Lionsgate Fiscal 2018 Third Quarter Earnings Conference Call Thursday, February 08, 2018, 5:00 PM Eastern CORPORATE PARTICIPANTS James Marsh - Head of Investor Relations Jon Feltheimer - Chief Executive Officer Jimmy Barge - Chief Financial Officer Chris Albrecht – President & Chief Executive Officer, Starz Michael Burns - Vice Chairman Kevin Beggs – Chairman Lionsgate Television Group 1 PRESENTATION Operator Ladies and gentlemen, thank you very much for standing by and welcome to the Lionsgate Fiscal 2018 Third Quarter Earnings Conference Call. At this time, all participants are in a listen- only mode. Later, we will conduct a question and answer session and instructions will be given to you at that time. If you should require assistance during today’s call, please press “*” then “0” and an operator will assist you offline. And also as a reminder, today’s call is being recorded. I would now like to turn the conference over to Head of Investor Relations at Lionsgate, Mr. James Marsh. Please go ahead. James Marsh Alright. Thanks, Perki [ph]. Good afternoon, everyone. Thank you for joining us today for the Lionsgate’s fiscal 2018 third quarter earnings conference call. We will begin with opening remarks from our CEO, Jon Feltheimer, followed by remarks from our CFO, Jimmy Barge. After their remarks, we will open the call for your questions. Also, joining us on the call today are, Vice Chairman, Michael Burns, Starz’ President and Chief Executive, Chris Albrecht, Starz’ Chief Operating Officer, Jeff Hirsch, Starz’ Chief Financial Officer Scott MacDonald, Lionsgate’s Chief Operating Officer, Brian Goldsmith, Motion Picture Group Co-Chairman, Joe Drake, Motion Picture Group Co-Chairman, Patrick Wachsberger, President of Motion Picture Group, Erik Feig, Chairman of the TV Group, Kevin Beggs, Chief Operating Officer of the TV Group, Laura Kennedy and Chief Accounting Officer, Rick Prell. The matters discussed on this call today include forward-looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors, including the risk factors set forth in Lionsgate’s annual report on Form 10-K filed with the SEC on May 25th, 2017, as amended in the Lionsgate’s quarterly report on Form 10-Q filed with the SEC on February 8, 2018. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements, and may be made to reflect any future events and circumstances. With that, I’ll turn it over…the call to Jon. Jon. Jon Feltheimer Thank you, James, and thanks everyone for joining us today. Our strong performance in the quarter keeps us on track for our fiscal year expectations, with robust free cash flow generation that has enabled us to de-lever ahead of schedule. I’m pleased to report that our continued financial strength has allowed us to resume paying a quarterly cash dividend of nine cents per common share, returning value to our shareholders as we continue to grow our Company. Lionsgate Thursday, February 08, 2018, 4:30 PM Eastern 2 I’d like to touch on a few highlights in the quarter, going a little deeper than usual into initiatives in our emerging businesses. Then I’ll drill down on each of our segments to tell you how we’re responding to the pace of disruption in our operating environment. In the quarter, the worldwide box office success of Wonder, which is nearing the $300 million mark, again shows our ability to achieve outsized performance from a lower budget, lower risk film. The movie capped a slate that was up 30% at the domestic box office from the previous year. At Starz, the drama series Vida, already generating buzz among Latinx audiences, the half-hour millennial drama Sweetbitter, based on the New York Times bestseller, and the prestige limited drama series Howards End, have all been added to a strong, diverse, and growing slate. I’m also pleased to report today that Starz is on track to air the 2nd season of the critically- acclaimed hit series American Gods early next year. All of these series are consistent with our Starz strategy of super-serving women, African- American, Latinx, and millennial audiences, and we’ll continue to invest in new premium programming that builds on our strength in reaching these demos. Also, during the quarter we announced a new Lionsgate Television premium series for Starz, The Continental, continuing the steady growth of our John Wick film, television, and game franchise. We continued to supply high-end content to our other network partners, launching the critically- acclaimed dance series Step Up: High Water for YouTube Red. Step Up is another adaptation of one of our successful film franchises, part of our Lionsgate 360 strategy exploiting our intellectual properties across multiple platforms. We had one of our most productive quarters in creating premium properties for our emerging businesses. Kevin Hart’s Lyft