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CFA Institute Research Challenge

California State University, Long Beach – Student Research Cyclical Consumer Goods & Services Sector, Motion picture and video production Industry

New York Stock Exchange

Lions Gate Entertainment Corp. Date: 02/12/16 Current Price: $18.62USD Recommendation: BUY (97%Upside)

Ticker – NYSE:LGF Headquarters: Santa Monica Target Price: $32.26 USD

This report is published for educational purposes only by students competing in The CFA Institute Research Challenge.

Highlights Consumption Trends - Technological developments have altered consumer viewing habits in the motion picture and television production industry. The amount of new platforms available to the end consumer resulted in an intensification of demand for premium content, providing leverage to Lions Gate, whose business revolves around content creation. Though Lions Gate has embraced the next-generation distribution platforms, they utilize a diversified distribution strategy. Motion Picture Operations - The company’s fiscal year 2016 ends March 31. Fiscal ‘16 has been underwhelming for its motion picture segment, but the current fiscal year was expected to be the smallest contributor in their three year plan. Lions Gate has stayed its course and continued to grow and diversify its product portfolio, the benefits of which will be realized long term. Television Operations - While the film segment has suffered a down year, the television segment has continued its robust performance in fiscal ‘16. The television business increased its revenue and margins, even as the timing of deliveries of television series adversely affected the quarter performance. The fourth quarter will be the first full quarter to include operations from Pilgrim Studios, which, along with the deliveries of critical television series, will drive television growth further. Risks - Although the entertainment industry is exposed to a multitude of risk factors, the bottom line depends on the unpredictable nature of consumers. The company’s business, financial condition, operating results, liquidity, and prospects are all vulnerable to changing consumer and cultural tastes. Valuation – We issue a Buy Recommendation on Lionsgate (LGF) with a target price of $32.26 using Discounted Cash Flow Analysis, Enterprise Valuation method, and Relative Valuation method in comparison to their competitors. We determined this target price using the average of all three valuation methods.

Recent News Increased dividends from $0.07 per share to $0.09 per share during 2Q Fiscal 2016 Though the company reported negative earnings in the quarter ending September 30, 2015, the company raised dividends by $0.02 per share regardless. The company firmly believes this underperformance is due to short-lived factors and remains confident in its outlook. M&A discussion with Starz Inc. February 3, 2016 - Lions Gate disclosed to the SEC that is has opened lines with Starz over a possible M&A. Starz’s share fell by -22.2% following Lions Gate’s underwhelming 3Q earnings for fiscal ‘16. Lions Gate’s stock fell -27.2% following its earnings call. The fall in stock price has become a dividing stake between the two companies and they are unable to come to terms regarding the price. The deal has yet to be consummated and seems increasingly unlikely to be consummated each passing day, but there are enough incentives for both sides to see this through, and will remain a key event to be on the lookout for. Acquisition of Property Rights February 4, 2016 - Continuing its recent strategy of acquiring intellectual property rights of already established book series, the company acquired rights the Magic Tree House. Spanning 54 volumes, the children’s book series has potential to become a long-lasting revenue source due to its beloved status across generations. If the first movie, expected to be released sometime in 2018, is able to capture the hearts of children, the subsequent releases may very well be guaranteed successes as well. October 1, 2015 - An acquisition more in line with its past acquisitions of IP, the Kingkiller Chronicle is another young-adult franchise that LGF is looking to capitalize on. Though the Divergent series has not matched the success of The Hunger Games franchise, it has done

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Share Price Movement

Clos ing Price $18.62

52-Week High/Low $41.41 / $16.21

10 Day Average Volume 5.7 mi l l ion

Di luted Shares Out. 153.3 mi l l ion

Market Cap $2.8 bi l l ion

Dividend Yield 1.93%

Beta 1.29

EV / Revenue 1.6x

EV / EBITDA 17.5x

Insti tutional Holdings 98.63%

EPS 0.36

LGF Market Profile

well for the bottom line, and the Kingkiller Chronicles would follow those expectations: potential to over-perform with the worst-case scenario still contributing positively to the bottom line. Strategic Partnership with New Regency January 19, 2016 - A multi-faceted production and distribution agreement was formed between LGF and New Regency. The arrangement brings together two companies with similar strategies relating to the type of content they engage in. The benefits for Lions Gate include adding to its international library, including New Regency’s recent string of award-caliber films (i.e., The Big Short, The Revenant). New Regency benefits from being able to utilize Lions Gate’s distribution infrastructure. The partnership also allows for the two studios to work together on future projects. Expansion of Television Operations November 12, 2015 - LGF has made an investment in Pilgrim Studios, giving them a majority stake of the unscripted producer (62.5%). The transaction doubles LGF’s television slate to 80. Pilgrim will operate autonomously, with full creative control. The deal provides complementary diversification to LGF’s premium scripted content, as Pilgrim operates in unscripted, non-fiction programming. Fiscal 2016, Third Quarter Results February 4, 2016 - Revenue is $670.5 million, Adjusted EBITDA is $53.6 million, Adjusted net income is $66.8 million (adjusted EPS of $0.45) compared to the previous year’s quarter results of $751.3 million, $146.8 million, and $110.0 million (EPS $0.79) respectively. Free cash flow went from a negative the previous year’s quarter at -$4.6 million to $73.9 million this quarter.

Business Description Lions Gate (LGF, Lionsgate) was first founded in 1997 in Vancouver, British Columbia, and is currently headquartered in Santa Monica, California. LGF has established themselves as one of the most commercially successful mini movie production and distribution companies, being the seventh most profitable movie studio in 2015. The company is a global content leader with a solid diversified presence in two segments, Motion Picture and Television Production. 75.9% of LGF’s gross revenue comes from Motion Picture while Television Production accounts for the other 24.1% for the fiscal year ended March 2015. Although Motion Picture is still LGF’s main source of revenue, its revenue has decreased 16.6% in comparison to 2014, while Television Production’s revenue increased 29.5%. Motion Picture Segment is separated into Theatrical, Home Entertainment, Television, International, and Motion Pictures-Other, with Home Entertainment (36.4%) being the top revenue source of this segment. The decrease in Motion Picture segment revenue overall was mostly driven by the fewer films released in Fiscal 2015 as well as the performance of the titles released in the current fiscal year. The only sub-segment in Motion Picture that increased in revenue this year is Television, which have increased by 19.9%, driven mainly by the contribution of 2014 and prior theatrical slates. Television Production Segment is separated into Domestic Television, International, Home Entertainment, Television Production-Other, with Domestic Television generating 71.7% of the segment revenue. The segment revenue has increased as a whole with the exception of Packaged Media under Home Entertainment revenue. The increase in the segment was mainly driven by the increase in television episodes delivered in fiscal 2015, such as Anger Management, Mad men, Nashville, Orange is the new black, etc. Although the company’s segmentation are motion picture and television production, the largest component of revenue comes from home entertainment, which is embedded in both segments. Revenue generated through home entertainment accounts for 29.5% of total revenue in fiscal year 2015, decreased 18.1% in comparison to prior year. LGF is also in the process of venturing into game space by investments and partnerships with game companies in fiscal year 2015. The company plan to extend television shows and featured films franchises to the gaming audiences as well. Many television shows or films have switch gears to enter to the game space in the past, such as the infamous Halo, Tron and Residence Evil, suggesting that this type of venture will have a positive development in the near future. Two major moves of LGF include the acquisition of an interest in Telltale Games and the Strategic partnership and investment in Next Games. Strategy LGF’s strategy focuses on the following three points:

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LGF Diluted FFO EPS

$1,820.10

$2,182.90

579.50 447.40

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SEGMENTATION

TelevisionProductionMotion Pictures

Diversification of the library of content - LGF aim to continue to grow and diversify the portfolio of film, television show, and digital content in order to capitalize on demand portion of the business, as that is where the future trend is pointing towards. By increasing the library of content, the company will be able to capture more diversified viewers with its long tail in various distribution channels. Disciplined approach in “greenlighting” and content acquisition - LGF attempt to strategically make decision on “greenlighting” and content acquisition in a disciplined manner. Many key executives are involved in the decision to greenlight a film, while taking in consideration of budget, hundreds of script and original intellectual properties, and the success of the film, which will highly affect the reputation of the company. Partnership and Joint Ventures - LGF actively seeks participation in partnership and joint ventures with various competitors as well as other companies or studios with similar interest. By doing so, LGF have successfully expanded its footprint in the media and entertainment industry, furthermore decreased cost accrued in comparison to sole production, and diversified portfolio of products and revenue sources. Shareholder Structure LGF is owned by 3 major shareholders that have over 5% of ownership, senior management of the company and the public. As of July 20, 2015, Mark H Racheskey M.D owns 27.2%, Capital World Investors Owns 5.8%, and Research Global Investors owns 5.4% of all the outstanding shares. Senior Management and Board of Directors collectively owns 35.3% of all the outstanding shares, with Mark H Racheskey M.D holding 27.2%, Michael Burns holding 2.4%, Jon Feltheimer holding 2.6%, Dr. John C. Malone holding 3% and the rest of the board and senior management holding less than 1%. Mark H Rachesky, who is currently a Director of Lionsgate, is also the Founder and the President of MHR Fund Management LLC, an investment firm that manages approximately $6 Billion of capital and has holding in public and private companies in various industries. Together with certain investment funds of Mark H Rachesky, namely MHR Affiliates. MHR Affiliates have helped with registration and the offering of the company’s common shares, and LGF have reimbursed the MHR affiliates for costs related to such purposes, accounting to approximately $1.0 million, which is included in general administration expense in the consolidated statement of income for fiscal year 2015. Corporate Management Mark H Rachesky is the independent, non-executive Chairman of the Board. He ensures independent oversight of the company and presides over regular scheduled executive sessions of the members of the Board. Along with executive Chief Executive Officer Jon Feltheimer and executive Vice Chairman Michael Burns, who have led the company’s development over the past 15 years, LGF has grown to one of the top seven most profitable independent movie studios.

