|
|
þ
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
¨
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
|
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)
|
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
|
|
Large accelerated filer
|
þ
|
Accelerated filer
|
¨
|
|
|
|
|
Non-accelerated filer
|
¨
|
Smaller reporting company
|
¨
|
|
|
|
|
|
|
Emerging growth company
|
¨
|
Class A Common Stock par value $0.01 per share
|
45,326,464
|
Class B Common Stock par value $0.01 per share
|
11,484,408
|
|
Page
|
|
|
|
|
|
|
Item 1.
|
Financial Statements.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
683,682
|
|
|
$
|
554,886
|
|
Accounts receivable, trade (less allowance for doubtful accounts of $9,267 and $10,788)
|
829,704
|
|
|
835,977
|
|
||
Current portion of program rights, net
|
433,862
|
|
|
440,739
|
|
||
Prepaid expenses and other current assets
|
157,972
|
|
|
131,809
|
|
||
Total current assets
|
2,105,220
|
|
|
1,963,411
|
|
||
Property and equipment, net of accumulated depreciation of $308,699 and $293,918
|
251,841
|
|
|
246,262
|
|
||
Program rights, net
|
1,154,265
|
|
|
1,214,051
|
|
||
Deferred carriage fees, net
|
14,871
|
|
|
16,831
|
|
||
Intangible assets, net
|
569,527
|
|
|
578,907
|
|
||
Goodwill
|
797,793
|
|
|
798,037
|
|
||
Deferred tax asset, net
|
19,927
|
|
|
19,272
|
|
||
Operating lease right-of-use asset
|
174,563
|
|
|
—
|
|
||
Other assets
|
433,907
|
|
|
441,792
|
|
||
Total assets
|
$
|
5,521,914
|
|
|
$
|
5,278,563
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
107,392
|
|
|
$
|
107,066
|
|
Accrued liabilities
|
249,950
|
|
|
264,918
|
|
||
Current portion of program rights obligations
|
321,914
|
|
|
343,589
|
|
||
Deferred revenue
|
51,261
|
|
|
55,424
|
|
||
Current portion of long-term debt
|
30,125
|
|
|
21,334
|
|
||
Current portion of lease obligations
|
31,341
|
|
|
5,090
|
|
||
Total current liabilities
|
791,983
|
|
|
797,421
|
|
||
Program rights obligations
|
342,173
|
|
|
373,249
|
|
||
Long-term debt
|
3,080,800
|
|
|
3,088,221
|
|
||
Lease obligations
|
224,684
|
|
|
21,427
|
|
||
Deferred tax liability, net
|
137,567
|
|
|
145,443
|
|
||
Other liabilities
|
160,368
|
|
|
208,036
|
|
||
Total liabilities
|
4,737,575
|
|
|
4,633,797
|
|
||
Commitments and contingencies
|
|
|
|
|
|
||
Redeemable noncontrolling interests
|
299,802
|
|
|
299,558
|
|
||
Stockholders' equity:
|
|
|
|
||||
Class A Common Stock, $0.01 par value, 360,000 shares authorized, 63,851 and 63,255 shares issued and 45,326 and 44,749 shares outstanding, respectively
|
634
|
|
|
633
|
|
||
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
|
242,322
|
|
|
239,767
|
|
||
Accumulated earnings
|
1,372,339
|
|
|
1,228,942
|
|
||
Treasury stock, at cost (18,525 and 18,507 shares Class A Common Stock, respectively)
|
(993,574
|
)
|
|
(992,583
|
)
|
||
Accumulated other comprehensive loss
|
(166,446
|
)
|
|
(160,194
|
)
|
||
Total AMC Networks stockholders' equity
|
455,390
|
|
|
316,680
|
|
||
Non-redeemable noncontrolling interests
|
29,147
|
|
|
28,528
|
|
||
Total stockholders' equity
|
484,537
|
|
|
345,208
|
|
||
Total liabilities and stockholders' equity
|
$
|
5,521,914
|
|
|
$
|
5,278,563
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Revenues, net
|
$
|
784,221
|
|
|
$
|
740,823
|
|
Operating expenses:
|
|
|
|
||||
Technical and operating (excluding depreciation and amortization)
|
340,148
|
|
|
320,365
|
|
||
Selling, general and administrative
|
172,512
|
|
|
166,449
|
|
||
Depreciation and amortization
|
24,056
|
|
|
20,354
|
|
||
Restructuring expense
|
2,642
|
|
|
—
|
|
||
Total operating expenses
|
539,358
|
|
|
507,168
|
|
||
Operating income
|
244,863
|
|
|
233,655
|
|
||
Other income (expense):
|
|
|
|
||||
Interest expense
|
(39,645
|
)
|
|
(38,205
|
)
|
||
Interest income
|
4,200
|
|
|
5,019
|
|
||
Miscellaneous, net
|
(12,785
|
)
|
|
16,946
|
|
||
Total other income (expense)
|
(48,230
|
)
|
|
(16,240
|
)
|
||
Income from operations before income taxes
|
196,633
|
|
|
217,415
|
|
||
Income tax expense
|
(46,476
|
)
|
|
(56,879
|
)
|
||
Net income including noncontrolling interests
|
150,157
|
|
|
160,536
|
|
||
Net income attributable to noncontrolling interests
|
(6,760
|
)
|
|
(3,666
|
)
|
||
Net income attributable to AMC Networks' stockholders
|
$
|
143,397
|
|
|
$
|
156,870
|
|
|
|
|
|
||||
Net income per share attributable to AMC Networks' stockholders:
|
|||||||
Basic
|
$
|
2.53
|
|
|
$
|
2.57
|
|
Diluted
|
$
|
2.48
|
|
|
$
|
2.54
|
|
|
|
|
|
||||
Weighted average common shares:
|
|
|
|
||||
Basic
|
56,588
|
|
|
60,967
|
|
||
Diluted
|
57,725
|
|
|
61,719
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Net income including noncontrolling interests
|
$
|
150,157
|
|
|
$
|
160,536
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Foreign currency translation adjustment
|
(5,762
|
)
|
|
18,805
|
|
||
Unrealized loss on interest rate swaps
|
(639
|
)
|
|
—
|
|
||
Other comprehensive income, before income taxes
|
(6,401
|
)
|
|
18,805
|
|
||
Income tax expense
|
149
|
|
|
—
|
|
||
Other comprehensive income, net of income taxes
|
(6,252
|
)
|
|
18,805
|
|
||
Comprehensive income
|
143,905
|
|
|
179,341
|
|
||
Comprehensive income attributable to noncontrolling interests
|
(6,722
|
)
|
|
(4,563
|
)
|
||
Comprehensive income attributable to AMC Networks' stockholders
|
$
|
137,183
|
|
|
$
|
174,778
|
|
|
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, 2018
|
$
|
633
|
|
|
$
|
115
|
|
|
$
|
239,767
|
|
|
$
|
1,228,942
|
|
|
$
|
(992,583
|
)
|
|
$
|
(160,194
|
)
|
|
$
|
316,680
|
|
|
$
|
28,528
|
|
|
$
|
345,208
|
|
Net income attributable to AMC Networks’ stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
143,397
|
|
|
—
|
|
|
—
|
|
|
143,397
|
|
|
—
|
|
|
143,397
|
|
|||||||||
Net income attributable to non-redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
942
|
|
|
942
|
|
|||||||||
Distributions to noncontrolling member
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(361
|
)
|
|
(361
|
)
|
|||||||||
Settlement of treasury stock
|
—
|
|
|
—
|
|
|
985
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
985
|
|
|
—
|
|
|
985
|
|
|||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,252
|
)
|
|
(6,252
|
)
|
|
38
|
|
|
(6,214
|
)
|
|||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
19,899
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,899
|
|
|
—
|
|
|
19,899
|
|
|||||||||
Proceeds from the exercise of stock options
|
—
|
|
|
—
|
|
|
4,630
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,630
|
|
|
—
|
|
|
4,630
|
|
|||||||||
Treasury stock acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(991
|
)
|
|
—
|
|
|
(991
|
)
|
|
—
|
|
|
(991
|
)
|
|||||||||
Restricted stock units converted to shares
|
1
|
|
|
—
|
|
|
(22,959
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,958
|
)
|
|
—
|
|
|
(22,958
|
)
|
|||||||||
Balance, March 31, 2019
|
$
|
634
|
|
|
$
|
115
|
|
|
$
|
242,322
|
|
|
$
|
1,372,339
|
|
|
$
|
(993,574
|
)
|
|
$
|
(166,446
|
)
|
|
$
|
455,390
|
|
|
$
|
29,147
|
|
|
$
|
484,537
|
|
|
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, 2017
|
$
|
627
|
|
|
$
|
115
|
|
|
$
|
191,303
|
|
|
$
|
766,725
|
|
|
$
|
(709,440
|
)
|
|
$
|
(114,386
|
)
|
|
$
|
134,944
|
|
|
$
|
29,001
|
|
|
$
|
163,945
|
|
Net income attributable to AMC Networks’ stockholders
|
—
|
|
|
—
|
|
|
—
|
|
|
156,870
|
|
|
—
|
|
|
—
|
|
|
156,870
|
|
|
—
|
|
|
156,870
|
|
|||||||||
Net income attributable to non-redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
469
|
|
|
469
|
|
|||||||||
Cumulative effects of adoption of accounting standards
|
—
|
|
|
—
|
|
|
—
|
|
|
12,784
|
|
|
|
|
—
|
|
|
12,784
|
|
|
—
|
|
|
12,784
|
|
||||||||||
Treasury stock not yet settled
|
—
|
|
|
—
|
|
|
(9,980
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,980
|
)
|
|
—
|
|
|
(9,980
|
)
|
|||||||||
Settlement of treasury stock
|
—
|
|
|
—
|
|
|
995
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
995
|
|
|
—
|
|
|
995
|
|
|||||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,804
|
|
|
18,804
|
|
|
897
|
|
|
19,701
|
|
|||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
15,319
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,319
|
|
|
—
|
|
|
15,319
|
|
|||||||||
Treasury stock acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83,637
|
)
|
|
—
|
|
|
(83,637
|
)
|
|
—
|
|
|
(83,637
|
)
|
|||||||||
Restricted stock units converted to shares
|
4
|
|
|
—
|
|
|
(15,359
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,355
|
)
|
|
—
|
|
|
(15,355
|
)
|
|||||||||
Balance, March 31, 2018
|
$
|
631
|
|
|
$
|
115
|
|
|
$
|
182,278
|
|
|
$
|
936,379
|
|
|
$
|
(793,077
|
)
|
|
$
|
(95,582
|
)
|
|
$
|
230,744
|
|
|
$
|
30,367
|
|
|
$
|
261,111
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income including noncontrolling interests
|
$
|
150,157
|
|
|
$
|
160,536
|
|
Adjustments to reconcile net income to net cash from operating activities:
|
|
|
|
||||
Depreciation and amortization
|
24,056
|
|
|
20,354
|
|
||
Share-based compensation expense related to equity classified awards
|
19,899
|
|
|
15,319
|
|
||
Non-cash restructuring charges
|
1,171
|
|
|
—
|
|
||
Amortization and write-off of program rights
|
205,275
|
|
|
218,626
|
|
||
Amortization of deferred carriage fees
|
2,710
|
|
|
4,401
|
|
||
Unrealized foreign currency transaction gain
|
(4,501
|
)
|
|
(4,582
|
)
|
||
Unrealized gain on derivative contracts, net
|
—
|
|
|
(13,984
|
)
|
||
Amortization of deferred financing costs and discounts on indebtedness
|
1,954
|
|
|
1,881
|
|
||
Bad debt expense
