Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 24, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-35106 | |
Entity Registrant Name | AMC Networks Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 27-5403694 | |
Entity Address, Address Line One | 11 Penn Plaza, | |
Entity Address, City or Town | New York, | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10001 | |
City Area Code | 212 | |
Local Phone Number | 324-8500 | |
Title of 12(b) Security | Class A Common Stock, par value $0.01 per share | |
Trading Symbol | AMCX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001514991 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 40,556,233 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 11,484,408 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 704,129 | $ 816,170 |
Accounts receivable, trade (less allowance for doubtful accounts of $8,610 and $5,733) | 826,022 | 857,143 |
Current portion of program rights, net | 17,059 | 426,624 |
Prepaid expenses and other current assets | 195,191 | 230,360 |
Total current assets | 1,742,401 | 2,330,297 |
Property and equipment, net of accumulated depreciation of $352,655 and $347,302 | 289,519 | 283,752 |
Program rights, net | 1,381,950 | 1,038,060 |
Intangible assets, net | 507,136 | 524,531 |
Goodwill | 686,835 | 701,980 |
Deferred tax asset, net | 50,813 | 51,545 |
Operating lease right-of-use asset | 168,503 | 170,056 |
Other assets | 489,265 | 496,465 |
Total assets | 5,316,422 | 5,596,686 |
Current Liabilities: | ||
Accounts payable | 104,126 | 94,306 |
Accrued liabilities | 239,584 | 251,214 |
Current portion of program rights obligations | 283,239 | 304,692 |
Deferred revenue | 73,334 | 63,921 |
Current portion of long-term debt | 70,625 | 56,250 |
Current portion of lease obligations | 33,857 | 33,959 |
Total current liabilities | 804,765 | 804,342 |
Program rights obligations | 210,173 | 239,813 |
Long-term debt | 2,824,470 | 3,039,979 |
Lease obligations | 219,709 | 211,047 |
Deferred tax liability, net | 151,033 | 136,911 |
Other liabilities | 156,909 | 163,638 |
Total liabilities | 4,367,059 | 4,595,730 |
Commitments and contingencies | ||
Redeemable noncontrolling interests | 311,967 | 309,451 |
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 45,000 shares authorized; none issued | 0 | 0 |
Paid-in capital | 282,153 | 286,491 |
Accumulated earnings | 1,676,139 | 1,609,428 |
Treasury stock, at cost (23,102 and 19,808 shares Class A Common Stock, respectively) | (1,149,138) | (1,063,181) |
Accumulated other comprehensive loss | (196,364) | (167,711) |
Total AMC Networks stockholders' equity | 613,548 | 665,781 |
Non-redeemable noncontrolling interests | 23,848 | 25,724 |
Total stockholders' equity | 637,396 | 691,505 |
Total liabilities and stockholders' equity | 5,316,422 | 5,596,686 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common stock | 643 | 639 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common stock | $ 115 | $ 115 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts receivable, trade, allowance for doubtful accounts | $ 8,610 | $ 5,733 |
Property and equipment, accumulated depreciation | $ 352,655 | $ 347,302 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 45,000,000 | 45,000,000 |
Preferred stock, shares issued | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 360,000,000 | 360,000,000 |
Common stock, shares issued | 64,347,000 | 63,886,000 |
Common stock, shares outstanding | 41,244,000 | 44,078,000 |
Treasury stock, shares | 23,102,000 | 19,808,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, shares issued | 11,484,000 | 11,484,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Revenues, net | $ 734,375 | $ 784,221 |
Operating expenses: | ||
Technical and operating (excluding depreciation and amortization) | 344,060 | 340,148 |
Selling, general and administrative | 184,649 | 172,512 |
Depreciation and amortization | 26,730 | 24,056 |
Restructuring and other related charges | 5,966 | 2,642 |
Total operating expenses | 561,405 | 539,358 |
Operating income | 172,970 | 244,863 |
Other income (expense): | ||
Interest expense | (37,564) | (39,645) |
Interest income | 4,555 | 4,200 |
Loss on extinguishment of debt | (2,908) | 0 |
Miscellaneous, net | (29,939) | (12,785) |
Total other (expense) income | (65,856) | (48,230) |
Income from operations before income taxes | 107,114 | 196,633 |
Income tax expense | (33,588) | (46,476) |
Net income including noncontrolling interests | 73,526 | 150,157 |
Net income attributable to noncontrolling interests | (4,859) | (6,760) |
Net income attributable to AMC Networks' stockholders | $ 68,667 | $ 143,397 |
Net income per share attributable to AMC Networks' stockholders: | ||
Basic (in dollars per share) | $ 1.24 | $ 2.53 |
Diluted (in dollars per share) | $ 1.22 | $ 2.48 |
Weighted average common shares | ||
Basic (in shares) | 55,477 | 56,588 |
Diluted (in shares) | 56,061 | 57,725 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income including noncontrolling interests | $ 73,526 | $ 150,157 |
Other comprehensive income (loss): | ||
Foreign currency translation adjustment | (27,121) | (5,762) |
Unrealized loss on interest rate swaps | (1,997) | (639) |
Other comprehensive loss, before income taxes | (29,118) | (6,401) |
Income tax benefit | 465 | 149 |
Other comprehensive loss, net of income taxes | (28,653) | (6,252) |
Comprehensive income | 44,873 | 143,905 |
Comprehensive income attributable to noncontrolling interests | (3,698) | (6,722) |
Comprehensive income attributable to AMC Networks' stockholders | $ 41,175 | $ 137,183 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Paid-in Capital | Accumulated Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | AMC Networks Stockholders’ Equity | Noncontrolling Interests | Class A Common StockCommon Stock | Class B Common StockCommon Stock |
Beginning Balance at Dec. 31, 2018 | $ 345,208 | $ 239,767 | $ 1,228,942 | $ (992,583) | $ (160,194) | $ 316,680 | $ 28,528 | $ 633 | $ 115 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income attributable to AMC Networks’ stockholders | 143,397 | 143,397 | 143,397 | ||||||
Net income (loss) attributable to non-redeemable noncontrolling interests | 942 | 942 | |||||||
Distributions to noncontrolling member | (361) | (361) | |||||||
Treasury stock not yet settled | 985 | 985 | 985 | ||||||
Other comprehensive income (loss) | (6,214) | (6,252) | (6,252) | 38 | |||||
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 | (22,958) | (22,959) | (22,958) | 1 | |||||
Ending Balance at Mar. 31, 2019 | 484,537 | 242,322 | 1,372,339 | (993,574) | (166,446) | 455,390 | 29,147 | 634 | 115 |
Beginning Balance at Dec. 31, 2019 | 691,505 | 286,491 | 1,609,428 | (1,063,181) | (167,711) | 665,781 | 25,724 | 639 | 115 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income attributable to AMC Networks’ stockholders | 68,667 | 68,667 | 68,667 | ||||||
Net income (loss) attributable to non-redeemable noncontrolling interests | (267) | (267) | |||||||
Distributions to noncontrolling member | (448) | (448) | |||||||
Treasury stock not yet settled | (10,988) | (10,988) | (10,988) | ||||||
Other comprehensive income (loss) | (29,814) | (28,653) | (28,653) | (1,161) | |||||
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 | (8,858) | (8,862) | (8,858) | 4 | |||||
Ending Balance at Mar. 31, 2020 | $ 637,396 | $ 282,153 | $ 1,676,139 | $ (1,149,138) | $ (196,364) | $ 613,548 | $ 23,848 | $ 643 | $ 115 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities: | ||
Net income including noncontrolling interests | $ 73,526 | $ 150,157 |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 26,730 | 24,056 |
Share-based compensation expense related to equity classified awards | 15,512 | 19,899 |
Non-cash restructuring and other related charges | 3,928 | 1,171 |
Amortization and write-off of program rights | 223,982 | 205,275 |
Amortization of deferred carriage fees | 6,783 | 2,710 |
Unrealized foreign currency transaction loss (gain) | 7,848 | (4,501) |
Amortization of deferred financing costs and discounts on indebtedness | 1,918 | 1,954 |
Loss on extinguishment of debt | 2,908 | 0 |
Bad debt expense | 1,211 | 2,353 |
Deferred income taxes | 15,900 | (8,858) |
Write-down of non-marketable equity securities and note receivable | 20,000 | 17,741 |
Other, net | 1,044 | 1,142 |
Changes in assets and liabilities: | ||
Accounts receivable, trade (including amounts due from related parties, net) | 27,178 | (1,429) |
Prepaid expenses and other assets | 17,532 | (26,233) |
Program rights and obligations, net | (221,627) | (190,651) |
Income taxes payable | 369 | 40,114 |
Deferred revenue | 9,522 | (4,200) |
Deferred carriage fees, net | (15,484) | (422) |
Accounts payable, accrued liabilities and other liabilities | (20,372) | (58,591) |
Net cash provided by operating activities | 198,408 | 171,687 |
Cash flows from investing activities: | ||
Capital expenditures | (12,916) | (22,053) |
Return of capital from investees | 0 | 3,908 |
Principal payment received on loan to investee | 1,250 | 0 |
Proceeds from sale of investments | 10,000 | 0 |
Net cash used in investing activities | (1,666) | (18,145) |
Cash flows from financing activities: | ||
Proceeds from the issuance of long-term debt | 5,000 | 2,521 |
Principal payments on long-term debt | (209,375) | (3,238) |
Deemed repurchases of restricted stock units | (8,858) | (22,959) |
Purchase of treasury stock | (85,957) | (991) |
Proceeds from stock option exercises | 0 | 4,630 |
Principal payments on finance lease obligations | (781) | (1,309) |
Distributions to noncontrolling interests | (3,081) | (5,629) |
Net cash used in financing activities | (303,052) | (26,975) |
Net increase (decrease) in cash and cash equivalents from operations | (106,310) | 126,567 |
Effect of exchange rate changes on cash and cash equivalents | (5,731) | 2,229 |
Cash and cash equivalents at beginning of period | 816,170 | 554,886 |
