United states securities and exchange commission


General and Administrative Expenses



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General and Administrative Expenses

The following table sets forth general and administrative expenses by segment for the fiscal years ended March 31, 2011 and 2010 :



 
73


Table of Contents



















































 

Year Ended

 

Year Ended

 

Increase (Decrease)

 

March 31, 2011

 

March 31, 2010




Amount

 

Percent

 

(Amounts in millions)

General and administrative expenses

 

 

 

 

 

 

 

Motion Pictures

$

48.4




 

$

47.3




 

$

1.1




 

2.3

%

Television Production

11.5




 

9.7




 

1.8




 

18.6

%

Shared services and corporate expenses, excluding items below

56.2




 

55.3




 

0.9




 

1.6

%

Total general and administrative expenses before share-based compensation expense, shareholder activist matter expenses, and Media Networks

116.1




 

112.3




 

3.8




 

3.4

%

Share-based compensation expense

32.4




 

18.8




 

13.6




 

72.3

%

Shareholder activist matter

22.9




 

5.8




 

17.1




 

294.8

%

Media Networks






 

6.2




 

(6.2

)

 

100.0

%

 

55.3




 

30.8




 

24.5




 

79.5

%

Total general and administrative expenses

$

171.4




 

$

143.1




 

$

28.3




 

19.8

%

Total general and administrative expenses as a percentage of revenue

10.8

%

 

9.6

%

 

 

 

 

General and administrative expenses excluding share-based compensation expense, shareholder activist matter expenses, and Media Networks, as a percentage of revenue

7.3

%

 

7.5

%

 

 

 

 

Total General and Administrative Expenses

General and administrative expenses increased by $28.3 million , or 19.8% , as reflected in the table above and further discussed below.



Motion Pictures

General and administrative expenses of the motion pictures segment increased $1.1 million , or 2.3% , mainly due to an increase in salary and related expenses. In fiscal 2011, $9.0 million of motion pictures production overhead was capitalized compared to $7.9 million in fiscal 2010.



Television Production

General and administrative expenses of the television production segment increased $1.8 million , or 18.6% , mainly due to an increase in salary and related expenses primarily associated with Debmar-Mercury. In fiscal 2011, $4.3 million of television production overhead was capitalized compared to $5.0 million in fiscal 2010.


Shared Services and Corporate Expenses

Shared services and corporate expenses excluding share-based compensation expense, shareholder activist matter costs and Media Networks increased $0.9 million , or 1.6% .


Shareholder activist matter costs increased $17.1 million as a result of legal and professional fees associated with a shareholder activist matter.
Share-based compensation expense increased $13.6 million , which includes $21.9 million of expense in fiscal 2011 associated with the immediate vesting of equity awards of certain executive officers triggered by the “change in control” provisions in their respective employment agreements.
Share-Based Compensation Expense. The following table sets forth share-based compensation expense included in shared services and corporate expenses for the fiscal years ended March 31, 2011 and 2010 :

 
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Year Ended

 

Year Ended

 

Increase (Decrease)

 

March 31, 2011

 

March 31, 2010




Amount

 

Percent

 

(Amounts in millions)

Share-Based Compensation Expense:

 

 

 

 

 

 

 

Stock options

$

2.6




 

$

3.2




 

$

(0.6

)

 

(18.8

)%

Restricted share units and other share-based compensation

26.0




 

14.4




 

11.6




 

80.6

 %

Stock appreciation rights

3.8




 

1.2




 

2.6




 

216.7

 %

 

$

32.4




 

$

18.8




 

$

13.6




 

72.3

 %

At March 31, 2011, there were unrecognized compensation costs of approximately $7.8 million related to stock options and restricted share units previously granted, including annual installments of share grants that were subject to performance targets, which will be expensed over the remaining vesting periods. At March 31, 2011, 458,037 shares of restricted share units have been awarded to two key executive officers, the vesting of which will be subject to performance targets to be set annually by the Compensation Committee of the Board of Directors of the Company. These restricted share units will vest in two annual installments assuming annual performance targets have been met. The fair value of the 458,037 shares, whose future annual performance targets have not been set, was $2.9 million, based on the market price of the Company's common shares as of March 31, 2011. The market value will be re-measured when the annual performance criteria are set and the value will be expensed over the remaining vesting periods once it becomes probable that the performance targets will be satisfied.



Depreciation, Amortization and Other Expenses (Income)

Depreciation and amortization of $5.8 million in fiscal 2011 decreased $6.7 million from $12.5 million in fiscal 2010, primarily associated with $3.2 million of depreciation and amortization recorded in fiscal 2010 from the Media Networks segment prior to its deconsolidation.

Interest expense of $55.2 million in fiscal 2011 increased $8.0 million , or 16.9% , from $47.2 million in fiscal 2010. The following table sets forth the components of interest expense for the fiscal years ended March 31, 2011 and 2010 :

 





























 

Year Ended

 

Year Ended

 

March 31, 2011

 

March 31, 2010

 

(Amounts in millions)

Interest Expense

 

 

 

Cash Based:

 

 

 

Senior revolving credit facility

$

6.8




 

$

5.8




Convertible senior subordinated notes

5.6




 

9.1




Senior secured second-priority notes

24.2




 

10.8




Other

2.3




 

1.8




 

38.9




 

27.5




Non-Cash Based:

 

 

 

Amortization of discount on:

 

 

 

Liability component of convertible senior subordinated notes

10.1




 

16.1




Senior secured second-priority notes

1.2




 

0.4




Amortization of deferred financing costs

5.0




 

3.2




 

16.3




 

19.7




 

$

55.2




 

$

47.2






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