|
2,353
|
|
|
914
|
|
||
Deferred income taxes
|
(8,858
|
)
|
|
31,800
|
|
||
Write-down of non-marketable equity securities and note receivable
|
17,741
|
|
|
—
|
|
||
Other, net
|
1,142
|
|
|
(2,348
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable, trade (including amounts due from related parties, net)
|
(1,429
|
)
|
|
(17,877
|
)
|
||
Prepaid expenses and other assets
|
(26,233
|
)
|
|
(5,512
|
)
|
||
Program rights and obligations, net
|
(190,651
|
)
|
|
(248,642
|
)
|
||
Income taxes payable
|
40,114
|
|
|
15,723
|
|
||
Deferred revenue
|
(4,200
|
)
|
|
4,980
|
|
||
Deferred carriage fees, net
|
(422
|
)
|
|
(1,610
|
)
|
||
Accounts payable, accrued liabilities and other liabilities
|
(58,591
|
)
|
|
(63,007
|
)
|
||
Net cash provided by operating activities
|
171,687
|
|
|
116,972
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Capital expenditures
|
(22,053
|
)
|
|
(11,942
|
)
|
||
Return of capital from investees
|
3,908
|
|
|
172
|
|
||
Investment in and loans to investees
|
—
|
|
|
(42,318
|
)
|
||
Net cash used in investing activities
|
(18,145
|
)
|
|
(54,088
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the issuance of long-term debt
|
2,521
|
|
|
—
|
|
||
Principal payments on long-term debt
|
(3,238
|
)
|
|
—
|
|
||
Deemed repurchases of restricted stock units
|
(22,959
|
)
|
|
(15,354
|
)
|
||
Purchase of treasury stock
|
(991
|
)
|
|
(83,637
|
)
|
||
Proceeds from stock option exercises
|
4,630
|
|
|
—
|
|
||
Principal payments on finance lease obligations
|
(1,309
|
)
|
|
(1,406
|
)
|
||
Distributions to noncontrolling interests
|
(5,629
|
)
|
|
(1,435
|
)
|
||
Net cash used in financing activities
|
(26,975
|
)
|
|
(101,832
|
)
|
||
Net increase (decrease) in cash and cash equivalents from operations
|
126,567
|
|
|
(38,948
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
2,229
|
|
|
9,365
|
|
||
Cash and cash equivalents at beginning of period
|
554,886
|
|
|
558,783
|
|
||
Cash and cash equivalents at end of period
|
$
|
683,682
|
|
|
$
|
529,200
|
|
•
|
National Networks: Includes activities of our five national programming networks, AMC Studios operations and AMC Broadcasting & Technology. Our national programming networks are AMC, WE tv, BBC AMERICA, IFC and SundanceTV in the U.S.; and AMC and IFC in Canada. Our AMC Studios operations produces original programming for our programming networks and also licenses such program rights worldwide. AMC Networks Broadcasting & Technology is our technical services business, which primarily services most of the national programming networks.
|
•
|
International and Other: Principally includes AMC Networks International (AMCNI), the Company's international programming businesses consisting of a portfolio of channels around the world; IFC Films, the Company's independent film distribution business; Levity Entertainment Group LLC ("Levity"), acquired April 20, 2018, our production services and comedy venues company; RLJ Entertainment Inc. ("RLJE"), acquired October 1, 2018, a content distribution company that also includes the subscription streaming services Acorn TV and Urban Movie Channel ("UMC") and our subscription streaming services, Sundance Now and Shudder.
|
(In thousands)
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Balances from contracts with customers:
|
|
|
|
|
||||
Accounts receivable (including long-term, included in Other assets)
|
|
$
|
1,029,236
|
|
|
$
|
1,018,105
|
|
Contract assets, short-term (included in Other current assets)
|
|
14,616
|
|
|
9,131
|
|
||
Contract assets, long-term (included in Other assets)
|
|
8,696
|
|
|
8,136
|
|
||
Contract liabilities (Deferred revenue)
|
|
51,261
|
|
|
55,424
|
|
(In thousands)
|
Three Months Ended March 31,
|
||||
2019
|
|
2018
|
|||
Basic weighted average common shares outstanding
|
56,588
|
|
|
60,967
|
|
Effect of dilution:
|
|
|
|
||
Stock options
|
33
|
|
|
—
|
|
Restricted stock units
|
1,104
|
|
|
752
|
|
Diluted weighted average common shares outstanding
|
57,725
|
|
|
61,719
|
|
(In thousands)
|
Severance and employee-related costs
|
|
Other exit costs
|
|
Total
|
||||||
Balance at December 31, 2018
|
$
|
33,774
|
|
|
$
|
1,415
|
|
|
$
|
35,189
|
|
Charges
|
1,075
|
|
|
1,567
|
|
|
2,642
|
|
|||
Cash payments
|
(17,089
|
)
|
|
(333
|
)
|
|
(17,422
|
)
|
|||
Non-cash adjustments
|
(737
|
)
|
|
(2,577
|
)
|
|
(3,314
|
)
|
|||
Currency translation
|
45
|
|
|
36
|
|
|
81
|
|
|||
Balance at March 31, 2019
|
$
|
17,068
|
|
|
$
|
108
|
|
|
$
|
17,176
|
|
Fair value of equity consideration transferred
|
$
|
41,513
|
|
Fair value of previously held equity interest
|
130,890
|
|
|
Fair value of redeemable noncontrolling interest
|
103,359
|
|
|
|
$
|
275,762
|
|
Allocation to net assets acquired:
|
|
||
Cash
|
3,360
|
|
|
Accounts receivable
|
16,316
|
|
|
Prepaid expenses and other current assets
|
963
|
|
|
Programming rights
|
69,775
|
|
|
Property and equipment
|
2,841
|
|
|
Other assets (equity method investments)
|
36,700
|
|
|
Intangible assets
|
126,600
|
|
|
Accounts payable
|
(12,008
|
)
|
|
Accrued liabilities
|
(41,501
|
)
|
|
Debt
|
(25,187
|
)
|
|
|
177,859
|
|
|
Goodwill
|
97,903
|
|
|
|
$
|
275,762
|
|
Cash paid for controlling interest
|
$
|
48,350
|
|
Redeemable noncontrolling interest
|
30,573
|
|
|
|
$
|
78,923
|
|
Allocation to net assets acquired:
|
|
||
Cash
|
13,471
|
|
|
Other current assets
|
17,251
|
|
|
Property and equipment
|
20,663
|
|
|
Intangible assets
|
46,413
|
|
|
Other noncurrent assets
|
3,306
|
|
|
Current liabilities
|
(23,647
|
)
|
|
Noncurrent liabilities
|
(21,394
|
)
|
|
Noncontrolling interests acquired
|
(1,354
|
)
|
|
Fair value of net assets acquired
|
54,709
|
|
|
Goodwill
|
24,214
|
|
|
|
$
|
78,923
|
|
(In thousands, except per share data)
|
Pro Forma Financial Information
For the Three Months Ended March 31, 2018
|
||||
Revenues, net
|
$
|
799,137
|
|
|
|
Income from operations before income taxes
|
$
|
148,210
|
|
|
|
Net income per share, basic
|
$
|
2.43
|
|
|
|
Net income per share, diluted
|
$
|
2.40
|
|
|
(In thousands)
|
National Networks
|
|
International
and Other
|
|
Total
|
||||||
December 31, 2018
|
$
|
238,431
|
|
|
$
|
559,606
|
|
|
$
|
798,037
|
|
Puchase accounting adjustments
|
—
|
|
|
(1,748
|
)
|
|
(1,748
|
)
|
|||
Amortization of "second component" goodwill
|
(332
|
)
|
|
—
|
|
|
(332
|
)
|
|||
Foreign currency translation
|
—
|
|
|
1,836
|
|
|
1,836
|
|
|||
March 31, 2019
|
$
|
238,099
|
|
|
$
|
559,694
|
|
|
$
|
797,793
|
|
(In thousands)
|
March 31, 2019
|
|
|
||||||||||
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Estimated Useful Lives
|
|||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
||||||
Affiliate and customer relationships
|
$
|
615,628
|
|
|
$
|
(205,195
|
)
|
|
$
|
410,433
|
|
|
6 to 25 years
|
Advertiser relationships
|
46,282
|
|
|
(18,665
|
)
|
|
27,617
|
|
|
11 years
|
|||
Trade names
|
124,453
|
|
|
(19,756
|
)
|
|
104,697
|
|
|
3 to 20 years
|
|||
Other amortizable intangible assets
|
13,428
|
|
|
(6,548
|
)
|
|
6,880
|
|
|
5 to 15 years
|
|||
Total amortizable intangible assets
|
799,791
|
|
|
(250,164
|
)
|
|
549,627
|
|
|
|
|||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trademarks
|
19,900
|
|
|
—
|
|
|
19,900
|
|
|
|
|||
Total intangible assets
|
$
|
819,691
|
|
|
$
|
(250,164
|
)
|
|
$
|
569,527
|
|
|
|
(In thousands)
|
December 31, 2018
|
|
|
||||||||||
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
|
|||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
||||||
Affiliate and customer relationships
|
$
|
620,771
|
|
|
$
|
(198,500
|
)
|
|
$
|
422,271
|
|
|
|
Advertiser relationships
|
46,282
|
|
|
(17,613
|
)
|
|
28,669
|
|
|
|
|||
Trade names
|
118,772
|
|
|
(17,971
|
)
|
|
100,801
|
|
|
|
|||
Other amortizable intangible assets
|
13,643
|
|
|
(6,377
|
)
|
|
7,266
|
|
|
|
|||
Total amortizable intangible assets
|
799,468
|
|
|
(240,461
|
)
|
|
559,007
|
|
|
|
|||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||
Trademarks
|
19,900
|
|
|
—
|
|
|
19,900
|
|
|
|
|||
Total intangible assets
|
$
|
819,368
|
|
|
$
|
(240,461
|
)
|
|
$
|
578,907
|
|
|
|
(In thousands)
|
|
||
Years Ending December 31,
|
|
||
2019
|
$
|
44,784
|
|
2020
|
47,216
|
|
|
2021
|
46,422
|
|
|
2022
|
46,159
|
|
|
2023
|
46,076
|
|
(In thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Interest
|
$
|
40,066
|
|
|
$
|
30,018
|
|
Employee related costs
|
58,202
|
|
|
100,729
|
|
||
Income taxes payable
|
41,425
|
|
|
1,527
|
|
||
Other accrued expenses
|
110,257
|
|
|
132,644
|
|
||
Total accrued liabilities
|
$
|
249,950
|
|
|
$
|
264,918
|
|
(In thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Senior Secured Credit Facility: (a)
|
|
|
|
||||
Term Loan A Facility
|
$
|
750,000
|
|
|
$
|
750,000
|
|
Senior Notes:
|
|
|
|
||||
4.75% Notes due August 2025
|
800,000
|
|
|
800,000
|
|
||
5.00% Notes due April 2024
|
1,000,000
|
|
|
1,000,000
|
|
||
4.75% Notes due December 2022
|
600,000
|
|
|
600,000
|
|
||
Other debt
|
2,000
|
|
|
2,584
|
|
||
Total long-term debt
|
3,152,000
|
|
|
3,152,584
|
|
||
Unamortized discount
|
(28,010
|
)
|
|
(29,181
|
)
|
||
Unamortized deferred financing costs
|
(13,065
|
)
|
|
(13,848
|
)
|
||
Long-term debt, net
|
3,110,925
|
|
|
3,109,555
|
|
||
Current portion of long-term debt
|
30,125
|
|
|
21,334
|
|
||
Noncurrent portion of long-term debt
|
$
|
3,080,800
|
|
|
$
|
3,088,221
|
|
(a)
|
The Company's $500 million revolving credit facility remains undrawn at March 31, 2019. Total undrawn revolver commitments are available to be drawn for general corporate purposes of the Company.
