AMC Networks Earnings 2021-03-31

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

amcx-20210331

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, 2021


☐			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 and posted 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 and post 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 30, 2021:


Class A Common Stock par value $0.01 per share			30,731,275
Class B Common Stock par value $0.01 per share			11,484,408

AMC NETWORKS INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS

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, 2021		December 31, 2020
ASSETS
Current Assets:
Cash and cash equivalents	$	993,123	$	888,526
Accounts receivable, trade (less allowance for doubtful accounts of $8,780 and $11,234)	777,063		813,587
Current portion of program rights, net	15,833		13,480
Prepaid expenses and other current assets	170,199		223,173
Total current assets	1,956,218		1,938,766
Property and equipment, net of accumulated depreciation of $268,770 and $261,082	224,725		256,045
Program rights, net	1,381,884		1,269,131
Intangible assets, net	389,919		410,672
Goodwill	682,632		686,407
Deferred tax asset, net	22,363		25,046
Operating lease right-of-use asset	120,293		146,522
Other assets	467,648		513,749
Total assets	$	5,245,682	$	5,246,338
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	116,668	$	120,530
Accrued liabilities	268,264		320,005
Current portion of program rights obligations	263,928		259,449
Deferred revenue	76,787		71,048
Current portion of long-term debt	8,438		75,000
Current portion of lease obligations	27,736		32,435
Total current liabilities	761,821		878,467
Program rights obligations	210,428		182,511
Long-term debt	2,825,104		2,774,307
Lease obligations	159,816		194,324
Deferred tax liability, net	134,630		132,009
Other liabilities	138,854		125,970
Total liabilities	4,230,653		4,287,588
Commitments and contingencies
Redeemable noncontrolling interests	293,468		315,649
Stockholders' equity:
Class A Common Stock, $0.01 par value, 360,000 shares authorized, 65,324 and 64,568 shares issued and 30,731 and 29,975 shares outstanding, respectively	653		646
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	314,331		323,425
Accumulated earnings	1,934,472		1,847,451
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	(156,237)		(134,950)
Total AMC Networks stockholders' equity	673,452		616,805
Non-redeemable noncontrolling interests	48,109		26,296
Total stockholders' equity	721,561		643,101
Total liabilities and stockholders' equity	$	5,245,682	$	5,246,338

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,
		2021		2020
Revenues, net		$	691,741	$	734,375
Operating expenses:
Technical and operating (excluding depreciation and amortization)		280,572		344,060
Selling, general and administrative		191,535		184,649
Depreciation and amortization		25,246		26,730
Impairment and other charges		16,055		—
Restructuring and other related charges		8,625		5,966
Total operating expenses		522,033		561,405
Operating income		169,708		172,970
Other income (expense):
Interest expense		(34,742)		(37,564)
Interest income		2,342		4,555
Loss on extinguishment of debt		(22,074)		(2,908)
Miscellaneous, net		5,406		(29,939)
Total other expense		(49,068)		(65,856)
Income from operations before income taxes		120,640		107,114
Income tax expense		(25,915)		(33,588)
Net income including noncontrolling interests		94,725		73,526
Net income attributable to noncontrolling interests		(7,704)		(4,859)
Net income attributable to AMC Networks' stockholders		$	87,021	$	68,667

Net income per share attributable to AMC Networks' stockholders:
Basic		$	2.08	$	1.24
Diluted		$	2.02	$	1.22

Weighted average common shares:
Basic		41,930		55,477
Diluted		43,171		56,061

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,
		2021		2020
Net income including noncontrolling interests		$	94,725	$	73,526
Other comprehensive income (loss):
Foreign currency translation adjustment		(22,024)		(27,121)
Unrealized gain (loss) on interest rate swaps		610		(1,997)
Other comprehensive loss, before income taxes		(21,414)		(29,118)
Income tax (expense) benefit		(143)		465
Other comprehensive loss, net of income taxes		(21,557)		(28,653)
Comprehensive income		73,168		44,873
Comprehensive income attributable to noncontrolling interests		(7,434)		(3,698)
Comprehensive income attributable to AMC Networks' stockholders		$	65,734	$	41,175