Legend, the 1st series for Laugh Out Loud, has already drawn over 50 million views. Since launch we’ve added six more series, including Cold As Balls, a sports interview show starring Kevin and a group of celebrities and star athletes that debuts today. Next week we’ll launch the Laugh Out Loud radio platform in partnership with Sirius, with Kevin’s “Straight from the Hart” weekly talk show leading a line-up of “laugh out loud” programming. Lionsgate Thursday, February 08, 2018, 4:30 PM Eastern 3 We’re also very pleased with the rapid growth of our over-the-top platform PANTAYA, backed by the first-run movies and library titles of Lionsgate, Pantelion, and Hemisphere Media, three of the leading content players in the Spanish-language and bilingual space. The service is well on its way to becoming a premier destination for Hispanic consumers. Our interactive games business is reaching critical mass with a fast-growing slate of premium properties. Following in the footsteps of John Wick Chronicles and Power Rangers Legacy Wars, our Saw downloadable content for the Dead by Daylight game reached number one last week on the Steam platform. On February 22nd we’ll launch Deploy and Destroy, a mobile game that will integrate multiple properties, beginning with Ash vs. Evil Dead, to coincide with the premiere of the show’s third season on Starz. And we’re developing three games in three different genres for the video game component of The Kingkiller Chronicle franchise. Our location-based entertainment business is reaching critical mass as well, with eight branded theme parks and entertainment offerings in operation or slated to open by the end of 2020. Buoyed by the recent opening of our Lionsgate Zone, the Motiongate theme park in Dubai is setting new attendance highs. The first Saw Escape Experience debuted in Las Vegas last month to rave reviews. And last week we announced our second Lionsgate Entertainment City indoor theme park with our partner Parques Reunidos in Madrid, incorporating multiple Lionsgate branded properties. As you can see, we continue to cross-promote great intellectual property created in our core businesses across our emerging platforms. As a result, both our location-based entertainment and interactive games divisions are positioned to make meaningful contributions to our bottom line in fiscal 2020. While our global IP platform is operating at full throttle, we’re operating in an increasingly disruptive environment that touches every part of our business – content spend, talent relationships, and how we look at and reach our audiences. In response, we’ll continue to rely on our strengths by competing in areas where we can win. We’ll build upon our leadership in reaching under-served audiences with exciting and relatable content. And we’ll leverage our status as a platform-agnostic supplier of high-end content to create relationships with new partners as we continue to grow existing ones. Lionsgate Thursday, February 08, 2018, 4:30 PM Eastern 4 As I touch on each of our businesses, let’s take a look at how we continue to incorporate these responses into our strategies. Looking first at motion pictures, our slate continues to reflect our core strengths – tentpole properties like Chaos Walking and The Kingkiller Chronicle… star-driven films like Good Universe’s Flarsky, teaming Charlize Theron and Seth Rogen, and Robin Hood, starring Jamie Foxx and Taron Egerton… strong commercial genre pictures like Hellboy, Borderlands, Naruto and, of course, John Wick 3… and movies targeted to large affinity audiences such as Pantelion and MGM’s Overboard, Uncle Drew, the Sundance favorite Blindspotting, and the next two Tyler Perry films. We’re also very excited about the Susanna Fogel-directed action comedy The Spy Who Dumped Me, starring Mila Kunis and Kate McKinnon from producers Ron Howard and Brian Grazer, and Paul Feig’s noir thriller A Simple Favor, teaming Blake Lively and Anna Kendrick. Both films continue our legacy of big commercial female star-driven properties. This is a diverse slate in areas of proved strength targeted to audience segments we know. Like last year, it has films with breakout potential in every category. Turning to Starz, the network continues to add exciting new series to a strong lineup that is performing well. The J.K. Simmons spy thriller Counterpart debuted impressively last month, earning a rare 100% score on Rotten Tomatoes. Ratings for Starz originals have grown for three years in a row and position the network as a strong #2 among the premium pay platforms with four of the top 10 dramas in premium television. Power is the top-rated premium series for African-American audiences, and Outlander ranks 2nd among women, reflecting our ability to deliver programming that resonates with our core demos.