|
(In thousands)
|
Balance Sheet
Location
|
|
March 31, 2019
|
||
Assets
|
|
|
|
||
Operating
|
Operating lease right-of-use asset
|
|
$
|
174,563
|
|
Finance
|
Property and equipment, net
|
|
18,502
|
|
|
Total lease assets
|
|
|
$
|
193,065
|
|
Liabilities
|
|
|
|
||
Current:
|
|
|
|
||
Operating
|
Current portion of lease obligations
|
|
$
|
26,633
|
|
Finance
|
Current portion of lease obligations
|
|
4,708
|
|
|
|
|
|
$
|
31,341
|
|
Noncurrent:
|
|
|
|
||
Operating
|
Lease obligations
|
|
$
|
204,336
|
|
Finance
|
Lease obligations
|
|
20,348
|
|
|
|
|
|
224,684
|
|
|
|
|
|
|
||
Total lease liabilities
|
|
|
$
|
256,025
|
|
(In thousands)
|
Income Statement Location
|
|
March 31, 2019
|
||
Operating lease costs
|
SG&A expenses
|
|
$
|
8,206
|
|
Finance lease costs:
|
|
|
|
||
Amortization of leased assets
|
Depreciation and amortization
|
|
673
|
|
|
Interest on lease liabilities
|
Net interest expense
|
|
678
|
|
|
Short term lease costs
|
SG&A expenses
|
|
1,590
|
|
|
Variable lease costs
|
SG&A expenses
|
|
308
|
|
|
Total net lease cost
|
|
|
$
|
11,455
|
|
(In thousands)
|
Operating Leases
|
|
Finance Leases
|
|
Total
|
||||||
2019
|
$
|
27,419
|
|
|
$
|
5,627
|
|
|
$
|
33,046
|
|
2020
|
35,909
|
|
|
5,862
|
|
|
41,771
|
|
|||
2021
|
31,248
|
|
|
4,388
|
|
|
35,636
|
|
|||
2022
|
33,309
|
|
|
4,414
|
|
|
37,723
|
|
|||
2023
|
33,766
|
|
|
4,441
|
|
|
38,207
|
|
|||
Thereafter
|
118,885
|
|
|
9,673
|
|
|
128,558
|
|
|||
Total lease payments
|
280,536
|
|
|
34,405
|
|
|
314,941
|
|
|||
Less: Interest
|
49,568
|
|
|
9,348
|
|
|
58,916
|
|
|||
Present value of lease liabilities
|
$
|
230,968
|
|
|
$
|
25,057
|
|
|
$
|
256,025
|
|
|
March 31, 2019
|
|
Weighted average remaining lease term (years):
|
|
|
Operating leases
|
8.31
|
|
Finance leases
|
6.08
|
|
Weighted average discount rate:
|
|
|
Operating leases
|
4.75
|
%
|
Finance leases
|
10.21
|
%
|
|
March 31, 2019
|
||
Operating cash flows from operating leases
|
$
|
8,240
|
|
Financing cash flows from finance leases
|
$
|
1,309
|
|
•
|
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.
|
(In thousands)
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||
At March 31, 2019:
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
$
|
120,119
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120,119
|
|
Marketable securities
|
|
1,405
|
|
|
—
|
|
|
—
|
|
|
1,405
|
|
||||
Foreign currency derivatives
|
|
—
|
|
|
2,957
|
|
|
—
|
|
|
2,957
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap contracts
|
|
$
|
—
|
|
|
$
|
995
|
|
|
$
|
—
|
|
|
$
|
995
|
|
Foreign currency derivatives
|
|
—
|
|
|
$
|
2,247
|
|
|
$
|
—
|
|
|
2,247
|
|
||
At December 31, 2018:
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
$
|
68,498
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
68,498
|
|
Marketable securities
|
|
1,173
|
|
|
—
|
|
|
—
|
|
|
1,173
|
|
||||
Foreign currency derivatives
|
|
—
|
|
|
3,509
|
|
|
—
|
|
|
3,509
|
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap contracts
|
|
$
|
—
|
|
|
$
|
356
|
|
|
$
|
—
|
|
|
$
|
356
|
|
Foreign currency derivatives
|
|
—
|
|
|
$
|
3,121
|
|
|
$
|
—
|
|
|
3,121
|
|
(In thousands)
|
March 31, 2019
|
||||||
Carrying
Amount
|
|
Estimated
Fair Value
|
|||||
Debt instruments:
|
|
|
|
||||
Term loan A facility
|
$
|
740,352
|
|
|
$
|
736,875
|
|
4.75% Notes due August 2025
|
786,894
|
|
|
794,000
|
|
||
5.00% Notes due April 2024
|
986,838
|
|
|
1,004,900
|
|
||
4.75% Notes due December 2022
|
594,841
|
|
|
606,750
|
|
||
Other debt
|
$
|
2,000
|
|
|
$
|
2,000
|
|
|
$
|
3,110,925
|
|
|
$
|
3,142,525
|
|
(In thousands)
|
December 31, 2018
|
||||||
Carrying
Amount
|
|
Estimated
Fair Value
|
|||||
Debt instruments:
|
|
|
|
||||
Term loan A facility
|
$
|
739,710
|
|
|
$
|
738,750
|
|
4.75% Notes due August 2025
|
786,458
|
|
|
720,000
|
|
||
5.00% Notes due April 2024
|
986,275
|
|
|
947,500
|
|
||
4.75% Notes due December 2022
|
594,528
|
|
|
580,500
|
|
||
Other debt
|
$
|
2,584
|
|
|
$
|
2,584
|
|
|
$
|
3,109,555
|
|
|
$
|
2,989,334
|
|
(In thousands)
|
Balance Sheet
Location
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
||||
Interest rate swap contracts
|
Accrued liabilities
|
|
$
|
995
|
|
|
$
|
356
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||
Assets:
|
|
|
|
|
|
||||
Foreign currency derivatives
|
Prepaid expenses and other current assets
|
|
$
|
1,270
|
|
|
$
|
1,452
|
|
Foreign currency derivatives
|
Other assets
|
|
1,687
|
|
|
2,057
|
|
||
Liabilities:
|
|
|
|
|
|
||||
Foreign currency derivatives
|
Accrued liabilities
|
|
$
|
597
|
|
|
$
|
700
|
|
Foreign currency derivatives
|
Other liabilities
|
|
1,650
|
|
|
2,421
|
|
(In thousands)
|
Gain or (Loss) on Derivatives
Recognized in OCI |
|
Location of Gain or (Loss) in Earnings
|
|
Gain or (Loss) Reclassified
from Accumulated OCI
into Earnings |
||||||||||||
Three Months Ended March 31,
|
|
|
|
Three Months Ended March 31,
|
|||||||||||||
2019
|
|
2018
|
|
|
|
2019
|
|
2018
|
|||||||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap contracts
|
$
|
(651
|
)
|
|
$
|
—
|
|
|
Interest expense
|
|
$
|
12
|
|
|
$
|
—
|
|
(In thousands)
|
Location of Gain or (Loss) Recognized in Earnings
on Derivatives
|
|
Amount of Gain or (Loss) Recognized in Earnings on Derivatives
|
||||||
|
|
Three Months Ended March 31,
|
|||||||
|
|
2019
|
|
2018
|
|||||
Interest rate swap contracts
|
Interest expense
|
|
$
|
—
|
|
|
$
|
(146
|
)
|
Foreign currency derivatives
|
Miscellaneous, net
|
|
457
|
|
|
(293
|
)
|
||
Other derivatives
|
Miscellaneous, net
|
|
—
|
|
|
11,687
|
|
||
Total
|
|
|
$
|
457
|
|
|
$
|
11,248
|
|
(In thousands)
|
Three Months Ended March 31, 2019
|
||
December 31, 2018
|
$
|
299,558
|
|
Net earnings
|
5,819
|
|
|
Distributions
|
(5,268
|
)
|
|
Other
|
(307
|
)
|
|
March 31, 2019
|
$
|
299,802
|
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
2019
|
|
2018
|
|||||
Non-Cash Investing and Financing Activities:
|
|
|
|
||||
Capital expenditures incurred but not yet paid
|
$
|
2,216
|
|
|
$
|
6,070
|
|
Treasury stock not yet settled
|
—
|
|
|
9,980
|
|
||
Supplemental Data:
|
|
|
|
||||
Cash interest paid
|
28,235
|
|
|
25,634
|
|
||
Income taxes paid, net
|
6,426
|
|
|
6,243
|
|
(In thousands)
|
Three Months Ended March 31, 2019
|
||||||||||||||
National
Networks
|
|
International
and Other
|
|
Inter-segment
eliminations
|
|
Consolidated
|
|||||||||
Revenues, net
|
|
|
|
|
|
|
|
||||||||
Advertising
|
$
|
239,089
|
|
|
$
|
21,206
|
|
|
$
|
—
|
|
|
$
|
260,295
|
|
Distribution
|
377,029
|
|
|
149,882
|
|
|
(2,985
|
)
|
|
523,926
|
|
||||
Consolidated revenues, net
|
$
|
616,118
|
|
|
$
|
171,088
|
|
|
$
|
(2,985
|
)
|
|
$
|
784,221
|
|
Operating income (loss)
|
$
|
251,502
|
|
|
$
|
(13,748
|
)
|
|
$
|
7,109
|
|
|
$
|
244,863
|
|
Share-based compensation expense
|
16,269
|
|
|
3,630
|
|
|
—
|
|
|
19,899
|
|
||||
Restructuring expense
|
303
|
|
|
3,035
|
|
|
(696
|
)
|
|
2,642
|
|
||||
Depreciation and amortization
|
8,612
|
|
|
15,444
|
|
|
—
|
|
|
24,056
|
|
||||
Equity investees (>50% interest) AOI
|
—
|
|
|
1,580
|
|
|
—
|
|
|
1,580
|
|
||||
Adjusted operating income
|
$
|
276,686
|
|
|
$
|
9,941
|
|
|
$
|
6,413
|
|
|
$
|
293,040
|
|
(In thousands)
|
Three Months Ended March 31, 2018
|
||||||||||||||
National
Networks
|
|
International
and Other
|
|
Inter-segment
eliminations
|
|
Consolidated
|
|||||||||
Revenues, net
|
|
|
|
|
|
|
|
||||||||
Advertising
|
$
|
225,730
|
|
|
$
|
22,510
|
|
|
$
|
—
|
|
|
$
|
248,240
|
|
Distribution
|
407,298
|
|
|
88,880
|
|
|
(3,595
|
)
|
|
492,583
|
|
||||
Consolidated revenues, net
|
$
|
633,028
|
|
|
$
|
111,390
|
|
|
$
|
(3,595
|
)
|
|
$
|
740,823
|
|
Operating income (loss)
|
$
|
249,852
|
|
|
$
|
(16,814
