AMC Networks Inc. [AMCX] Filings

10-Q 1 amcx-20220331.htm 10-Q amcx-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2022


☐			Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 1-35106

AMC Networks Inc.

(Exact name of registrant as specified in its charter)


Delaware		27-5403694
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11 Penn Plaza,
New York,	NY	10001
(Address of principal executive offices)		(Zip Code)

(212) 324-8500

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.01 per share

AMCX

The

NASDAQ

Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company (as defined in Exchange Act Rule 12b-2).


Large accelerated filer	þ	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of shares of common stock outstanding as of April 29, 2022:


Class A Common Stock par value $0.01 per share			31,434,451
Class B Common Stock par value $0.01 per share			11,484,408

AMC NETWORKS INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets			1
Condensed Consolidated Statements of Income			2
Condensed Consolidated Statements of Comprehensive Income			3
Condensed Consolidated Statements of Stockholders' Equity			4
Condensed Consolidated Statements of Cash Flows			5
Notes to Condensed Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			35
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			36
Item 6. Exhibits			36
SIGNATURES			37

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

AMC NETWORKS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)


	March 31, 2022		December 31, 2021
ASSETS
Current Assets:
Cash and cash equivalents	$	821,626	$	892,221
Accounts receivable, trade (less allowance for doubtful accounts of $8,029 and $8,030)	773,273		815,444
Current portion of program rights, net	15,104		10,068
Prepaid expenses and other current assets	357,399		282,453
Total current assets	1,967,402		2,000,186
Property and equipment, net of accumulated depreciation of $299,737 and $286,133	221,294		225,791
Program rights, net	1,855,025		1,731,838
Intangible assets, net	388,706		399,434
Goodwill	701,239		709,344
Deferred tax assets, net	12,041		11,334
Operating lease right-of-use assets	119,774		125,866
Other assets	484,253		545,153
Total assets	$	5,749,734	$	5,748,946
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	161,968	$	173,207
Accrued liabilities	280,906		340,407
Current portion of program rights obligations	321,308		307,054
Deferred revenue	205,432		167,071
Current portion of long-term debt	33,750		33,750
Current portion of lease obligations	38,376		36,596
Total current liabilities	1,041,740		1,058,085
Program rights obligations	183,594		218,321
Long-term debt, net	2,798,179		2,804,720
Lease obligations	141,784		151,839
Deferred tax liabilities, net	185,755		163,600
Other liabilities	133,948		165,860
Total liabilities	4,485,000		4,562,425
Commitments and contingencies
Redeemable noncontrolling interests	287,756		283,849
Stockholders' equity:
Class A Common Stock, $0.01 par value, 360,000 shares authorized, 66,027 and 65,485 shares issued and 31,434 and 30,892 shares outstanding, respectively	660		655
Class B Common Stock, $0.01 par value, 90,000 shares authorized, 11,484 shares issued and outstanding	115		115
Preferred stock, $0.01 par value, 45,000 shares authorized; none issued	—		—
Paid-in capital	335,803		347,971
Accumulated earnings	2,202,235		2,098,047
Treasury stock, at cost (34,593 and 34,593 shares Class A Common Stock, respectively)	(1,419,882)		(1,419,882)
Accumulated other comprehensive loss	(193,580)		(175,818)
Total AMC Networks stockholders' equity	925,351		851,088
Non-redeemable noncontrolling interests	51,627		51,584
Total stockholders' equity	976,978		902,672
Total liabilities and stockholders' equity	$	5,749,734	$	5,748,946

See accompanying notes to condensed consolidated financial statements.