Corporate Governance and Management LGF’s Board of directors each has unique expertise that is crucial to the success of the company, including extensive knowledge and experiences in investment banking and regulation, media and entertainment law, media and entertainment industry, and business acumen and management strategies. The board has formed 4 standing committees: Audit & Risk Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Strategic Advisory Committee; with a financial expert assigned to comply with SEC guidelines and NYSE listing standards. The interest of LGF’s executives is also aligned with the interest of the shareholders, in part due to the Executive Compensation Programs that reward executives based upon the performance of the company. Additionally, long term incentive programs are designed to compete with entrepreneurial employment alternatives, as well as short term initiatives that would jeopardize long term growth of LGF. LGF also has a policy that prohibits any officers, directors, and employees from entering in any type of short positions that would hedge against losses of LGF, in hopes to mitigate discrepancy in interest between shareholders and employees. In order to gain assistance in its review and determination of the Company’s executive compensation program, the Compensation Committee hires Pay Governance as the Compensation Consultant from time to time. The consultant provides competitive data on compensation, review executive compensation programs, provides information on compensation related practices, and compares peer group in the industry to provide a competitive compensation in retaining executives.

Shareholder Structure

Key Executives and Board Members

Dr. John C. Malone

Mark H. Rachesky, M.D.

Capital World Investors

Capital Research Global Investors

Public

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Screen Marketshare

1. Regal EntertainmentGroup

2. AMC Entertainment Inc.

3. Cinemark USA, Inc.

4. Carmike Cinemas, Inc.

Rest of Theatres

Industry Overview and Competition Positioning Key Drivers for Entertainment Industry Number of cinemas and screen in the United States: The number of cinemas in the United States have been steadily declining, but this is due to new theatres that have been built in place of old theatres, which have the capability to handle more screens than in the past. These new theatres are being spearheaded by the top 4 multiplexes including Regency, AMC, Cinemark, and Carmike Cinemas, which controls around 48% of all movie theatres in the U.S and Canada in 2015. The number of cinemas is decreasing, but the number of screen each cinema can hold is increasing. Movie Genres that matter: The most profitable movie genre for 2015 was action and adventures movies followed by comedy, drama, and thrillers. Lionsgate is dependent on creating high cost blockbuster films, but is currently in search of a new franchise that will take the pedestal from The Hunger Games series. Divergent is a good franchise, but does not have the pull that The Hunger Games had. In addition, Lionsgate have one high cost movie coming out this year “Gods of Egypt” and this can hurt the company’s value if it does not become a major hit in the theatre. Global consumer demand for movies have increased faster than those in the United States and Canada: The international market have been growing at a faster rate than the United States and Canada. Most noticeably is the rate at which the Asian market have been ascending, which for 2014 accounted for an 11% increase from 2013. Increasing global presence will help Lionsgate increase its market share and also lower the risk of producing movies. This was seen with many of the movies it made in the past 3 years, where a movie that was considered a bust in the U.S/Canada region made more revenue overseas. (Example I, Frankenstein). For Lionsgate to succeed it must build more relationship with overseas partner, especially with partners in Asia since it is the fastest growing market in the world currently (MPAA Market Statistics 2014). The cost of a movie ticket and the ticket admissions for theatres: The cost of a movie ticket have gone up consistently each year since 1994. The average movie ticket cost in the U.S in 2015 was $8.43, and we forecast that by 2019, the average cost will be $9.80. This comes at a time when admission tickets are declining. Our forecast indicates that admission tickets sold in the U.S. was around 1.28 billion, and by 2019 it will decline to 1.19 billion tickets sold. Frequent movie goers account for 51% of ticket sales, but only make up 11% of the population of people who watch movies at the cinema. Consuming content on the internet and multiple device Cloud storage have become an important factor for distributing movies and television shows: Ultraviolet is a cloud base digital rights locker that stores the license for movies and television shows. It allows users to access content on multiple devices, and up to 5 users can access the files. Lionsgate is a user of the Ultraviolet system, but some noticeable rivals includes Disney’s Movie Anywhere, ITunes, Google Play, and Amazon Prime. In addition Atom is a mobile app for android and IOS that inspires to simplify the movie going experience. Disney, Fox, and Lionsgate are currently working together to fund Atom with $50 million and Lionsgate owns 18.1% of ATOM through the partnership. Internet Infrastructure: Internet Infrastructure upgrade will be required to support higher resolution content that online streamers will use. CISCO reported that by 2019, 62% of internet traffic will cross content delivery networks in North America, an uptick of 42% compared to 2014. According to the Akami 2015 ranking of broadband speed, the United States ranks 14th in the world, with an average internet connection speed of 12.6 MB/sec. Netflix recommends that users should have a 24 Mb/sec internet connection to stream 4K content reliably. Streaming viewership: The amount of mediums that a view can use to consume contact have increased dramatically in the past 10 years. With a library of over 15,000 movies, videos and television shows, Lionsgate is in a strong position to stay competitive in the future. Lionsgate Premiere is the latest effort to streamline the distribution of movies each year for the company, and their goal is to deliver 15 movies annually. Netflix, Hulu, and Amazon Prime are the main players in online streaming that have paid subscribers. Netflix on its own has over 75 million subscribers, while Hulu has roughly 9 million subscribers, while Amazon Prime has between 40-50 million subscribers. Fall of the DVD business and physical media content: The DVD business and physical media content empire is rapidly declining in terms of market share and revenue. Our estimation is that by 2019, market share for DVD will drop to 12%, while the bulk of new product will be

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sold through the digital market. Physical rentals will be obsolete by 2019 accounting for less than 3% of revenue. Lionsgate packaged media for television products dropped by 8% year over year from 2014 to 2015, and by 26.3% from 2013 to 2014. Its packaged media sells for theatre slates decreased by 26.72% from 2014 to 2015, and television production packaged media sells decreased by 8.7% in the same time frame. Industry Overview The television and motion picture production and distribution industry is highly competitive. As an industry, the market is at saturated levels domestically, with some growth potential internationally. In the international markets, there are local entertainment companies that are also competing for market share. Domestically, there is not much potential for growth other than in the form of stealing market share and cannibalization. Industry Leaders The industry is dominated in large part by a handful of companies known as a “major studio”. There are six major studios, Walt Disney Studios, Universal Pictures, 20th Century Fox, Columbia Pictures, Warner Bros. Pictures and Paramount Pictures. Together, they have a tight stranglehold on all of the domestic films and programming being produced or distributed, whether it be through their primary unit or through a variety of subsidiaries. Each major studio is attached to a larger media conglomerate that generate over half of their revenue outside of the industry, primarily through their broadcast and cable networks, or in the case of Columbia Pictures, through their parent company’s electronics division (Sony). Because the major studios have a steady revenue source from their parent company, they are better equipped to survive turbulence in the market and are provided the means of distributing their film and television content. Independent Studios Aside from the major studios, there are also numerous independent motion picture and television production companies fighting for market share. These mini-majors are typically concentrated solely in the motion picture and television production and distribution industry. Independent studios have more freedom than major studios when it comes to what projects they may pursue. Considering that mini-majors are concentrated on smaller independent films than blockbusters, they are less concerned than major studios with the controversial nature that are often part of such intellectual property. Mini-majors include The Weinstein Company, DreamWorks Animation, and Open Road. Property Rights While all studios do have a division that create content for motion pictures and television series from scratch, most of the property rights are acquired from third parties. There are varying stages at which the property rights are bought, from as early as the script development stage, to stages past completion of the film, such as film rights being bought in film festivals. Technological Advancements: The Internet A recent development in the industry has been the emergence of digital media platforms. Such platforms provide an alternative channel of distribution for studios, which is to the benefit of studios, but digital media platforms have begun to create and compete for the acquisition of property rights. This effectively cuts out the studio as intermediaries. Major studios have a variety of traditional distribution networks themselves, but consumer viewing habits show that digital media platforms are crucial for the future welfare of studios. The scale of the digital platforms are not large enough to affect the bottom line, but depending on how actively they pursue the acquisition of property rights, the digital media platforms remain a cause for concern, as well as a

welcomed business partner. Competitive positioning Film and television producers compete with one another for market share of the box-office spots, television airtime, digital and physical sell-through, and online streaming services. The movie industry have seen a decline in number of admission sold in recent years leading to heighten competition between all major players who produces movies. Lionsgate will see more competition in the future as they fight for better film release time, spending more resources to create large and expensive action and adventure films to attract consumers to cover the revenue loss that will come from the finalization of “The Hunger Game” series. Production cost have also increased due to unionization of the Screen Actor Guild and the American Federation of Television and Radio Artist, which have strong bargaining power due to their size (Appendix 11). Lionsgate invest and partners with different television channels and internet channels to

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Legend

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distribute its products. It currently has a library with over 13,000 movie and television products, giving it the second largest content library in the industry. It was able to grow its library through acquisition of other film and television producers. Lionsgate strong line-up have in television products have increased their competitive power and allows for strong negotiation and partnership. In addition, substitute products are changing the way consumers view content, and is creating a new generation of people who are heavily reliant on the use of the internet to consume content, and who are used to paid-subscription models and freemium products provided by streaming services and mobile apps. Lionsgate increased exposure to new forms of entertainment including investments in Telltale Games and Next Game adds additional dimension to their competitive position. Lionsgate has a strong history of having the best box-office to DVD, and box-office to VOD conversion rate, having an average 15% conversion rate higher than the industry. In contrast, physical media sales are declining and will hurt Lionsgate bottom line, as they get 36.4% of their revenue from home entertainment. They have also created a new division in April 2015 called Lionsgate Premiere, which goal is to produce and distribute 15 films annually in the theatres, online, and VOD.