|
)
|
|
$
|
617
|
|
|
$
|
233,655
|
|
Share-based compensation expense
|
12,527
|
|
|
2,792
|
|
|
—
|
|
|
15,319
|
|
||||
Depreciation and amortization
|
8,495
|
|
|
11,859
|
|
|
—
|
|
|
20,354
|
|
||||
Adjusted operating income
|
$
|
270,874
|
|
|
$
|
(2,163
|
)
|
|
$
|
617
|
|
|
$
|
269,328
|
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
2019
|
|
2018
|
|||||
Inter-segment revenues
|
|
|
|
||||
National Networks
|
$
|
(1,390
|
)
|
|
$
|
(2,535
|
)
|
International and Other
|
(1,595
|
)
|
|
(1,060
|
)
|
||
|
$
|
(2,985
|
)
|
|
$
|
(3,595
|
)
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
2019
|
|
2018
|
|||||
Revenues
|
|
|
|
||||
United States
|
$
|
662,464
|
|
|
$
|
586,568
|
|
Europe
|
79,434
|
|
|
86,264
|
|
||
Other
|
42,323
|
|
|
67,991
|
|
||
|
$
|
784,221
|
|
|
$
|
740,823
|
|
(In thousands)
|
March 31, 2019
|
|
December 31, 2018
|
||||
Property and equipment, net
|
|
|
|
||||
United States
|
$
|
209,903
|
|
|
$
|
202,833
|
|
Europe
|
26,554
|
|
|
27,218
|
|
||
Other
|
15,384
|
|
|
16,211
|
|
||
|
$
|
251,841
|
|
|
$
|
246,262
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
March 31, 2019
|
|||||||||||||||||||
(In thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non- Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
827
|
|
|
$
|
477,816
|
|
|
$
|
205,039
|
|
|
$
|
—
|
|
|
$
|
683,682
|
|
Accounts receivable, trade (less allowance for doubtful accounts)
|
19
|
|
|
589,936
|
|
|
239,749
|
|
|
—
|
|
|
829,704
|
|
|||||
Current portion of program rights, net
|
—
|
|
|
293,477
|
|
|
140,586
|
|
|
(201
|
)
|
|
433,862
|
|
|||||
Prepaid expenses, other current assets and intercompany receivable
|
58
|
|
|
194,921
|
|
|
32,133
|
|
|
(69,140
|
)
|
|
157,972
|
|
|||||
Total current assets
|
904
|
|
|
1,556,150
|
|
|
617,507
|
|
|
(69,341
|
)
|
|
2,105,220
|
|
|||||
Property and equipment, net of accumulated depreciation
|
—
|
|
|
182,433
|
|
|
69,408
|
|
|
—
|
|
|
251,841
|
|
|||||
Investment in affiliates
|
3,844,267
|
|
|
1,637,988
|
|
|
—
|
|
|
(5,482,255
|
)
|
|
—
|
|
|||||
Program rights, net
|
—
|
|
|
918,943
|
|
|
236,759
|
|
|
(1,437
|
)
|
|
1,154,265
|
|
|||||
Long-term intercompany notes receivable
|
—
|
|
|
—
|
|
|
218
|
|
|
(218
|
)
|
|
—
|
|
|||||
Deferred carriage fees, net
|
—
|
|
|
14,055
|
|
|
816
|
|
|
—
|
|
|
14,871
|
|
|||||
Intangible assets, net
|
—
|
|
|
158,947
|
|
|
410,580
|
|
|
—
|
|
|
569,527
|
|
|||||
Goodwill
|
—
|
|
|
64,950
|
|
|
732,843
|
|
|
—
|
|
|
797,793
|
|
|||||
Deferred tax asset, net
|
—
|
|
|
—
|
|
|
19,927
|
|
|
—
|
|
|
19,927
|
|
|||||
Operating lease right-of-use asset
|
101,521
|
|
|
20,085
|
|
|
52,957
|
|
|
—
|
|
|
174,563
|
|
|||||
Other assets
|
—
|
|
|
171,200
|
|
|
262,707
|
|
|
—
|
|
|
433,907
|
|
|||||
Total assets
|
$
|
3,946,692
|
|
|
$
|
4,724,751
|
|
|
$
|
2,403,722
|
|
|
$
|
(5,553,251
|
)
|
|
$
|
5,521,914
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
38,969
|
|
|
$
|
68,423
|
|
|
$
|
—
|
|
|
$
|
107,392
|
|
Accrued liabilities and intercompany payable
|
79,873
|
|
|
116,858
|
|
|
124,069
|
|
|
(70,850
|
)
|
|
249,950
|
|
|||||
Current portion of program rights obligations
|
—
|
|
|
243,013
|
|
|
78,901
|
|
|
—
|
|
|
321,914
|
|
|||||
Deferred revenue
|
—
|
|
|
28,632
|
|
|
22,629
|
|
|
—
|
|
|
51,261
|
|
|||||
Current portion of long-term debt
|
28,125
|
|
|
—
|
|
|
2,000
|
|
|
—
|
|
|
30,125
|
|
|||||
Current portion of lease obligations
|
13,505
|
|
|
6,568
|
|
|
11,268
|
|
|
—
|
|
|
31,341
|
|
|||||
Total current liabilities
|
121,503
|
|
|
434,040
|
|
|
307,290
|
|
|
(70,850
|
)
|
|
791,983
|
|
|||||
Program rights obligations
|
—
|
|
|
323,343
|
|
|
18,830
|
|
|
—
|
|
|
342,173
|
|
|||||
Long-term debt, net
|
3,080,800
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,080,800
|
|
|||||
Lease obligations
|
125,814
|
|
|
21,833
|
|
|
77,037
|
|
|
—
|
|
|
224,684
|
|
|||||
Deferred tax liability, net
|
131,723
|
|
|
—
|
|
|
5,844
|
|
|
—
|
|
|
137,567
|
|
|||||
Other liabilities and intercompany notes payable
|
31,463
|
|
|
101,268
|
|
|
27,783
|
|
|
(146
|
)
|
|
160,368
|
|
|||||
Total liabilities
|
3,491,303
|
|
|
880,484
|
|
|
436,784
|
|
|
(70,996
|
)
|
|
4,737,575
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
299,802
|
|
|
—
|
|
|
299,802
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
AMC Networks stockholders' equity
|
455,389
|
|
|
3,844,267
|
|
|
1,637,989
|
|
|
(5,482,255
|
)
|
|
455,390
|
|
|||||
Non-redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
29,147
|
|
|
—
|
|
|
29,147
|
|
|||||
Total stockholders' equity
|
455,389
|
|
|
3,844,267
|
|
|
1,667,136
|
|
|
(5,482,255
|
)
|
|
484,537
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
3,946,692
|
|
|
$
|
4,724,751
|
|
|
$
|
2,403,722
|
|
|
$
|
(5,553,251
|
)
|
|
$
|
5,521,914
|
|
Condensed Consolidating Balance Sheet
|
|||||||||||||||||||
December 31, 2018
|
|||||||||||||||||||
(In thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non- Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
121
|
|
|
$
|
368,151
|
|
|
$
|
186,614
|
|
|
$
|
—
|
|
|
$
|
554,886
|
|
Accounts receivable, trade (including amounts due from related parties, net,
less allowance for doubtful accounts) |
16
|
|
|
600,121
|
|
|
235,840
|
|
|
—
|
|
|
835,977
|
|
|||||
Current portion of program rights, net
|
—
|
|
|
292,002
|
|
|
148,955
|
|
|
(218
|
)
|
|
440,739
|
|
|||||
Prepaid expenses, other current assets and intercompany receivable
|
6,543
|
|
|
158,936
|
|
|
23,549
|
|
|
(57,219
|
)
|
|
131,809
|
|
|||||
Total current assets
|
6,680
|
|
|
1,419,210
|
|
|
594,958
|
|
|
(57,437
|
)
|
|
1,963,411
|
|
|||||
Property and equipment, net of accumulated depreciation
|
—
|
|
|
175,040
|
|
|
71,222
|
|
|
—
|
|
|
246,262
|
|
|||||
Investment in affiliates
|
3,656,003
|
|
|
1,655,083
|
|
|
—
|
|
|
(5,311,086
|
)
|
|
—
|
|
|||||
Program rights, net
|
—
|
|
|
969,802
|
|
|
245,862
|
|
|
(1,613
|
)
|
|
1,214,051
|
|
|||||
Long-term intercompany notes receivable
|
—
|
|
|
—
|
|
|
190
|
|
|
(190
|
)
|
|
—
|
|
|||||
Deferred carriage fees, net
|
—
|
|
|
15,993
|
|
|
838
|
|
|
—
|
|
|
16,831
|
|
|||||
Intangible assets, net
|
—
|
|
|
161,417
|
|
|
417,490
|
|
|
—
|
|
|
578,907
|
|
|||||
Goodwill
|
—
|
|
|
65,282
|
|
|
732,755
|
|
|
—
|
|
|
798,037
|
|
|||||
Deferred tax asset, net
|
—
|
|
|
—
|
|
|
19,272
|
|
|
—
|
|
|
19,272
|
|
|||||
Other assets
|
—
|
|
|
149,724
|
|
|
292,068
|
|
|
|
|
441,792
|
|
||||||
Total assets
|
$
|
3,662,683
|
|
|
$
|
4,611,551
|
|
|
$
|
2,374,655
|
|
|
$
|
(5,370,326
|
)
|
|
$
|
5,278,563
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
34,630
|
|
|
$
|
72,436
|
|
|
$
|
—
|
|
|
$
|
107,066
|
|
Accrued liabilities and intercompany payable
|
35,189
|
|
|
173,836
|
|
|
114,943
|
|
|
(59,050
|
)
|
|
264,918
|
|
|||||
Current portion of program rights obligations
|
—
|
|
|
259,414
|
|
|
84,175
|
|
|
—
|
|
|
343,589
|
|
|||||
Deferred revenue
|
—
|
|
|
34,608
|
|
|
20,816
|
|
|
—
|
|
|
55,424
|
|
|||||
Current portion of long-term debt
|
18,750
|
|
|
—
|
|
|
2,584
|
|
|
—
|
|
|
21,334
|
|
|||||
Current portion of capital lease obligations
|
—
|
|
|
2,941
|
|
|
2,149
|
|
|
—
|
|
|
5,090
|
|
|||||
Total current liabilities
|
53,939
|
|
|
505,429
|
|
|
297,103
|
|
|
(59,050
|
)
|
|
797,421
|
|
|||||
Program rights obligations
|
—
|
|
|
349,814
|
|
|
23,435
|
|
|
—
|
|
|
373,249
|
|
|||||
Long-term debt, net
|
3,088,221
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,088,221
|
|
|||||
Capital lease obligations
|
—
|
|
|
1,420
|
|
|
20,007
|
|
|
—
|
|
|
21,427
|
|
|||||
Deferred tax liability, net
|
140,474
|
|
|
—
|
|
|
4,969
|
|
|
—
|
|
|
145,443
|
|
|||||
Other liabilities and intercompany notes payable
|
63,369
|
|
|
98,885
|
|
|
45,972
|
|
|
