to renew these leases on similar terms upon expiration. If we cannot renew, we believe that we could find other suitable premises without any material adverse impact on our operations.

ITEM 3. LEGAL PROCEEDINGS.

On July 23, 2010, Icahn Partners filed a petition in the BC Court against us, Dr. Rachesky, MHR Fund Management LLC and MHR Institutional Partners III LP (the “MHR Fund”) and Kornitzer Capital Management, Inc. (the “BC Action”). Icahn Partners filed an amended petition on July 26, 2010. Dr. Rachesky is the managing member of MHR Institutional Partners III LP’s general partner. Among other things, Icahn Partners claimed that a July 20, 2010 refinancing exchange (as discussed under “Item 7. Management’s discussion and analysis of financial conditions and results of operations—Liquidity and Capital Resources — July 20, 2010 Refinancing Exchange Agreement”) between us and Kornitzer Capital Management, Inc. to exchange certain convertible senior subordinated notes of LGEI (the “Exchange”), as well as the Note Sale (as defined below) and Conversion (as defined below), were “oppressive” to Icahn Partners under British Columbia law. Icahn Partners sought orders that would, among other things, (1) declare that the Company is oppressing its shareholders, (2) prohibit MHR Institutional Partners III LP from transferring or voting its new shares, (3) prohibit us from issuing any securities, (4) unwind the July 20 transactions between the MHR Fund, us, and Kornitzer Capital Management, Inc. (which includes the Exchange, the Note Sale and the Conversion) and (5) compensate the petitioners. The BC Court heard argument during the week of October 11, 2010. On November 1, 2010, the BC Court issued a final order and decision dismissing Icahn Partners’ claims in their entirety and awarding costs to us. On November 2, 2010, Icahn Partners announced its intent to appeal the decision. On November 5, 2010, a single Justice of the British Columbia Court of Appeal denied Icahn Partners’ application for an expedited appeal or, in the alternative, an order prohibiting us from scheduling our 2010 annual general meeting of shareholders before January 21, 2011. Icahn Partners’ application to vary this order was denied by a panel of the British Columbia Court of Appeal on December 7, 2010. The British Columbia Court of Appeal heard oral argument on the Icahn Partners’ appeal from the final order and decision of the BC Court on March 24, 2011. The appeal was dismissed on May 10, 2011. For purposes herein, the “Note Sale” means the July 20, 2010 entry into a Purchase Agreement and subsequent sale of certain convertible notes received by Kornitzer Capital Management, Inc. in the Exchange to MHR Institutional Partners III LP. Additionally, the “Conversion” means, after the consummation of the Note Sale, the July 20, 2010 exercise by MHR Institutional Partners III LP of conversion rights under certain convertible notes whereby those notes were converted in full into 16,236,305 of our common shares.

Icahn Partners also sought an order from the British Columbia Securities Commission (the “BCSC”) on July 22, 2010 requiring, among other things, that Dr. Rachesky, the MHR Fund, and their respective affiliates cease trading in any of our securities until further order of the BCSC and that we and each of our directors cease trading in any of our securities until further order of the BCSC. Icahn Partners alleged that the Exchange was, among other things, an unlawful defensive tactic, and that the disclosures concerning the transactions violated applicable securities laws. A hearing on the request for a temporary cease trade order was held on July 28, 2010, and the BCSC determined to dismiss Icahn Partners’ application for a temporary cease trade order against us and the MHR Fund.

On July 26, 2010, Icahn Partners filed suit in New York Supreme Court against us, our Board of Directors, LGEI, Dr. Rachesky, the MHR Fund, MHR Institutional Advisors II LLC, MHR Institutional Advisors III LLC, and Kornitzer Capital Management, Inc. and its principal John C. Kornitzer (the “New York Action”). Icahn Partners claimed, among other things, that the Exchange and subsequent issuance of our common shares to Dr. Rachesky’s fund through the Conversion constituted (1) a breach of a certain July 9, 2010 letter agreement between us and Icahn Partners; (2) tortious interference with the same July 9 letter agreement; and (3) tortious interference with prospective business relationships. The complaint sought, among other things, a preliminary and permanent injunction rescinding the Exchange and share issuance; a preliminary injunction prohibiting all defendants from voting their shares in any election of directors or any other shareholder vote; and an award of compensatory and punitive damages. On August 26, 2010, the defendants moved to dismiss or stay the New York Action. On November 15, 2010, Icahn Partners filed a motion for a preliminary injunction. Icahn Partners’ motion for a preliminary injunction was denied on December 9, 2010. On March 30, 2011, defendants’ motion to dismiss the complaint was granted in its entirety and the complaint was dismissed. Icahn Partners filed a notice of appeal on April 4, 2011.

On October 28, 2010, we filed an action in the United States District Court for the Southern District of New York against Carl Icahn, Brett Icahn, and various investment vehicles controlled by Carl Icahn. The complaint, filed as Exhibit (a)(8) to our Amendment No. 7 to the Schedule 14D-9, filed with the SEC on October 29, 2010, alleges violations of Sections 13(d), 14(a), 14(d), and 14(e) of the Exchange Act, and certain rules promulgated thereunder, and tortious interference with prospective business relations under state law. The complaint seeks damages and injunctive relief, including an order requiring the defendants to make corrective disclosures before our 2010 annual general meeting of shareholders. On November 22, 2010, Icahn Partners moved to dismiss the complaint. We amended our complaint on December 3, 2010. Icahn Partners moved to dismiss the amended complaint on December 17, 2010. Following oral argument on March 18, 2011, the Court granted in part and denied in part Icahn Partners’ motion to dismiss. The Court granted Icahn Partners’ motion to dismiss with respect to our claims alleging that Icahn Partners violated Sections 13(d), 14(a), 14(d) (except for Section 14(d)(7) as discussed below) and 14(e) of the Exchange Act, and certain rules promulgated thereunder, and tortuous interference with prospective business relations under state law. The Court denied Icahn Partners’ motion to dismiss with respect to our claim alleging that Icahn Partners violated Section 14(d)(7) of the Exchange Act, and Rule 14d-10(a)(2) promulgated thereunder, by offering special consideration to a particular shareholder in the course of its tender offer when it was required to offer all shareholders the highest consideration paid to any single shareholder, and the suit is ongoing with respect to that remaining claim. Icahn Partners has since moved for reconsideration of the Court’s ruling on the motion to dismiss.