Cash and cash equivalents at end of period | $ 704,129 | $ 683,682 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | 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. The Company is comprised of two operating segments: • 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 and also include our AMC Premiere service. 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 : Includes AMC Networks International ("AMCNI"), our international programming businesses consisting of a portfolio of channels around the world; AMC Networks SVOD, consisting of our targeted subscription streaming services, Acorn TV, Shudder, Sundance Now, and UMC; Levity, our production services and comedy venues business; and IFC Films, our independent film distribution 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, 2019 contained in the Company's Annual Report on Form 10-K ("2019 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, 2020. Risks and Uncertainties In March 2020, the World Health Organization characterized the novel coronavirus ("COVID-19") a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The rapid spread of the pandemic and the continuously evolving responses to combat it have had an increasingly negative impact on the global economy. The impact of COVID-19 and measures to prevent its spread are affecting our businesses in a number of ways. Beginning in mid-March, the Company experienced adverse advertising sales impacts and suspended content production, which has led to delays in the creation and availability of some of its television programming. Operationally, nearly all Company employees are working remotely, and the Company has restricted business travel. If significant portions of our workforce, including key personnel, are unable to work effectively because of illness, government actions or other restrictions in connection with the COVID-19 pandemic, the impact of the pandemic on our businesses could be exacerbated. The Company has evaluated and continues to evaluate the potential impact of the COVID-19 pandemic on its consolidated financial statements, including the impairment of goodwill and indefinite-lived intangible assets and the fair value and collectibility of receivables. The ultimate impact of the COVID-19 pandemic, including the extent of any adverse impact on our business, results of operations and financial condition, 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, and global economic conditions. Although the effect of the pandemic may not be fully reflected in the Company’s business until future periods, the Company believes that the adverse impact of the COVID-19 pandemic will be material to its results of operations. The Company does not expect the COVID-19 pandemic and its related economic impact to affect its liquidity position or its ongoing ability to meet the covenants in its debt instruments. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include the useful lives and methodologies used to amortize and assess recoverability of program rights, the estimated useful lives of intangible assets and the valuation and recoverability of goodwill and intangible assets. Recently Adopted Accounting Standards Effective January 1, 2020, the Company adopted Financial Accounting Standard Board (the “FASB”) Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments , which changed the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking "expected loss" model that would generally result in the earlier recognition of allowances for losses. The Company adopted the standard using the modified retrospective approach and recorded a decrease to opening retained earnings of $2.0 million, after taxes, for the cumulative-effect of the adoption. Effective January 1, 2020, the Company adopted FASB ASU No. 2018-13, Fair Value Measurement (Topic 820) . The standard changed the disclosure requirements related to transfers between Level I and II assets, as well as several aspects surrounding the valuation process and unrealized gains and losses related to Level III assets. The adoption of the standard did not have any effect on the Company's consolidated financial statements. Effective January 1, 2020, the Company adopted FASB ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract . The standard amended prior guidance to align the accounting for costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs associated with developing or obtaining internal-use software. Capitalized implementation costs must be expensed over the term of the hosting arrangement and presented in the same line item in the income statement as the fees associated with the hosting element (service) of the arrangement. The adoption of the standard did not have a material effect on the Company's consolidated financial statements. Effective January 1, 2020, the Company adopted FASB ASU No. 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials. The standard aligns the accounting for production costs of episodic television series with the accounting for production costs of films. In addition, the standard modifies certain aspects of the capitalization, impairment, presentation and disclosure requirements in Accounting Standards Codification (“ASC”) 926-20 and the impairment, presentation and disclosure requirements in ASC 920-350. The Company adopted the standard on a prospective basis. See Note 5 for further information. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes . ASU 2019-12 removes certain exceptions to the general principles in Topic 740 - Income Taxes. These changes are effective for the first quarter of 2021, with early adoption permitted. The Company is currently evaluating the impact the adoption will have on its consolidated financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Transaction Price Allocated to Future Performance Obligations As of March 31, 2020, 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, 2020 December 31, 2019 Balances from contracts with customers: Accounts receivable (including long-term, included in Other assets) $ 1,109,949 $ 1,121,834 Contract assets, short-term (included in Other current assets) 7,303 7,283 Contract assets, long-term (included in Other assets) 2,877 9,964 Contract liabilities (Deferred revenue) 73,334 63,921 Revenue recognized for the three months ended March 31, 2020 relating to the contract liability at December 31, 2019 was $11.7 million. |
Net Income per Share
Net Income per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Net Income per Share | Net Income per Share The following is a reconciliation between basic and diluted weighted average shares outstanding: (In thousands) Three Months Ended March 31, 2020 2019 Basic weighted average common shares outstanding 55,477 56,588 Effect of dilution: Stock options — 33 Restricted stock units 584 1,104 Diluted weighted average common shares outstanding 56,061 57,725 Approximately 1.3 million and 1.5 million restricted stock units outstanding as of March 31, 2020 and March 31, 2019 have been excluded from diluted weighted average common shares outstanding since a performance condition for these awards was not met in each of the respective periods. As of March 31, 2020, there were 0.4 million restricted stock units that would have been anti-dilutive to the diluted weighted average common shares outstanding. 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, 2020, the Company repurchased 3.3 million shares of its Class A Common Stock at an average purchase price of approximately $26.09 per share. As of March 31, 2020, the Company has $402.9 million of authorization remaining for repurchase under the Stock Repurchase Program. |
Restructuring and Other Related
Restructuring and Other Related Charges | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Related Charges | Restructuring and Other Related Charges Restructuring and other related charges of $6.0 million for the three months ended March 31, 2020 related to restructuring costs associated with 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, 2020 2019 National Networks $ 1,509 $ 303 International & Other 4,457 3,035 Inter-segment eliminations — (696) Total restructuring and other related charges $ 5,966 $ 2,642 The following table summarizes the accrued restructuring costs: (In thousands) Severance and employee-related costs Other exit costs Total December 31, 2019 $ 27,407 $ 221 $ 27,628 Charges 3,081 2,885 5,966 Cash payments (16,402) (100) (16,502) Non-cash adjustments (1,251) (2,894) (4,145) Currency translation — — — Balance, March 31, 2020 $ 12,835 $ 112 $ 12,947 Accrued restructuring costs of $12.9 million are included in accrued liabilities in the consolidated balance sheet at March 31, 2020. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2020 | |
Investments [Abstract] | |
Investments | 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 $66.7 million at March 31, 2020 and $69.1 million at December 31, 2019. 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 realized and unrealized gains (losses) on equity securities, included in Miscellaneous, net in the condensed consolidated statement of income. Investments in marketable equity securities were $3.3 million at March 31, 2020 and $4.4 million at December 31, 2019. 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 realized and unrealized gains (losses) on equity securities, included in Miscellaneous, net in the condensed consolidated statement of income. Investments in non-marketable equity securities were $41.8 million at March 31, 2020 and $61.8 million at December 31, 2019. For the three months ended March 31, 2020 and March 31, 2019, the Company recognized impairment charges of $20.0 million and $17.7 million, respectively, related to the write-down of certain non-marketable equity securities and a note receivable, included in Miscellaneous, net in the condensed consolidated statement of income. |
Program Rights
Program Rights | 3 Months Ended |
Mar. 31, 2020 | |
Entertainment [Abstract] | |
Program Rights | Program Rights Effective January 1, 2020, the Company adopted FASB ASU No. 