Investment Summary Lions Gate has remained dedicated to its core business and growth strategies over the course of the year, the benefits of which will be realized over the next few years. As long as Lions Gate continues to approach its strategies with discipline and balance, the expectations of the upcoming years remain bright. We issue a Buy Recommendation on Lionsgate (LGF) with a target price of $32.26 using Discounted Cash Flow Analysis. Consumption trend - With the advent of digital media platforms, consumers’ viewing habits changed dramatically, resulting in the overall number of buyers for TV content increasing. Being bullish on future market demand and on LGF’s abilities to deliver premium content, the shift on consumption trend plays enormously to LGF’s benefit. Expansion without overreaching - The film industry is a very crowded field. While LGF has previously relegated itself to mostly independent films, the company has now branched out to bigger budget films, but have done so in measured steps, after years of building its market share little by little. At some point, LGF will have to compete on or near the same release date with a major studio’s blockbuster. Whether it chooses to do so by counterprogramming, or by engaging in a box-office battle has to be done wisely. Considering independent films are LGF’s forte, and are very distinct compared to blockbusters, LGF’s option to counterprogram will never be a bad decision. However, the option to release a big-budget film of its own on the same date as its competitors does not seem like too bad of a decision in itself, as some of its tentpole films have extremely distinct characteristics, and tend to be well-known brands. Conglomerate Infrastructure - Each major studio is attached to a larger media conglomerate that generate over half of their revenue outside of the industry, primarily through their broadcast and cable networks, or in the case of Columbia Pictures, through their parent company’s electronics division (Sony).

- Resource - Because the major studios have a steady revenue source from their parent company, they are better equipped to survive turbulence in the market.

- Distribution availability - As most of the studios have easy access to network platforms there is a degree of security in terms of distributing their film and television content.

- Network risks - While the conglomerates do provide benefits to its studios, the huge infrastructure of broadcast and cable networks are some cause for concerns with technology developments. Future viewing habits are unpredictable, and may fully embrace the digital media platforms, or may continue to disrupt the industry with new innovations.

There are many factors to be on the lookout for. Being a content creator exclusively, LGF is a unique investment, which has undoubtedly inflated its stock price. The third quarter earnings report has plummeted LGF’s stock, and is now looking like a much more attractive investment than it has previously. There are concerns if LGF can survive the unending stream of comic book movies, but the three studios with intellectual property rights to comic book franchises seem to be competing against themselves more so than with LGF and its diverse portfolio. There is also the Fast & Furious franchise refusing to stop, the Transformers franchise that is being expanded, the Jurassic Park franchise that

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Theatre Market Share 2015

Universal Buena Vista

Warner Bros. 20th Century Fox

Sony / Columbia Paramount

Lionsgate

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Porter's Five Forces

has been rebooted, the beloved Star Wars franchise, and an unending list of franchises to worry about. What Lionsgate needs to worry about is not what others are doing, but how well they execute themselves. The Last Witch Hunter, American Ultra, and Norm of the North all invoke feelings of doubt and suspicious activity during the greenlighting process. How did such horrible movies come to being? If the script was satisfactory, was there a problem in the production stage? How did the greenlighting committee fail to reach the same conclusions as both the critics and the consumers? It could be that the studios acknowledged that the movies went too deep into production, and to cancel it at that stage would result in too big of a write-off. As they use a financial model that prioritizes risk mitigation, releasing the films and capturing as much revenues as possible may have simply been the best thing to do. With the expectation that the same dubious decision-making that greenlit Norm of the North will not be repeated again, the expectations for LGF is high, and we emphasize the buy recommendation.

Financial Analysis Lions Gate Entertainment Corp’s revenues have fallen 8.77% from 2.63B in 2014 to $2.40B in 2015, however they have continued to manage a growth in net income by nearly 20% from $152.03M to $181.78M. The company posted 3rd quarter results that that showed revenue declining by 10.3% year over year due to the poor performance of their historic blockbuster Hunger Games: Mocking Jay Part 2, which grossed only 650 million worldwide. Meanwhile, LGF’s Television segment continued its healthy growth and expansion in the quarter and seems to be anchoring in as a big future part of their business as Netflix renewed their number one hit series Orange is the New Black for seasons 5, 6, and 7. Revenue has remained just below -5% over the past 3 years, but has maintained a healthy compound annual growth rate of 6.1% over the preceding 5 years. This rising CAGR is primarily due to their recent acquisition of Summit, which inflated their revenues nearly 70% during their 2013 fiscal year. With strong revenues, LGF remained at a gross profit margin of 35.58%, which is considered a solid number when comparing to the industry. Regardless of their high profit margins, the company still failed to increase those lines from the same quarter last year. When looking at net income, from exactly one year ago, LGF has considerably disappointed in comparison to the market and the movie production industry. The net income fell just over 300% from the same quarter one year ago, dropping from $20.75M to -$42.60M. The company has produced a combination of strong growth and resourceful acquisitions that have helped LGF gain momentum of their television operations. They are on the path to deliver a top line run rate of over a billion dollars in 2018FY with margins increasing to between 15% and 20%. This is all without allocating any M&A. LGF’s substantial amount of debt totaling $1.63 billion dollars and debt to equity ratio of 1.6, higher than the industry average, suggests that there is a large risk related with the controlling of debt levels in their firm. In addition, there seems to be a sufficient amount of liquid able assets to fulfil the company’s existing debt commitments. Collection of cash seems to be a durable attribute as the company has uncollected accounts receivables totaling over $600 million which provides a day’s receivables outstanding of 135.66 as of end of 2015FY. LGF is continually viewed as a strong on high relative volume trading equity. They’ve averaged a daily-volume of $80.9 million, which is 13.12X greater than the normal stock within that industry.

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Equity and Debt Structure

Equity = 955.4 Mil USD

Debt = 1620.10 Mil USD

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Valuation We evaluated Lions Gate using the Discounted Cash Flow technique (DCF) and the DCF analysis is based on the company’s combined total financial figures. We projected LGF’s revenues on a per years’ basis using CAGR from 2006 until 2015. DCF Valuation Sales: Net Revenues or Sales were classified as a combination of 75.6% movie production and 24.6% television production. CapEx : The capital expenditure was projected from fixed assets as a percentage of sales. We determined the net additions in fixed assets to be the amount for projected capital expenditure. Change in Net Working Capital: The negative dip in Change in Net Working Capital in 2016 was determined by 3rd quarter results that came in lower than anticipated, however the following two years were positive. We took the difference of the change in net operating working capital on a year-by-year basis to determine our investment in working capital and eventually our NOPAT. Free Cash Flows: These numbers were generated from subtracting the projected investments in operating capital from NOPAT in 2016 to 2018. We then calculated a horizon value by multiplying the calculated sustainable growth rate to the last year’s free cash flows and using a WACC of 8.6%. We then discounted all of future cash flows as well as the horizon value back to the present in order to get the present value of all cash flows.

Key Financial Ratios

Turnover 2012 2013 2014 2015 2016E 2017E 2018E

Total Asset Turnover 0.73 0.98 0.94 0.78 0.63 0.60 0.59

Days Sales Outstanding 128.54 105.91 116.06 135.18 94.51 96.95 101.77

Profitability

EBITDA Margin 2.38 10.39 10.13 9.54 8.92 9.35 9.59

EBIT/Revenue % 2.75 9.23 9.55 11.08 8.35 8.72 8.88

Net Income Margin -2.46 8.57 5.78 7.58 4.19 4.20 4.48

Return on Assets -1.40 8.41 5.33 5.52 2.62 2.52 2.64

Return on Common Equity -34.22 104.02 32.31 25.48 9.63 8.94 9.06

Solvency

Total Debt/Total Assets 37.95 48.07 38.44 39.95 64.12 58.98 55.06

Long-Term Debt/Equity 120.59 24.45 60.65 58.07 159.34 93.12 116.20

Liquidity

Cash Ratio 0.03 0.03 0.02 0.06 0.26 0.28 0.29

Current Ratio 0.46 0.46 0.61 0.59 0.53 0.53 0.53

Enterprise Valuation When calculating the enterprise valuation, we found the market capitalization of the firm, total debt and cash and equivalents. We added the debt to the market capitalization and subtracted the cash of the firm. Once we found the enterprise value, we divided the figure by the number of outstanding shares to come up with the intrinsic value of the stock. See appendix 5. Relative Valuation Forward projected earnings growth was used to determine the relative valuation of Lionsgate and its competitors. Lionsgate forward earnings is higher compared to their peers and is comparable to the mini-major film studio such as DreamWorks. Lionsgate forward P/E ratio of 30.41x is lower than their current P/E ratio of 47.50x due to uncertainty in its ability to establish a new strong movie franchise to bring in strong revenue.