From time to time, we are involved in certain claims and legal proceedings arising in the normal course of business. While the resolution of these matters cannot be predicted with certainty, we do not believe, based on current knowledge, that the outcome of any currently pending claims or legal proceedings in which the Company is currently involved will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flow.

ITEM 4. REMOVED AND RESERVED.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market Information

     Our common shares are listed on the NYSE under the symbol “LGF.”

     On May 20, 2011, the closing sales price of our common shares on the NYSE was $5.97.

     The following table sets forth the range of high and low closing sale prices for our common shares, as reported by the NYSE in U.S. dollars, for our two most recent fiscal years:

		High				Low
Year ended March 31, 2012
First Quarter (through May 20, 2011)		$	6.72			$	5.95
Year ended March 31, 2011
Fourth Quarter		$	6.79			$	5.76
Third Quarter			7.65				6.47
Second Quarter			7.38				6.03
First Quarter			7.27				6.14
Year ended March 31, 2010
Fourth Quarter		$	6.30			$	4.85
Third Quarter			6.07				4.89
Second Quarter			6.66				5.40
First Quarter			6.26				4.55

Holders

     As of May 20, 2011, there were 899 registered holders of our common shares.

Dividend Policy

     We have not paid any dividends on our outstanding common shares since our inception and do not anticipate doing so in the foreseeable future. The declaration of dividends on our common shares is restricted by our senior revolving credit facility and is within the discretion of our Board of Directors and will depend upon the assessment of, among other things, our earnings, financial requirements and operating and financial condition. At the present time, given our anticipated capital requirements, we intend to follow a policy of retaining earnings in order to finance further development of our business. We may be limited in our ability to pay dividends on our common shares by restrictions under the Business Corporations Act (British Columbia) relating to the satisfaction of solvency tests.

Securities Authorized for Issuance Under Equity Compensation Plans

     We currently maintain two equity compensation plans: the Lions Gate Entertainment Corp. 2004 Performance Incentive Plan (the “2004 Plan”) and the Lionsgate Employees’ and Directors’ Equity Incentive Plan (the “Equity Incentive Plan”), each of which has been approved by our shareholders. In addition, as described below, we granted certain equity-based awards that were not under shareholder-approved plans in connection with our acquisition of Mandate Pictures in 2007.

     The following table sets forth, for each of our equity compensation plans, the number of common shares subject to outstanding options and rights, the weighted-average exercise price of outstanding options, and the number of shares remaining available for future award grants as of March 31, 2011.

										Number of Common Shares
										Remaining Available for
		Number of Common								Future Issuance Under Equity
		Shares to be Issued				Weighted-Average				Compensation Plans
		Upon Exercise of				Exercise Price of				(Excluding Shares
		Outstanding Options,				Outstanding Options,				Reflected in
Plan Category		Warrants and Rights				Warrants and Rights				the First Column)
Equity compensation plans approved by shareholders			5,304,090	(1)		$	9.87	(2)			3,682,606	(3)
Equity compensation plans not approved by shareholders			600,000	(4)		$	9.22	(4)			—
Total			5,904,090			$	9.75				3,682,606

Taxation

     The following is a general summary of certain Canadian income tax consequences to U.S. Holders (who, at all relevant times, deal at arm’s length and are not affiliated with the Company) of the purchase, ownership and disposition of common shares. For the purposes of this Canadian income tax discussion, a “U.S. Holder” means a holder of common shares who (1) for the purposes of the Income Tax Act (Canada) is not, has not, and will not be, or deemed to be, resident in Canada at any time while he, she or it holds common shares, (2) at all relevant times is a resident of the United States under the Canada-United States Income Tax Convention (1980) (the “Convention”) and is eligible for benefits under the Convention, and (3) does not and will not use or be deemed to use the common shares in carrying on a business or part of a business in Canada. This summary does not apply to U.S. Holders who are insurers or “authorized foreign banks” within the meaning of the Income Tax Act (Canada). Such U.S. Holders should seek tax advice from their advisors.

     This summary is not intended to be, and should not be construed to be, legal or tax advice to any prospective investor and no representation with respect to the tax consequences to any particular investor is made. The summary does not address any aspect of any provincial, state or local tax laws or the tax laws of any jurisdiction other than Canada or the tax considerations applicable to non-U.S. Holders. Accordingly, prospective investors should consult with their own tax advisors for advice with respect to the income tax consequences to them having regard to their own particular circumstances, including any consequences of an investment in common shares arising under any provincial, state or local tax laws or the tax laws of any jurisdiction other than Canada.

     This summary is based upon the current provisions of the Income Tax Act (Canada), the regulations thereunder and the proposed amendments thereto publicly announced by the Department of Finance, Canada before the date

hereof (the “Tax Proposals”) and our understanding of the current published administrative and assessing practices of the Canada Revenue Agency. No assurance may be given that any proposed amendment will be enacted in the form proposed, if at all. This summary does not otherwise take into account or anticipate any changes in law, whether by legislative, governmental or judicial action.

     The following summary applies only to U.S. Holders who hold their common shares as capital property. In general, common shares will be considered capital property of a holder where the holder is neither a trader nor dealer in securities, does not hold the common shares in the course of carrying on a business and is not engaged in an adventure in the nature of trade in respect thereof. : (a) holders who are “financial institutions” within the meaning of the mark-to-market rules contained in the Income Tax Act (Canada) ; (b) a holder, an interest in which would be a “tax shelter investment” as defined in the Income Tax Act (Canada); (c) a holder that is a “specified financial institution” as defined in the Income Tax Act (Canada); or (d) a holder that is a corporation which has elected to use functional currency tax reporting as set out in the Income Tax Act (Canada). Such U.S. Holders should consult their own tax advisors.