(190
|
)
|
|
208,036
|
|
|||||
Total liabilities
|
3,346,003
|
|
|
955,548
|
|
|
391,486
|
|
|
(59,240
|
)
|
|
4,633,797
|
|
|||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||||
Redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
299,558
|
|
|
—
|
|
|
299,558
|
|
|||||
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
AMC Networks stockholders' equity
|
316,680
|
|
|
3,656,003
|
|
|
1,655,083
|
|
|
(5,311,086
|
)
|
|
316,680
|
|
|||||
Non-redeemable noncontrolling interests
|
—
|
|
|
—
|
|
|
28,528
|
|
|
—
|
|
|
28,528
|
|
|||||
Total stockholders' equity
|
316,680
|
|
|
3,656,003
|
|
|
1,683,611
|
|
|
(5,311,086
|
)
|
|
345,208
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
3,662,683
|
|
|
$
|
4,611,551
|
|
|
$
|
2,374,655
|
|
|
$
|
(5,370,326
|
)
|
|
$
|
5,278,563
|
|
Condensed Consolidating Statement of Income
|
|||||||||||||||||||
Three Months Ended March 31, 2019
|
|||||||||||||||||||
(In thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non- Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues, net
|
$
|
—
|
|
|
$
|
574,230
|
|
|
$
|
212,760
|
|
|
$
|
(2,769
|
)
|
|
$
|
784,221
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Technical and operating (excluding depreciation and amortization)
|
—
|
|
|
220,488
|
|
|
120,718
|
|
|
(1,058
|
)
|
|
340,148
|
|
|||||
Selling, general and administrative
|
—
|
|
|
111,581
|
|
|
62,831
|
|
|
(1,900
|
)
|
|
172,512
|
|
|||||
Depreciation and amortization
|
—
|
|
|
12,537
|
|
|
11,519
|
|
|
—
|
|
|
24,056
|
|
|||||
Impairment charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring expense
|
—
|
|
|
(283
|
)
|
|
2,925
|
|
|
—
|
|
|
2,642
|
|
|||||
Total operating expenses
|
—
|
|
|
344,323
|
|
|
197,993
|
|
|
(2,958
|
)
|
|
539,358
|
|
|||||
Operating income
|
—
|
|
|
229,907
|
|
|
14,767
|
|
|
189
|
|
|
244,863
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
(38,929
|
)
|
|
3,183
|
|
|
301
|
|
|
—
|
|
|
(35,445
|
)
|
|||||
Share of affiliates’ income (loss)
|
224,244
|
|
|
(7,311
|
)
|
|
—
|
|
|
(216,933
|
)
|
|
—
|
|
|||||
Miscellaneous, net
|
(99
|
)
|
|
709
|
|
|
(13,206
|
)
|
|
(189
|
)
|
|
(12,785
|
)
|
|||||
Total other income (expense)
|
185,216
|
|
|
(3,419
|
)
|
|
(12,905
|
)
|
|
(217,122
|
)
|
|
(48,230
|
)
|
|||||
Income from operations before income taxes
|
185,216
|
|
|
226,488
|
|
|
1,862
|
|
|
(216,933
|
)
|
|
196,633
|
|
|||||
Income tax expense
|
(41,819
|
)
|
|
(2,244
|
)
|
|
(2,413
|
)
|
|
—
|
|
|
(46,476
|
)
|
|||||
Net income including noncontrolling interests
|
143,397
|
|
|
224,244
|
|
|
(551
|
)
|
|
(216,933
|
)
|
|
150,157
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(6,760
|
)
|
|
—
|
|
|
(6,760
|
)
|
|||||
Net income attributable to AMC Networks’ stockholders
|
$
|
143,397
|
|
|
$
|
224,244
|
|
|
$
|
(7,311
|
)
|
|
$
|
(216,933
|
)
|
|
$
|
143,397
|
|
Condensed Consolidating Statement of Income
|
|||||||||||||||||||
Three Months Ended March 31, 2018
|
|||||||||||||||||||
(In thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non- Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Revenues, net
|
$
|
—
|
|
|
$
|
574,917
|
|
|
$
|
170,386
|
|
|
$
|
(4,480
|
)
|
|
$
|
740,823
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Technical and operating (excluding depreciation and amortization)
|
—
|
|
|
222,621
|
|
|
98,522
|
|
|
(778
|
)
|
|
320,365
|
|
|||||
Selling, general and administrative
|
—
|
|
|
122,059
|
|
|
48,089
|
|
|
(3,699
|
)
|
|
166,449
|
|
|||||
Depreciation and amortization
|
—
|
|
|
10,804
|
|
|
9,550
|
|
|
—
|
|
|
20,354
|
|
|||||
Impairment and related charges
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring (credit) expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
—
|
|
|
355,484
|
|
|
156,161
|
|
|
(4,477
|
)
|
|
507,168
|
|
|||||
Operating income
|
—
|
|
|
219,433
|
|
|
14,225
|
|
|
(3
|
)
|
|
233,655
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense, net
|
(36,907
|
)
|
|
11,897
|
|
|
(8,176
|
)
|
|
—
|
|
|
(33,186
|
)
|
|||||
Share of affiliates’ income
|
247,482
|
|
|
17,498
|
|
|
—
|
|
|
(264,980
|
)
|
|
—
|
|
|||||
Loss on extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Miscellaneous, net
|
(206
|
)
|
|
734
|
|
|
16,415
|
|
|
3
|
|
|
16,946
|
|
|||||
Total other income (expense)
|
210,369
|
|
|
30,129
|
|
|
8,239
|
|
|
(264,977
|
)
|
|
(16,240
|
)
|
|||||
Income from operations before income taxes
|
210,369
|
|
|
249,562
|
|
|
22,464
|
|
|
(264,980
|
)
|
|
217,415
|
|
|||||
Income tax (expense) benefit
|
(53,499
|
)
|
|
(2,080
|
)
|
|
(1,300
|
)
|
|
—
|
|
|
(56,879
|
)
|
|||||
Net income including noncontrolling interests
|
156,870
|
|
|
247,482
|
|
|
21,164
|
|
|
(264,980
|
)
|
|
160,536
|
|
|||||
Net income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(3,666
|
)
|
|
—
|
|
|
(3,666
|
)
|
|||||
Net income attributable to AMC Networks’ stockholders
|
$
|
156,870
|
|
|
$
|
247,482
|
|
|
$
|
17,498
|
|
|
$
|
(264,980
|
)
|
|
$
|
156,870
|
|
Condensed Consolidating Statement of Comprehensive Income
|
|||||||||||||||||||
Three Months Ended March 31, 2019
|
|||||||||||||||||||
(In thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non- Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income including noncontrolling interests
|
$
|
143,397
|
|
|
$
|
224,244
|
|
|
$
|
(551
|
)
|
|
$
|
(216,933
|
)
|
|
$
|
150,157
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustment
|
(5,762
|
)
|
|
—
|
|
|
(5,762
|
)
|
|
5,762
|
|
|
(5,762
|
)
|
|||||
Unrealized loss on interest rate swaps
|
(639
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(639
|
)
|
|||||
Other comprehensive income, before income taxes
|
(6,401
|
)
|
|
—
|
|
|
(5,762
|
)
|
|
5,762
|
|
|
(6,401
|
)
|
|||||
Income tax expense
|
149
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
149
|
|
|||||
Other comprehensive income, net of income taxes
|
(6,252
|
)
|
|
—
|
|
|
(5,762
|
)
|
|
5,762
|
|
|
(6,252
|
)
|
|||||
Comprehensive income
|
137,145
|
|
|
224,244
|
|
|
(6,313
|
)
|
|
(211,171
|
)
|
|
143,905
|
|
|||||
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(6,722
|
)
|
|
—
|
|
|
(6,722
|
)
|
|||||
Comprehensive income attributable to AMC Networks' stockholders
|
$
|
137,145
|
|
|
$
|
224,244
|
|
|
$
|
(13,035
|
)
|
|
$
|
(211,171
|
)
|
|
$
|
137,183
|
|
Condensed Consolidating Statement of Comprehensive Income
|
|||||||||||||||||||
Three Months Ended March 31, 2018
|
|||||||||||||||||||
(In thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non- Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Net income including noncontrolling interest
|
$
|
156,870
|
|
|
$
|
247,482
|
|
|
$
|
21,164
|
|
|
$
|
(264,980
|
)
|
|
$
|
160,536
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustment
|
18,805
|
|
|
—
|
|
|
18,805
|
|
|
(18,805
|
)
|
|
18,805
|
|
|||||
Other comprehensive income, net of income taxes
|
18,805
|
|
|
—
|
|
|
18,805
|
|
|
(18,805
|
)
|
|
18,805
|
|
|||||
Comprehensive income
|
175,675
|
|
|
247,482
|
|
|
39,969
|
|
|
(283,785
|
)
|
|
179,341
|
|
|||||
Comprehensive income attributable to noncontrolling interests
|
—
|
|
|
—
|
|
|
(4,563
|
)
|
|
—
|
|
|
(4,563
|
)
|
|||||
Comprehensive income attributable to AMC Networks’ stockholders
|
$
|
175,675
|
|
|
$
|
247,482
|
|
|
$
|
35,406
|
|
|
$
|
(283,785
|
)
|
|
$
|
174,778
|
|
Condensed Consolidating Statement of Cash Flows
|
|||||||||||||||||||
Three Months Ended March 31, 2019
|
|||||||||||||||||||
(In thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non- Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in) operating activities
|
$
|
197,776
|
|
|
$
|
164,138
|
|
|
$
|
27,703
|
|
|
$
|
(217,930
|
)
|
|
$
|
171,687
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
(26
|
)
|
|
(19,868
|