AMC NETWORKS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended March 31,
		2022		2021
Revenues, net		$	712,157	$	691,741
Operating expenses:
Technical and operating (excluding depreciation and amortization)		284,237		280,572
Selling, general and administrative		230,653		191,535
Depreciation and amortization		22,590		25,246
Impairment and other charges		—		16,055
Restructuring and other related charges		—		8,625
Total operating expenses		537,480		522,033
Operating income		174,677		169,708
Other income (expense):
Interest expense		(30,797)		(34,742)
Interest income		2,460		2,342
Loss on extinguishment of debt		—		(22,074)
Miscellaneous, net		5,828		5,406
Total other expense		(22,509)		(49,068)
Income from operations before income taxes		152,168		120,640
Income tax expense		(41,634)		(25,915)
Net income including noncontrolling interests		110,534		94,725
Net income attributable to noncontrolling interests		(6,346)		(7,704)
Net income attributable to AMC Networks' stockholders		$	104,188	$	87,021

Net income per share attributable to AMC Networks' stockholders:
Basic		$	2.44	$	2.08
Diluted		$	2.38	$	2.02

Weighted average common shares:
Basic		42,780		41,930
Diluted		43,715		43,171

See accompanying notes to condensed consolidated financial statements.

AMC NETWORKS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)


	Three Months Ended March 31,
		2022		2021
Net income including noncontrolling interests		$	110,534	$	94,725
Other comprehensive income (loss):
Foreign currency translation adjustment		(18,593)		(22,024)
Unrealized gain on interest rate swaps		—		610
Other comprehensive loss, before income taxes		(18,593)		(21,414)
Income tax expense		—		(143)
Other comprehensive loss, net of income taxes		(18,593)		(21,557)
Comprehensive income		91,941		73,168
Comprehensive income attributable to noncontrolling interests		(5,515)		(7,434)
Comprehensive income attributable to AMC Networks' stockholders		$	86,426	$	65,734

See accompanying notes to condensed consolidated financial statements.

AMC NETWORKS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(in thousands)

(unaudited)


	Class A Common Stock		Class B Common Stock		Paid-in Capital		Accumulated Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		AMC Networks Stockholders’ Equity		Noncontrolling Interests		Total Stockholders' Equity
Balance, December 31, 2021	$	655	$	115	$	347,971	$	2,098,047	$	(1,419,882)	$	(175,818)	$	851,088	$	51,584	$	902,672
Net income attributable to AMC Networks’ stockholders	—		—		—		104,188		—		—		104,188		—		104,188
Net income attributable to non-redeemable noncontrolling interests	—		—		—		—		—		—		—		2,439		2,439


Distribution to noncontrolling member	—		—		—		—		—		—		—		(1,565)		(1,565)

Other comprehensive income	—		—		—		—		—		(17,762)		(17,762)		(831)		(18,593)
Share-based compensation expenses	—		—		8,129		—		—		—		8,129		—		8,129



Net share issuances under employee stock plans	5		—		(20,297)		—		—		—		(20,292)		—		(20,292)
Balance, March 31, 2022	$	660	$	115	$	335,803	$	2,202,235	$	(1,419,882)	$	(193,580)	$	925,351	$	51,627	$	976,978


	Class A Common Stock		Class B Common Stock		Paid-in Capital		Accumulated Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		AMC Networks Stockholders’ Equity		Noncontrolling Interests		Total Stockholders' Equity
Balance, December 31, 2020	$	646	$	115	$	323,425	$	1,847,451	$	(1,419,882)	$	(134,950)	$	616,805	$	26,296	$	643,101
Net income attributable to AMC Networks’ stockholders	—		—		—		87,021		—		—		87,021		—		87,021
Net income attributable to non-redeemable noncontrolling interests	—		—		—		—		—		—		—		1,134		1,134
Transfer from redeemable noncontrolling interests	—		—		—		—		—		—		—		18,367		18,367
Contribution from noncontrolling member	—		—		—		—		—		—		—		2,582		2,582





Other comprehensive income	—		—		—		—		—		(21,287)		(21,287)		(270)		(21,557)
Proceeds from the exercise of stock options	—		—		9,795		—		—		—		9,795		—		9,795
Share-based compensation expenses	—		—		13,446		—		—		—		13,446		—		13,446

Net share issuances under employee stock plans	7		—		(32,335)		—		—		—		(32,328)		—		(32,328)
Balance, March 31, 2021	$	653	$	115	$	314,331	$	1,934,472	$	(1,419,882)	$	(156,237)	$	673,452	$	48,109	$	721,561

See accompanying notes to condensed consolidated financial statements.