     Amounts in respect of common shares paid or credited or deemed to be paid or credited as, on account or in lieu of payment of, or in satisfaction of, dividends to a shareholder who is not a resident of Canada within the meaning of the Income Tax Act (Canada) will generally be subject to Canadian non-resident withholding tax. Canadian withholding tax applies to dividends that are formally declared and paid by the Company and also to deemed dividends that may be triggered by a cancellation of common shares if the cancellation occurs otherwise than as a result of a simple open market transaction. For either deemed or actual dividends, withholding tax is levied at a basic rate of 25%, which may be reduced pursuant to the terms of an applicable tax treaty between Canada and the country of residence of the non-resident shareholder. Under the Convention, the rate of Canadian non-resident withholding tax on the gross amount of dividends received by a U.S. Holder, which is the beneficial owner of such dividends, is generally 15%. However, where such beneficial owner is a company that owns at least 10% of the voting shares of the company paying the dividends, the rate of such withholding is 5%.

     In addition to the Canadian withholding tax on actual or deemed dividends, a U.S. Holder also needs to consider the potential application of Canadian capital gains tax. A U.S. Holder will generally not be subject to tax under the Income Tax Act (Canada) in respect of any capital gain arising on a disposition of common shares (including, generally, on a purchase by the Company on the open market) unless at the time of disposition such shares constitute taxable Canadian property of the holder for purposes of the Income Tax Act (Canada) and such U.S. Holder is not entitled to relief under the Convention. If the common shares are listed on a designated stock exchange (which includes the NYSE) at the time they are disposed of, they will generally not constitute taxable Canadian property of a U.S. Holder unless, at any time during the 60-month period immediately preceding the disposition of the common shares, the U.S. Holder, persons with whom he, she or it does not deal at arm’s length, or the U.S. Holder together with such non-arm’s length persons, owned 25% or more of the issued shares of any class or series of the capital stock of the Company. Furthermore, pursuant to the Tax Proposals, shares of corporations that did not, at any time during the immediately preceding 60-month period, derive their value principally from one or any combination of (i) real or immovable property situated in Canada, (ii) Canadian resource properties, (iii) timber resource properties, and (iv) options in respect of, or interests in, such properties, no longer constitute taxable Canadian property. In any event, under the Convention, gains derived by a U.S. Holder from the disposition of common shares will generally not be subject to tax in Canada unless the value of the company’s shares is derived principally from real property or certain other immovable property situated in Canada.

Issuer Purchases of Equity Securities

     On May 31, 2007, our Board of Directors authorized the repurchase of up to $50 million of our common shares. Thereafter, on each of May 29, 2008 and November 6, 2008, as part of its regularly scheduled meetings, our Board of Directors authorized the repurchase up to an additional $50 million of our common shares, subject to market conditions. The additional resolutions increased the total authorization to $150 million. The common shares may be purchased, from time to time, at the Company’s discretion, including the quantity, timing and price thereof. Such purchases will be structured as permitted by securities laws and other legal requirements. During the period from the authorization date through March 31, 2011, 6,787,310 shares have been repurchased at a cost of approximately $65.2 million (including commission costs). The share repurchase program has no expiration date.

     There were no purchases of shares of our common stock by us during the three months ended March 31, 2011.

ISSUER PURCHASES OF EQUITY SECURITIES

(d) Approximate

(c) Total Number of

Dollar Value of

Shares Purchased

Shares that May

as

Yet

(a) Total

Part of Publicly

Be Purchased

Number of

(b) Average

Announced Plans

Under

Shares

Price

or

the Plans or

Period

Purchased

Paid per Share

Programs

Programs

January 1, 2011 — January 31, 2011

—

—

—

—

February 1, 2011 — February 29, 2011

—

—

—

—

March 1, 2011 — March 31, 2011

—

—

—

—

Total

—

—

—

$

85,080,000

Stock Performance Graph

     The following graph compares our cumulative total shareholder return with those of the NYSE Composite Index and the S&P Movies & Entertainment Index for the period commencing March 31, 2006 and ending March 31, 2011. All values assume that $100 was invested on March 31, 2006 in our common shares and each applicable index and all dividends were reinvested.

     The comparisons shown in the graph below are based on historical data and we caution that the stock price performance shown in the graph below is not indicative of, and is not intended to forecast, the potential future performance of our common shares.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Lions Gate Entertainment Corporation, the NYSE Composite Index
and the S&P Movies & Entertainment Index

		3/06				3/07				3/08				3/09				3/10				3/11
Lions Gate Entertainment Corporation			100.00				112.51				96.06				49.75				61.48				61.58
NYSE Composite			100.00				114.95				111.67				65.07				99.79				115.19
S&P Movies & Entertainment			100.00				122.79				102.96				53.79				105.17				130.98

The graph and related information are being furnished solely to accompany this Form 10-K pursuant to Item 201(e) of Regulation S-K. They shall not be deemed “soliciting materials” or to be “filed” with the SEC (other than as provided in Item 201), nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.

ITEM 6. SELECTED FINANCIAL DATA.

     The consolidated financial statements for all periods presented in this Form 10-K are prepared in conformity with U.S. GAAP.

The Selected Consolidated Financial Data below includes the results of Lionsgate UK, Debmar-Mercury and Mandate Pictures from their acquisition dates of October 17, 2005, July 3, 2006 and September 10, 2007, respectively, onwards. The Selected Consolidated Financial Data below also includes the results of Maple Pictures from the date of consolidation of July 18, 2007, onwards. In addition, the selected consolidated historical financial data below includes the results of TV Guide Network from the acquisition date of February 28, 2009 until its

deconsolidation on May 28, 2009, as explained below. The selected consolidated historical financial data below has been adjusted for the adoption of a new accounting standard pertaining to consolidation accounting for variable interest entities. This new accounting standard applied to our investment in TV Guide Network. Upon adoption, we applied the provisions of the new accounting standard retrospectively and accordingly, we deconsolidated TV Guide Network on May 28, 2009, the date on which we sold a 49% interest in TV Guide Network to OEP, and retrospectively adjusted the financial statements to account for TV Guide Network under the equity method of accounting since that date. See Note 7 and Note 17 to our audited consolidated financial statements. Due to the acquisitions and the consolidation of Maple Pictures and the deconsolidation of TV Guide Network, the Company’s results of operations for the years ended March 31, 2011, 2010, 2009, 2008, and 2007 and financial positions as at March 31, 2011, 2010, 2009, 2008, and 2007 are not directly comparable to prior reporting periods.