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, 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)
Share-based compensation expense	—		—		13,446		—		—		—		13,446		—		13,446

Proceeds from the exercise of stock options	—		—		12,100		—		—		—		12,100		—		12,100

Restricted stock units converted to shares	7		—		(34,640)		—		—		—		(34,633)		—		(34,633)
Balance, March 31, 2021	$	653	$	115	$	314,331	$	1,934,472	$	(1,419,882)	$	(156,237)	$	673,452	$	48,109	$	721,561


	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, 2019	$	639	$	115	$	286,491	$	1,609,428	$	(1,063,181)	$	(167,711)	$	665,781	$	25,724	$	691,505
Net income attributable to AMC Networks’ stockholders	—		—		—		68,667		—		—		68,667		—		68,667
Net income attributable to non-redeemable noncontrolling interests	—		—		—		—		—		—		—		(267)		(267)
Distributions to noncontrolling member	—		—		—		—		—		—		—		(448)		(448)

Adoption of ASU 2016-13, credit losses	—		—		—		(1,956)		—		—		(1,956)		—		(1,956)

Settlement of treasury stock	—		—		(10,988)		—		—		—		(10,988)		—		(10,988)
Other comprehensive loss	—		—		—		—		—		(28,653)		(28,653)		(1,161)		(29,814)

Share-based compensation expense	—		—		15,512		—		—		—		15,512		—		15,512
Treasury stock acquired	—		—		—		—		(85,957)		—		(85,957)		—		(85,957)
Restricted stock units converted to shares	4		—		(8,862)		—		—		—		(8,858)		—		(8,858)
Balance, March 31, 2020	$	643	$	115	$	282,153	$	1,676,139	$	(1,149,138)	$	(196,364)	$	613,548	$	23,848	$	637,396

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,
	2021		2020
Cash flows from operating activities:
Net income including noncontrolling interests	$	94,725	$	73,526
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	25,246		26,730
Impairment and other charges	16,055		—
Share-based compensation expense related to equity classified awards	13,446		15,512
Non-cash restructuring and other related charges	4,329		3,928
Amortization and write-off of program rights	150,987		223,982
Amortization of deferred carriage fees	4,867		6,783
Unrealized foreign currency transaction (gain) loss	(13,758)		7,848
Amortization of deferred financing costs and discounts on indebtedness	2,048		1,918
Loss on extinguishment of debt	22,074		2,908
Bad debt expense	771		1,211
Deferred income taxes	4,646		15,900
Loss on investments	5,366		—
Write-down of non-marketable equity securities and note receivable	—		20,000
Other, net	(755)		1,044
Changes in assets and liabilities:
Accounts receivable, trade (including amounts due from related parties, net)	36,996		27,178
Prepaid expenses and other assets	29,383		17,532
Program rights and obligations, net	(237,951)		(221,627)
Income taxes payable	11,138		369
Deferred revenue	5,671		9,522
Deferred carriage fees, net	(57)		(15,484)
Accounts payable, accrued liabilities and other liabilities	(67,664)		(20,372)
Net cash provided by operating activities	107,563		198,408
Cash flows from investing activities:
Capital expenditures	(8,537)		(12,916)

Acquisition of investment securities	(25,694)		—
Cash paid on distribution of business	(7,052)		—
Principal payment received on loan to investee	1,875		1,250
Proceeds from sale of investments	95,370		10,000
Net cash provided by (used in) investing activities	55,962		(1,666)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	984,500		5,000
Principal payments on long-term debt	(1,015,000)		(209,375)
Deemed repurchases of restricted stock units	(34,633)		(8,858)
Purchase of treasury stock	—		(85,957)
Proceeds from stock option exercises	12,100		—
Principal payments on finance lease obligations	(1,095)		(781)
Contributions from noncontrolling interests	2,702		—
Distributions to noncontrolling interests	(2,464)		(3,081)
Net cash used in financing activities	(53,890)		(303,052)
Net increase in cash and cash equivalents	109,635		(106,310)
Effect of exchange rate changes on cash and cash equivalents	(5,038)		(5,731)
Cash and cash equivalents at beginning of period	888,526		816,170
Cash and cash equivalents at end of period	$	993,123	$	704,129

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") own and operate entertainment businesses and assets.