AMC NETWORKS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net income including noncontrolling interests	$	110,534	$	94,725
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	22,590		25,246
Impairment and other charges	—		16,055
Share-based compensation expenses related to equity classified awards	8,129		13,446
Non-cash restructuring and other related charges	—		4,329
Amortization of program rights	192,852		150,987
Amortization of deferred carriage fees	8,657		4,867
Unrealized foreign currency transaction (gain) loss	1,073		(13,758)
Amortization of deferred financing costs and discounts on indebtedness	1,898		2,048
Loss on extinguishment of debt	—		22,074
Bad debt expense	820		771
Deferred income taxes	21,430		4,646
(Gain) loss on investments	(4,293)		5,366

Other, net	(2,447)		(755)
Changes in assets and liabilities:
Accounts receivable, trade (including amounts due from related parties, net)	37,510		36,996
Prepaid expenses and other assets	(1,910)		29,383
Program rights and obligations, net	(340,300)		(237,951)
Income taxes payable	8,039		11,138
Deferred revenue	6,715		5,671
Deferred carriage fees, net	(9,934)		(57)
Accounts payable, accrued liabilities and other liabilities	(84,918)		(67,664)
Net cash provided by (used in) operating activities	(23,555)		107,563
Cash flows from investing activities:
Capital expenditures	(11,528)		(8,537)
Return of capital from investees	1,771		—

Acquisition of investments	—		(25,694)
Cash paid on distribution of business	—		(7,052)
Principal payment received on loan to investee	—		1,875
Proceeds from sale of investments	—		95,370
Net cash provided by (used in) investing activities	(9,757)		55,962
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	—		984,500
Principal payments on long-term debt	(8,438)		(1,015,000)
Deemed repurchases of restricted stock units	(20,292)		(32,328)

Proceeds from stock option exercises	—		9,795
Principal payments on finance lease obligations	(716)		(1,095)
Contributions from noncontrolling interests	—		2,702
Distributions to noncontrolling interests	(1,565)		(2,464)
Net cash used in financing activities	(31,011)		(53,890)
Net increase (decrease) in cash and cash equivalents from operations	(64,323)		109,635
Effect of exchange rate changes on cash and cash equivalents	(6,272)		(5,038)
Cash and cash equivalents at beginning of period	892,221		888,526
Cash and cash equivalents at end of period	$	821,626	$	993,123

See accompanying notes to condensed consolidated financial statements.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Description of Business and Basis of Presentation

Description of Business

AMC Networks Inc. ("AMC Networks") and its subsidiaries (collectively referred to as the "Company," "we," "us," or "our") own and operate entertainment businesses and assets. The Company is comprised of two operating segments:

•Domestic Operations: Includes our programming services and AMC Broadcasting & Technology. Our programming services consist of our five national programming networks, our streaming services, our AMC Studios operation and IFC Films. Our national programming networks are AMC, WE tv, BBC AMERICA, IFC, and SundanceTV. Our streaming services consist of our targeted subscription streaming services (Acorn TV, Shudder, Sundance Now, ALLBLK, and HIDIVE), AMC+ and other streaming initiatives. Our AMC Studios operation produces original programming for our programming networks and also licenses such programming worldwide and IFC Films is our film distribution business. AMC Networks Broadcasting & Technology, our technical services business, primarily services most of the national programming networks.

•International and Other: Includes AMC Networks International ("AMCNI"), our international programming businesses consisting of a portfolio of channels around the world, and 25/7 Media, our production services business.

Basis of Presentation

Principles of Consolidation

The consolidated financial statements include the accounts of AMC Networks and its subsidiaries in which a controlling voting interest is maintained or variable interest entities ("VIEs") in which the Company has determined it is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

Investments in business entities in which the Company lacks control but does have the ability to exercise significant influence over operating and financial policies are accounted for using the equity method of accounting.