)
|
|
(2,159
|
)
|
|
—
|
|
|
(22,053
|
)
|
|||||
Return of capital from investees
|
—
|
|
|
—
|
|
|
3,908
|
|
|
—
|
|
|
3,908
|
|
|||||
Investment in and loans to investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Payments for acquisition of a business, net of cash acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Increase (decrease) to investment in affiliates
|
(177,117
|
)
|
|
69,120
|
|
|
(75,454
|
)
|
|
183,451
|
|
|
—
|
|
|||||
Net cash (used in) provided by investing activities
|
(177,143
|
)
|
|
49,252
|
|
|
(73,705
|
)
|
|
183,451
|
|
|
(18,145
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from the issuance of long-term debt
|
—
|
|
|
—
|
|
|
2,521
|
|
|
—
|
|
|
2,521
|
|
|||||
Repayment of long-term debt
|
—
|
|
|
—
|
|
|
(3,238
|
)
|
|
—
|
|
|
(3,238
|
)
|
|||||
Deemed repurchases of restricted stock units
|
(22,959
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,959
|
)
|
|||||
Purchase of treasury stock
|
(991
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(991
|
)
|
|||||
Proceeds from stock option exercises
|
4,630
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,630
|
|
|||||
Principal payments on finance lease obligations
|
—
|
|
|
(786
|
)
|
|
(523
|
)
|
|
—
|
|
|
(1,309
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
(5,629
|
)
|
|
—
|
|
|
(5,629
|
)
|
|||||
Net cash used in financing activities
|
(19,320
|
)
|
|
(786
|
)
|
|
(6,869
|
)
|
|
—
|
|
|
(26,975
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents from operations
|
1,313
|
|
|
212,604
|
|
|
(52,871
|
)
|
|
(34,479
|
)
|
|
126,567
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
(607
|
)
|
|
(102,939
|
)
|
|
71,296
|
|
|
34,479
|
|
|
2,229
|
|
|||||
Cash and cash equivalents at beginning of period
|
121
|
|
|
368,151
|
|
|
186,614
|
|
|
—
|
|
|
554,886
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
827
|
|
|
$
|
477,816
|
|
|
$
|
205,039
|
|
|
$
|
—
|
|
|
$
|
683,682
|
|
Condensed Consolidated Statement of Cash Flows
|
|||||||||||||||||||
Three Months Ended March 31, 2018
|
|||||||||||||||||||
(In thousands)
|
Parent Company
|
|
Guarantor Subsidiaries
|
|
Non- Guarantor Subsidiaries
|
|
Eliminations
|
|
Consolidated
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by operating activities
|
$
|
234,947
|
|
|
$
|
154,495
|
|
|
$
|
(7,472
|
)
|
|
$
|
(264,998
|
)
|
|
$
|
116,972
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(11,040
|
)
|
|
(902
|
)
|
|
—
|
|
|
(11,942
|
)
|
|||||
Return of capital from investees
|
—
|
|
|
—
|
|
|
172
|
|
|
—
|
|
|
172
|
|
|||||
Investment in investees
|
—
|
|
|
—
|
|
|
(42,318
|
)
|
|
—
|
|
|
(42,318
|
)
|
|||||
Increase (decrease) to investment in affiliates
|
(141,109
|
)
|
|
(129,821
|
)
|
|
67,191
|
|
|
203,739
|
|
|
—
|
|
|||||
Net cash (used in) provided by investing activities
|
(141,109
|
)
|
|
(140,861
|
)
|
|
24,143
|
|
|
203,739
|
|
|
(54,088
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from the issuance of long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Principal payments on long-term debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Payments for financing costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Deemed repurchases of restricted stock units
|
(15,354
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,354
|
)
|
|||||
Purchase of treasury stock
|
(83,637
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83,637
|
)
|
|||||
Principal payments on capital lease obligations
|
—
|
|
|
(723
|
)
|
|
(683
|
)
|
|
—
|
|
|
(1,406
|
)
|
|||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
(1,435
|
)
|
|
—
|
|
|
(1,435
|
)
|
|||||
Net cash used in financing activities
|
(98,991
|
)
|
|
(723
|
)
|
|
(2,118
|
)
|
|
—
|
|
|
(101,832
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents from operations
|
(5,153
|
)
|
|
12,911
|
|
|
14,553
|
|
|
(61,259
|
)
|
|
(38,948
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
5,017
|
|
|
(49,740
|
)
|
|
(7,171
|
)
|
|
61,259
|
|
|
9,365
|
|
|||||
Cash and cash equivalents at beginning of period
|
320
|
|
|
391,248
|
|
|
167,215
|
|
|
—
|
|
|
558,783
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
184
|
|
|
$
|
354,419
|
|
|
$
|
174,597
|
|
|
$
|
—
|
|
|
$
|
529,200
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations.
|
•
|
market demand, including changes in viewer consumption patterns, for our programming networks, our subscription streaming services, our programming, and our production services;
|
•
|
our ability to maintain and renew distribution or affiliation agreements with distributors;
|
•
|
the cost of, and our ability to obtain or produce, desirable programming content for our networks, other forms of distribution, including digital and licensing in international markets, as well as our independent film distribution businesses;
|
•
|
market demand for our owned original programming and our independent film content;
|
•
|
changes in consumer demand for our comedy venues;
|
•
|
changes in laws or treaties relating to taxation, or the interpretation thereof, in the U.S. or in the countries in which we operate, including the impact of the Tax Cuts and Jobs Act and the Bipartisan Budget Act of 2018;
|
•
|
the impact of new and proposed federal, state and international laws and regulations relating to data protection, privacy and security, including the E.U. General Data Protection Regulation;
|
•
|
the impact of Brexit, particularly in the event of the U.K.'s departure from the E.U. without an agreement on terms;
|
•
|
our ability to successfully acquire new businesses and, if acquired, to integrate, and implement our plan with respect to businesses we acquire;
|
•
|
problems we may discover post-closing with the operations, including the internal controls and financial reporting process, of businesses we acquire;
|
•
|
uncertainties regarding the financial results of equity method investees, issuers of our investments in marketable equity securities and non-marketable equity securities and changes in the nature of key strategic relationships with partners and joint ventures;
|
•
|
financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate;
|
•
|
events that are outside our control, such as political unrest in international markets, terrorist attacks, natural disasters and other similar events; and
|
•
|
the factors described under Item 1A, "Risk Factors" in our 2018 Annual Report on Form 10-K (the "2018 Form 10-K"), as filed with the Securities and Exchange Commission ("SEC").
|
•
|
National Networks: Includes activities of our five national programming networks, AMC Studios operations and AMC Broadcasting & Technology. Our national programming networks are AMC, WE tv, BBC AMERICA, IFC and SundanceTV in the U.S.; and AMC and IFC in Canada. Our AMC Studios operations produces original programming for our programming networks and also licenses such program rights worldwide. AMC Networks Broadcasting & Technology is our technical services business, which primarily services most of the national programming networks.
|
•
|
International and Other: Principally includes AMC Networks International (AMCNI), the Company's international programming businesses consisting of a portfolio of channels around the world; IFC Films, the Company's independent film distribution business; Levity Entertainment Group ("Levity") (acquired April 20, 2018, see discussion below), our production services and comedy venues company; RLJ Entertainment Inc. ("RLJE"), acquired October 1, 2018, a content distribution company that also includes the subscription streaming services Acorn TV and UMC, and our wholly-owned subscription streaming services, Shudder and Sundance Now.