		Year Ended March 31,
		2011				2010				2009				2008				2007
		(Amounts in thousands, except per share amounts)
Statement of Operations Data:
Revenues		$	1,582,720			$	1,489,506			$	1,466,374			$	1,361,039			$	976,740
Expenses:
Direct operating			795,746				777,969				793,816				660,924				435,934
Distribution and marketing			547,226				506,141				669,557				635,666				404,410
General and administration			171,407				143,060				136,563				119,080				90,782
Depreciation and amortization			5,811				12,455				7,657				5,500				3,670
Total expenses			1,520,190				1,439,625				1,607,593				1,421,170				934,796
Operating income (loss)			62,530				49,881				(141,219	)			(60,131	)			41,944
Other expenses (income):
Interest expense
Contractual cash based interest			38,879				27,461				15,131				12,851				14,056
Amortization of debt discount and deferred financing costs			16,301				19,701				19,144				17,048				15,783
Total interest expense			55,180				47,162				34,275				29,899				29,839
Interest and other income			(1,742	)			(1,547	)			(5,785	)			(11,276	)			(11,930	)
Gain on sale of equity securities			—				—				—				(2,909	)			(1,722	)
Loss (gain) on extinguishment of debt			14,505				(5,675	)			(3,023	)			—				—
Total other expenses, net			67,943				39,940				25,467				15,714				16,187
Income (loss) before equity interests and income taxes			(5,413	)			9,941				(166,686	)			(75,845	)			25,757
Equity interests loss			(43,930	)			(28,201	)			(9,044	)			(7,559	)			(2,605	)
Income (loss) before income taxes			(49,343	)			(18,260	)			(175,730	)			(83,404	)			23,152
Income tax provision			4,256				1,218				2,724				4,031				7,680
Net income (loss)		$	(53,599	)		$	(19,478	)		$	(178,454	)		$	(87,435	)		$	15,472
Basic Net Income (Loss) Per Common Share		$	(0.41	)		$	(0.17	)		$	(1.53	)		$	(0.74	)		$	0.14
Diluted Net Income (Loss) Per Common Share		$	(0.41	)		$	(0.17	)		$	(1.53	)		$	(0.74	)		$	0.14
Weighted average number of common shares outstanding:
Basic			131,176				117,510				116,795				118,427				108,398
Diluted			131,176				117,510				116,795				118,427				111,164
Balance Sheet Data (at end of period):
Cash and cash equivalents			86,419				69,242				138,475				371,589				51,497
Investments — auction rate securities			—				—				—				—				237,379
Investment in films and television programs			621,288				661,105				702,767				608,942				493,140
Total assets			1,557,844				1,527,155				1,667,250				1,536,927				1,135,598
Senior revolving credit facility			69,750				17,000				255,000				—				—
Senior secured second-priority notes			226,331				225,155				—				—				—
Convertible senior subordinated notes and other financing obligations			110,973				192,036				281,521				261,519				243,675
Total liabilities			1,430,298				1,473,233				1,625,557				1,282,328				807,880
Total shareholders’ equity			127,546				53,922				41,693				254,599				327,718

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview

     Lions Gate Entertainment Corp. (“Lionsgate,” the “Company,” “we,” “us” or “our”) is a leading global entertainment company with a strong and diversified presence in motion picture production and distribution, television programming and syndication, home entertainment, family entertainment, digital distribution and new channel platforms.

     We released approximately 14 motion pictures theatrically per year for the last three fiscal years, which included films that we developed and produced in-house, films that we developed and produced with our partners and films that we acquired from third parties. In fiscal 2012, we currently intend to release approximately 11 to 13 motion pictures theatrically.

     We have also delivered, on average, approximately 76 hours of original television programming for the last three fiscal years, which include primarily prime time television series for the cable and broadcast networks. In fiscal 2012, we currently intend to deliver approximately 56 hours of television programming.

     We distribute our library of approximately 13,000 motion picture titles and television episodes and programs directly to retailers, rental kiosks, 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 also distribute our library through the following joint ventures::

	•		TV Guide Network, TV Guide Network On Demand and TV Guide Online (www.tvguide.com) (collectively, “TV Guide Network”), our joint ventures with One Equity Partners (“OEP”), the global private equity investment arm of JPMorgan Chase, N.A.;
	•		Studio 3 Partners LLC (“EPIX”), our joint venture with Viacom Inc. (“Viacom”), Paramount Pictures Corporation (“Paramount Pictures”) and Metro-Goldwyn-Mayer Studios Inc. (“MGM”);
	•		Tiger Gate Entertainment Limited (“Tiger Gate”), our joint venture with Saban Capital Group, Inc. (“SCG”); and
	•		Horror Entertainment, LLC (“FEARnet”), our joint venture with Sony Pictures Television (“Sony”) and Comcast Corporation (“Comcast”).

     In order to maximize our profit, we attempt to maintain a disciplined approach to acquisition, production and distribution of projects, including films and television programs, by balancing our financial risks against the probability of commercial success for each project. We also attempt to maintain the same disciplined approach to investments in, or acquisitions of, libraries or other assets complementary to our business, entertainment studios and companies that we believe will enhance our competitive position in the industry, generate significant long-term returns, represent an optimal use of our capital and build a diversified foundation for future growth. Historically, we have made numerous acquisitions that are significant to our business and we may continue to make such acquisitions in the future. For example, we have acquired, integrated and/or consolidated into our business the following:

	•		Mandate Pictures, LLC (“Mandate Pictures”), a worldwide independent film producer, financier and distributor (acquired in September 2007);
	•		Maple Pictures Corp. (“Maple Pictures”), a Canadian film, television and home video distributor (consolidated effective July 2007);
	•		Debmar-Mercury, LLC (“Debmar-Mercury”), a leading independent media company specializing in syndication, network, cable and ancillary markets (acquired in July 2006);
	•		Redbus Film Distribution Ltd. and Redbus Pictures (collectively, “Redbus” and currently, Lions Gate UK Ltd. (“Lionsgate UK”)), an independent film distributor, which provides 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).

