Lions Gate Entertainment Corporation

Good day and welcome to the Lionsgate fiscal 2023 fourth quarter conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to run the conference over to Neelay Shah, Investor Relations. Please go ahead.

Good afternoon. Thank you for joining us for the Lionsgate Fiscal 2023 Fourth Quarter Conference Call. We'll begin with opening remarks from our CEO, John Feldheimer, followed by remarks from our CFO, Jimmy Barge. After their remarks, we'll open the call for questions. Also joining us on the call today are Vice Chairman Michael Burns, CEO Brian Goldsmith, Chairman of the TV Group, Kevin Beggs, Chairman of the Motion Picture Group, Joe Drake, and President of the Worldwide Television Distribution Group, Jim Packer. And from STARS, we have President and CEO Jeffrey Hirsch, CFO Scott McDonald, and President of Domestic Networks Allison Hoffman. The matters discussed on this call 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. This includes the risk factors set forth in Lionsgate's most recent annual report on Form 10-K. The company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements that may be made to reflect any future events or circumstances. I'll now turn the call over to John.

Thanks, Nealey. Good afternoon, everyone, and thank you for joining us. I'm pleased to report that we ended the fiscal year with another strong quarter. We enter fiscal 24 with strong earnings momentum and projected strong growth. To recap the quarter's highlights, in our motion picture group, success came from many places. A franchise best performance from John Wick Chapter 4. The faith-based hit, Jesus Revolution, the action film Plane, and a record performance from our growing multi-platform release business, showcasing our ability to build unique financial models for every kind of movie. In television, we relied on a similar portfolio strategy, continuing to launch new shows, renew current series, and develop exciting new properties in our scripted business, while generating strong contributions from Three Arts, Pilgrim Media, and Debmar Mercury. Stars came back strongly in the quarter, growing subscribers, improving ARPU, completing bundle deals domestically and internationally, streamlining its international operations to focus on key territories, and maintaining its profitability. Our library continued its record performance with trailing 12-month revenue of $884 million as it finished the fiscal year with its best two revenue quarters ever. Its performance also benefited from continued diversification as the long tail of our content grew longer, generating nearly $150 million in library revenue in the fiscal year from titles outside the top 500. And financially, We continue to prepare for the separation of Lionsgate and STARS by strengthening our balance sheet, opportunistically buying back bonds, improving our leverage ratio, and ending the fiscal year with an untapped revolving credit facility of $1.25 billion and $272 million in unrestricted available cash. Jimmy will provide more details in a few minutes. In an operating environment that is tougher than ever, our business models and our employees continue to be resilient, navigating the headwinds, pivoting in order to seize even the smallest opportunities, unafraid of change in a changing world. Drilling down on each of our businesses, beginning with the Motion Picture Group, the success of John Wick Chapter 4 demonstrated our ability to deliver big IP comparable to any studio. Not only did John Wick 4 achieve our franchise best performance at the domestic box office, it improved its international box office performance by more than 50% over its predecessor, establishing John Wick as our fourth billion-dollar franchise and a truly global phenomenon. Its success continues to drive the expansion of the John Wick universe as we complete production on the Ana de Armas spinoff Ballerina for a June 2024 release, ready the launch of the prequel television event series The Continental on Peacock and Amazon, and continue our planning for multiple additional spinoffs. As we've said before, our motion picture strategy is a little different. We surround our tent poles with targeted original movies built around smart releasing strategies, multi-platform releases that drive historically outsized returns on investment, and direct-to-streaming films that capitalize on the enormous demand for studio movies across every kind of platform. Our upcoming slate reflects the same balance that led to our success last quarter. Driven by tent poles like The Hunger Games, Ballad of Songbird and Snakes, franchise extensions with built-in fan bases such as Saw 10 and Expendables 4, bold, edgy, and original fare like Tim Story's horror comedy The Blackening, Adele Lim's effervescent and raunchy Joyride, and great new intellectual properties like the Michael Jackson event film to be produced by Graham King and directed by Anton Fuqua. Turning to television, we had a busy quarter, taking advantage of our ability to create and deliver bespoke content with unique business models to every platform. Ghosts led the CBS lineup as one of the top half-hour comedies in television. Mythic Quest continued its standout performance in its third season on Apple TV Plus with a spin-off series in the works. And the true crime limited series, Love and Death, starring Elizabeth Olsen and written by David E. Kelly, was the