Operating Leases. The Company has operating leases for offices and equipment. The Company incurred rental expense of $8.3 million during the year ended March 31, 2012 ( 2011 — $8.6 million ; 2010 — $9.7 million ). The Company earned sublease income of $0.7 million during the year ended March 31, 2012 ( 2011 — $0.7 million ; 2010 — $0.7 million ).
Contingencies. From time to time, the Company is involved in certain claims and legal proceedings arising in the normal course of business. While the resolution of these matters cannot be predicted with certainty, the Company does not believe, based on current knowledge, that the outcome of any currently pending claims or legal proceedings in which the Company is currently involved will have a material adverse effect on the Company’s financial statements.
Other Commitments. Pursuant to the September 2007 acquisition of Mandate Pictures, LLC, the the Company has an earn-out commitment if certain performance levels are achieved on certain films and derivative works. As of March 31, 2012 , the total earnings and fees from identified projects in process are not projected to reach the performance levels requiring further payment. However, as additional projects are identified in the future and current projects are released in the market place, the total projected earnings and fees from these projects could increase causing additional payments to the sellers to become payable.
21. Financial Instruments
(a) Credit Risk
Concentration of credit risk with the Company’s customers is limited due to the Company’s customer base and the diversity of its sales throughout the world. The Company performs ongoing credit evaluations and maintains a provision for potential credit losses. The Company generally does not require collateral for its trade accounts receivable. Accounts receivable include amounts receivable from governmental agencies in connection with government assistance for productions as well as amounts due from customers. Amounts receivable from governmental agencies amounted to 15.2% of accounts receivable, net at March 31, 2012 ( 2011 — 22.0% ).
The Company enters into forward foreign exchange contracts to hedge its foreign currency exposures on future production expenses denominated in various foreign currencies. As of March 31, 2012 , we had outstanding forward foreign exchange contracts to sell British Pound Sterling £10.7 million in exchange for US $16.9 million over a period of six months at a weighted average exchange rate of one British Pound Sterling equals US $1.58 . Changes in the fair value representing a net unrealized fair value loss on foreign exchange contracts that qualified as effective hedge contracts outstanding during the year ended March 31, 2012 amounted to less than $0.1 million and are included in accumulated other comprehensive loss, a separate component of shareholders’ equity. These contracts are entered into with a major financial institution as counterparty. We are exposed to credit loss in the event of nonperformance by the counterparty, which is limited to the cost of replacing the contracts, at current market rates. We do not require collateral or other security to support these contracts.
(a) Interest paid during the fiscal year ended March 31, 2012 amounted to $52.1 million ( 2011 — $38.8 million ; 2010 — $18.1 million ).
(b) Income taxes paid during the fiscal year ended March 31, 2012 amounted to $3.6 million ( 2011 — $4.3 million ; 2010 — $1.1 million ).
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LIONS GATE ENTERTAINMENT CORP.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
23. Quarterly Financial Data (Unaudited)
Certain quarterly information is presented below. Due to the elimination of the lag in reporting EPIX's results at March 31, 2012 , prior quarter amounts reported for net income (loss), and basic and diluted income (loss) per share have been adjusted as shown below (see Note 7):
During the first quarter of fiscal 2011, the Company incurred $21.9 million of share-based compensation expense associated with the immediate vesting of equity awards of certain executive officers triggered by the “change in control” provisions in their respective employment agreements. As a result of the accelerated $21.9 million of share-based compensation expense, the second, third and fourth quarters of fiscal 2011 do not include $3.0 million , $2.1 million and $1.9 million of stock-based compensation expense that otherwise would have been recorded, respectively.
24. Consolidating Financial Information — Convertible Senior Subordinated Notes The October 2004 2.9375% Notes, the February 2005 3.625% Notes, the April 2009 3.625% Notes, and the January 2012 4.00% by their terms, are fully and unconditionally guaranteed by the Company.
The following tables present condensed consolidating financial information as of March 31, 2012 and March 31, 2011 , and for the years ended March 31, 2012 , 2011 and 2010 for (1) the Company, on a stand-alone basis, (2) LGEI, on a stand-alone basis, (3) the non-guarantor subsidiaries of the Company (including the subsidiaries of LGEI), on a combined basis (collectively, the “Non-guarantor Subsidiaries”) and (4) the Company, on a consolidated basis.