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials . The new guidance impacts the Company as follows: • Allows for the classification of acquired/licensed program rights as long-term assets. Previously, the Company reported a portion of these rights in current assets. Advances for live programming rights made prior to the live event and acquired/licensed program rights with license terms of less than one-year continue to be reported in current assets. • Aligns the capitalization of production costs for episodic television programs with the capitalization of production costs for theatrical content. Previously, theatrical content production costs could be fully capitalized while episodic television production costs were generally limited to the amount of contracted revenues. • Introduces the concept of “predominant monetization strategy” to classify capitalized program rights for purposes of amortization and impairment as follows: ◦ Individual program rights - programming value is predominantly derived from third-party revenues that are directly attributable to the specific film or television title (e.g., theatrical revenues, significant in-show advertising on the Company’s programming networks or specific content licensing revenues). ◦ Group program rights - programming value is predominantly derived from third-party revenues that are not directly attributable to a specific film or television title (e.g., library of program rights for purpose of the Company’s programming networks or subscription revenue for direct-to-consumer SVOD targeted streaming services). The determination of the predominant monetization strategy is made at commencement of production and is based on the means by which we derive third-party revenues from use of the programming. The classification of program rights as individual or group only changes if there is a significant change to the title’s monetization strategy relative to its initial assessment. Total capitalized produced and licensed content by predominant monetization strategy is as follows: As of March 31, 2020 Predominantly Monetized Individually Predominantly Monetized as a Group Total Owned original program rights, net: Completed $ 230,459 $ — $ 230,459 In-production and in-development 198,347 — 198,347 Total owned original program rights, net $ 428,806 $ — $ 428,806 Licensed program rights, net: Licensed film and acquired series $ 9,462 $ 605,314 $ 614,776 Licensed originals 289,242 — 289,242 Advances and content versioning costs — 66,185 66,185 Total licensed program rights, net 298,704 671,499 970,203 Program rights, net $ 727,510 $ 671,499 $ 1,399,009 Current portion of program rights, net 17,059 Program rights, net (long-term) 1,381,950 $ 1,399,009 Amortization of owned and licensed program rights is as follows: Three months ended March 31, 2020 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 Rights to programming, including feature films and episodic series, acquired under license agreements are stated at the lower of unamortized cost or fair value. Such licensed rights along with the related obligations are recorded at the contract value when a license agreement is executed, unless there is uncertainty with respect to either cost, acceptability or availability. If such uncertainty exists, those rights and obligations are recorded at the earlier of when the uncertainty is resolved or the license period begins. Costs are amortized to technical and operating expense on a straight-line or accelerated basis, based on the expected exploitation strategy of the rights, over a period not to exceed the respective license periods. Owned original programming costs, including estimated participation and residual costs, qualifying for capitalization as program rights are amortized to technical and operating expense over their estimated useful lives, commencing upon the first airing, based on attributable revenue for airings to date as a percentage of total projected attributable revenue, or ultimate revenue (individual-film-forecast-computation method). Projected attributable revenue is based on previously generated revenues for similar content in established markets, primarily consisting of distribution and advertising revenues, and projected program usage. Projected program usage is based on the Company's current expectation of future exhibitions taking into account historical usage of similar content. Projected attributable revenue can change based upon programming market acceptance, levels of distribution and advertising revenue and decisions regarding planned program usage. These calculations require management to make assumptions and to apply judgment regarding revenue and planned usage. Accordingly, the Company periodically reviews revenue estimates and planned usage and revises its assumptions if necessary, which could impact the timing of amortization expense or result in a write-down to fair value. Any capitalized development costs for programs that the Company determines will not be produced are written off. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The carrying amount of goodwill, by operating segment is as follows: (In thousands) National Networks International Total December 31, 2019 $ 237,103 $ 464,877 $ 701,980 Amortization of "second component" goodwill (332) (332) Foreign currency translation (14,813) (14,813) March 31, 2020 $ 236,771 $ 450,064 $ 686,835 The reduction of $0.3 million in the carrying amount of goodwill for the National Networks 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 Company performs its annual goodwill impairment test as of December 1 each year. In addition to the annual impairment test, the Company is required to regularly assess whether a triggering event has occurred which would require an interim impairment test. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact on each of its reporting units. Further, the Company assessed the current forecasts (including significant assumptions about revenue growth rates, long-term growth rates and enterprise specific discount rates) and the amount of excess fair value over carrying value for each of its reporting units in the 2019 impairment test. The Company determined that a triggering event has not occurred which would require an interim impairment test to be performed. However, we are unable to predict how long the COVID-19 pandemic conditions will persist, what additional measures may be introduced by governments or private parties or what effect any such additional measures may have on our business. If these estimates or related assumptions change in the future, we may be required to record impairment charges related to goodwill. The following tables summarize information relating to the Company's identifiable intangible assets: (In thousands) March 31, 2020 Gross Accumulated Amortization Net Estimated Useful Lives Amortizable intangible assets: Affiliate and customer relationships $ 608,758 $ (237,333) $ 371,425 6 to 25 years Advertiser relationships 46,282 (22,872) 23,410 11 years Trade names 110,343 (18,589) 91,754 3 to 20 years Other amortizable intangible assets 2,798 (2,151) 647 5 to 15 years Total amortizable intangible assets 768,181 (280,945) 487,236 Indefinite-lived intangible assets: Trademarks 19,900 — 19,900 Total intangible assets $ 788,081 $ (280,945) $ 507,136 (In thousands) December 31, 2019 Gross Accumulated Amortization Net Amortizable intangible assets: Affiliate and customer relationships $ 616,197 $ (232,193) $ 384,004 Advertiser relationships 46,282 (21,820) 24,462 Trade names 113,075 (17,997) 95,078 Other amortizable intangible assets 2,798 (1,711) 1,087 Total amortizable intangible assets 778,352 (273,721) 504,631 Indefinite-lived intangible assets: Trademarks 19,900 — 19,900 Total intangible assets $ 798,252 $ (273,721) $ 524,531 Aggregate amortization expense for amortizable intangible assets for the three months ended March 31, 2020 and 2019 was $12.1 million and $10.3 million, respectively. Estimated aggregate amortization expense for intangible assets subject to amortization for each of the following five years is: (In thousands) Years Ending December 31, 2020 $ 45,895 2021 46,130 2022 45,631 2023 45,523 2024 45,455 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following: (In thousands) March 31, 2020 December 31, 2019 Employee related costs $ 53,000 $ 89,753 Participations and residuals 79,512 70,682 Interest 37,096 29,767 Other accrued expenses 69,976 61,012 Total accrued liabilities $ 239,584 $ 251,214 |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt The Company's long-term debt consists of the following: (In thousands) March 31, 2020 December 31, 2019 Senior Secured Credit Facility: (a) Term Loan A Facility $ 721,875 $ 731,250 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 400,000 600,000 Other debt (b) 5,000 — Total long-term debt 2,926,875 3,131,250 Unamortized discount (22,058) (24,351) Unamortized deferred financing costs (9,722) (10,670) Long-term debt, net 2,895,095 3,096,229 Current portion of long-term debt 70,625 56,250 Noncurrent portion of long-term debt $ 2,824,470 $ 3,039,979 (a) The Company's $500 million revolving credit facility remains undrawn at March 31, 2020. Total undrawn revolver commitments are available to be drawn for general corporate purposes of the Company. (b) A majority owned subsidiary of the Company has credit facilities totaling $7.0 million, which bear interest at the greater of 3.5% or the prime rate and mature on August 25, 2020. As of March 31, 2020, there was $5.0 million of outstanding borrowings on the credit facilities. 4.75% Notes due December 2022 In March 2020, the Company redeemed $200 million principal amount of the outstanding $600 million principal amount of its 4.75% Notes due 2022. In connection with the redemption, the Company incurred a loss on extinguishment of debt for the three months ended March 31, 2020 of $2.9 million representing the redemption premium and the write-off of a portion of the unamortized discount and deferred financing costs. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Leases The following table summarizes the leases included in the consolidated balance sheets as follows: (In thousands) Balance Sheet March 31, 2020 December 31, 2019 Assets Operating Operating lease right-of-use asset $ 168,503 $ 170,056 Finance Property and equipment, net 27,853 15,713 Total lease assets 196,356 $ 185,769 Liabilities Current: Operating Current portion of lease obligations 30,546 $ 30,171 Finance Current portion of lease obligations 3,311 3,788 33,857 33,959 Noncurrent: Operating Lease obligations 189,873 193,570 Finance Lease obligations 29,836 17,477 219,709 211,047 Total lease liabilities $ 253,566 $ 245,006 |
Leases | Leases The following table summarizes the leases included in the consolidated balance sheets as follows: (In thousands) Balance Sheet March 31, 2020 December 31, 2019 Assets Operating Operating lease right-of-use asset $ 168,503 $ 170,056 Finance Property and equipment, net 27,853 15,713 Total lease assets 196,356 $ 185,769 Liabilities Current: Operating Current portion of lease obligations 30,546 $ 30,171 Finance Current portion of lease obligations 3,311 3,788 33,857 33,959 Noncurrent: Operating Lease obligations 189,873 193,570 Finance Lease obligations 29,836 17,477 219,709 211,047 Total lease liabilities $ 253,566 $ 245,006 |
Fair Value Measurement