     As part of this strategy, we also have ownership interests in the following:

	•		Pantelion Films, a joint venture designed to produce and distribute a slate of English and Spanish language feature films to target Hispanic moviegoers in the U.S. (entered into in July 2010);
	•		Tiger Gate, an operator of pay television channels and a distributor of television programming and action and horror films across Asia (entered into in April 2010);
	•		TV Guide Network (acquired in February 2009 and sold a 49% interest to OEP in May 2009);
	•		EPIX, a joint venture entered into to create a premium television channel and subscription video-on-demand service (entered into in April 2008);

	•		Elevation Sales Limited (“Elevation”), a U.K. based home entertainment distributor (interest acquired in July 2007);
	•		Roadside Attractions, LLC (“Roadside”), an independent theatrical distribution company (interest acquired in July 2007);
	•		NextPoint, Inc. (“Break Media”), an online video entertainment service provider (interest acquired in June 2007); and
	•		FEARnet, a multiplatform programming and content service provider (interest acquired in October 2006).

Revenues

     Our revenues are derived from the Motion Pictures and Television Production segments, as described below. Our revenues are derived from the U.S., Canada, the U.K., Australia and other foreign countries; none of the non-U.S. countries individually comprised greater than 10% of total revenues. See Note 21 to our audited consolidated financial statements.

     Motion Pictures. Motion Pictures includes “Theatrical,” “Home Entertainment,” “Television,” “International,” “Lionsgate UK,” and “Mandate Pictures” revenue.

     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 includes revenues from our own film and television productions and acquired or licensed films, including theatrical and direct-to-video releases, generated from the sale 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. We categorized our Home Entertainment revenue as follows:

	•		Packaged media revenue: Package media revenue consists of the sale or rental of DVD’s and Blu-ray devices.
	•		Electronic media revenue: Electronic media revenue consists of revenues generated from electronic-sell through or “EST”, digital rental, pay-per-view and video-on-demand platforms.

     Television revenues are primarily derived from the licensing of our productions and acquired films to the domestic cable, satellite, and 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 revenues from our distribution to international sub-distributors, on a territory-by-territory basis.

     Lionsgate UK revenues include revenues from the licensing and sale of our productions, acquired films, our catalog product or libraries of acquired titles from our subsidiary located in the U.K.

     Mandate Pictures revenues include revenues from the sales and licensing of domestic and worldwide rights of titles developed or acquired by Mandate Pictures to third-party distributors and to international sub-distributors.

     Television Production. Television Production 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 home entertainment revenues consisting of television production movies or series.

     Media Networks. Media Networks consists of TV Guide Network, including TV Guide Network On Demand, and TV Guide Online (www.tvguide.com), from the acquisition date of February 28, 2009 until its deconsolidation on May 28, 2009. We adopted the new accounting standard pertaining to consolidation accounting for variable interest entities on April 1, 2010 and applied the provisions of the new accounting standard retrospectively. Accordingly, we deconsolidated TV Guide Network on May 28, 2009, the date on which we sold a 49% interest in

TV Guide Network to OEP, and retrospectively adjusted our financial statements to account for TV Guide Network under the equity method of accounting since that date. Media Networks revenue includes distribution revenue from multi-system cable operators and digital broadcast satellite providers (distributors generally pay a per subscriber fee for the right to distribute programming) and advertising revenue from the sale of advertising on its television channel and related online media platforms.

Expenses

     Our primary operating expenses include direct operating expenses, distribution and marketing expenses and general and administration expenses.

     Direct operating expenses include amortization of film and television production or acquisition costs, participation and residual expenses, provision for doubtful accounts, and foreign exchange gains and losses. 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 primarily include the costs of theatrical “prints and advertising” (“P&A”) and of DVD/Blu-ray duplication and marketing. Theatrical P&A includes the costs of the theatrical prints delivered to theatrical exhibitors and the advertising and marketing cost associated with the theatrical release of the picture. DVD/Blu-ray duplication represents the cost of the DVD/Blu-ray product and the manufacturing costs associated with creating the physical products. DVD/Blu-ray 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 include salaries and other overhead.

Recent Developments

     Additional Issuance of Senior Secured Second-Priority Notes. On May 13, 2011, Lions Gate Entertainment Inc. (“LGEI”), our wholly-owned subsidiary, issued approximately $200.0 million aggregate principal amount of senior secured second priority notes due 2016 (the “Additional Senior Notes”) in a private offering conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). The Additional Senior Notes were issued pursuant to a supplemental indenture dated as of May 13, 2011 (the “Supplemental Indenture”) to the indenture dated as of October 21, 2009 (the “Indenture”), among LGEI, the Company, the subsidiary guarantors party thereto, and U.S. Bank National Association, as trustee. LGEI had issued $236.0 million aggregate principal amount of 10.25% senior secured second priority notes due 2016 (the “Senior Notes”) under the Indenture on October 21, 2009. The Supplemental Indenture amended the Indenture to, among other things, enable the Issuer to issue additional notes having the same terms as the Senior Notes, except for the issue date, issue price and first interest payment, in an aggregate principal amount of up to $200.0 million. The Additional Senior Notes were sold at 102.219% of the principal amount plus accrued interest thereon from May 1, 2011, resulting in gross proceeds of approximately $204.4 million and net proceeds of approximately $197.2 million after certain transaction costs, and approximately $191.6 million after $5.6 million paid in connection with the consent solicitation of holders of the Senior Notes. A portion of the proceeds were used to pay down amounts outstanding under our senior secured credit facility. The Additional Senior Notes accrue interest at a rate of 10.25% per annum from May 1, 2011 and will be payable semiannually on May 1 and November 1 of each year, commencing on November 1, 2011. The Additional Senior Notes will mature on November 1, 2016.

CRITICAL ACCOUNTING POLICIES

     The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The application of the following accounting policies, which are important to our financial position and results of operations, requires significant judgments and estimates on the part of management. As described more fully below, these estimates bear the risk of change due to

the inherent uncertainty attached to the estimate. In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. For example, accounting for films and television programs requires us 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. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. For a summary of all of our accounting policies, including the accounting policies discussed below, see Note 2 to our audited consolidated financial statements.

     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 for an individual film or television program are amortized and participation and residual costs are accrued to direct operating expenses 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.

     Due to the inherent uncertainties involved in making such estimates of ultimate revenues and expenses, these estimates have differed in the past from actual results and are likely to differ to some extent in the future from actual results. In addition, in the normal course of our business, some films and titles are more successful than anticipated and some are less successful than anticipated. 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.