Investment Risk Economic Risks (MR: Severe discretionary income declines) The entertainment industry is extremely cyclical; therefore, it is more susceptible to macroeconomic factors. Major macroeconomic factors that would increasingly affect the entertainment industry include increases in interest rates, changes in discretionary income, and increases in the costs of motion picture production and marketing. Additionally, slower global economic growth is expected this year and could negatively affect demand, due to high elasticity in the entertainment industry and decreased consumer confidence. Industry Risks Home entertainment revenues have been increasing primarily led by an 8% increase in Blu-ray disk sales. (Digital Entertainment Group) A potential drawback from this success is that box office ticket sales may be substituted or cannibalized by home entertainment. DEG predicts that home videos, including pay-television and online streaming services will exceed movie ticket sales in 2017. Content producers will have to adapt to changes in viewership trends, as viewers continue to shift to home entertainment and digital platforms. In addition, declining physical media sales will affect producer revenue streams. (Appendix 13) Regulatory Risks (RR: Increase in regulations) The film industry is required to amortize film costs individually, which is done by forecasting the expected revenue for the current period and the total future revenues for a particular project. Given the inaccuracy of forecasts, future adjustments for amortization could be required, and these adjustments may negatively impact the value of the firm. In addition to these guidelines, content producers could be severely affected if they fail to comply with SAG-AFTRA working guidelines, as negotiations within unions may be exceedingly costly and pose the threat of a strike. (IBIS) The film industry is receiving support that will protect the intellectual property of their products. The private sector has the Copyright Alert System and the Trust Accountability Group’s Brand integrity Program Against Piracy (Tag Anti-piracy program) to reduce online piracy.

Risk Risk Mitigation

Rise in Interest Rates

Plan to enter into interest rate SWAPS in order to exchange their floating rate for a fixed rate.

Foreign Exchange Rate Risk

Plan to use hedges and derivatives to minimize risk.

Film failure

Cost discipline and closely manage film exposure through joint ventures.

Volatile Revenue

LGF has further diversified through T.V. revenue and agreement with Netflix.

Debt Risk (IR: Increase in Interest Rates) The interest on Lionsgate’s debt under amended and restated senior revolving credit facility along with certain production loans are expected to continue to be at variable rates of interest which exposes the firm to substantial interest rate risk. Thus, an increase in interest rates would increase variable debt service obligations, thus decreasing net income, even if the amount borrowed remained constant. LGF’s revolving credit facility is priced at a margin of 2.50% over LIBOR, with a maximum borrowing capacity of $800 million. Production loans incur interest at rates ranging from approximately 3.27% to 3.52% and margins may range anywhere from 2.5% over the one, two, three, or six-month LIBOR to 3.0% over the one, three or six-month LIBOR. (Appendix 15) Inclusively, if LGF has the need to raise capital through debt their current speculative credit rating of Ba3 would be an increased financing rate relative to their competitors. Business Risk International Lionsgate operates globally and is impacted by foreign laws, policies, taxes, and content restrictions. Piracy is also a risk that LGF faces abroad and cannot be assured sanctions will be enforced. Moreover, war and terrorist attacks may have a negative impact on LGF’s revenue streams. LGF is also tasked with the challenge of adapting to cultural tastes and attitudes. Foreign Exchange Rate Risk (FR) Although LGF reports revenues and results of operations in U.S. dollars, 26% of their revenue for fiscal year 2015 was earned outside of North America. Lionsgate’s currency exposure is between U.S. dollars, Canadian dollars, British pound sterling, Euros, and Australian dollars. This currency exposure may impact revenues and operating margins, which in turn may affect financial conditions, operating results, liquidity, and LGF’s overall business. The potential impact of such currency exposure was demonstrated when the revenues from Mockingjay 2 were negatively impacted by 15% as international currencies devalued. (PiperJaffray) Financial Exposure Motion Picture accounted for 76% of Lionsgate revenues for fiscal year 2015. Given that a major portion of LGF’s revenue is derived from motion pictures it is important to note that viewership trends are unpredictable and past successes will not necessarily predict future success. Due to the high costs of producing and marketing films, it is possible that a film that fails to resonate with the audience may incur higher capital expenditures than the capital revenue it delivers. Inclusively, it should be noted that there is a gap between the time when capital expenditures occur and when capital revenue is received. LGF faces intense competition from larger and more diversified studios. Competition may lead to an oversupply of films, which may decrease LGF’s market share and revenue. Loss of retailers and distributors (LR) Lionsgate received 8% or $191.97 million of its total revenue in 2015 from Walmart. LGF does not have long-term agreements with Walmart or any other retailers. If Walmart or any other of the retailers LGF does business with reduces or cancels an order, or is negatively impacted by the economy, LGF’s revenues would be reduced. Additionally, Walmart recently announced the closing of 154 U.S. stores and 115 more of its global locations, so that consumers of LGF products will have less access to these products in those locations. Ownership of Shares A few shareholders, some of which serve on the Board of Directors, such as the Chairman Mark H. Rachesky, own a majority of the shares. Jointly the shareholders are able to considerably influence matters that require shareholder approval. These matters include but are not limited to the election of directors, approval of mergers and corporate transactions. Additionally, the control that Rachesky and other shareholders of the board have obstructs other shareholders’ ability to implement prompt changes. Due to the large percentage of shares held by the board and certain institutional investors holding more than 5% of shares, the stock price may be substantially affected by any sales they make or by a perception that they might sell a large number of shares. This in turn can hamper Lionsgate’s ability to raise capital through the sale of common shares or debt that is convertible into common shares. Accretive Acquisitions Lionsgate has grown primarily through acquisitions. They have acquired Mandate Pictures, Maple Pictures, Debmar-Mercury, Redbus, Artisan Entertainment, and Trimark. It also has a stakes in EPIX (31.2%), TV Guide (50%), Break Media (42%), Tiger Gate (45.5%), Pantellion Films (49%), Road- side Attractions (43%), Elevation (50%), and Celestial Tiger

Pro

ba

bili

ty

Impact

Source: Team

Risk Matrix

Entertainment (16%). Although, Lionsgate’s acquisitions have been successful, this does not guarantee that their future acquisitions will continue to be successful. Lionsgate might also acquire Starz, which would increase Lionsgate’s revenue stream.

Disclosures:

CFA Institute Research Challenge

Ownership and material conflicts of interest:

The author(s), or a member of their household, of this report does not hold a financial interest in the securities of this company.

The author(s), or a member of their household, of this report does not know of the existence of any conflicts of interest that might bias the

content or publication of this report.

Receipt of compensation:

Compensation of the author(s) of this report is not based on investment banking revenue.

Position as a officer or director:

The author(s), or a member of their household, does not serve as an officer, director or advisory board member of the subject company.

Market making:

The author(s) does not act as a market maker in the subject company’s securities.

Disclaimer:

The information set forth herein has been obtained or derived from sources generally available to the public and believed by the author(s) to be

reliable, but the author(s) does not make any representation or warranty, express or implied, as to its accuracy or completeness. The information

is not intended to be used as the basis of any investment decisions by any person or entity. This information does not constitute investment

advice, nor is it an offer or a solicitation of an offer to buy or sell any security. This report should not be considered to be a recommendation by

any individual affiliated with CFA - Society of Orange County, CFA Institute or the CFA Institute Research Challenge with regard to this company’s

stock.

Appendices

Appendix 1 – Statement of Profit or Loss

Appendix 2 – Statement of Financial Position

Appendix 3 – Fixed Assets

Appendix 4 – Growth

Statement of Profit or Loss

LGF (millions) 2012 2013 2014 2015 2016E 2017E 2018E

Net Sales Or Revenues 1,587.57 2,708.14 2,630.25 2,399.64 2,336.93 2,556.69 2,814.91

Cost Of Goods Sold 908.40 1,390.56 1,369.38 1,315.77 1,367.10 1,518.40 1,706.45

Gross Profit 679.17 1,317.57 1,260.87 1,083.86 969.83 1,038.29 1,108.46

Selling General And Admin Expense 641.41 1,036.20 994.38 854.99 761.48 799.19 838.37

EBITDA 37.76 281.36 266.48 228.86 208.35 239.11 270.09

Depreciation and Amortization 4.27 8.29 6.53 6.58 10.74 13.32 16.36

Net Operating Income 33.49 273.07 259.95 222.28 197.61 225.79 253.73

Non Operating Income + 10.19 (23.12) (8.81) 43.60 (2.38) (2.81) (3.91)

EBIT 43.68 249.95 251.14 265.88 195.23 222.98 249.82

Interest Expense (-) 78.11 93.58 66.17 52.47 62.34 88.66 92.15

Pretax Income (EBT) (34.42) 156.37 184.96 213.40 132.89 134.32 157.67

Provisionfor Income Taxes (- Taxes) 4.69 (75.75) 32.92 31.62 34.96 26.86 31.53

Net Income (39.11) 232.12 152.03 181.78 97.93 107.46 126.14

Dividends Paid - - - - 6.76 33.12 46.58

Shares Outstanding 143.42 135.19 138.02 145.55 151.08 155.46 160.23

DPS - 0.05 0.24 0.32 0.43 0.57 0.76

Statement of Financial Position

LGF (millions) 2012 2013 2014 2015 2016E 2017E 2018E

Cash 76.23 73.02 34.61 105.20 178.59 202.08 228.49

Receivables 784.53 787.15 885.57 891.88 605.10 679.11 784.86

Total Current Assets 860.76 860.17 920.18 997.08 783.69 881.19 1,013.34

Property Plant And Equipment 42.08 50.86 65.74 66.37 82.43 99.02 118.68

Accumulated Depreciation 31.04 33.55 36.31 39.09 45.67 55.27 65.15

Net Property Plant And Equipment 9.77 8.53 14.55 26.65 36.76 43.75 53.53

Deposits And Other Assets 90.51 72.61 71.06 74.78 82.56 97.22 106.85

Total Assets 2,787.99 2,760.86 2,851.63 3,292.08 3,736.49 4,264.54 4,776.31

Accounts Payable 371.09 313.62 332.45 332.47 375.69 385.88 390.84

Total Current Liabilities 902.35 1,084.37 655.07 332.47 676.12 722.85 781.04

Long Term Debt 1,038.66 569.01 722.54 1,256.75 1,619.60 1,118.83 1,617.93

Other Long Term Liabilities 420.32 409.76 469.39 471.66 604.10 619.84 617.60

Total Liabilities 2,698.21 2,404.34 2,267.09 2,449.80 2,395.79 2,515.32 2,629.61

Common Stock Net 712.62 672.91 743.78 830.78 911.48 1,000.01 1,097.15

Retained Earnings (542.03) (309.91) (157.87) 13.72 107.18 203.72 297.44

Treasury Stock 77.08 - - - - - -

Other Liabilities (3.71) (6.47) (1.37) (2.21) (2.21) (2.21) (2.21)