Unaudited Interim Financial Statements

These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the Company's consolidated financial statements and notes thereto for the year ended December 31, 2021 contained in the Company's Annual Report on Form 10-K ("2021 Form 10-K") filed with the SEC. The condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q are unaudited; however, in the opinion of management, such financial statements reflect all adjustments, consisting solely of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented.

The results of operations for interim periods are not necessarily indicative of the results that might be expected for future interim periods or for the full year ending December 31, 2022.

Risks and Uncertainties

The Company continues to monitor the ongoing impact of the COVID-19 pandemic on all aspects of its business. The Company cannot reasonably predict the ultimate impact of the COVID-19 pandemic, including the extent of any adverse impact on our business, results of operations and financial condition, which will depend on, among other things, the impact of governmental regulations that have been, and may continue to be, imposed in response to the pandemic, the effectiveness of actions taken to contain or mitigate the outbreak, the acceptance, safety and efficacy of vaccines, and global economic conditions. The Company does not expect the COVID-19 pandemic and its related economic impact to affect its liquidity position or its ongoing ability to meet the covenants in its debt instruments.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include the useful lives and methodologies used to amortize and assess recoverability of program rights, the estimated useful lives of intangible assets and the valuation and recoverability of goodwill and intangible assets.

Reclassifications

Certain reclassifications were made to the prior period amounts to conform to the current period presentation.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Note 2. Revenue Recognition

Transaction Price Allocated to Future Performance Obligations

As of March 31, 2022, other than contracts for which the Company has applied the practical expedients, the aggregate amount of transaction price allocated to future performance obligations was not material to our consolidated revenues.

Contract Balances from Contracts with Customers

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.


(In thousands)	March 31, 2022		December 31, 2021
Balances from contracts with customers:
Accounts receivable (including long-term, included in Other assets)	$	1,031,446	$	1,106,225
Contract assets, short-term (included in Prepaid expenses and other current assets)	139,079		69,351
Contract assets, long-term (included in Other assets)	2,126		29,323
Contract liabilities (Deferred revenue)	205,432		167,071
Contract liabilities (Deferred revenue included in Other liabilities)	218		31,832

Revenue recognized for the three months ended March 31, 2022 and 2021 relating to the contract liability at December 31, 2021 and 2020 was $29.4 million and $7.7 million, respectively.

Note 3. Net Income per Share

The following is a reconciliation between basic and diluted weighted average common shares outstanding:


(In thousands)	Three Months Ended March 31,
		2022	2021
Basic weighted average common shares outstanding		42,780	41,930
Effect of dilution:
Stock options		—	12
Restricted stock units		935	1,229
Diluted weighted average common shares outstanding		43,715	43,171

As of March 31, 2022 and March 31, 2021, 0.2 million and 0.4 million, respectively, of restricted stock units have been excluded from diluted weighted average common shares outstanding, as their impact would have been anti-dilutive.

Stock Repurchase Program

The Company's Board of Directors has authorized a program to repurchase up to $1.5 billion of its outstanding shares of common stock (the "Stock Repurchase Program"). The Stock Repurchase Program has no pre-established closing date and may be suspended or discontinued at any time. For the three months ended March 31, 2022 and 2021, the Company did not repurchase any shares of its Class A Common Stock. As of March 31, 2022, the Company had $135.3 million of authorization remaining for repurchase under the Stock Repurchase Program.

Note 4. Impairment and Other Charges

There were no impairment and other charges for the three months ended March 31, 2022.

In March 2021, the Company completed a spin-off of the live comedy venue and talent management businesses ("LiveCo") of Levity Entertainment Group, LLC. In connection with the transaction, the Company effectively exchanged all of its rights and interests in LiveCo for the release of the Company's obligations, principally related to leases. As a result of this divestiture, the Company recognized a loss on the disposal of $16.1 million reflecting the net assets transferred (consisting of property and equipment, lease right-of-use assets and intangibles, partially offset by lease and other obligations), which is included in Impairment and other charges. The Company retained its interest in the production services business of Levity Entertainment Group, LLC, which was renamed 25/7 Media Holdings, LLC following the spin-off.