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
2019
|
|
2018
|
|||||
Revenues, net
|
|
|
|
||||
National Networks
|
$
|
616,118
|
|
|
$
|
633,028
|
|
International and Other
|
171,088
|
|
|
111,390
|
|
||
Inter-segment eliminations
|
(2,985
|
)
|
|
(3,595
|
)
|
||
Consolidated revenues, net
|
$
|
784,221
|
|
|
$
|
740,823
|
|
Operating income (loss)
|
|
|
|
||||
National Networks
|
$
|
251,502
|
|
|
$
|
249,852
|
|
International and Other
|
(13,748
|
)
|
|
(16,814
|
)
|
||
Inter-segment eliminations
|
7,109
|
|
|
617
|
|
||
Consolidated operating income
|
$
|
244,863
|
|
|
$
|
233,655
|
|
AOI
|
|
|
|
||||
National Networks
|
$
|
276,686
|
|
|
$
|
270,874
|
|
International and Other
|
9,941
|
|
|
(2,163
|
)
|
||
Inter-segment eliminations
|
6,413
|
|
|
617
|
|
||
Consolidated AOI
|
$
|
293,040
|
|
|
$
|
269,328
|
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
2019
|
|
2018
|
|||||
Operating income
|
$
|
244,863
|
|
|
$
|
233,655
|
|
Share-based compensation expense
|
19,899
|
|
|
15,319
|
|
||
Restructuring expense
|
2,642
|
|
|
—
|
|
||
Depreciation and amortization
|
24,056
|
|
|
20,354
|
|
||
Equity investees (>50% interest) AOI
|
1,580
|
|
|
—
|
|
||
AOI
|
$
|
293,040
|
|
|
$
|
269,328
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||||||||
|
2019
|
|
2018
|
|
|
|
|
|||||||||||||
(In thousands)
|
Amount
|
|
% of
Revenues,
net
|
|
Amount
|
|
% of
Revenues,
net
|
|
$ change
|
|
% change
|
|||||||||
Revenues, net
|
$
|
784,221
|
|
|
100.0
|
%
|
|
$
|
740,823
|
|
|
100.0
|
%
|
|
$
|
43,398
|
|
|
5.9
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Technical and operating (excluding depreciation and amortization)
|
340,148
|
|
|
43.4
|
|
|
320,365
|
|
|
43.2
|
|
|
19,783
|
|
|
6.2
|
|
|||
Selling, general and administrative
|
172,512
|
|
|
22.0
|
|
|
166,449
|
|
|
22.5
|
|
|
6,063
|
|
|
3.6
|
|
|||
Depreciation and amortization
|
24,056
|
|
|
3.1
|
|
|
20,354
|
|
|
2.7
|
|
|
3,702
|
|
|
18.2
|
|
|||
Restructuring expense
|
2,642
|
|
|
0.3
|
|
|
—
|
|
|
—
|
|
|
2,642
|
|
|
n/m
|
|
|||
Total operating expenses
|
539,358
|
|
|
68.8
|
|
|
507,168
|
|
|
68.5
|
|
|
32,190
|
|
|
6.3
|
|
|||
Operating income
|
244,863
|
|
|
31.2
|
|
|
233,655
|
|
|
31.5
|
|
|
11,208
|
|
|
4.8
|
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest expense, net
|
(35,445
|
)
|
|
(4.5
|
)
|
|
(33,186
|
)
|
|
(4.5
|
)
|
|
(2,259
|
)
|
|
6.8
|
|
|||
Miscellaneous, net
|
(12,785
|
)
|
|
(1.6
|
)
|
|
16,946
|
|
|
2.3
|
|
|
(29,731
|
)
|
|
(175.4
|
)
|
|||
Total other income (expense)
|
(48,230
|
)
|
|
(6.2
|
)
|
|
(16,240
|
)
|
|
(2.2
|
)
|
|
(31,990
|
)
|
|
197.0
|
|
|||
Net income from operations before income taxes
|
196,633
|
|
|
25.1
|
|
|
217,415
|
|
|
29.3
|
|
|
(20,782
|
)
|
|
(9.6
|
)
|
|||
Income tax expense
|
(46,476
|
)
|
|
(5.9
|
)
|
|
(56,879
|
)
|
|
(7.7
|
)
|
|
10,403
|
|
|
(18.3
|
)
|
|||
Net income including noncontrolling interests
|
150,157
|
|
|
19.1
|
|
|
160,536
|
|
|
21.7
|
|
|
(10,379
|
)
|
|
(6.5
|
)
|
|||
Net income attributable to noncontrolling interests
|
(6,760
|
)
|
|
(0.9
|
)
|
|
(3,666
|
)
|
|
(0.5
|
)
|
|
(3,094
|
)
|
|
84.4
|
%
|
|||
Net income attributable to AMC Networks' stockholders
|
$
|
143,397
|
|
|
18.3
|
%
|
|
$
|
156,870
|
|
|
21.2
|
%
|
|
$
|
(13,473
|
)
|
|
(8.6
|
)%
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||||||||
|
2019
|
|
2018
|
|
|
|
|
|||||||||||||
(In thousands)
|
Amount
|
|
% of
Revenues,
net
|
|
Amount
|
|
% of
Revenues,
net
|
|
$ change
|
|
% change
|
|||||||||
Revenues, net
|
$
|
616,118
|
|
|
100.0
|
%
|
|
$
|
633,028
|
|
|
100.0
|
%
|
|
$
|
(16,910
|
)
|
|
(2.7
|
)%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Technical and operating (excluding depreciation and amortization)
|
241,260
|
|
|
39.2
|
|
|
249,786
|
|
|
39.5
|
|
|
(8,526
|
)
|
|
(3.4
|
)
|
|||
Selling, general and administrative
|
114,441
|
|
|
18.6
|
|
|
124,895
|
|
|
19.7
|
|
|
(10,454
|
)
|
|
(8.4
|
)
|
|||
Depreciation and amortization
|
8,612
|
|
|
1.4
|
|
|
8,495
|
|
|
1.3
|
|
|
117
|
|
|
1.4
|
|
|||
Restructuring expense
|
303
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
303
|
|
|
n/m
|
|
|||
Operating income
|
$
|
251,502
|
|
|
40.8
|
%
|
|
$
|
249,852
|
|
|
39.5
|
%
|
|
$
|
1,650
|
|
|
0.7
|
%
|
Share-based compensation expense
|
16,269
|
|
|
2.6
|
|
|
12,527
|
|
|
2.0
|
|
|
3,742
|
|
|
29.9
|
|
|||
Restructuring credit
|
303
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
303
|
|
|
n/m
|
|
|||
Depreciation and amortization
|
8,612
|
|
|
1.4
|
|
|
8,495
|
|
|
1.3
|
|
|
117
|
|
|
1.4
|
|
|||
AOI
|
$
|
276,686
|
|
|
44.9
|
%
|
|
$
|
270,874
|
|
|
42.8
|
%
|
|
$
|
5,812
|
|
|
2.1
|
%
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||||||||
|
2019
|
|
2018
|
|
|
|
|
|||||||||||||
(In thousands)
|
Amount
|
|
% of
Revenues,
net
|
|
Amount
|
|
% of
Revenues,
net
|
|
$ change
|
|
% change
|
|||||||||
Revenues, net
|
$
|
171,088
|
|
|
100.0
|
%
|
|
$
|
111,390
|
|
|
100.0
|
%
|
|
$
|
59,698
|
|
|
53.6
|
%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Technical and operating (excluding depreciation and amortization)
|
108,272
|
|
|
63.3
|
|
|
74,763
|
|
|
67.1
|
|
|
33,509
|
|
|
44.8
|
|
|||
Selling, general and administrative
|
58,085
|
|
|
34.0
|
|
|
41,582
|
|
|
37.3
|
|
|
16,503
|
|
|
39.7
|
|
|||
Depreciation and amortization
|
15,444
|
|
|
9.0
|
|
|
11,859
|
|
|
10.6
|
|
|
3,585
|
|
|
30.2
|
|
|||
Restructuring expense
|
3,035
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|
3,035
|
|
|
n/m
|
|
|||
Operating loss
|
$
|
(13,748
|
)
|
|
(8.0
|
)%
|
|
$
|
(16,814
|
)
|
|
(15.1
|
)%
|
|
$
|
3,066
|
|
|
(18.2
|
)%
|
Share-based compensation expense
|
3,630
|
|
|
2.1
|
|
|
2,792
|
|
|
2.5
|
|
|
838
|
|
|
30.0
|
|
|||
Restructuring expense
|
3,035
|
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|
3,035
|
|
|
n/m
|
|
|||
Depreciation and amortization
|
15,444
|
|
|
9.0
|
|
|
11,859
|
|
|
10.6
|
|
|
3,585
|
|
|
30.2
|
|
|||
Equity investees (>50% interest) AOI
|
1,580
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
1,580
|
|
|
n/m
|
|
|||
AOI
|
$
|
9,941
|
|
|
5.8
|
%
|
|
$
|
(2,163
|
)
|
|
(1.9
|
)%
|
|
$
|
12,104
|
|
|
(559.6
|
)%
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||||||||
(In thousands)
|
2019
|
|
% of total
|
|
2018
|
|
% of total
|
|
$ change
|
|
% change
|
|||||||||
National Networks
|
$
|
616,118
|
|
|
78.6
|
%
|
|
$
|
633,028
|
|
|
85.4
|
%
|
|
$
|
(16,910
|
)
|
|
(2.7
|
)%
|
International and Other
|
171,088
|
|
|
21.8
|
|
|
111,390
|
|
|
15.0
|
|
|
59,698
|
|
|
53.6
|
|
|||
Inter-segment eliminations
|
(2,985
|
)
|
|
(0.4
|
)
|
|
(3,595
|
)
|
|
(0.4
|
)
|
|
610
|
|
|
(17.0
|
)
|
|||
Consolidated revenues, net
|
$
|
784,221
|
|
|
100.0
|
%
|
|
$
|
740,823
|
|
|
100.0
|
%
|
|
$
|
43,398
|
|
|
5.9
|
%
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||||||||
(In thousands)
|
2019
|
|
% of total
|
|
2018
|
|
% of total
|
|
$ change
|
|
% change
|
|||||||||
Advertising
|
$
|
239,089
|
|
|
38.8
|
%
|
|
$
|
225,730
|
|
|
35.7
|
%
|
|
$
|
13,359
|
|
|
5.9
|
%
|
Distribution
|
377,029
|
|
|
61.2
|
|
|
407,298
|
|
|
64.3
|
|
|
(30,269
|
)
|
|
(7.4
|
)
|
|||
|
$
|
616,118
|
|
|
100.0
|
%
|
|
$
|
633,028
|
|
|
100.0
|
%
|
|
$
|
(16,910
|
)
|
|
(2.7
|
)%
|
•
|
The increase of $13.4 million in advertising revenues was driven by the timing of our original programming and pricing increases across all of our networks, partially offset by lower ratings. Most of our advertising revenues vary based on the timing of our original programming series and the popularity of our programming as measured by Nielsen. Due to these factors, we expect advertising revenues to vary from quarter to quarter.
|
•
|
Distribution revenues decreased $30.3 million due to a decrease in content licensing revenues of $35.0 million from lower foreign distribution revenues derived from our original programming, primarily at AMC. Subscription revenues increased $4.7 million resulting from an increase in rates, partially offset by lower subscribers. Subscription revenues may vary based on the impact of renewals of affiliation agreements and content licensing revenues vary based on the timing of availability of our programming to distributors. Because of these factors, we expect distribution revenues to vary from quarter to quarter.