Shareholders Equity 89.78 356.52 584.53 842.28 1,016.45 1,201.52 1,392.38

Total Liabilities And Shareholders Equity2,787.99 2,760.86 2,851.63 3,292.08 3,412.24 3,716.84 4,021.99

Fixed Assets

LGF (millions) 2012 2013 2014 2015 2016E 2017E 2018E

Beginning Fixed Assets (Property Plant And Equipment)40.81 42.08 50.86 65.74 66.37 82.43 99.02

Net Additions (CapEx) 1.27 8.78 14.88 0.63 16.07 16.58 19.66

Percentage of NetAdditions/Fixed Assets 0.03 0.21 0.29 0.01 0.24 0.20 0.20

Ending Fixed Assets 42.08 50.86 65.74 66.37 82.43 99.02 118.68

Beginning Accumulated Depreciation 31.04 33.55 36.31 39.09 45.67 55.27 65.15

Depreciation Charge 4.27 8.29 6.53 6.58 9.60 9.88 7.28

Ending Accumulated Depreciation 33.55 36.31 39.09 45.67 55.27 65.15 72.42

Appendix 5 – Enterprise Valuation ((Market Cap + Debt – Cash)/(Shares Outstanding))

Source: E Trade

Appendix 6 – Compensation Summary

Growth

LGF 2012 2013 2014 2015 2016E 2017E 2018E

Revenue Growth 0.3% 70.6% -2.9% -8.8% -2.6% 9.40% 10.10%

Gross Profit Margin 86.30% 194.00% 95.70% 85.96% 89.48% 107.06% 106.76%

Selling General And Admin Expense 89.25% 161.55% 95.96% 85.98% 89.06% 104.95% 104.90%

Fixed Assets 40.81 42.08 50.86 65.74 66.37 82.43 99.02

Depreciation/Fixed Assets 110.46% 119.70% 112.84% 110.01% 16.39% 16.16% 16.52%

ST Loans 371.09 313.62 332.45 332.47 332.47 332.47 332.47

LT Loans 1038.66 569.01 722.54 1256.75 1256.75 1256.75 1256.75

LT Loan % 217.23% -45.22% 26.98% 73.94% 28.87% -30.92% 44.61%

Total Borrowing 1409.75 882.63 1054.99 1589.22 1589.22 1589.22 1589.22

Average Borrowing 990.305 1146.19 968.81 1322.105 1589.22 1589.22 1589.22

Interest Expense 7.89% 8.16% 6.83% 3.97% 5.39% 5.58% 5.80%

Tax Rate -13.63% -48.44% 17.80% 14.82% 26.31% 20.00% 20.00%

Cash/Sales 4.80% 2.70% 1.32% 4.38% 7.64% 7.90% 8.12%

Accounts Reveivable Days 128.54 105.91 116.06 135.18 94.51 96.95 101.77

Total Current Assets 30.87% 31.16% 32.27% 30.29% 20.97% 20.66% 21.22%

Name and Principal

Position

Fiscal

YearSalary ($) Bonus ($)

Stock Awards

($)

Option Awards

($)

Non-Equity

Incentive Plan

Compensation

($)

Change in

Pension Value

and

Nonqualified

Deferred

Compensation

Earnings ($)

All Other

Compensation

($)

Total ($)

Jon Feltheimer* 2015 $1,500,000.00 $ - $ 1,000,000.00 $ - $4,050,000.00 $ - $ 220,311.00 $ 6,770,311.00

Chief Executive Officer 2014 $1,465,428.00 $ - $14,402,803.00 $41,513,029.00 $8,750,000.00 $ - $ 197,201.00 $66,328,461.00

2013 $1,264,070.00 $6,000,000.00 $ 3,625,278.00 $ - $1,500,000.00 $ - $ 184,535.00 $12,573,883.00

Michael Burns* 2015 $1,000,000.00 $ - $ 4,500,000.00 $ - $3,000,000.00 $ - $ 146,965.00 $ 8,646,965.00

Vice Chairman 2014 $1,000,000.00 $ - $ 3,000,000.00 $ - $4,400,000.00 $ - $ 78,205.00 $ 8,478,205.00

2013 $ 970,962.00 $4,000,000.00 $ 7,900,172.00 $13,995,430.00 $1,300,000.00 $ - $ 33,484.00 $28,200,048.00

James W. Barge 2015 $ 812,500.00 $ - $ 1,212,000.00 $ 719,637.00 $ 450,000.00 $ 2,921.00 $ 3,197,058.00

Chief Financial Officer 2014 $ 381,538.00 $1,100,000.00 $ 936,250.00 $ 2,597,054.00 $ - $ - $ 477.00 $ 5,015,319.00

Steven Beeks 2015 $ 900,000.00 $ - $ 1,285,500.00 $ 1,665,285.00 $ 371,250.00 $ - $ 2,921.00 $ 4,224,956.00

Co-Chief Operating 2014 $ 900,000.00 $ - $ - $ - $ 825,000.00 $ - $ 3,657.00 $ 1,728,657.00

Officer and Co-President, 2013 $ 900,000.00 $ 850,000.00 $ - $ - $ - $ - $ 5,960.00 $ 1,755,960.00

Motion Picture Group

Wayne Levin 2015 $ 825,000.00 $ - $ 1,987,680.00 $ 1,596,786.00 $ 471,250.00 $ - $ 2,921.00 $ 4,883,637.00

General Counsel and 2014 $ 825,000.00 $ - $ - $ - $ 825,000.00 $ - $ 2,932.00 $ 1,652,932.00

Chief Strategic Officer 2013 $ 751,442.00 $ 612,750.00 $ 1,896,000.00 $ 1,258,600.00 $ 187,500.00 $ - $ 2,960.00 $ 4,709,252.00

Appendix 7: Lionsgate Films

Appendix 8 – Board of Directors

Director Qualifications

Michael Burns, 56 Director Since: August 1999 Vice Chairman Since March 2000

Served as Managing Director and Head of the Office at Prudential Securities Inc's Los Angeles Investment Banking Office from 1991 to March 2000. Also act as director, member of the Audit Committee and member of the Finance Committee of Hasbro, Inc; Chairman and co-founder of Novica.com; member of the Board of Visitors of the John E. Anderson Graduate School of Management at UCLA. With extensive experiences specializing in raising equity within the media and entertainment industry, Mr. Burns brings important business and financial expertise to the Board. His understanding of the company and industry, knowledge in financial and investment banking expertise and connections in business and relationships with shareholder contributes to his important at Lionsgate.

Gordon Crawford, 68 Director Since: February 2013 Member of the Strategic Advisory Committee

Held various position at Capital Research and Management since 1971, retired as its Senior Vice President in December 2012. Served as Vice Chairman at the Nature Conservancy and Vice Chairman of the Paley Center for Media. Currently serves as Chairman of the Board of Trustees of the US Olympics and Paralympic Foundation, as well as Life Trustee on the Board of Trustees of Southern California Public Radio. Being one of the most influential and successful investors in the media and entertainment industry since 1971, Mr. Crawford's professional experiences and understanding of the industry makes him a valuable member at Lionsgate.

Arthur Evrensel, 57 Director Since: September 2001 Chairman of the Compensation Committee

Founding partner of the law firm of Michael, Evrensel & Pawar LLP formed in February 2014; partner with the law firm of Heenan Blaikie LLP from 1992 until 2014. Recognized as one of Canada's leading entertainment lawyers, including his recognition in the Guide to the Leading 500 Lawyers in Canada published by Lexpert/American Lawyer and many more. As a leading counsel in entertainment law relating to television and motion picture development, production, financing and distribution, as well as new media and video game law, Mr. Evrensel published numerous articles on international co-productions and bank financing in the filmed entertainment industry, lectured at top notch universities as well chaired numerous seminars and conferences on the film and television industry in Canada, the United States, China, and England. Above expertise is crucial in keeping the company in line with the regulations in the industry.

Jon Feltheimer, 63 Director Since: January 2000 CEO since March 2000; Co-Chairman of the Board, June 2005 - February 2012

Worked for Sony Pictures Entertainment 1991-1999; served Founder and President of TriStar Television 1991-1993; President of Columbia TriStar Television 1993-1995; President of Columbia TriStar Television Group and Executive Vice President of Sony Pictures Entertainment 1995-1999. Also member of Board of Directors of Grupo Televisa, S.A.B. LGF has grown into a premier next generation content leader with a reputation for innovation under Mr. Feltheimer's leadership. With over 30 years of experience in the industry, he provided an unparalleled level of strategic and operational experience to the Board.