Note 5. Restructuring and Other Related Charges

There were no restructuring and other related charges for the three months ended March 31, 2022.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Restructuring and other related charges of $8.6 million for the three months ended March 31, 2021, consisted of $4.1 million of severance costs associated with the restructuring plan announced in November 2020 and $4.5 million at AMCNI related to the termination of distribution in certain international territories.

The following table summarizes the restructuring and other related charges recognized by operating segment:


(In thousands)	Three Months Ended March 31,
		2021
Domestic Operations		$	2,427
International & Other		4,490
Corporate / Inter-segment eliminations		1,708
Total restructuring and other related charges		$	8,625

Note 6. Program Rights

Total capitalized produced and licensed content by predominant monetization strategy is as follows:


	March 31, 2022
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Owned original program rights, net:
Completed	$	248,085	$	165,975	$	414,060
In-production and in-development	128,173		321,724		449,897
Total owned original program rights, net	$	376,258	$	487,699	$	863,957

Licensed program rights, net:
Licensed film and acquired series	$	5,797	$	598,519	$	604,316
Licensed originals	62,367		189,300		251,667
Advances and content versioning costs	26,600		123,589		150,189
Total licensed program rights, net	94,764		911,408		1,006,172
Program rights, net	$	471,022	$	1,399,107	$	1,870,129

Current portion of program rights, net					$	15,104
Program rights, net (long-term)					1,855,025
					$	1,870,129

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)


	December 31, 2021
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Owned original program rights, net:
Completed	$	185,228	$	127,470	$	312,698
In-production and in-development	161,881		264,927		426,808
Total owned original program rights, net	$	347,109	$	392,397	$	739,506

Licensed program rights, net:
Licensed film and acquired series	$	7,005	$	620,935	$	627,940
Licensed originals	61,923		148,063		209,986
Advances and content versioning costs	57,278		107,196		164,474
Total licensed program rights, net	126,206		876,194		1,002,400
Program rights, net	$	473,315	$	1,268,591	$	1,741,906

Current portion of program rights, net					$	10,068
Program rights, net (long-term)					1,731,838
					$	1,741,906

Amortization of owned and licensed program rights, included in Technical and operating expenses on the condensed consolidated statements of income, is as follows:


	Three Months Ended March 31, 2022
(In thousands)		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total

Owned original program rights		$	49,840	$	16,935	$	66,775
Licensed program rights		7,608		118,469		126,077
Program rights amortization		$	57,448	$	135,404	$	192,852


	Three Months Ended March 31, 2021
(In thousands)		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total

Owned original program rights		$	33,906	$	4,566	$	38,472
Licensed program rights		25,020		87,495		112,515
Program rights amortization		$	58,926	$	92,061	$	150,987

The Company periodically reviews the programming usefulness of its licensed and owned original program rights based on several factors, including expected future revenue generation from airings on the Company's networks and other exploitation opportunities, ratings, type and quality of program material, standards and practices, and fitness for exhibition through various forms of distribution. If it is determined that film or other program rights have limited, or no, future programming usefulness, the useful life is updated, which generally results in a write-off of the unamortized cost to technical and operating expenses in the consolidated statements of income. There were no significant program rights write-offs included in technical and operating expense for the three months ended March 31, 2022 or 2021.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Note 7. Investments

The Company holds several investments in and loans to non-consolidated entities which are included in Other assets in the condensed consolidated balance sheet. Equity method investments were $87.1 million at March 31, 2022 and $93.7 million at December 31, 2021.