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||||||||
(In thousands)
|
2019
|
|
% of total
|
|
2018
|
|
% of total
|
|
$ change
|
|
% change
|
|||||||||
Advertising
|
$
|
21,206
|
|
|
12.4
|
%
|
|
$
|
22,510
|
|
|
20.2
|
%
|
|
$
|
(1,304
|
)
|
|
(5.8
|
)%
|
Distribution
|
149,882
|
|
|
87.6
|
|
|
88,880
|
|
|
79.8
|
|
|
61,002
|
|
|
68.6
|
|
|||
|
$
|
171,088
|
|
|
100.0
|
%
|
|
$
|
111,390
|
|
|
100.0
|
%
|
|
$
|
59,698
|
|
|
53.6
|
%
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
(In thousands)
|
2019
|
|
2018
|
|
$ change
|
|
% change
|
|||||||
National Networks
|
$
|
241,260
|
|
|
$
|
249,786
|
|
|
$
|
(8,526
|
)
|
|
(3.4
|
)%
|
International and Other
|
108,272
|
|
|
74,763
|
|
|
33,509
|
|
|
44.8
|
|
|||
Inter-segment eliminations
|
(9,384
|
)
|
|
(4,184
|
)
|
|
(5,200
|
)
|
|
124.3
|
|
|||
Total
|
$
|
340,148
|
|
|
$
|
320,365
|
|
|
$
|
19,783
|
|
|
6.2
|
%
|
Percentage of revenues, net
|
43.4
|
%
|
|
43.2
|
%
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
(In thousands)
|
2019
|
|
2018
|
|
$ change
|
|
% change
|
|||||||
National Networks
|
$
|
114,441
|
|
|
$
|
124,895
|
|
|
$
|
(10,454
|
)
|
|
(8.4
|
)%
|
International and Other
|
58,085
|
|
|
41,582
|
|
|
16,503
|
|
|
39.7
|
|
|||
Inter-segment eliminations
|
(14
|
)
|
|
(28
|
)
|
|
14
|
|
|
(50.0
|
)
|
|||
Total
|
$
|
172,512
|
|
|
$
|
166,449
|
|
|
$
|
6,063
|
|
|
3.6
|
%
|
Percentage of revenues, net
|
22.0
|
%
|
|
22.5
|
%
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
(In thousands)
|
2019
|
|
2018
|
|
$ change
|
|
% change
|
|||||||
National Networks
|
$
|
8,612
|
|
|
$
|
8,495
|
|
|
$
|
117
|
|
|
1.4
|
%
|
International and Other
|
15,444
|
|
|
11,859
|
|
|
3,585
|
|
|
30.2
|
|
|||
|
$
|
24,056
|
|
|
$
|
20,354
|
|
|
$
|
3,702
|
|
|
18.2
|
%
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
(In thousands)
|
2019
|
|
2018
|
|
$ change
|
|
% change
|
|||||||
National Networks
|
$
|
251,502
|
|
|
$
|
249,852
|
|
|
$
|
1,650
|
|
|
0.7
|
%
|
International and Other
|
(13,748
|
)
|
|
(16,814
|
)
|
|
3,066
|
|
|
(18.2
|
)
|
|||
Inter-segment Eliminations
|
7,109
|
|
|
617
|
|
|
6,492
|
|
|
n/m
|
|
|||
|
$
|
244,863
|
|
|
$
|
233,655
|
|
|
$
|
11,208
|
|
|
4.8
|
%
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
(In thousands)
|
2019
|
|
2018
|
|
$ change
|
|
% change
|
|||||||
Operating income
|
$
|
244,863
|
|
|
$
|
233,655
|
|
|
$
|
11,208
|
|
|
4.8
|
%
|
Share-based compensation expense
|
19,899
|
|
|
15,319
|
|
|
4,580
|
|
|
29.9
|
|
|||
Restructuring expense
|
2,642
|
|
|
—
|
|
|
2,642
|
|
|
n/m
|
|
|||
Depreciation and amortization
|
24,056
|
|
|
20,354
|
|
|
3,702
|
|
|
18.2
|
|
|||
Equity investees (>50% interest) AOI
|
1,580
|
|
|
—
|
|
|
1,580
|
|
|
n/m
|
|
|||
AOI
|
$
|
293,040
|
|
|
$
|
269,328
|
|
|
$
|
23,712
|
|
|
8.8
|
%
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
(In thousands)
|
2019
|
|
2018
|
|
$ change
|
|
% change
|
|||||||
National Networks
|
$
|
276,686
|
|
|
$
|
270,874
|
|
|
$
|
5,812
|
|
|
2.1
|
%
|
International and Other
|
9,941
|
|
|
(2,163
|
)
|
|
12,104
|
|
|
(559.6
|
)
|
|||
Inter-segment eliminations
|
6,413
|
|
|
617
|
|
|
5,796
|
|
|
939.4
|
|
|||
AOI
|
$
|
293,040
|
|
|
$
|
269,328
|
|
|
$
|
23,712
|
|
|
8.8
|
%
|
(In thousands)
|
Three Months Ended March 31,
|
||||||
2019
|
|
2018
|
|||||
Cash provided by operating activities
|
$
|
171,687
|
|
|
$
|
116,972
|
|
Cash used in investing activities
|
(18,145
|
)
|
|
(54,088
|
)
|
||
Cash used in financing activities
|
(26,975
|
)
|
|
(101,832
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
126,567
|
|
|
(38,948
|
)
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 1.
|
Legal Proceedings.
|
Period
|
|
Total Number of Shares
(or Units) Purchased
|
|
Average Price Paid per Share (or Unit)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
|
||||||
January 1, 2019 to January 31, 2019
|
|
18,411
|
|
|
$
|
53.82
|
|
|
18,411
|
|
|
$
|
558,419,334
|
|
February 1, 2019 to February 28, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
558,419,334
|
|
March 1, 2019 to March 31, 2019
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
558,419,334
|
|
Total
|
|
18,411
|
|
|
$
|
53.82
|
|
|
18,411
|
|
|
|
Item 6.
|
Exhibits.
|
(a)
|
Index to Exhibits.
|
10.1
|
|
|
|
10.2
|
|
|
|
31.1
|
|
|
|
31.2
|
|
|
|
32
|
|
|
|
101.INS
|
XBRL Instance Document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase.
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
AMC Networks Inc.
|
|
|
|
|
|
Date:
|
May 1, 2019
|
|
By:
|
/s/ Sean S. Sullivan
|
|
|
|
|
Sean S. Sullivan
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
1.
|
SERVICES
|
(a)
|
Contractor shall comply with all applicable laws and regulations;
|
(b)
|
The Deliverables and Work Product and all works and other intellectual property provided by the Contractor in connection with the Deliverables and/or Work Product, including without limitation all works, materials and intellectual property other than the materials created by or for the Contractor, and any and all intellectual property and all improvements and other derivatives thereto or thereof, whether made in connection with this Agreement, the Contractor Agreement or otherwise, do not and shall not infringe upon or violate any rights whatsoever of any third party;
|
(c)
|
Contractor has not, and shall not at any time, created or permitted to exist any lien, pledge, security interest or any other encumbrance in or to the Deliverables and/or Work Product or any other product using any Customer materials that may be developed, created or utilized pursuant to this Agreement and/or the Contractor Agreement; and
|
(d)
|
Contractor shall be solely responsible for and shall pay any and all development costs related to the Deliverables and/or Work Product (as applicable) and shall obtain any and all rights and clearances for any Third-Party Materials (as referenced in Section 3.5 below) used in connection with the Deliverables and/or Work Product.
|
2.
|
COMPENSATION
|
3.
|
WORK PRODUCT, DELIVERABLES, CUSTOMER MATERIALS, AND RESERVATION OF RIGHTS
|
4.
|
COORDINATION AND COMMUNICATION
|
5.
|
TERM AND TERMINATION
|
6.
|
REPRESENTATIONS AND WARRANTIES; DISCLAIMER
|
7.
|
INDEMNIFICATION
|
8.
|
LIMITATIONS OF LIABILITY
|
9.
|
CONFIDENTIALITY
|
10.
|
INSURANCE.
|
11.
|
GENERAL
|
1.
|
SERVICES. 605 shall perform the following Services under this Statement of Work: [_____________________]
|
2.
|
DELIVERABLES. The following are the Deliverables under this Statement of Work: [_____________________]
|
3.
|
CERTAIN CUSTOMER RESPONSIBILITIES. In addition to Customer’s responsibilities under the Agreement, Customer shall be responsible for the following: [_____________________]
|
4.
|
FEES AND EXPENSES. Subject to mutual execution of this Statement of Work and receipt of an invoice at least thirty (30) days prior to each payment date, Customer shall pay 605 the following fees under this Statement of Work: [_____________________], payable upon satisfactory completion, delivery and acceptance by Customer of the Services and Deliverables.
|
5.
|
TERM. The term of this Statement of Work begins on the Statement of Work Effective Date and ends on [_______________] unless earlier terminated as provided in this Statement of Work or the Agreement.
|
6.
|
ESTIMATED TIMELINE. This is a high-level estimated timeline for the provision of Services and Deliverables under this Statement of Work:
|
Task/Phase
|
Estimated Completion Date
|
|
|
|
|
|
|
7.
|
ASSUMPTIONS. All Services provided by 605 under this Statement of Work are conditioned on (a) Customer’s fulfillment of its responsibilities under this Statement of Work and the Agreement and (b) the assumptions and exclusions set forth below.
|
8.
|
ADDITIONAL RESTRICTIONS. Customer agrees that its use of 605 Materials (including the Deliverables) provided under this Statement of Work is subject at all times to the following restrictions:
|
9.
|
OTHER. [_________________________]
|
RAINBOW MEDIA HOLDINGS LLC
By:
Authorized Signature
Printed Name
Title
|
605, LLC:
By:
Authorized Signature
Ben Tatta
Printed Name
President
Title
|
(a)
|
Within two (2) business days notify the Client representative that has supplied or provided access to the IP and send an email to contentbreach@amcnetworks.com which shall include specific information describing the nature and extent of such occurrence; and
|
(b)
|
Promptly, at Vendor’s expense, take all necessary and reasonable interim steps to resolve and prevent recurrence of the Security Incident and to minimize any adverse impact to the Client, including taking any reasonable steps requested by Client.
|
(a)
|
If Vendor is hosting any IP or using a third party hosting provider, all IP shall be maintained in ISO 27001, ISAE 3402, SSAE 16/SOC 2 compliant data centers and, upon Client’s request, Vendor shall provide annual certificates of compliance along with annual vulnerability assessment test results.
|
(b)
|
Vendor shall use and maintain appropriate administrative, physical, and technical safeguards for the protection of all IP against unauthorized disclosure or access, or accidental or unlawful destruction, loss, or alteration. Vendor shall include, without limitation, (a) industry standard firewalls for all data entering internal data network from any external source; (b) industry standard anti-virus and anti-spyware software protection programs and techniques to prevent harmful software code from affecting the IP, monitoring for vulnerabilities and apply appropriate patches on a regular and ongoing basis; (c) encryption of data in transit and encryption of 128-bit (or higher) for any IP that is digitally stored either permanently or temporarily (including, but not limited to, portable or removable media, such as USB storage drives, optical media, or laptops); (d) no transmission of IP via email, facsimile or via unsecured protocols; (e) isolation of any IP in a logically discrete production database environment for Client; (f) development and maintenance of secure systems and applications, including but not limited to, 24x7 networks Intrusion Detection Systems, DLP Systems (when implemented by Vendor) and procedures for logging, alarming and reporting security violations; (g) non-use of any vendor-supplied defaults for system passwords or other security parameters; (h) installation, maintenance and updating of a log management application to accumulate application logs in one place for monitoring and review; (i) maintenance of all IP in a secure, access-controlled storage location that includes least privilege for administrator access, an audit trail of all administrator actions, maintenance of audit logs, and a minimum number of persons with privileged access; and (j) the use of unique identifiers, such as separate credentials and/or multi-factor authentication for each individual accessing any IP.
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Date:
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May 1, 2019
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By:
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/s/ Joshua W. Sapan
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Joshua W. Sapan
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President and Chief Executive Officer
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Date:
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May 1, 2019
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By:
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/s/ Sean S. Sullivan
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Sean S. Sullivan
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Executive Vice President and Chief Financial Officer
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Date:
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May 1, 2019
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By:
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/s/ Joshua W. Sapan
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Joshua W. Sapan
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President and Chief Executive Officer
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Date:
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May 1, 2019
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By:
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/s/ Sean S. Sullivan
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Sean S. Sullivan
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Executive Vice President and Chief Financial Officer
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