Fair Value Measurement | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity's pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: • Level I - Quoted prices for identical instruments in active markets. • Level II - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. • Level III - Instruments whose significant value drivers are unobservable. The following table presents for each of these hierarchy levels, the Company's financial assets and liabilities that are measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019: (In thousands) Level I Level II Level III Total At March 31, 2020: Assets Cash equivalents $ 256,983 $ — $ — $ 256,983 Marketable securities 3,273 — — 3,273 Foreign currency derivatives — 3,366 — 3,366 Liabilities Interest rate swap contracts $ — $ 3,963 $ — $ 3,963 Foreign currency derivatives — 3,018 — 3,018 At December 31, 2019: Assets Cash equivalents $ 191,214 $ — $ — $ 191,214 Marketable securities 4,448 — — 4,448 Foreign currency derivatives — 1,884 — 1,884 Liabilities Interest rate swap contracts $ — $ 1,966 $ — $ 1,966 Foreign currency derivatives — 1,888 — 1,888 The Company's cash equivalents and marketable securities are classified within Level I of the fair value hierarchy because they are valued using quoted market prices. The Company's interest rate swap contracts and foreign currency derivatives are classified within Level II of the fair value hierarchy as their fair values are determined based on a market approach valuation technique that uses readily observable market parameters and the consideration of counterparty risk. At March 31, 2020, the Company does not have any assets or liabilities measured at fair value on a recurring basis that would be considered Level III. Fair value measurements are also used in nonrecurring valuations performed in connection with acquisition accounting. These nonrecurring valuations primarily include the valuation of affiliate and customer relationships intangible assets, advertiser relationship intangible assets and property and equipment. All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level III of the fair value hierarchy. Credit Facility Debt and Senior Notes The fair values of each of the Company's debt instruments are based on quoted market prices for the same or similar issues or on the current rates offered to the Company for instruments of the same remaining maturities. The carrying values and estimated fair values of the Company's financial instruments, excluding those that are carried at fair value in the condensed consolidated balance sheets, are summarized as follows: (In thousands) March 31, 2020 Carrying Estimated Debt instruments: Term loan A facility $ 714,999 $ 683,977 4.75% Notes due August 2025 788,707 778,000 5.00% Notes due April 2024 989,205 975,000 4.75% Notes due December 2022 397,184 387,880 Other debt 5,000 5,000 $ 2,895,095 $ 2,829,857 (In thousands) December 31, 2019 Carrying Estimated Debt instruments: Term loan A facility $ 723,560 $ 724,303 4.75% Notes due August 2025 788,247 803,000 5.00% Notes due April 2024 988,609 1,020,000 4.75% Notes due December 2022 595,813 605,250 $ 3,096,229 $ 3,152,553 Fair value estimates related to the Company's debt instruments presented above are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgments and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Interest Rate Risk To manage interest rate risk, the Company enters into interest rate swap contracts to adjust the amount of total debt that is subject to variable interest rates. As of March 31, 2020, the Company had interest rate swap contracts outstanding with notional amounts aggregating $100.0 million that are designated as hedging instruments. The Company's outstanding interest rate swap contracts mature in December 2021. Foreign Currency Exchange Rate Risk We are exposed to foreign currency risk to the extent that we enter into transactions denominated in currencies other than our or our subsidiaries' respective functional currencies (non-functional currency risk), such as affiliation agreements, programming contracts, certain accounts payable and trade receivables (including intercompany amounts) that are denominated in a currency other than the applicable functional currency. The fair values of the Company's derivative financial instruments not designated as hedging instruments included in the condensed consolidated balance sheets are as follows: (In thousands) Balance Sheet March 31, 2020 December 31, 2019 Derivatives designated as hedging instruments: Liabilities: Interest rate swap contracts Accrued liabilities $ 3,963 $ 1,966 Derivatives not designated as hedging instruments: Assets: Foreign currency derivatives Prepaid expenses and other current assets $ 1,701 $ 891 Foreign currency derivatives Other assets 1,665 993 Liabilities: Foreign currency derivatives Accrued liabilities $ 886 $ 687 Foreign currency derivatives Other liabilities 2,132 1,202 The amounts of gains and losses related to the Company's derivative financial instruments designated as hedging instruments are as follows: (In thousands) Gain or (Loss) on Derivatives Location of Gain or (Loss) in Earnings Gain or (Loss) Reclassified Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 Derivatives in cash flow hedging relationships: Interest rate swap contracts $ (2,234) $ (651) Interest expense $ 237 $ 12 The amounts of gains and losses related to the Company's derivative financial instruments not designated as hedging instruments are as follows: (In thousands) Location of Gain or (Loss) Recognized in Earnings Amount of Gain or (Loss) Recognized in Earnings on Derivatives Three Months Ended March 31, 2020 2019 Foreign currency derivatives Miscellaneous, net 408 457 Total $ 408 $ 457 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended March 31, 2020, income tax expense was $33.6 million, representing an effective tax rate of 31%. The effective tax rate differs from the federal statutory rate of 21% due primarily to tax expense of $4.6 million for excess tax deficiencies related to stock compensation, tax expense from foreign operations of $4.0 million, state income tax expense of $3.0 million and $2.7 million for an increase in valuation allowances for foreign taxes and U.S. foreign tax credits, partially offset by tax benefit of $2.8 million relating to uncertain tax positions (including accrued interest) due to an audit settlement. For the three months ended March 31, 2019, income tax expense was $46.5 million, representing an effective tax rate of 24%. The effective tax rate differs from the federal statutory rate of 21% due primarily to state income tax expense of $3.2 million. At March 31, 2020, the Company had foreign tax credit carry forwards of approximately $30.3 million, expiring on various dates from 2022 through 2030. These carryforwards have been reduced by a valuation allowance of $28.9 million as it is more likely than not that these carry forwards will not be realized. For the three months ended March 31, 2020, $0.3 million relating to amortization of tax deductible second component goodwill was realized as a reduction in tax liability (as determined on a 'with-and-without' approach). |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments As of March 31, 2020, the Company's contractual obligations not reflected on the Company's condensed consolidated balance sheet decreased $74.8 million, as compared to December 31, 2019, to $859.1 million. The decrease primarily relates to payments for program rights and marketing commitments. Legal Matters On December 17, 2013, Frank Darabont ("Darabont"), Ferenc, Inc., Darkwoods Productions, Inc., and Creative Artists Agency, LLC (together, the "2013 Plaintiffs"), filed a complaint in New York Supreme Court in connection with Darabont's rendering services as a writer, director and producer of the television series entitled The Walking Dead and the agreement between the parties related thereto. The Plaintiffs asserted claims for breach of contract, breach of the covenant of good faith and fair dealing, for an accounting and for declaratory relief. On August 19, 2015, Plaintiffs filed their First Amended Complaint (the "Amended Complaint"), in which they retracted their claims for wrongful termination and failure to apply production tax credits in calculating Plaintiffs' contingent compensation. Plaintiffs also added a claim that Darabont is entitled to a larger share, on a percentage basis, of contingent compensation than he is currently being accorded. On September 26, 2016, Plaintiffs filed their note of issue and certificate of readiness for trial, which included a claim for damages of no less than $280 million. The parties each filed motions for summary judgment. Oral arguments of the summary judgment motions took place on September 15, 2017. On April 19, 2018, the Court granted the Company’s motion for leave to submit supplemental summary judgment briefing. A hearing on the supplemental summary judgment submissions was held on June 13, 2018. On December 10, 2018, the Court denied Plaintiffs' motion for partial summary judgment and granted in part Defendants' motion for summary judgment, dismissing four of Plaintiffs' causes of action. The Company believes that the remaining claims are without merit, denies the allegations and continues to defend the case vigorously. At this time, no determination can be made as to the ultimate outcome of this litigation or the potential liability, if any, on the part of the Company. On January 18, 2018, the 2013 Plaintiffs filed a second action in New York Supreme Court in connection with Darabont’s services on The Walking Dead television series and agreements between the parties related thereto. The claims in the action allegedly arise from Plaintiffs' audit of their participation statements covering the accounting period from inception of The Walking Dead through September 30, 2014. Plaintiffs seek no less than $20 million in damages on claims for breach of contract, breach of the covenant of good faith and fair dealing, and declaratory relief. The Company filed an Answer to the Complaint on April 16, 2018. On August 30, 2018, Plaintiff's filed an Amended Complaint, and on September 19, 2018, the Company answered. The parties have agreed to consolidate this action for a joint trial with the action Plaintiffs filed in the New York Supreme Court on December 17, 2013. Following the conclusion of discovery, the Company filed a motion for summary judgment seeking the dismissal of the second action, which was denied on April 13, 2020. Although the joint trial was previously scheduled to begin on June 1, 2020, due to delays resulting from the closure of the NY State courts because of the Coronavirus pandemic, the trial is currently scheduled to begin on November 2, 2020. The Company believes that the asserted claims are without merit, denies the allegations and will defend the case vigorously. At this time, no determination can be made as to the ultimate outcome of this litigation or the potential liability, if any, on the part of the Company. On August 14, 2017, Robert Kirkman, Robert Kirkman, LLC, Glen Mazzara, 44 Strong Productions, Inc., David Alpert, Circle of Confusion Productions, LLC, New Circle of Confusion Productions, Inc., Gale Anne Hurd, and Valhalla Entertainment, Inc. f/k/a Valhalla Motion Pictures, Inc. (together, the "California Plaintiffs") filed a complaint in California Superior Court in connection with California Plaintiffs’ rendering of services as writers and producers of the television series entitled The Walking Dead , as well as Fear the Walking Dead and/or Talking Dead , and the agreements between the parties related thereto (the "California Action"). The California Plaintiffs asserted