Frank Giustra, 57 Director Since: December 2010 Founded Lionsgate in 1997; Chairman 1997-2003

CEO of Fiore Financial Corporation; director and member of the Corporate Governance Committee, the Compensation Committee and the Health and Safety Committee of Petromanas Energy Inc.; director of Endeavour Mining Corp.; director of Catalyst Copper Corp. Member of the Board of Directors of Eacom Timber Corporation, July 2010 - June 2013; member of the Board of Directors of Gold Wheaton Gold Corp., July 2008 - March 2011; member of the Board of Directors of Crew Gold Corporation, February 2010 - September 2010; member of the Board of Directors of Etruscan Resources Inc., October 2009 - September 2010. Also a member of the Board of Trustees of the Bill, Hillary, Chelsea Clinton Foundation and International Crisis Group; the founder and President of the Radcliffe Foundation; director of Streetohome Foundation; and trustee of the Boston’s Museum of Fine Arts. His reputation and relationship with investment community, along with his experience in the entertainment industry as the founder of LGF provides him to be qualified to be on the Board of Directors.

Harald Ludwig, 60 Director Since: November 1997 - December 2004; June 2005 - Now

President and Chief Executive Officer of Macluan Capital Corporation since 1985; director, a member of the Governance and Nominating Committee and Chairman of the Compensation Committee of West Fraser Timber Co. Limited; director, Chairman of the Corporate Governance and Nominating Committee, and member of the Audit and Compensation Committees of Canadian Overseas Petroleum Limited; director and member of the Conflict Committee of Seaspan Corporation; director of Prima Columbia Hardwood Inc., 2010-2012; director of West African Iron Ore Corp., 2011-2013; director of Zattikka plc, 2011-2013. With extensive experience in business and investment, also being a private equity investor in North America and international private equity firms, his unique insight and valuable advice provides the Board with critical perspective on issues the company faces.

Dr. John C. Malone, 74 Director Since: March 2015

Chairman of the Board and a director of Liberty Interactive Corporation since 1994; Chairman of the Board of Liberty Media Corporation since August 2011 and as a director since December 2010; director of Charter Communications since May 2013; Chairman of the Board of Liberty Global plc since June 2013; Chairman of the Board of Liberty TripAdvisor Holdings since August 2014; Chairman of the Board of Liberty Broadband Corporation since November 2014. Liberty Interactive’s Chief Executive Officer from August 2005 through February 2006. Served as Chairman of the Board of Liberty Global since June 2013, previously served as Chairman of the Board of Liberty Global, Inc. Also director of Discovery Communications, Inc. since September 2008. Served as a director of Discovery Holding Company; served as Chief Executive Officer and Chairman of the Board of DHC, March 2005 - September 2008 and director of DHC, May 2005 - September 2008. Served as director of Expedia, Inc. since December 2012, previously served as director, August 2005 - November 2012. Previously served as director of Ascent Capital Group, Inc.; director of Live Nation Entertainment, Inc.; Chairman of the Board of DIRECTV; director of IAC/InterActiveCorp.; director of Sirius XM Radio Inc. Holds a Bachelor’s Degree in electrical engineering and economics from Yale University; a Master’s Degree in industrial management and a Ph.D. in operations research from Johns Hopkins University. Dr. Malone is essential to the company for his industry knowledge and unique perspective with him being one of the preeminent figures in the media and telecommunication industry.

Scott Paterson, 51 Director Since: November 1997 Chairman of the Audit & Risk Committee

Media/technology venture capitalist. Previously served as Chairman & Chief Executive Officer of Yorkton Securities Inc. which, during his tenure, was Canada’s leading technology and entertainment-focused investment bank. Also served as Chairman of the Canadian Venture Stock Exchange and Vice Chairman of the Toronto Stock Exchange. Obtained an ICD.D designation in 2009 by graduating from the Rotman Institute of Corporate Directors at the University of Toronto. Obtained a Certificate in Entertainment Law from Osgoode Hall Law School in 2014. Chairman of Engagement Labs Inc.; Chairman of Apogee Silver Ltd.; and Chairman of QYOU Media Inc. In addition, Mr. Paterson was instrumental in the evolution of NeuLion Inc., having led the company’s predecessor company JumpTV as Chairman and Chief Executive Officer through a successful August 2006 $65 million initial public offering and a subsequent February 2007 $100 million secondary financing. Mr. Paterson’s investment banking background and experience with the Canadian securities industry, together with his management experience at media/entertainment/technology-related companies provide the Board with significant operational and financial expertise with specific application to these industries. His varied service as a director and chairman of other public companies brings him a wide range of knowledge surrounding strategic transactions, board of director oversight, corporate responsibility and securities regulations that is valuable to the Board when considering recommendations and decisions for the Company.

Mark H Rachesky, M.D., 56 Director Since: September 2009 Chairman of the Board, member of the Strategic Advisory Committee and member of the Compensation Committee

Founder and President of MHR Fund Management LLC; holds an M.B.A. from the Stanford University School of Business, an M.D. from the Stanford University School of Medicine, and a B.A. from the University of Pennsylvania. Non-Executive Chairman of the Board of Directors, member of the Executive Committee and Chairman of the Compensation Committee of Loral Space & Communications Inc.; non-executive Chairman of the Board and member of the Compensation & Corporate Governance Committee of Telesat Canada; non-executive director and member of the Nominating and Governance Committee and the Compensation Committee of Emisphere Technologies, Inc.; non-executive director and member of the Nominating and Governance Committee and Compensation Committee of Titan International, Inc.; and non-executive director and member of the Nominating and Governance Committee, Co-Chairman of the Finance Committee and a member of the Compensation Committee of Navistar International Corporation. Formerly served on the Board of Directors of Neose Technologies, Inc. and NationsHealth, Inc., and was a director of Leap Wireless International, Inc. until its merger with AT&T in March 2014.

Daryl Simm, 54 Director Since: September 2014 Member of the Nominating and Corporate Governance Committee and member of the Compensation Committee

Chairman and Chief Executive Officer of Omnicom Media Group, a division of Omnicom Group, Inc. Leads one of the industry’s largest media planning and buying groups representing blue-chip global advertisers that connect their brands to consumers through entertainment content. The agencies he leads routinely receive accolades as the most effective and creative in their field and he has been recognized as one of the “100 most influential leaders in marketing, media and tech.” Mr. Simm was the top media executive at Procter & Gamble, the world’s largest advertiser and a pioneer in the use of branded entertainment content. His broad experience across the media and content space makes Mr. Simm well qualified to serve on the Board.

Hardwick Simmons, 75 Director Since: June 2005 Chairman of the Strategic Advisory Committee and member of the Audit & Risk Committee

From February 2001 to June 2003, Mr. Simmons served first as Chief Executive Officer and then as Chairman and Chief Executive Officer at The NASDAQ Stock Market Inc. From May 1991 to December 2000, Mr. Simmons served as President and Chief Executive Officer of Prudential Securities Incorporated. Currently the Lead Director and Chairman of the Audit and Risk Committee of Raymond James Financial (RJF: NYSE). Additionally, from 2007 to 2009, Mr. Simmons was a director of Geneva Acquisition Corp., a company listed on the American Stock Exchange. Mr. Simmons, through an accomplished career overseeing one of the largest equity securities trading markets in the world and other large complex financial institutions, brings important business and financial expertise to the Board in its deliberations on complex transactions and other financial matters. In addition, his broad business knowledge, connections in the business community, and valuable insight regarding investment banking and regulation are relevant to the Board’s oversight of the Company’s business.

Phyllis Yaffe, 66 Director Since: September 2009 Member of the Audit & Risk Committee and member of the Nominating and Corporate Governance Committee

Chief Executive Officer and a member of the Board of Directors of Alliance Atlantis Communications, June 2005 - December 2007; Lead Director, the Chair of the Nominating and Governance Committee and a member of the Salary and Organization Committee of Torstar Corporation; Chair of the Board of Cineplex Entertainment LP. Cineplex Inc. owns approximately 99.6% of Cineplex Entertainment LP. Also director of Astral Media, Inc., 2010-2013; member (former Chair) of the Board of Governors of Ryerson University; Chair of Women Against Multiple Sclerosis (Canada); member of the Board of Directors of Blue Ant Media. Ms. Yaffe has extensive experience in the entertainment industry. At Alliance Atlantis, Ms. Yaffe was responsible for overseeing worldwide operations, including all of its Canadian specialty television channels, its international television distribution business and the hit CSI franchise. In 1999, Ms. Yaffe was selected as the Canadian Women in Communications Woman of the Year, and received the Lifetime Achievement Award from Women in Film and Television in April 2000. In 2006, Ms. Yaffe was included in the Women’s Executive Network’s list of Canada’s 100 Most Powerful Women and in November 2007, she was inducted into the Canadian Association of Broadcasters’ Broadcast Hall of Fame. Ms. Yaffe brings to the Board new broadcast expertise as the Company continues its successful diversification into television production and broadcasting.