Marketable Equity Securities

The Company classifies publicly traded investments with readily determinable fair values that are not accounted for under the equity method as marketable equity securities. Marketable equity securities are recorded at cost and adjusted to fair value at each reporting period. The changes in fair value between measurement dates are recorded in miscellaneous, net in the condensed consolidated statement of income. Investments in marketable equity securities were $10.1 million at March 31, 2022 and $5.8 million at December 31, 2021. There were $4.3 million unrealized gains and $5.4 million realized losses on marketable equity securities for the three months ended March 31, 2022 and 2021, respectively, included in miscellaneous, net in the condensed consolidated statement of income.

Non-marketable Equity Securities

The Company classifies investments without readily determinable fair values that are not accounted for under the equity method as non- marketable equity securities. Investments in non-marketable equity securities were $37.7 million at March 31, 2022 and December 31, 2021. The changes in value, if any, are recorded in miscellaneous, net in the condensed consolidated statement of income.

Note 8. Goodwill and Other Intangible Assets

The carrying amount of goodwill, by operating segment is as follows:


(In thousands)	Domestic Operations		International and Other		Total
December 31, 2021	$	353,470	$	355,874	$	709,344

Purchase accounting adjustments	(1,408)		—		(1,408)
Amortization of "second component" goodwill	(336)		—		(336)
Foreign currency translation	—		(6,361)		(6,361)
March 31, 2022	$	351,726	$	349,513	$	701,239

As of March 31, 2022 and December 31, 2021, accumulated impairment charges in the International and Other segment totaled $123.1 million.

The purchase accounting adjustments of $1.4 million to the carrying amount of goodwill in Domestic Operations relates to the acquisition of Sentai Holdings, a global supplier of anime content, including its anime-focused HIDIVE subscription streaming service, for which the allocation of goodwill is preliminary and is based on current estimates and currently available information, and is subject to revision based on final allocation of the purchase price to the identifiable assets and liabilities acquired.

The reduction of $0.3 million in the carrying amount of goodwill for Domestic Operations is due to the realization of a tax benefit for the amortization of "second component" goodwill at SundanceTV. Second component goodwill is the amount of tax deductible goodwill in excess of goodwill for financial reporting purposes. In accordance with the authoritative guidance at the time of the SundanceTV acquisition, the tax benefits associated with this excess are applied to first reduce the amount of goodwill, and then other intangible assets for financial reporting purposes, if and when such tax benefits are realized in the Company's tax returns.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

The following tables summarize information relating to the Company's identifiable intangible assets:


(In thousands)	March 31, 2022
	Gross		Accumulated Amortization		Net		Estimated Useful Lives
Amortizable intangible assets:
Affiliate and customer relationships	$	645,838	$	(359,436)	$	286,402	6 to 25 years
Advertiser relationships	46,282		(31,287)		14,995		11 years
Trade names and other amortizable intangible assets	110,860		(43,451)		67,409		3 to 20 years

Total amortizable intangible assets	802,980		(434,174)		368,806
Indefinite-lived intangible assets:
Trademarks	19,900		—		19,900
Total intangible assets	$	822,880	$	(434,174)	$	388,706

(In thousands)	December 31, 2021
	Gross		Accumulated Amortization		Net
Amortizable intangible assets:
Affiliate and customer relationships	$	649,543	$	(354,673)	$	294,870
Advertiser relationships	46,282		(30,235)		16,047
Trade names and other amortizable intangible assets	111,151		(42,534)		68,617

Total amortizable intangible assets	806,976		(427,442)		379,534
Indefinite-lived intangible assets:
Trademarks	19,900		—		19,900
Total intangible assets	$	826,876	$	(427,442)	$	399,434

Aggregate amortization expense for amortizable intangible assets for the three months ended March 31, 2022 and 2021 was $10.6 million and $9.5 million, respectively. Estimated aggregate amortization expense for intangible assets subject to amortization for each of the following five years is:


(In thousands)
Years Ending December 31,
2022	$	42,201
2023	42,118
2024	42,034
2025	40,290
2026	35,712

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Note 9. Accrued Liabilities

Accrued liabilities consist of the following:


(In thousands)	March 31, 2022		December 31, 2021
Employee related costs	87,238		$	128,388
Participations and residuals	125,636		133,988
Interest	21,804		36,922