that the Company has been improperly underpaying the California Plaintiffs under their contracts with the Company and they assert claims for breach of contract, breach of the covenant of good faith and fair dealing, inducing breach of contract, and liability for violation of Cal. Bus. & Prof. Code § 17200. On August 15, 2017, two of the California Plaintiffs, Gale Anne Hurd and David Alpert (and their associated loan-out companies), along with Charles Eglee and his loan-out company, United Bongo Drum, Inc., filed a complaint in New York Supreme Court alleging nearly identical claims as the California Action (the "New York Action"). Hurd, Alpert, and Eglee filed the New York Action in connection with their contract claims involving The Walking Dead because their agreements contained exclusive New York jurisdiction provisions. On October 23, 2017, the parties stipulated to discontinuing the New York Action without prejudice and consolidating all of the claims in the California Action. The California Plaintiffs seek compensatory and punitive damages and restitution. The Company filed an Answer on April 30, 2018 and believes that the asserted claims are without merit and will vigorously defend against them. On August 8, 2019, the judge in the California Action ordered a trial to resolve certain issues of contract interpretation only. The trial commenced on February 10, 2020 and concluded on March 10, 2020 after eight days of trial. Following post-trial briefing, a decision in this first phase trial is expected in or around June 2020, depending on the re-opening of the California state courts. At this time, no determination can be made as to the ultimate outcome of this litigation or the potential liability, if any, on the part of the Company. The Company is party to various lawsuits and claims in the ordinary course of business, including the matters described above. Although the outcome of these matters cannot be predicted with certainty and while the impact of these matters on the Company's results of operations in any particular subsequent reporting period could be material, management does not believe that the resolution of these matters will have a material adverse effect on the financial position of the Company or the ability of the Company to meet its financial obligations as they become due. |
Equity Plans
Equity Plans | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Equity Plans | Equity Plans In March 2020, AMC Networks granted 1,171,956 restricted stock units ("RSUs") to certain executive officers and employees under the AMC Networks Inc. 2016 Employee Stock Plan. The RSUs vest ratably over a three During the three months ended March 31, 2020, 475,114 RSUs and 325,836 PRSUs of AMC Networks Class A Common Stock previously issued to employees of the Company vested. On the vesting date, 197,824 RSUs and 142,882 PRSUs were surrendered to the Company to cover the required statutory tax withholding obligations and 277,290 RSU and 182,954 PRSU were converted to shares of AMC Networks Class A Common Stock. The units surrendered to satisfy the employees' statutory minimum tax withholding obligations for the applicable income and other employment tax had an aggregate value of $8.9 million, which has been reflected as a financing activity in the condensed consolidated statement of cash flows for the three months ended March 31, 2020. Share-based compensation expense included in selling, general and administrative expense, for the three months ended March 31, 2020 and March 31, 2019 was $15.5 million and $19.9 million, respectively. As of March 31, 2020, there was $71.2 million of total unrecognized share-based compensation cost related to outstanding unvested share-based awards. The unrecognized compensation cost is expected to be recognized over a weighted-average remaining period of approximately 2.0 years. |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interests | 3 Months Ended |
Mar. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interests | Redeemable Noncontrolling Interests The following table summarizes activity related to redeemable noncontrolling interest for the three months ended March 31, 2020. (In thousands) Three Months Ended March 31, 2020 December 31, 2019 $ 309,451 Net earnings 5,126 Distributions (2,633) Other 23 March 31, 2020 $ 311,967 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company and its related parties routinely enter into transactions with each other in the ordinary course of business. Revenues, net from related parties amounted to $1.2 million and $1.2 million for the three months ended March 31, 2020 and 2019, respectively. Amounts charged to the Company, included in selling, general and administrative expenses, pursuant to transactions with its related parties amounted to $0.1 million and $0.7 million for the three months ended March 31, 2020 and 2019, respectively. |
Cash Flows
Cash Flows | 3 Months Ended |
Mar. 31, 2020 | |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |
Cash Flows | Cash Flows The Company's non-cash investing and financing activities and other supplemental data are as follows: (In thousands) Three Months Ended March 31, 2020 2019 Non-Cash Investing and Financing Activities: Treasury stock not yet settled 10,988 $ — Capital lease additions 14,271 — Capital expenditures incurred but not yet paid 2,501 2,216 Supplemental Data: Cash interest paid 27,873 28,235 Income taxes paid, net 4,069 6,426 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company classifies its operations into two operating segments: National Networks and International and Other. These operating segments represent strategic business units that are managed separately. The Company generally allocates all corporate overhead costs within operating expenses to the Company's two operating segments based upon their proportionate estimated usage of services, including such costs as executive salaries and benefits, costs of maintaining corporate headquarters, facilities and common support functions (such as human resources, legal, finance, strategic planning and information technology) as well as sales support functions and creative and production services. The Company evaluates segment performance based on several factors, of which the primary financial measure is operating segment adjusted operating income ("AOI"), a non-GAAP measure. The Company defines AOI as operating income (loss) before depreciation and amortization, cloud computing amortization, share-based compensation expense or benefit, impairment and related charges (including gains or losses on sales or dispositions of businesses), restructuring and other related charges and including the Company’s proportionate share of adjusted operating income (loss) from majority-owned equity method investees. The Company has presented the components that reconcile adjusted operating income to operating income, an accepted GAAP measure, and other information as to the continuing operations of the Company's operating segments below. (In thousands) Three Months Ended March 31, 2020 National International Inter-segment Consolidated Revenues, net Advertising $ 213,226 $ 19,365 $ — $ 232,591 Distribution 353,713 151,129 (3,058) 501,784 Consolidated revenues, net $ 566,939 $ 170,494 $ (3,058) $ 734,375 Operating income (loss) $ 195,224 $ (19,450) $ (2,804) $ 172,970 Share-based compensation expense 12,465 3,047 — 15,512 Depreciation and amortization 8,389 18,341 — 26,730 Restructuring and other related charges 1,509 4,457 — 5,966 Majority owned equity investees AOI — 1,276 — 1,276 Adjusted operating income $ 217,587 $ 7,671 $ (2,804) $ 222,454 (In thousands) Three Months Ended March 31, 2019 National International Inter-segment 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 Depreciation and amortization 8,612 15,444 — 24,056 Restructuring and other related charges 303 3,035 (696) 2,642 Majority-owned equity investees AOI — 1,580 — 1,580 Adjusted operating income $ 276,686 $ 9,941 $ 6,413 $ 293,040 Inter-segment eliminations are primarily licensing revenues recognized between the National Networks and International and Other segments as well as revenues recognized by AMC Networks Broadcasting & Technology for transmission revenues recognized from the International and Other operating segment. (In thousands) Three Months Ended March 31, 2020 2019 Inter-segment revenues National Networks $ (2,070) $ (1,390) International and Other (988) (1,595) $ (3,058) $ (2,985) The table below summarizes revenues based on customer location: (In thousands) Three Months Ended March 31, 2020 2019 Revenues United States $ 624,993 $ 662,464 Europe 72,479 79,434 Other 36,903 42,323 $ 734,375 $ 784,221 The table below summarizes property and equipment based on asset location: (In thousands) March 31, 2020 December 31, 2019 Property and equipment, net United States $ 252,702 $ 244,175 Europe 23,762 25,925 Other 13,055 13,652 $ 289,519 $ 283,752 |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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, 2019 contained in the Company's Annual Report on Form 10-K ("2019 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. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include the useful lives and methodologies used to amortize and assess recoverability of program rights, the estimated useful lives of intangible assets and the valuation and recoverability of goodwill and intangible assets. |