Appendix 2 – Management

Management Position(s) Past Experiences

James W. Barge

Chief Financial Officer since October 1, 2013

From October 2010 to November 2012. Mr. Barge served as the Executive Vice President, Chief Financial Officer of Viacom, Inc. (having served as its Executive Vice President, Controller, Tax and Treasury since January 2008), where he was responsible for overseeing all aspects of the company’s global finances and capital structure, as well as information technology, risk management and internal audit activities. Prior to joining Viacom, Mr. Barge served as Senior Vice President, Controller and Chief Accounting Officer (from October 2002 to December 2007) and Vice President and Controller (from February 2000 to October 2002) of Time Warner Inc., where he was responsible for the company’s overall financial planning, reporting and analysis, including budgeting and long range planning, and led several shared service and global process improvement initiatives. Mr. Barge joined Time Warner in March 1995 as Assistant Controller. Prior to joining Time Warner, Mr. Barge held several positions at Ernst & Young, including Area Industry Leader of the Consumer Products Group and National Office Partner, where he was responsible for the resolution of SEC accounting and reporting issues.

Steven Beeks

President, Motion Picture Group, since March 2012, Co-President, Motion Picture Group, since February 2015, Chief Operating Officer since April 2007, Co-Chief Operating Officer since September 2007, and President of Lions Gate Entertainment Inc., since December 2003

From July 2006 to March 2012, Mr. Beeks served as our President, and from January 1998 to December 2003, as the President of Artisan Home Entertainment Inc., our wholly owned subsidiary.

Brian Goldsmith

co-Chief Operating Officer since October 2012, and Executive Vice President, Corporate Development and Strategy, from September 2008 to October 2012

Prior to that, Mr. Goldsmith served as the Chief Operating Officer and Chief Financial Officer of Mandate Pictures, LLC, a wholly-owned subsidiary of the Company since September 2007.

Wayne Levin Chief Strategic Officer since February 2013 and General Counsel since November 2000.

Previously, Mr. Levin had been our Executive Vice President, Corporate Operations since February 2004. Mr. Levin had been our Executive Vice President, Legal and Business Affairs since November 2000. Mr. Levin worked for Trimark Holdings, Inc. from September 1996 to November 2000, first as Director of Legal and Business Affairs from 1996 to 1998 and then as General Counsel and Vice President from 1998 to 2000.

Appendix 9 – Corporate Governance

S&P Corporate Governance Scores

Ownership Structure & Influence - 7 All ownerships of LGF are disclosed on the company’s website publicly for anyone to access. Any

updates on the change of ownership are filed with the SEC with the filing posted on the company’s website. Certain owners of the company display high influence over the board, namely Mark H Rachesky, who owns 27.2% as of July 2015

Transparency of ownership Financial Stakeholder Rights & Relations - 9

LGF has a one vote per share policy. Shareholders are regularly solicit for their input, having approached shareholders representing approximately 60% of our outstanding shares regarding the Company’s performance, strategic focus and compensation practices over the past year.

Financial Transparency and Information Disclosure - 9 Financial reports and disclosure are accurate and clearly articulated, released in a timely manner,

and readily available for shareholders to access. Board formed Audit & Risk Committee in charge of the audit process, in addition appointing independent registered public accounting firm Ernst & Young LLP to overlook the auditing process by the Committee.

Board Structure & Process - 9 Board is comprised of an independent non executive chairman, an executive chief executive Officer,

an executive Vice Chairman, along with nine other independent directors. The board has formed 4 standing committees: Audit & Risk Committee, Compensation Committee, Nominating and Corporate Governance Committee, and Strategic Advisory Committee; with a financial expert assigned to comply with SEC guidelines and NYSE listing standards. All members in the committee are independent directors, to be insured that there are no conflict of interest. Executive compensations are reviewed by a separate committee and overlooked by a compensation consultant hired externally.

Overall Corporate Governance Score - 8.5

Appendix 10: Movie Theatre Screen, Cinema, Admission, and Ticket Growth Projection

We used the compound annual growth rate from 2005 to 2014 to calculate the expected growth rate for the number

of screens, number of cinema, ticket price, and admission number for 2015 to 2019. We pulled the numbers from

the National Association of Theatre Owners.

Source: National Associate of Theatre Owners

Number of Screen Indoor Growth CAGR Drive-Thru Growth CAGR Total

2019E 40690 0.58% 1.0058 665 0.45% 1.00448 41355

2018E 40457 0.53% 1.0053 662 0.38% 1.00379 41119

2017E 40242 0.58% 1.0058 659 0.13% 1.00131 40902

2016E 40011 0.70% 1.0070 659 0.15% 1.00148 40669

2015E 39731 0.95% 1.0095 658 0.25% 1.00247 40389

2014 39356 -0.03% 0.9997 656 0.00% 1.00000 39956

2013 39368 0.80% 1.0080 656 8.25% 1.08251 40024

2012 39056 0.21% 1.0021 606 0.00% 1.00000 39662

2011 38974 0.19% 1.0019 606 -1.94% 0.98058 39580

2010 38902 0.77% 1.0077 618 -1.59% 0.98408 39520

2009 38605 1.06% 1.0106 628 -0.79% 0.99210 39233

2008 38201 0.11% 1.0011 633 -0.31% 0.99685 38 834

2007 38159 1.04% 1.0104 635 -2.31% 0.97692 38794

2006 37765 1.96% 1.0196 650 0.31% 1.00309 38415

2005 37040 3.48% 1.0348 648 1.25% 1.01250 37688

2004 35795 2.22% 1.0222 640 0.95% 1.00946 36435

2003 35016 -0.02% 0.9998 634 -4.80% 0.95195 35650

2002 35022 0.57% 1.0057 666 -2.49% 0.97511 35688

2001 34823 -2.45% 0.9755 683 0.00% 1.00000 35506

2000 35696 -2.06% 0.9794 683 0.00% 1.00000 36379

1999 36448 9.07% 1.0907 683 -8.93% 0.91067 37131

1998 33418 7.63% 1.0763 750 -7.98% 0.92025 34168

1997 31050 7.42% 1.0742 815 -1.33% 0.98668 31865

1996 28905 7.08% 1.0708 826 -2.59% 0.97406 29731

1995 26995 4.51% 1.0451 848 -1.28% 0.98719 27843

1994 25830 4.20% 1.0420 859 2.63% 1.02628 26689

1993 24789 1.83% 1.0183 837 -3.79% 0.96207 25626

1992 24344 2.54% 1.0254 870 -3.23% 0.96774 25214

1991 23740 3.65% 1.0365 899 -1.21% 0.98791 24639

1990 22904 4.55% 1.0455 910 -10.26% 0.89744 23814

1989 21907 1.27% 1.0127 1014 -32.26% 0.67735 22921

1988 21632 5.04% 1.0504 1497 -28.17% 0.71833 23129

1987 20595 2084 22679

Source: National Association of Theatre Owners

Number of Cinemas Indoor Growth CAGR Drive-thru Growth CAGR Total

2019E 5394 -0.01% 0.9999 392 0.2% 1.0022 5787

2018E 5395 -0.25% 0.9975 392 0.2% 1.0020 5787

2017E 5409 -0.22% 0.9978 391 -0.1% 0.9988 5799

2016E 5421 -0.48% 0.9952 391 -0.2% 0.9978 5812

2015E 5447 -0.30% 0.9970 392 -0.2% 0.9977 5839

2014 5463 2.57% 1.0257 393 0.0% 1.0000 5856

2013 5326 0.17% 1.0017 393 7.4% 1.0738 5719

2012 5317 -0.26% 0.9974 366 0.0% 1.0000 5683

2011 5331 -1.26% 0.9874 366 -2.1% 0.9786 5697

2010 5399 -2.91% 0.9709 374 -1.8% 0.9816 5773

2009 5561 2.92% 1.0292 381 -0.5% 0.9948 5942

2008 5403 -2.56% 0.9744 383 0.0% 1.0000 5786

2007 5545 0.04% 1.0004 383 -3.3% 0.9672 5928

2006 5543 -2.98% 0.9702 396 -1.2% 0.9875 5939

2005 5713 1.49% 1.0149 401 -0.2% 0.9975 6114

2004 5629 -1.25% 0.9875 402 0.5% 1.0050 6031

2003 5700 -0.21% 0.9979 400 -7.4% 0.9259 6100

2002 5712 -1.74% 0.9826 432 -1.8% 0.9818 6144

2001 5813 -11.25% 0.8875 440 -0.5% 0.9955 6253

2000 6550 -6.84% 0.9316 442 -0.9% 0.9910 6992

1999 7031 1.99% 1.0199 446 -14.9% 0.8511 7477

1998 6894 -0.13% 0.9987 524 -9.2% 0.9081 7418

1997 6903 -4.32% 0.9568 577 -1.0% 0.9897 7480

1996 7215 0.89% 1.0089 583 -1.7% 0.9831 7798

1995 7151 593 7744

Source: National Association of Theatre Owners

Admissions In Billions Growth CAGR

2019E 1.19 -1.0% 0.9895

2018E 1.21 -1.3% 0.9866

2017E 1.22 -1.2% 0.9877

2016E 1.24 -1.0% 0.9905

2015E 1.25 -1.5% 0.9845

2014 1.27 -5.2% 0.9478

2013 1.34 -1.5% 0.9853

2012 1.36 6.3% 1.0625

2011 1.28 -4.4% 0.9559

2010 1.34 -5.3% 0.9470

2009 1.41 5.4% 1.0544

2008 1.34 -4.2% 0.9579

2007 1.40 -0.1% 0.9993

2006 1.40 1.8% 1.0182

2005 1.38 -7.3% 0.9272

2004 1.48 -2.4% 0.9757

2003 1.52 -3.1% 0.9688

2002 1.57 9.2% 1.0918

2001 1.44 4.0% 1.0398

2000 1.38 -4.0% 0.9604

1999 1.44 0.1% 1.0014

1998 1.44 6.2% 1.0620

1997 1.35 2.7% 1.0265

1996 1.32 8.9% 1.0892

1995 1.21 -2.3% 0.9766

1994 1.24 4.9% 1.0491

1993 1.18 7.6% 1.0755

1992  1.10 -3.6% 0.9640

1991 1.14 -4.2% 0.9580

1990 1.19 -5.6% 0.9444

1989 1.26 16.7% 1.1667

1988 1.08 -0.9% 0.9908

1987 1.09

Source: National Association of Theatre Owners

Movie ticket prices Growth CAGR

2020E 9.80 2.9% 1.02864

2019E 9.52 3.0% 1.02999

2018E 9.25 3.2% 1.03183

2017E 8.96 3.1% 1.03092

2016E 8.69 3.1% 1.03104

2015 8.43 3.2% 1.03182

2014 8.17 0.5% 1.00492

2013 8.13 2.1% 1.02136

2012 7.96 0.4% 1.00378

2011 7.93 0.5% 1.00507

2010 7.89 5.2% 1.05200

2009 7.50 4.5% 1.04457

2008 7.18 4.4% 1.04360

2007 6.88 5.0% 1.05038

2006 6.55 2.2% 1.02184

2005 6.41 3.2% 1.03221

Appendix 11 – Porter’s Five Forces for Lionsgate Film

Legend 0 No threat to Lionsgate 1 Insignificant threat to Lionsgate 2 Low threat to Lionsgate 3 4 5