Other accrued expenses	46,228		41,109
Total accrued liabilities	$	280,906	$	340,407

Note 10. Long-term Debt

The Company's long-term debt consists of the following:


(In thousands)	March 31, 2022		December 31, 2021
Senior Secured Credit Facility: (a)
Term Loan A Facility	$	666,563	$	675,000
Senior Notes:

5.00% Notes due April 2024	400,000		400,000
4.75% Notes due August 2025	800,000		800,000
4.25% Notes due February 2029	1,000,000		1,000,000

Total long-term debt	2,866,563		2,875,000
Unamortized discount	(22,088)		(23,167)
Unamortized deferred financing costs	(12,546)		(13,363)
Long-term debt, net	2,831,929		2,838,470
Current portion of long-term debt	33,750		33,750
Noncurrent portion of long-term debt	$	2,798,179	$	2,804,720

(a)The Company's $500 million revolving credit facility remains undrawn at March 31, 2022. Total undrawn revolver commitments are available to be drawn for general corporate purposes of the Company.

In March 2022, the Company repaid $8.4 million of the principal amount of the Term Loan A Facility in accordance with the terms of the agreement.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Note 11. Leases

The following table summarizes the leases included in the condensed consolidated balance sheets as follows:


(In thousands)	Balance Sheet Location	March 31, 2022		December 31, 2021
Assets
Operating	Operating lease right-of-use assets	$	119,774	$	125,866
Finance	Property and equipment, net	11,805		12,080
Total lease assets		$	131,579	$	137,946
Liabilities
Current:
Operating	Current portion of lease obligations	$	34,424	$	32,929
Finance	Current portion of lease obligations	3,952		3,667
		$	38,376	$	36,596
Noncurrent:
Operating	Lease obligations	$	119,416	128,319
Finance	Lease obligations	22,368		23,520
		141,784		$	151,839

Total lease liabilities		$	180,160	$	188,435

Note 12. Fair Value Measurement

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels:

•Level I - Quoted prices for identical instruments in active markets.

•Level II - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

•Level III - Instruments whose significant value drivers are unobservable.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

The following table presents for each of these hierarchy levels, the Company's financial assets and liabilities that are measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021:


(In thousands)	Level I		Level II		Level III		Total
At March 31, 2022:
Assets
Cash equivalents	$	45,000	$	—	$	—	$	45,000
Marketable securities	10,064		—		—		10,064


Foreign currency derivatives	—		166		—		166

Liabilities

Foreign currency derivatives	—		5,927		—		5,927


At December 31, 2021:
Assets

Marketable securities	$	5,771	$	—	$	—	$	5,771


Foreign currency derivatives	—		196		—		196

Liabilities

Foreign currency derivatives	—		5,911		—		5,911

The Company's cash equivalents (comprised of money market funds) and marketable securities are classified within Level I of the fair value hierarchy because they are valued using quoted market prices.

The Company's foreign currency derivatives are classified within Level II of the fair value hierarchy as their fair values are determined based on a market approach valuation technique that uses readily observable market parameters and the consideration of counterparty risk.

At March 31, 2022 and December 31, 2021, the Company did not have any assets or liabilities measured at fair value on a recurring basis that would be considered Level III.

Fair value measurements are also used in nonrecurring valuations performed in connection with acquisition accounting and impairment testing. These nonrecurring valuations primarily include the valuation of program rights, goodwill, intangible assets and property and equipment. All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level III of the fair value hierarchy.

Credit Facility Debt and Senior Notes

The fair values of each of the Company's debt instruments are based on quoted market prices for the same or similar issues or on the current rates offered to the Company for instruments of the same remaining maturities.

The carrying values and estimated fair values of the Company's financial instruments, excluding those that are carried at fair value in the condensed consolidated balance sheets, are summarized as follows:


(In thousands)	March 31, 2022
	Carrying Amount	Estimated Fair Value
Debt instruments:
Term loan A facility	$