Adoption of New Lease Standard and Recently Issued Accounting Pronouncements | Effective January 1, 2020, the Company adopted Financial Accounting Standard Board (the “FASB”) Accounting Standards Update (“ASU”) 2016-13, Measurement of Credit Losses on Financial Instruments , which changed the impairment model for most financial assets and certain other instruments, including trade and other receivables, held-to-maturity debt securities and loans, and requires entities to use a new forward-looking "expected loss" model that would generally result in the earlier recognition of allowances for losses. The Company adopted the standard using the modified retrospective approach and recorded a decrease to opening retained earnings of $2.0 million, after taxes, for the cumulative-effect of the adoption. Effective January 1, 2020, the Company adopted FASB ASU No. 2018-13, Fair Value Measurement (Topic 820) . The standard changed the disclosure requirements related to transfers between Level I and II assets, as well as several aspects surrounding the valuation process and unrealized gains and losses related to Level III assets. The adoption of the standard did not have any effect on the Company's consolidated financial statements. Effective January 1, 2020, the Company adopted FASB ASU No. 2018-15, Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract . The standard amended prior guidance to align the accounting for costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs associated with developing or obtaining internal-use software. Capitalized implementation costs must be expensed over the term of the hosting arrangement and presented in the same line item in the income statement as the fees associated with the hosting element (service) of the arrangement. The adoption of the standard did not have a material effect on the Company's consolidated financial statements. Effective January 1, 2020, the Company adopted FASB ASU No. 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials. The standard aligns the accounting for production costs of episodic television series with the accounting for production costs of films. In addition, the standard modifies certain aspects of the capitalization, impairment, presentation and disclosure requirements in Accounting Standards Codification (“ASC”) 926-20 and the impairment, presentation and disclosure requirements in ASC 920-350. The Company adopted the standard on a prospective basis. See Note 5 for further information. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, Simplifying the Accounting for Income Taxes . ASU 2019-12 removes certain exceptions to the general principles in Topic 740 - Income Taxes. These changes are effective for the first quarter of 2021, with early adoption permitted. The Company is currently evaluating the impact the adoption will have on its consolidated financial statements. |
Program Rights | Effective January 1, 2020, the Company adopted FASB ASU No. 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials . The new guidance impacts the Company as follows: • Allows for the classification of acquired/licensed program rights as long-term assets. Previously, the Company reported a portion of these rights in current assets. Advances for live programming rights made prior to the live event and acquired/licensed program rights with license terms of less than one-year continue to be reported in current assets. • Aligns the capitalization of production costs for episodic television programs with the capitalization of production costs for theatrical content. Previously, theatrical content production costs could be fully capitalized while episodic television production costs were generally limited to the amount of contracted revenues. • Introduces the concept of “predominant monetization strategy” to classify capitalized program rights for purposes of amortization and impairment as follows: ◦ Individual program rights - programming value is predominantly derived from third-party revenues that are directly attributable to the specific film or television title (e.g., theatrical revenues, significant in-show advertising on the Company’s programming networks or specific content licensing revenues). ◦ Group program rights - programming value is predominantly derived from third-party revenues that are not directly attributable to a specific film or television title (e.g., library of program rights for purpose of the Company’s programming networks or subscription revenue for direct-to-consumer SVOD targeted streaming services). The determination of the predominant monetization strategy is made at commencement of production and is based on the means by which we derive third-party revenues from use of the programming. The classification of program rights as individual or group only changes if there is a significant change to the title’s monetization strategy relative to its initial assessment. Rights to programming, including feature films and episodic series, acquired under license agreements are stated at the lower of unamortized cost or fair value. Such licensed rights along with the related obligations are recorded at the contract value when a license agreement is executed, unless there is uncertainty with respect to either cost, acceptability or availability. If such uncertainty exists, those rights and obligations are recorded at the earlier of when the uncertainty is resolved or the license period begins. Costs are amortized to technical and operating expense on a straight-line or accelerated basis, based on the expected exploitation strategy of the rights, over a period not to exceed the respective license periods. Owned original programming costs, including estimated participation and residual costs, qualifying for capitalization as program rights are amortized to technical and operating expense over their estimated useful lives, commencing upon the first airing, based on attributable revenue for airings to date as a percentage of total projected attributable revenue, or ultimate revenue (individual-film-forecast-computation method). Projected attributable revenue is based on previously generated revenues for similar content in established markets, primarily consisting of distribution and advertising revenues, and projected program usage. Projected program usage is based on the Company's current expectation of future exhibitions taking into account historical usage of similar content. Projected attributable revenue can change based upon programming market acceptance, levels of distribution and advertising revenue and decisions regarding planned program usage. These calculations require management to make assumptions and to apply judgment regarding revenue and planned usage. Accordingly, the Company periodically reviews revenue estimates and planned usage and revises its assumptions if necessary, which could impact the timing of amortization expense or result in a write-down to fair value. Any capitalized development costs for programs that the Company determines will not be produced are written off. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Contract with Customer, Asset and Liability | The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers. (In thousands) March 31, 2020 December 31, 2019 Balances from contracts with customers: Accounts receivable (including long-term, included in Other assets) $ 1,109,949 $ 1,121,834 Contract assets, short-term (included in Other current assets) 7,303 7,283 Contract assets, long-term (included in Other assets) 2,877 9,964 Contract liabilities (Deferred revenue) 73,334 63,921 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Weighted Average Number of Shares | The following is a reconciliation between basic and diluted weighted average shares outstanding: (In thousands) Three Months Ended March 31, 2020 2019 Basic weighted average common shares outstanding 55,477 56,588 Effect of dilution: Stock options — 33 Restricted stock units 584 1,104 Diluted weighted average common shares outstanding 56,061 57,725 |
Restructuring and Other Relat_2
Restructuring and Other Related Charges (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Summary of Accrued Restructuring Costs | The following table summarizes the restructuring and other related charges recognized by operating segment: (In thousands) Three Months Ended March 31, 2020 2019 National Networks $ 1,509 $ 303 International & Other 4,457 3,035 Inter-segment eliminations — (696) Total restructuring and other related charges $ 5,966 $ 2,642 The following table summarizes the accrued restructuring costs: (In thousands) Severance and employee-related costs Other exit costs Total December 31, 2019 $ 27,407 $ 221 $ 27,628 Charges 3,081 2,885 5,966 Cash payments (16,402) (100) (16,502) Non-cash adjustments (1,251) (2,894) (4,145) Currency translation — — — Balance, March 31, 2020 $ 12,835 $ 112 $ 12,947 |
Program Rights (Tables)
Program Rights (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Entertainment [Abstract] | |
Program Rights by Predominant Monetization Strategy | Total capitalized produced and licensed content by predominant monetization strategy is as follows: As of March 31, 2020 Predominantly Monetized Individually Predominantly Monetized as a Group Total Owned original program rights, net: Completed $ 230,459 $ — $ 230,459 In-production and in-development 198,347 — 198,347 Total owned original program rights, net $ 428,806 $ — $ 428,806 Licensed program rights, net: Licensed film and acquired series $ 9,462 $ 605,314 $ 614,776 Licensed originals 289,242 — 289,242 Advances and content versioning costs — 66,185 66,185 Total licensed program rights, net 298,704 671,499 970,203 Program rights, net $ 727,510 $ 671,499 $ 1,399,009 Current portion of program rights, net 17,059 Program rights, net (long-term) 1,381,950 $ 1,399,009 |
Amortization of Owned and Licensed Program Rights | Amortization of owned and licensed program rights is as follows: Three months ended March 31, 2020 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 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The carrying amount of goodwill, by operating segment is as follows: (In thousands) National Networks International Total December 31, 2019 $ 237,103 $ 464,877 $ 701,980 Amortization of "second component" goodwill (332) (332) Foreign currency translation (14,813) (14,813) March 31, 2020 $ 236,771 $ 450,064 $ 686,835 |
Schedule of Finite-Lived Intangible Assets | The following tables summarize information relating to the Company's identifiable intangible assets: (In thousands) March 31, 2020 Gross Accumulated Amortization Net Estimated Useful Lives Amortizable intangible assets: Affiliate and customer relationships $ 608,758 $ (237,333) $ 371,425 6 to 25 years Advertiser relationships 46,282 (22,872) 23,410 11 years Trade names 110,343 (18,589) 91,754 3 to 20 years Other amortizable intangible assets 2,798 (2,151) 647 5 to 15 years Total amortizable intangible assets 768,181 (280,945) 487,236 Indefinite-lived intangible assets: Trademarks 19,900 — 19,900 Total intangible assets $ 788,081 $ (280,945) $ 507,136 (In thousands) December 31, 2019 Gross Accumulated Amortization Net Amortizable intangible assets: Affiliate and customer relationships $ 616,197 $ (232,193) $ 384,004 Advertiser relationships 46,282 (21,820) 24,462 Trade names 113,075 (17,997) 95,078 Other amortizable intangible assets 2,798 (1,711) 1,087 Total amortizable intangible assets 778,352 (273,721) 504,631 Indefinite-lived intangible assets: Trademarks 19,900 — 19,900 Total intangible assets $ 798,252 $ (273,721) $ 524,531 |