     An increase in the estimate of ultimate revenue will generally result in a lower amortization rate and, therefore, less film and television program amortization expense, while a decrease in the estimate of ultimate revenue will generally result in a higher amortization rate and, therefore, higher film and television program amortization expense, and also 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 theatrical release of feature films is recognized at the time of exhibition based on our participation in box office receipts. Revenue from the sale of DVDs/Blu-ray discs 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 we are 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 our 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 our assessment of the relative fair value of each title. The primary estimate requiring the most subjectivity and judgment involving revenue recognition is the estimate of sales returns associated with our revenue from the sale of DVD’s/Blu-ray discs in the retail market which is discussed separately below under the caption “Sales Returns Allowance.”

     Sales Returns Allowance. Revenues are recorded net of estimated returns and other allowances. We estimate reserves for DVD/Blu-ray returns based on previous returns experience, point-of-sale data available from certain retailers, current economic trends, and projected future sales of the title to the consumer based on the actual performance of similar titles on a title-by-title basis in each of the DVD/Blu-ray businesses. Factors affecting actual returns include, among other factors, limited retail shelf space at various times of the year, success of advertising or other sales promotions, and the near term release of competing titles. 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. Our estimate of future returns affects reported revenue and operating income. If we underestimate the impact of future returns in a particular period, then we may record less revenue in later periods when returns exceed the estimated amounts. If we overestimate the impact of future returns in a particular period, then we may record additional revenue in later periods when returns are less than estimated. An incremental change of 1% in our estimated sales returns rate (i.e., provisions for returns divided by gross sales of related product) for home entertainment products would have had an approximately $8.1 million impact on our total revenue in the fiscal year ended March 31, 2011.

     Provisions for Accounts Receivable. 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 or could be better or worse than anticipated 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. We are subject to federal and state income taxes in the U.S., and in several foreign jurisdictions. We record deferred tax assets, net of applicable reserves, related to net operating loss carryforwards and certain temporary differences. We recognize a future tax benefit to the extent that realization of such benefit is more likely than not or a valuation allowance is applied. In order to realize the benefit of our deferred tax assets we will need to generate sufficient taxable income in the future. Because of our historical operating losses, we have provided a full valuation allowance against our net deferred tax assets. However, the assessment as to whether there will be sufficient taxable income to realize our net deferred tax assets is an estimate which could change in the future depending primarily upon the actual performance of our Company. 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 or a portion of the valuation allowance will be reversed and reflected as a benefit in the income tax provision. After that we will be required to continually evaluate the more likely than not assessment that our net deferred tax assets will be realized and if operating results deteriorate we may need to reestablish all or a portion of the valuation allowance through a charge to our income tax provision.

     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. We perform our annual impairment test as of January 1 in each fiscal year. We performed our last annual impairment test on our goodwill as of January 1, 2011. No goodwill impairment was identified in any of our 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.

     Convertible Senior Subordinated Notes. We account for our convertible senior subordinated notes by separating the liability and equity components. The liability component is recorded at the date of issuance based on its fair value which is generally determined in a manner that will reflect an interest cost equal to our nonconvertible debt borrowing rate at the convertible senior subordinated notes issuance date. The amount of the proceeds less the amount recorded as the liability component is recorded as an addition to shareholders’ equity reflecting the equity component (i.e., conversion feature). The difference between the principal amount and the amount recorded as the liability component represents the debt discount. The carrying amount of the liability is accreted up to the principal amount through the amortization of the discount, using the effective interest method, to interest expense over the

expected life of the note. The determination of the fair value of the liability component is an estimate dependent on a number of factors including estimates of market rates for similar non convertible debt instruments at the date of issuance. A higher value attributable to the liability component results in a lower value attributed to the equity component and therefore a smaller discount amount and lower interest cost as a result of amortization of the smaller discount. A lower value attributable to the liability component results in a higher value attributed to the equity component and therefore a larger discount amount and higher interest cost as a result of amortization of the larger discount.

     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 a one-year allocation period. The changes in these estimates or different assumptions used in determining 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 assumptions and estimates have been materially accurate in the past.

Recent Accounting Pronouncements

     Consolidation accounting for variable interest entities. This new accounting guidance modifies the previous guidance in relation to the identification of controlling financial interests in a variable interest entity (“VIE”). Under this new guidance, the primary beneficiary of a VIE is the enterprise that has both of the following characteristics, among others: (a) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance; and (b) the obligation to absorb losses of the entity, or the right to receive benefits from the entity, that could potentially be significant to the VIE. If an enterprise determines that power is shared among multiple unrelated parties such that no one party has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance, then no party is the primary beneficiary. Power is shared if each of the parties sharing power are required to consent to the decisions relating to the activities that most significantly impact the VIE’s performance. The provisions of this standard became effective for us beginning in fiscal 2011.

     Upon adoption of the new accounting standard, on April 1, 2010, we determined that we are no longer the primary beneficiary of TV Guide Network because the power to direct the activities that most significantly impact the economic performance of TV Guide Network are shared with the 49% owner of TV Guide Network, OEP. Although we own a 51% interest in TV Guide Network, the power to direct the activities that most significantly impact the economic performance of TV Guide Network are held by the board of managers pursuant to the operating agreement of TV Guide Entertainment Group LLC. Accordingly, upon adoption of the new accounting standard, we are no longer consolidating TV Guide Network and instead are accounting for TV Guide Network under the equity method of accounting.

     We have applied the provisions of the new accounting standard retrospectively and, accordingly, we deconsolidated TV Guide Network from May 28, 2009, the date we sold a 49% interest to OEP, and retrospectively adjusted the financial statements to reflect TV Guide Network as if it were accounted for under the equity method of accounting since that date. The deconsolidation of TV Guide network resulted in the reclassification of $305.4 million of assets, $147.3 million of liabilities and $30.0 million of non-controlling interest amounts from each of their respective consolidated balance sheet captions to the investment in equity method investee’s account as of March 31, 2010, reflecting the carrying amount of the Company’s interest in the mandatorily redeemable preferred and common stock units of TV Guide Network as of March 31, 2010. In addition, under the equity method of accounting, our share of the revenues, expenses of TV Guide Network and income for the accretion of the dividend and discount of the mandatorily redeemable preferred stock are recorded net in the equity interest line item in the consolidated statements of operations. The adoption of the new accounting standard did not impact the Company’s net loss. See Note 7 and Note 17 to our audited consolidated financial statements for further detail regarding TV Guide Network.