Segment Reporting Changes

In the first quarter of 2021, the Company changed its presentation of operating segments, reflecting a reorganized operating structure focused on a multi-platform distribution approach to content monetization. The Company's streaming services and IFC Films, previously included in the International and Other segment, are now included within Domestic Operations (formerly referred to as the National Networks segment). In addition, certain corporate overhead costs will no longer be allocated to the operating segments. Operating segment information for the prior period has been recast to reflect these changes. The new reporting structure consists of the following two operating segments:

•Domestic Operations: Includes activities of our five national programming networks, our streaming services, AMC Studios operation, IFC Films and AMC Broadcasting & Technology. 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, and ALLBLK), AMC+ and other streaming initiatives. Our AMC Studios operation produces original programming for our programming networks and also licenses such programming worldwide. IFC Films is our film distribution business and AMC Networks Broadcasting & Technology is our technical services business, which 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 (formerly Levity), our production services business. See Note 4 relating to the spin-off of the Levity comedy venues 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, 2020 contained in the Company's Annual Report on Form 10-K ("2020 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, 2021.

Risks and Uncertainties

The COVID-19 pandemic and measures to prevent its spread continue to affect our businesses in a number of ways, including adverse advertising sales impacts and delays in the creation and availability of our programming. 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 duration and spread of the pandemic, 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 availability, 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

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

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.

Recently Adopted Accounting Standards

Effective January 1, 2021, the Company adopted Financial Accounting Standard Board (“FASB”) Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 - Income Taxes. The adoption of the standard did not have a material effect on its consolidated financial statements.

Note 2. Revenue Recognition

Transaction Price Allocated to Future Performance Obligations

As of March 31, 2021, 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, 2021		December 31, 2020
Balances from contracts with customers:
Accounts receivable (including long-term, included in Other assets)	$	1,019,853	$	1,081,070
Contract assets, short-term (included in Other current assets)	7,536		9,830
Contract assets, long-term (included in Other assets)	942		942
Contract liabilities (Deferred revenue)	76,787		71,048

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

Note 3. Net Income per Share

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


(In thousands)	Three Months Ended March 31,
		2021	2020
Basic weighted average common shares outstanding		41,930	55,477
Effect of dilution:
Stock options		12	—
Restricted stock units		1,229	584
Diluted weighted average common shares outstanding		43,171	56,061

Approximately 0.5 million and 1.3 million restricted stock units outstanding as of March 31, 2021 and March 31, 2020, respectively, have been excluded from diluted weighted average common shares outstanding since a performance condition for these awards had not been met in each of the respective periods. As of March 31, 2021 and March 31, 2020, 0.4 million and 0.4 million, respectively, of restricted stock units and stock options 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, 2021, the Company did not repurchase any shares of its Class A Common Stock. As of March 31, 2021, the Company had $135.3 million of authorization remaining for repurchase under the Stock Repurchase Program.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Note 4. Impairment and Other Charges

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

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.

Restructuring and other related charges of $6.0 million for the three months ended March 31, 2020, primarily related to restructuring costs associated with the termination of distribution in certain territories, as well as severance and other personnel related costs associated with previously announced restructuring activities.

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


(In thousands)	Three Months Ended March 31,
		2021		2020
Domestic Operations		$	2,427	$	1,482
International & Other		4,490		3,977
Corporate / Inter-segment eliminations		1,708		507
Total restructuring and other related charges		$	8,625	$	5,966

The following table summarizes the accrued restructuring costs:


(In thousands)	Severance and employee-related costs		Other exit costs		Total
December 31, 2020	$	25,571	$	31	$	25,602
Charges	4,168		4,457		8,625
Cash payments	(22,499)		—		(22,499)
Non-cash adjustments	—		(4,457)		(4,457)
Other	105		—		105