Schedule of Indefinite-Lived Intangible Assets | The following tables summarize information relating to the Company's identifiable intangible assets: (In thousands) March 31, 2020 Gross Accumulated Amortization Net Estimated Useful Lives Amortizable intangible assets: Affiliate and customer relationships $ 608,758 $ (237,333) $ 371,425 6 to 25 years Advertiser relationships 46,282 (22,872) 23,410 11 years Trade names 110,343 (18,589) 91,754 3 to 20 years Other amortizable intangible assets 2,798 (2,151) 647 5 to 15 years Total amortizable intangible assets 768,181 (280,945) 487,236 Indefinite-lived intangible assets: Trademarks 19,900 — 19,900 Total intangible assets $ 788,081 $ (280,945) $ 507,136 (In thousands) December 31, 2019 Gross Accumulated Amortization Net Amortizable intangible assets: Affiliate and customer relationships $ 616,197 $ (232,193) $ 384,004 Advertiser relationships 46,282 (21,820) 24,462 Trade names 113,075 (17,997) 95,078 Other amortizable intangible assets 2,798 (1,711) 1,087 Total amortizable intangible assets 778,352 (273,721) 504,631 Indefinite-lived intangible assets: Trademarks 19,900 — 19,900 Total intangible assets $ 798,252 $ (273,721) $ 524,531 |
Schedule of Estimated Amortization Expense | Estimated aggregate amortization expense for intangible assets subject to amortization for each of the following five years is: (In thousands) Years Ending December 31, 2020 $ 45,895 2021 46,130 2022 45,631 2023 45,523 2024 45,455 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: (In thousands) March 31, 2020 December 31, 2019 Employee related costs $ 53,000 $ 89,753 Participations and residuals 79,512 70,682 Interest 37,096 29,767 Other accrued expenses 69,976 61,012 Total accrued liabilities $ 239,584 $ 251,214 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | The Company's long-term debt consists of the following: (In thousands) March 31, 2020 December 31, 2019 Senior Secured Credit Facility: (a) Term Loan A Facility $ 721,875 $ 731,250 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 400,000 600,000 Other debt (b) 5,000 — Total long-term debt 2,926,875 3,131,250 Unamortized discount (22,058) (24,351) Unamortized deferred financing costs (9,722) (10,670) Long-term debt, net 2,895,095 3,096,229 Current portion of long-term debt 70,625 56,250 Noncurrent portion of long-term debt $ 2,824,470 $ 3,039,979 (a) The Company's $500 million revolving credit facility remains undrawn at March 31, 2020. Total undrawn revolver commitments are available to be drawn for general corporate purposes of the Company. (b) A majority owned subsidiary of the Company has credit facilities totaling $7.0 million, which bear interest at the greater of 3.5% or the prime rate and mature on August 25, 2020. As of March 31, 2020, there was $5.0 million of outstanding borrowings on the credit facilities. |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Summary of Leases Included in the Consolidated Balance Sheets | The following table summarizes the leases included in the consolidated balance sheets as follows: (In thousands) Balance Sheet March 31, 2020 December 31, 2019 Assets Operating Operating lease right-of-use asset $ 168,503 $ 170,056 Finance Property and equipment, net 27,853 15,713 Total lease assets 196,356 $ 185,769 Liabilities Current: Operating Current portion of lease obligations 30,546 $ 30,171 Finance Current portion of lease obligations 3,311 3,788 33,857 33,959 Noncurrent: Operating Lease obligations 189,873 193,570 Finance Lease obligations 29,836 17,477 219,709 211,047 Total lease liabilities $ 253,566 $ 245,006 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents for each of these hierarchy levels, the Company's financial assets and liabilities that are measured at fair value on a recurring basis at March 31, 2020 and December 31, 2019: (In thousands) Level I Level II Level III Total At March 31, 2020: Assets Cash equivalents $ 256,983 $ — $ — $ 256,983 Marketable securities 3,273 — — 3,273 Foreign currency derivatives — 3,366 — 3,366 Liabilities Interest rate swap contracts $ — $ 3,963 $ — $ 3,963 Foreign currency derivatives — 3,018 — 3,018 At December 31, 2019: Assets Cash equivalents $ 191,214 $ — $ — $ 191,214 Marketable securities 4,448 — — 4,448 Foreign currency derivatives — 1,884 — 1,884 Liabilities Interest rate swap contracts $ — $ 1,966 $ — $ 1,966 Foreign currency derivatives — 1,888 — 1,888 |
Carrying Values and Fair Values of the Company's Financial Instruments | The carrying values and estimated fair values of the Company's financial instruments, excluding those that are carried at fair value in the condensed consolidated balance sheets, are summarized as follows: (In thousands) March 31, 2020 Carrying Estimated Debt instruments: Term loan A facility $ 714,999 $ 683,977 4.75% Notes due August 2025 788,707 778,000 5.00% Notes due April 2024 989,205 975,000 4.75% Notes due December 2022 397,184 387,880 Other debt 5,000 5,000 $ 2,895,095 $ 2,829,857 (In thousands) December 31, 2019 Carrying Estimated Debt instruments: Term loan A facility $ 723,560 $ 724,303 4.75% Notes due August 2025 788,247 803,000 5.00% Notes due April 2024 988,609 1,020,000 4.75% Notes due December 2022 595,813 605,250 $ 3,096,229 $ 3,152,553 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair Value of Derivative Instruments Included in Balance Sheets | The fair values of the Company's derivative financial instruments not designated as hedging instruments included in the condensed consolidated balance sheets are as follows: (In thousands) Balance Sheet March 31, 2020 December 31, 2019 Derivatives designated as hedging instruments: Liabilities: Interest rate swap contracts Accrued liabilities $ 3,963 $ 1,966 Derivatives not designated as hedging instruments: Assets: Foreign currency derivatives Prepaid expenses and other current assets $ 1,701 $ 891 Foreign currency derivatives Other assets 1,665 993 Liabilities: Foreign currency derivatives Accrued liabilities $ 886 $ 687 Foreign currency derivatives Other liabilities 2,132 1,202 |
Schedule of Gains and Losses Related to Derivative Instruments | The amounts of gains and losses related to the Company's derivative financial instruments designated as hedging instruments are as follows: (In thousands) Gain or (Loss) on Derivatives Location of Gain or (Loss) in Earnings Gain or (Loss) Reclassified Three Months Ended March 31, Three Months Ended March 31, 2020 2019 2020 2019 Derivatives in cash flow hedging relationships: Interest rate swap contracts $ (2,234) $ (651) Interest expense $ 237 $ 12 |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The amounts of gains and losses related to the Company's derivative financial instruments not designated as hedging instruments are as follows: (In thousands) Location of Gain or (Loss) Recognized in Earnings Amount of Gain or (Loss) Recognized in Earnings on Derivatives Three Months Ended March 31, 2020 2019 Foreign currency derivatives Miscellaneous, net 408 457 Total $ 408 $ 457 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interests (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest | The following table summarizes activity related to redeemable noncontrolling interest for the three months ended March 31, 2020. (In thousands) Three Months Ended March 31, 2020 December 31, 2019 $ 309,451 Net earnings 5,126 Distributions (2,633) Other 23 March 31, 2020 $ 311,967 |
Cash Flows (Tables)
Cash Flows (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | |
Summary of Non-Cash Activities and Other Supplemental Data | The Company's non-cash investing and financing activities and other supplemental data are as follows: (In thousands) Three Months Ended March 31, 2020 2019 Non-Cash Investing and Financing Activities: Treasury stock not yet settled 10,988 $ — Capital lease additions 14,271 — Capital expenditures incurred but not yet paid 2,501 2,216 Supplemental Data: Cash interest paid 27,873 28,235 Income taxes paid, net 4,069 6,426 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Continuing Operations by Reportable Segment | (In thousands) Three Months Ended March 31, 2020 National International Inter-segment Consolidated Revenues, net Advertising $ 213,226 $ 19,365 $ — $ 232,591 Distribution 353,713 151,129 (3,058) 501,784 Consolidated revenues, net $ 566,939 $ 170,494 $ (3,058) $ 734,375 Operating income (loss) $ 195,224 $ (19,450) $ (2,804) $ 172,970 Share-based compensation expense 12,465 3,047 — 15,512 Depreciation and amortization 8,389 18,341 — 26,730 Restructuring and other related charges 1,509 4,457 — 5,966 Majority owned equity investees AOI — 1,276 — 1,276 Adjusted operating income $ 217,587 $ 7,671 $ (2,804) $ 222,454 (In thousands) Three Months Ended March 31, 2019 National International Inter-segment 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 Depreciation and amortization 8,612 15,444 — 24,056 Restructuring and other related charges 303 3,035 (696) 2,642 Majority-owned equity investees AOI — 1,580 — 1,580 Adjusted operating income $ 276,686 $ 9,941 $ 6,413 $ 293,040 |
Summary of Inter-Segment Eliminations | Inter-segment eliminations are primarily licensing revenues recognized between the National Networks and International and Other segments as well as revenues recognized by AMC Networks Broadcasting & Technology for transmission revenues recognized from the International and Other operating segment. (In thousands) Three Months Ended March 31, 2020 2019 Inter-segment revenues National Networks $ (2,070) $ (1,390) International and Other (988) (1,595) $ (3,058) $ (2,985) |
Schedule of Revenue by Geographic Area | The table below summarizes revenues based on customer location: (In thousands) Three Months Ended March 31, 2020 2019 Revenues United States $ 624,993 $ 662,464 Europe 72,479 79,434 Other 36,903 42,323 $ 734,375 $ 784,221 |
Schedule of Disclosure on Geographic Areas, Long-Lived Assets | The table below summarizes property and equipment based on asset location: (In thousands) March 31, 2020 December 31, 2019 Property and equipment, net United States $ 252,702 $ 244,175 Europe 23,762 25,925 Other 13,055 13,652 $ 289,519 $ 283,752 |
Description of Business and B_3
Description of Business and Basis of Presentation (Narrative) (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)segmentnetwork | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Number of operating segments | segment | 2 | ||
Number of national programming networks | network | 5 | ||
Decrease to operating earnings | $ (1,676,139) | $ (1,609,428) | |
ASU No. 2016-13 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Decrease to operating earnings | $ 2,000 |
Revenue Recognition (Narrative)
Revenue Recognition (Narrative) (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognized | $ 11.7 |
Revenue Recognition (Contract w
Revenue Recognition (Contract with Customer, Asset and Liability) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable (including long-term, included in Other assets) | $ 1,109,949 | $ 1,121,834 |
Contract assets, short-term (included in Other current assets) | 7,303 | 7,283 |
Contract assets, long-term (included in Other assets) | 2,877 | 9,964 |
Contract liabilities (Deferred revenue) | $ 73,334 | $ 63,921 |
Net Income per Share (Reconcili