RESULTS OF OPERATIONS

Fiscal 2011 Compared to Fiscal 2010

     The following table sets forth the components of consolidated revenue for the fiscal years ended March 31, 2011 and 2010:

		Year				Year
		Ended				Ended
		March 31,				March 31,				Increase (Decrease)
		2011				2010				Amount				Percent
		(Amounts in millions)
Consolidated Revenue
Motion Pictures		$	1,229.5			$	1,119.3			$	110.2				9.8	%
Television Production			353.2				350.9				2.3				0.7	%
Media Networks			—				19.3				(19.3	)			NM
		$	1,582.7			$	1,489.5			$	93.2				6.3	%

     Our largest component of revenue comes from home entertainment. The following table sets forth total home entertainment revenue for both the Motion Pictures and Television Production reporting segments for the fiscal years ended March 31, 2011 and 2010:

		Year				Year
		Ended				Ended
		March 31,				March 31,				Increase (Decrease)
		2011				2010				Amount				Percent
		(Amounts in millions)
Home Entertainment Revenue (1)
Motion Pictures		$	635.6			$	591.4			$	44.2				7.5	%
Television Production			54.4				67.8				(13.4	)			(19.8	%)
		$	690.0			$	659.2			$	30.8				4.7	%

Motion Pictures Revenue

     The following table sets forth the components of revenue and the changes in these components for the motion pictures reporting segment for the years ended March 31, 2011 and 2010:

		Year				Year
		Ended				Ended
		March 31,				March 31,				Increase (Decrease)
		2011				2010				Amount				Percent
		(Amounts in millions)
Motion Pictures
Theatrical		$	205.9			$	139.4			$	66.5				47.7	%
Home Entertainment (1)			635.6				591.4				44.2				7.5	%
Television (1)			139.8				135.8				4.0				2.9	%
International			126.5				73.4				53.1				72.3	%
Lionsgate UK			79.2				74.3				4.9				6.6	%
Mandate Pictures			38.7				99.1				(60.4	)			(60.9	%)
Other			3.8				5.9				(2.1	)			(35.6	%)
		$	1,229.5			$	1,119.3			$	110.2				9.8	%

Motion Pictures — Theatrical Revenue

     The following table sets forth the titles contributing significant theatrical revenue by fiscal years theatrical slate and the month of their release for the fiscal years ended March 31, 2011 and 2010:

Year Ended March 31,
2011				2010
		Theatrical Release Date				Theatrical Release Date
Fiscal 2011 Theatrical Slate:				Fiscal 2010 Theatrical Slate:
For Colored Girls		November 2010		From Paris With Love		February 2010
Saw 3D		October 2010		Daybreakers		January 2010
Alpha and Omega		September 2010		Spy Next Door		January 2010
The Expendables		August 2010		Brothers		December 2009
The Last Exorcism		August 2010		Precious		November 2009
Killers		June 2010		Saw VI		October 2009
Why Did I Get Married Too?		April 2010		Gamer		September 2009
Kick-Ass		April 2010		I Can Do Bad All By Myself		September 2009
				Fiscal 2009 Theatrical Slate:
				The Haunting in Connecticut		March 2009

     Theatrical revenue of $205.9 million increased $66.5 million, or 47.7%, in fiscal 2011 as compared to fiscal 2010. The increase in theatrical revenue in fiscal 2011 as compared to the prior year is primarily due to higher box office receipts earned during fiscal 2011 as compared to fiscal 2010 on the theatrical releases listed in the table above. The contribution of theatrical revenue from the titles listed above was $188.8 million in fiscal 2011 compared to $126.4 million in fiscal 2010, representing an increase of $62.4 million in revenue from titles individually contributing greater than 5% of theatrical revenue.

Motion Pictures — Home Entertainment Revenue

     The following table sets forth the titles contributing significant motion pictures home entertainment revenue for the fiscal years ended March 31, 2011 and 2010:

Year Ended March 31,
2011				2010
		DVD Release Date				DVD Release Date
Fiscal 2011 Theatrical Slate:				Fiscal 2010 Theatrical Slate:
The Next Three Days		March 2011		Brothers		March 2010
For Colored Girls		February 2011		Precious		March 2010
Saw 3D		January 2011		Gamer		January 2010
Alpha and Omega		January 2011		I Can Do Bad All By Myself		January 2010
The Expendables		November 2010		Saw VI		January 2010
Killers		September 2010		Crank: High Voltage		September 2009
Kick-Ass		August 2010
Why Did I Get Married Too?		August 2010
Fiscal 2010 Theatrical Slate:				Fiscal 2009 Theatrical Slate:
From Paris With Love		June 2010		The Haunting In Connecticut		July 2009
Daybreakers		May 2010		Madea Goes to Jail		June 2009
The Spy Next Door		May 2010		My Bloody Valentine 3-D		May 2009
Precious		March 2010		New In Town		May 2009
Direct-to-DVD, acquired and licensed brands, acquired library & other:				The Spirit		April 2009
The Switch		March 2011

     The following table sets forth the components of home entertainment revenue by product category for the fiscal years ended March 31, 2011 and 2010:

		Year Ended March 31,
		2011												2010
		Packaged				Electronic								Packaged				Electronic
		Media				Media				Total				Media				Media				Total
		(Amounts in millions)
Home entertainment revenues (1)
Fiscal 2011 Theatrical Slate		$	192.9			$	38.7			$	231.6			$	—			$	—			$	—
Fiscal 2010 Theatrical Slate			74.4				42.3				116.7				113.1				5.8				118.9
Fiscal 2009 Theatrical Slate			10.0				1.2				11.2				129.9				41.2				171.1
Fiscal 2008 & Prior Theatrical Slate			22.8				4.2				27.0				35.8				4.0				39.8
Direct-to-DVD, acquired and licensed brands, acquired library & other			201.2				32.7				233.9				225.2				14.8				240.0
Other			12.0				3.2				15.2				19.5				2.1				21.6
		$	513.3			$	122.3			$	635.6			$	523.5			$	67.9			$	591.4

     Home entertainment revenue of $635.6 million increased $44.2 million, or 7.5%, in fiscal 2011 as compared to fiscal 2010. The increase in home entertainment revenue is primarily due to an increase in revenue from electronic media from $67.9 million in fiscal 2010 to $122.3 million in fiscal 2011, offset by a slight decrease in revenue from packaged media. The increase in electronic media is primarily driven by an increase in revenue generated from the product categories listed in the table above. The slight decrease in revenue from packaged media results from a decrease in direct-to-DVD, acquired and licensed brands, acquired library and other products, partially offset by an increase in revenue from the theatrical slates and other products. The increase in revenue contributed by the theatrical slates is primarily due to higher box office receipts and the timing of theatrical releases. The decrease in direct-to-DVD, acquired and licensed brands, acquired library and other products is largely due to a decrease in packaged media revenue from fitness and family entertainment titles, as well as a decline in revenue from one previously acquired library.