Balance, March 31, 2021	$	7,345	$	31	$	7,376

Accrued restructuring costs of $7.4 million are included in accrued liabilities in the condensed consolidated balance sheet at March 31, 2021.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Note 6. Program Rights

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


	March 31, 2021
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Owned original program rights, net:
Completed	$	252,306	$	23,015	$	275,321
In-production and in-development	263,912		13,197		277,109
Total owned original program rights, net	$	516,218	$	36,212	$	552,430

Licensed program rights, net:
Licensed film and acquired series	$	8,694	$	560,787	$	569,481
Licensed originals	195,814		—		195,814
Advances and content versioning costs	—		79,992		79,992
Total licensed program rights, net	204,508		640,779		845,287
Program rights, net	$	720,726	$	676,991	$	1,397,717

Current portion of program rights, net					$	15,833
Program rights, net (long-term)					1,381,884
					$	1,397,717

Amortization, including write-offs, of owned and licensed program rights is as follows:


	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

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)


	Three Months Ended March 31, 2020
(In thousands)		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total

Owned original program rights		$	105,561	$	—	$	105,561
Licensed program rights		21,352		97,069		118,421
Program rights amortization		$	126,913	$	97,069	$	223,982

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 expense in the consolidated statements of income. There were no program rights write-offs included in technical and operating expense for the three months ended March 31, 2021 and 2020.

Note 7. Investments

The Company holds several investments and loans in non-consolidated entities which are included in Other assets in the condensed consolidated balance sheet. Equity method investments were $95.3 million at March 31, 2021 and $69.5 million at December 31, 2020. In February 2021, the Company invested $25.5 million for an interest in a Toronto-based production company and studio, which is accounted for as an equity method investment.

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 $11.2 million at March 31, 2021 and $62.4 million at December 31, 2020. In January 2021, the Company sold the remaining portion of one of its marketable securities with a carrying value of $51.0 million as of December 31, 2020, resulting in a realized loss of $5.4 million. There were no unrealized gains or losses on marketable equity securities for the three months ended March 31, 2021. For the three months ended March 31, 2020, unrealized losses on marketable equity securities were $1.1 million, 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. The accounting guidance requires non-marketable equity securities to be recorded at cost and adjusted to fair value at each reporting period. However, the guidance allows for a measurement alternative, which is to record the investments at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer. The Company applies this measurement alternative to its non-marketable equity securities. When an observable event occurs, the Company estimates the fair values of its non-marketable equity securities based on Level 2 inputs that are derived from observable price changes of similar securities adjusted for insignificant differences in rights and obligations. The changes in value are recorded in miscellaneous, net in the condensed consolidated statement of income.

Investments in non-marketable equity securities were $36.0 million at March 31, 2021 and $35.8 million at December 31, 2020. For the three months ended March 31, 2020, the Company recognized impairment charges of $20.0 million related to the write-down of certain non-marketable equity securities, included in miscellaneous, net in the condensed consolidated statements of income.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

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, 2020	$	333,502	$	352,905	$	686,407
Goodwill written off related to spin-off of a business unit	—		(476)		(476)
Amortization of "second component" goodwill	(336)		—		(336)
Foreign currency translation	—		(2,963)		(2,963)
March 31, 2021	$	333,166	$	349,466	$	682,632

As of March 31, 2021 and December 31, 2020, accumulated impairment charges in the International and Other segment totaled $123.1 million.

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.

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


(In thousands)	March 31, 2021
	Gross		Accumulated Amortization		Net		Estimated Useful Lives
Amortizable intangible assets:
Affiliate and customer relationships	$	621,136	$	(335,631)	$	285,505	6 to 25 years
Advertiser relationships	46,282		(27,080)		19,202		11 years
Trade names and other amortizable intangible assets	104,902		(39,590)		65,312		3 to 20 years