most watched premiere this year on HBO Max. Looking ahead, we delivered all three event installments of The Continental to Peacock and Amazon for its September premiere. And Peacock launched the promotional trailer to record numbers on the heels of John Wick Chapter 4's opening at the box office. We started production on the new NBC multi-camera comedy, Extended Family, starring Jon Cryer and Donald Faison, from creator and showrunner Mike O'Malley and executive producer Tom Werner. And we're preparing to begin fall production on Seth Rogen's new show for Apple TV Plus to launch in 2024 from our television and motion picture group collaboration with Point Grey. Behind them, we have another strong development slate that includes extensions of Weeds, Nurse Jackie, and some of our other major film and television brands. Our global expansion strategy in scripted television also continues to bear fruit. ABC recently picked up Lionsgate Television's Motherland to pilot, adapted from the hit BBC series. Disney's Onyx Collection picked up Queenie from our partnership with Channel 4 in the UK. And the Lionsgate CBC comedy Son of a Critch was renewed for a third season in Canada and picked up for multiple seasons by the CW in the U.S., We are also partnering with Stan in Australia on the family drama, Prosper, and the comic crime thriller, Population 11. And in the current quarter, we acquired the worldwide distribution rights to two very high profile intellectual properties. Earlier this week, we announced that we would be the global distributor for all seasons of the acclaimed event series, The Chosen, from creator, director, and producer, Dallas Jenkins. The first multi-season series of its kind, a groundbreaking historical drama about the life of Jesus as seen through the eyes of his followers, The Chosen has grown from a crowdsourcing project into a massive global phenomenon with over 110 million viewers in 175 countries. It continues to deepen our faith-based vertical that is already responsible for the hit films, Jesus Revolution and I Can Only Imagine. And this afternoon, I'm pleased to announce that Lionsgate has partnered with master filmmaker Quentin Tarantino for distribution rights to three of his most iconic films, Kill Bill Volumes 1 and 2 and Jackie Brown. beginning with Reservoir Dogs, a Lionsgate Library favorite for nearly 20 years, we've grown what is now Hollywood's largest portfolio of Tarantino films to include Inglourious Basterds, Django Unchained, The Hateful Eight, and Death Proof, in addition to the movies we just picked up. We look forward to collaborating with the Tarantino team on a celebration of Kill Bill's 20th anniversary later this year with a new and remastered 4K edition. At Starz, we finished the year strong with two returning tentpoles. The second season of the crime drama BMF was a standout performer in the quarter, and the third season of PowerBook 2 Ghost shattered multi-platform viewership records with the platform's biggest premiere weekend ever. The success of fan-favorite Party Down rounded out a strong content quarter as Starz achieved robust subscriber growth with the addition of 1.3 million global streaming subscribers, including 700,000 domestically, an overall net growth of 1 million global subscribers. And in the current quarter, we're excited to bring back one of our most popular and eagerly anticipated series, the seventh season of Outlander. Streaming services have discovered that properly marketed feature films that arrive on their platforms with built-in awareness are powerful tools for driving subscriber acquisition and retention. In this regard, Starz enters the new fiscal year with a strong flow of movies from its pay-one and pay-two theatrical output deals that is nearly double the number of films from last year, including the Starz premiere of John Wick Chapter 4. Perhaps the most important development for STARS is the emergence of bundling in the streaming space. With STARS' transition to digital more than 60% complete, we're well positioned to execute on our core strategy, becoming a complimentary premium add-on service to every platform, and our efforts are gaining significant traction. In the quarter, Star's teamed with Amazon to enter a domestic bundling agreement with MGM+, followed by a domestic bundling deal with AMC+, and a bundling agreement with HiU in the UK, while completing our integration into the Disney Plus bundle in Latin America. We expect this momentum to continue as the industry evolves. Internationally, our restructuring has significantly improved our financial profile, concentrating our resources on territories where we believe we can continue to scale our operations profitably. We enter the new fiscal year with a strong international slate, great partnerships, and a compelling value proposition to drive subscriber growth and further improvement in our economics. In closing, we continue to execute on our strategy of separating Lionsgate and STARS by the end of the September quarter. We submitted our Form 10 with the SEC in March, and we're working through the organizational and governance issues accompanying the separation, finalizing the intercompany agreement, and taking the appropriate steps to strengthen both companies and their respective balance sheets so they will be prepared to unlock the incremental value that the separation makes possible. Now I'll turn things over to Jimmy.