Motion Pictures — Television Revenue

     The following table sets forth the titles contributing significant motion pictures television revenue for the fiscal years ended March 31, 2011 and 2010:

Year Ended March 31,
2011				2010
Fiscal 2011 Theatrical Slate:				Fiscal 2009 Theatrical Slate:
Kick-Ass				Madea Goes to Jail
Killers				My Bloody Valentine 3-D
Why Did I Get Married Too?				Saw V
Fiscal 2010 Theatrical Slate:				The Family That Preys
Brothers				The Haunting In Connecticut
Daybreakers				Transporter 3
From Paris With Love				W.
I Can Do Bad All By Myself				Fiscal 2008 Theatrical Slate:
Precious				Why Did I Get Married? — Feature
Saw VI
The Spy Next Door
Fiscal 2009 Theatrical Slate:
The Forbidden Kingdom

     The following table sets forth the components of television revenue by product category for the fiscal years ended March 31, 2011 and 2010:

		Year Ended
		March 31,
		2011				2010
		(Amounts in millions)
Television revenues (1)
Fiscal 2011 Theatrical Slate		$	29.4			$	—
Fiscal 2010 Theatrical Slate			56.3				3.5
Fiscal 2009 Theatrical Slate			13.2				89.0
Fiscal 2008 & Prior Theatrical Slate			22.6				26.8
Direct-to-DVD, acquired and licensed brands, acquired library & other			16.2				13.5
Other			2.1				3.0
		$	139.8			$	135.8

     Television revenue included in motion pictures revenue of $139.8 million increased $4.0 million, or 2.9%, in fiscal 2011 as compared to fiscal 2010. The increase in television revenue in fiscal 2011 compared to fiscal 2010 is mainly due to the revenue generated by the product categories listed above. The contribution of television revenue from the titles listed above was $85.0 million in fiscal 2011 compared to $68.1 million in fiscal 2010, and the contribution of television revenue from titles not listed above was $54.8 million in fiscal 2011 compared to $67.7 million in fiscal 2010.

Motion Pictures — International Revenue

     The following table sets forth the titles contributing significant motion pictures international revenue for the fiscal years ended March 31, 2011 and 2010:

Year Ended March 31,
2011				2010
Fiscal 2011 Theatrical Slate:				Fiscal 2010 Theatrical Slate:
Alpha and Omega				Brothers
Kick-Ass				Saw VI
Killers				Fiscal 2009 Theatrical Slate:
Saw 3D				My Bloody Valentine 3-D
The Next Three Days				Saw V

     The following table sets forth the components of international revenue by product category for the fiscal years ended March 31, 2011 and 2010:

		Year Ended
		March 31,
		2011				2010
		(Amounts in millions)
International revenues
Fiscal 2011 Theatrical Slate		$	86.8			$	0.3
Fiscal 2010 Theatrical Slate			14.4				21.9
Fiscal 2009 Theatrical Slate			4.7				16.0
Fiscal 2008 & Prior Theatrical Slate			7.4				11.3
Direct-to-DVD, acquired and licensed brands, acquired library & other			10.3				17.9
Other			2.9				6.0
		$	126.5			$	73.4

     International revenue included in motion pictures revenue of $126.5 million increased $53.1 million, or 72.3%, in fiscal 2011 as compared to fiscal 2010. The increase in international revenue in fiscal 2011 compared to fiscal 2010 is mainly due to the revenues generated by the titles and product categories listed above.

Motion Pictures — Lionsgate UK Revenue

     The following table sets forth the titles contributing significant Lionsgate UK revenue for the fiscal years ended March 31, 2011 and 2010:

Year Ended March 31,
2011				2010
Fiscal 2011 Theatrical Slate:				Fiscal 2010 Theatrical Slate:		:
Saw 3D				Saw VI
The Expendables				Fiscal 2009 Theatrical Slate:
Fiscal 2010 Theatrical Slate:				My Bloody Valentine 3-D
Daybreakers				LGUK Theatrical Slate:
LGUK Theatrical Slate:				Harry Brown
Harry Brown				The Hurt Locker
The Hurt Locker				Other:
				Drag Me To Hell

     The following table sets forth the components of Lionsgate UK revenue by product category for the fiscal years ended March 31, 2011 and 2010:

		Year Ended
		March 31,
		2011				2010
		(Amounts in millions)
Lionsgate UK revenues
Fiscal 2011 Theatrical Slate		$	32.2			$	—
Fiscal 2010 Theatrical Slate			8.2				10.4
Fiscal 2009 Theatrical Slate			1.0				10.0
Fiscal 2008 & Prior Theatrical Slate			2.5				8.9
Lionsgate UK and third party product			22.1				25.2
Direct-to-DVD, acquired and licensed brands, acquired library & other			10.4				12.3
Other			2.8				7.5
		$	79.2			$	74.3

     Lionsgate UK revenue of $79.2 million increased $4.9 million, or 6.6%, in fiscal 2011 as compared to fiscal 2010. The increase in Lionsgate UK revenue in fiscal 2011 compared to fiscal 2010 is mainly due to the revenue generated by the titles and product categories listed above.

Motion Pictures — Mandate Pictures Revenue

     The following table sets forth the titles contributing significant Mandate Pictures revenue for the fiscal years ended March 31, 2011 and 2010:

Year Ended March 31,
2011				2010
Drag Me To Hell				Drag Me To Hell
Juno				Horsemen
Peacock				Juno
The Switch				Passengers
Whip It				Whip It