Total amortizable intangible assets	772,320		(402,301)		370,019
Indefinite-lived intangible assets:
Trademarks	19,900		—		19,900
Total intangible assets	$	792,220	$	(402,301)	$	389,919
(In thousands)	December 31, 2020
	Gross		Accumulated Amortization		Net
Amortizable intangible assets:
Affiliate and customer relationships	$	624,699	$	(330,350)	$	294,349
Advertiser relationships	46,282		(26,028)		20,254
Trade names and other amortizable intangible assets	116,526		(40,357)		76,169

Total amortizable intangible assets	787,507

Price	48.14	EPS	8
Shares	57	P/E	6
MCap	2,754	P/FCF	7
Net Debt	2,368	EBIT	657
TEV	5,123	TEV/EBIT	8
TTM 2019-09-30, in MM, except price, ratios

10-Q	2021-03-31	Filed 2021-05-07
10-K	2020-12-31	Filed 2021-02-26
10-Q	2020-09-30	Filed 2020-11-02
10-Q	2020-06-30	Filed 2020-08-05
10-Q	2020-03-31	Filed 2020-05-05
10-K	2019-12-31	Filed 2020-02-27
10-Q	2019-09-30	Filed 2019-10-31
10-Q	2019-06-30	Filed 2019-07-31
10-Q	2019-03-31	Filed 2019-05-01
10-K	2018-12-31	Filed 2019-03-01
10-Q	2018-09-30	Filed 2018-11-01
10-Q	2018-06-30	Filed 2018-08-02
10-Q	2018-03-31	Filed 2018-05-10
10-K	2017-12-31	Filed 2018-03-01
10-Q	2017-09-30	Filed 2017-11-02
10-Q	2017-06-30	Filed 2017-08-03
10-Q	2017-03-31	Filed 2017-05-04
10-K	2016-12-31	Filed 2017-02-24
10-Q	2016-09-30	Filed 2016-11-03
10-Q	2016-06-30	Filed 2016-08-04
10-Q	2016-03-31	Filed 2016-05-05
10-K	2015-12-31	Filed 2016-02-25
10-Q	2015-09-30	Filed 2015-11-05
10-Q	2015-06-30	Filed 2015-08-06
10-Q	2015-03-31	Filed 2015-05-04
10-K	2014-12-31	Filed 2015-02-26
10-Q	2014-09-30	Filed 2014-11-06
10-Q	2014-06-30	Filed 2014-08-07
10-Q	2014-03-31	Filed 2014-05-08
10-K	2013-12-31	Filed 2014-02-27
10-Q	2013-09-30	Filed 2013-11-07
10-Q	2013-06-30	Filed 2013-08-08
10-Q	2013-03-31	Filed 2013-05-09
10-Q	2012-09-30	Filed 2012-11-08
10-Q	2012-06-30	Filed 2012-08-09
10-Q	2012-03-31	Filed 2012-05-10
10-K	2011-12-31	Filed 2012-03-15
10-Q	2011-09-30	Filed 2011-11-10
10-Q	2011-06-30	Filed 2011-08-11

8-K	2021-02-08	Enter Agreement, Off-BS Arrangement, Other Events, Exhibits
8-K	2021-01-15
8-K	2020-12-11
8-K	2020-11-18
8-K	2020-11-02
8-K	2020-10-16
8-K	2020-09-10
8-K	2020-08-04
8-K	2020-07-02
8-K	2020-06-17
8-K	2020-05-05
8-K	2020-03-27
8-K	2020-02-26
8-K	2019-10-31
8-K	2019-07-31
8-K	2019-06-14
8-K	2019-05-01
8-K	2019-02-28
8-K	2018-11-01
8-K	2018-10-12
8-K	2018-08-02
8-K	2018-07-29
8-K	2018-06-14
8-K	2018-06-13
8-K	2018-05-10
8-K	2018-03-01
8-K	2018-02-26

EX-22	amcx-3312021xex22.htm
EX-31.1	amcx-3312021xex311.htm
EX-31.2	amcx-3312021xex312.htm
EX-32	amcx-3312021xex32.htm


			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			36
Item 4. Controls and Procedures			37
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			38
Item 6. Exhibits			38
SIGNATURES			39

AMCX 10Q Quarterly Report

AMC Networks Earnings 2021-03-31