Moderate threat to Lionsgate Significant threat to Lionsgate High Threat to Lionsgate

Bargaining Power of Suppliers - Moderate and Increasing: Suppliers are the cast, crew members, writers, and directors

necessary to produce a film or t.v. product. In 2012, the Screen Actors Guild and American Federation of Television and Radio

artists merged to create SAG-AFTRA, a powerful union able to negotiate for better compensation for its member, thus increasing

bargaining power. In addition, a high premium must be paid to acquire key talents such as famous actors and actresses,

directors who specialize in certain genres and have a proven history of successful productions, and other key talents with unique

skills. Finally, power is diluted slightly due to recent technology advancement, which allows key players to substitute

traditionally expensive form of film production such as costume and make-up, with computer generated images.

Bargaining Power of Customers – Moderate: Consumers are price sensitive when it comes to discretionary spending. The price

for a movie ticket at the theatre have been steadily rising by nearly 2% for the last five years, which have seen a steady decline

in movie-goers. Large retail chain such as Walmart have continued to drive sales for many film production, which accounts for a

large portion of Lionsgate revenue in particular, but have seen a dramatic decline in physical media sale-through over the past 5

years.

Threat of Substitution- Moderate: There is a high number of substitute products that consumers can choose from. The advent of the smartphone has unlocked new distribution channels which have given rise to free content from Youtube, and twitch.tv, which can be consumed on most device with an app or internet access. Strategic plays from Fox, Disney, and NBC have created their own products to take advantage of the current trend through Hulu. In addition, Substitution will become a greater threat as the new generation habit, and culture shift towards consuming content from the substitution products and less from traditional models.

Threat of New Entrants- Moderate and Increasing: The barrier to entry is low for new entrants looking to target the niche

market of creating content for the internet, but a high barrier still exists when it comes to making blockbuster films, which have

the ability to generate heavy profit. This protects the major players in the industry who have the financial backing to create

blockbusters, but doesn’t guarantee box-office success for lesser known films. New entrants are taking advantage of the

segmented market and can profit by producing genuine, original content that draws in the millennial audiences, for example

Pew-Di-Pie, who is a Youtube star, earned around $16 million from his channel.

Degree of Rivalry – Significant: The film industry is diverse in content and genre. This limits rivalry in the industry and major players have a higher degree of rivalry among each other, while some smaller players can disrupt the rivalry with niche products, which may not have a blockbuster budget, but can still bring in strong sales relative to their cost. Barrier to exit is low because there is not a high fixed-cost to exit. Lionsgate is heavily dependent on making blockbuster films to help them produce lower budget films which are riskier than blockbusters as far as making a profit. This have become a problem in recent history with The Hunger Game: Mocking Jay Part 2 being released in November, and not meeting the company’s goal because of Star Wars: The Force Awaken. Currently, Lionsgate is dependent on “Gods of Egypt” and “Divergent: Allegiant” to perform well in theatres which is risky due to these series not having superior brand recognition compared to “The Hunger Games” series and “Twilight” series.

0

1

2

3

4

5

Bargaining Power ofSupplier

Bargaining Power ofBuyers

Threat ofSubstitution

Threat of NewEntrants

Degree of Rivalry

Porter's Five Forces

Appendix 12: Internet Traffic

Appendix 13: U.S Home Entertainment Trend

U.S home entertainment trends were calculated using compound average growth rate from 2011 to 2015.

2019E 2018E 2017E 2016E 2015 2014 2013 2012 2011

U.S. Home Entertainment Spending ($M) 26761 22782 19950 17821 16289 17906 18134 18000 17959

Sell Through 3996 4462 4986 5543 6101 6935 7779 8462 8952

Rental 528 649 810 1013 1286 3323 3866 4413 5016

Brick & Mortar 254 310 389 488 619 693 956 1216 1599

Subscription 274 339 422 525 667 793 1015 1258 1741

Kiosk 1735 1755 1782 1812 1784 1837 1895 1939 1676

Digital 22237 17671 14153 11265 8903 7649 6489 5126 3990

Video On Demand 1924 1935 1969 1970 1932 1981 2109 1977 1784

Electronic Sell-Through 5538 4321 3338 2516 1891 1601 1189 812 603

Streaming 14775 11415 8846 6779 5080 4066 3191 2337 1603

Source: Digital Entertainment Group Home Entertainment YOY CAGR Physical Sub Growth CAGR

2019E 14107.17 -4.7% 0.9534 2019E 273.74 -19% 0.8084

2018E 14796.25 -4.0% 0.9601 2018E 338.64 -20% 0.8029

2017E 15410.57 -3.1% 0.9694 2017E 421.78 -20% 0.8037

2016E 15896.82 -2.4% 0.9759 2016E 524.82 -21% 0.7868

2015 16289.39 -9.0% 0.9097 2015 667.06 -16% 0.8411

2014 17905.98 -1.3% 0.9874 2014 793.11 -22% 0.7813

2013 18133.71 0.7% 1.0074 2013 1015.06 -19% 0.8069

2012 18000.20 0.2% 1.0023 2012 1258.00 -28% 0.7226

2011 17959.00 2011 1741.00

VOD Kiosk

2019E 1924.01 -1% 0.9941 2019E 1734.99 -1.13% 0.9887

2018E 1935.35 -2% 0.9830 2018E 1754.89 -1.53% 0.9847

2017E 1968.84 0% 0.9992 2017E 1782.08 -1.67% 0.9833

2016E 1970.47 2% 1.0201 2016E 1812.41 1.58% 1.0158

2015 1931.68 -3% 0.9749 2015 1784.27 -2.86% 0.9714

2014 1981.39 -6% 0.9396 2014 1836.81 -3.08% 0.9692

2013 2108.72 7% 1.0666 2013 1895.10 -2.26% 0.9774

2012 1977.00 11% 1.1082 2012 1939.00 15.69% 1.1569

2011 1784.00 2011 1676.00

Electronic Sell Through Brick and Morter

2019E 5537.99 28% 1.2817 2019E 253.99 -18% 0.8182

2018E 4320.75 29% 1.2944 2018E 310.42 -20% 0.7986

2017E 3338.15 33% 1.3268 2017E 388.70 -20% 0.7960

2016E 2516.03 33% 1.3307 2016E 488.29 -21% 0.7888

2015 1890.76 18% 1.1810 2015 619.03 -11% 0.8938

2014 1600.98 35% 1.3461 2014 692.59 -28% 0.7248

2013 1189.31 46% 1.4647 2013 955.59 -21% 0.7858

2012 812.00 35% 1.3466 2012 1216.00 -24% 0.7605

2011 603.00 2011 1599.00

Streaming Sell Through

2019E 14775.29 29% 1.2944 2019E 3995.96 -10% 0.8956

2018E 11414.80 29% 1.2904 2018E 4461.74 -11% 0.8948

2017E 8846.12 31% 1.3050 2017E 4986.44 -10% 0.8996

2016E 6778.51 33% 1.3343 2016E 5542.77 -9% 0.9086

2015 5080.36 25% 1.2494 2015 6100.50 -12% 0.8797

2014 4066.29 27% 1.2744 2014 6934.81 -11% 0.8915

2013 3190.74 37% 1.3653 2013 7779.19 -8% 0.9193

2012 2337.00 46% 1.4579 2012 8462.00 -5% 0.9453

2011 1603.00 2011 8952.00

Appendix 14: Top 10 North American Theatres

Circuit Screens Sites

1. Regal Entertainment Group 7,295 565

2. AMC Entertainment Inc. 4,960 344

3. Cinemark USA, Inc. 4,499 335

4. Carmike Cinemas, Inc. 2,892 280

5. Cineplex Entertainment LP 1,635 161

6. Marcus Theatres Corp. 681 53

7. Harkins Theatres 446 31

8. Southern Theatres LLC 445 39

9. B & B Theatres 409 50

10. National Amusements, Inc. 409 32

Top 10 Total 40389 1890

Top Four Cinema Market Share 19,646 1524

% of total Market Share 0.4864 0.2610

Rest of Theatres 20743 4315

Source: National Association of Theatre Owners

Appendix 15: Corporate Debt Structure