Net Income per Share (Reconciliation Between Basic and Diluted Weighted Average Shares Outstanding) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Basic weighted average shares outstanding (in shares) | 55,477 | 56,588 |
Effect of dilution: | ||
Diluted weighted average shares outstanding (in shares) | 56,061 | 57,725 |
Stock options | ||
Effect of dilution: | ||
Effect of dilution (in shares) | 0 | 33 |
Restricted stock units | ||
Effect of dilution: | ||
Effect of dilution (in shares) | 584 | 1,104 |
Net Income per Share (Narrative
Net Income per Share (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from EPS | 0.4 | |
Amount authorized under Stock Repurchase Program | $ 1,500,000,000 | |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from EPS | 1.3 | 1.5 |
Class A Common Stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of shares repurchased | 3.3 | |
Average purchase price (in dollars per share) | $ 26.09 | |
Available for repurchase under the Stock Repurchase Program | $ 402,900,000 |
Restructuring and Other Relat_3
Restructuring and Other Related Charges (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring and other related charges | $ 5,966 | $ 2,642 |
Accrued restructuring costs, accrued liabilities | $ 12,900 |
Restructuring and Other Relat_4
Restructuring and Other Related Charges (Summary of Restructuring and Other Related Charges by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring and other related charges | $ 5,966 | $ 2,642 |
Operating segments | National Networks | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring and other related charges | 1,509 | 303 |
Operating segments | International & Other | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring and other related charges | 4,457 | 3,035 |
Inter-segment eliminations | ||
Restructuring Cost and Reserve [Line Items] | ||
Total restructuring and other related charges | $ 0 | $ (696) |
Restructuring and Other Relat_5
Restructuring and Other Related Charges (Summary of Accrued Restructuring Costs) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Restructuring Reserve [Roll Forward] | |
December 31, 2019 | $ 27,628 |
Charges | 5,966 |
Cash payments | (16,502) |
Non-cash adjustments | (4,145) |
Currency translation | 0 |
Balance, March 31, 2020 | 12,947 |
Severance and employee-related costs | |
Restructuring Reserve [Roll Forward] | |
December 31, 2019 | 27,407 |
Charges | 3,081 |
Cash payments | (16,402) |
Non-cash adjustments | (1,251) |
Currency translation | 0 |
Balance, March 31, 2020 | 12,835 |
Other exit costs | |
Restructuring Reserve [Roll Forward] | |
December 31, 2019 | 221 |
Charges | 2,885 |
Cash payments | (100) |
Non-cash adjustments | (2,894) |
Currency translation | 0 |
Balance, March 31, 2020 | $ 112 |
Investments (Narrative) (Detail
Investments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Investments [Abstract] | |||
Equity method investments | $ 66,700 | $ 69,100 | |
Investments in marketable equity securities | 3,300 | 4,400 | |
Investments in non-marketable equity securities | 41,800 | $ 61,800 | |
Write-down of non-marketable equity securities and note receivable | $ 20,000 | $ 17,741 |
Program Rights (Program Rights
Program Rights (Program Rights by Predominant Monetization Strategy) (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Predominantly Monetized Individually | |
Completed | $ 230,459 |
In-production and in-development | 198,347 |
Total owned original program rights, net | 428,806 |
Licensed film and acquired series | 9,462 |
Licensed originals | 289,242 |
Advances and content versioning costs | 0 |
Total licensed program rights, net | 298,704 |
Program rights, net | 727,510 |
Predominantly Monetized as a Group | |
Completed | 0 |
In-production and in-development | 0 |
Total owned original program rights, net | 0 |
Licensed film and acquired series | 605,314 |
Licensed originals | 0 |
Advances and content versioning costs | 66,185 |
Total licensed program rights, net | 671,499 |
Program rights, net | 671,499 |
Total | |
Completed | 230,459 |
Completed | 198,347 |
Total owned original program rights, net | 428,806 |
Licensed film and acquired series | 614,776 |
Licensed originals | 289,242 |
Advances and content versioning costs | 66,185 |
Total licensed program rights, net | 970,203 |
Program rights, net | 1,399,009 |
Current portion of program rights, net | 17,059 |
Program rights, net (long-term) | $ 1,381,950 |
Program Rights (Amortization of
Program Rights (Amortization of Owned and Licensed Program Rights) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Owned original program rights | |
Predominantly Monetized Individually | $ 105,561 |
Predominantly Monetized as a Group | 0 |
Total | 105,561 |
Licensed program rights | |
Predominantly Monetized Individually | 21,352 |
Predominantly Monetized as a Group | 97,069 |
Total | 118,421 |
Predominantly Monetized Individually | 126,913 |
Predominantly Monetized as a Group | 97,069 |
Total | $ 223,982 |
Program Rights (Narrative) (Det
Program Rights (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Entertainment [Abstract] | ||
Program rights write-offs | $ 0 | $ 3,300,000 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Reduction in carrying amount of goodwill | $ 332 | |
Aggregate amortization expense for amortizable intangible assets | 12,100 | $ 10,300 |
National Networks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Reduction in carrying amount of goodwill | $ 332 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets (Schedule of Goodwill) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 701,980 |
Amortization of "second component" goodwill | (332) |
Foreign currency translation | (14,813) |
Ending balance | 686,835 |
National Networks | |
Goodwill [Roll Forward] | |
Beginning balance | 237,103 |
Amortization of "second component" goodwill | (332) |
Foreign currency translation | |
Ending balance | 236,771 |
International & Other | |
Goodwill [Roll Forward] | |
Beginning balance | 464,877 |
Amortization of "second component" goodwill | |
Foreign currency translation | (14,813) |
Ending balance | $ 450,064 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets (Schedule of Finite and Indefinite-Lived Intangible Assets) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 768,181 | $ 778,352 |
Accumulated Amortization | (280,945) | (273,721) |
Net | 487,236 | 504,631 |
Trademarks | 19,900 | 19,900 |
Total intangible assets, gross | 788,081 | 798,252 |
Total intangible assets, net | 507,136 | 524,531 |
Affiliate and customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 608,758 | 616,197 |
Accumulated Amortization | (237,333) | (232,193) |
Net | 371,425 | 384,004 |
Advertiser relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 46,282 | 46,282 |
Accumulated Amortization | (22,872) | (21,820) |
Net | $ 23,410 | 24,462 |
Estimated useful lives (in years) | 11 years | |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 110,343 | 113,075 |
Accumulated Amortization | (18,589) | (17,997) |
Net | 91,754 | 95,078 |
Other amortizable intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 2,798 | 2,798 |
Accumulated Amortization | (2,151) | (1,711) |
Net | $ 647 | $ 1,087 |
Minimum | Affiliate and customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives (in years) | 6 years | |
Minimum | Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives (in years) | 3 years | |
Minimum | Other amortizable intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives (in years) | 5 years | |
Maximum | Affiliate and customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives (in years) | 25 years | |
Maximum | Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives (in years) | 20 years | |
Maximum | Other amortizable intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Estimated useful lives (in years) | 15 years |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets (Schedule of Estimated Amortization Expense) (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2020 | $ 45,895 |
2021 | 46,130 |
2022 | 45,631 |
2023 | 45,523 |
2024 | $ 45,455 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities, Current [Abstract] | ||
Employee related costs | $ 53,000 | $ 89,753 |
Participations and residuals | 79,512 | 70,682 |
Interest | 37,096 | 29,767 |
Other accrued expenses | 69,976 | 61,012 |
Total accrued liabilities | $ 239,584 | $ 251,214 |
Long-term Debt (Summary of Long
Long-term Debt (Summary of Long-Term Debt) (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Long-term debt | $ 2,926,875,000 | $ 3,131,250,000 | |
Unamortized discount | (22,058,000) | (24,351,000) | |
Unamortized deferred financing costs | (9,722,000) | (10,670,000) | |
Long-term debt, net | 2,895,095,000 | 3,096,229,000 | |
Current portion of long-term debt | 70,625,000 | 56,250,000 | |
Long-term debt | $ 2,824,470,000 | 3,039,979,000 | |
4.75% Notes due August 2025 | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.75% | ||
5.00% Notes due April 2024 | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.00% | ||
4.75% Notes due December 2022 | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.75% | ||
Senior Notes | 4.75% Notes due August 2025 | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.75% | ||
Long-term debt | $ 800,000,000 | 800,000,000 | |
Senior Notes | 5.00% Notes due April 2024 | |||
Debt Instrument [Line Items] | |||
Interest rate | 5.00% | ||
Long-term debt | $ 1,000,000,000 | 1,000,000,000 | |
Senior Notes | 4.75% Notes due December 2022 | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.75% | ||
Long-term debt | $ 400,000,000 | 600,000,000 | |
Long-term debt, net | 600,000,000 | ||
Senior Notes | Other debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | 5,000,000 | 0 | |
Credit facilities | Subsidiary Credit Facilities | |||
Debt Instrument [Line Items] | |||
Long-term debt | 5,000,000 | ||
Total credit facilities | $ 7,000,000 | ||
Credit facilities | Subsidiary Credit Facilities | Minimum | |||
Debt Instrument [Line Items] | |||
Interest rate | 3.50% | ||
Secured debt | Term Loan A Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | [1] | $ 721,875,000 | $ 731,250,000 |
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Remaining undrawn capacity | $ 500,000,000 | ||
[1] | The Company's $500 million revolving credit facility remains undrawn at March 31, 2020. Total undrawn revolver commitments are available to be drawn for general corporate purposes of the Company. (b) A majority owned subsidiary of the Company has credit facilities totaling $7.0 million, which bear interest at the greater of 3.5% or the prime rate and mature on August 25, 2020. As of March 31, 2020, there was $5.0 million of outstanding borrowings on the credit facilities. |
Long-term Debt (Narrative) (Det
Long-term Debt (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Principal amount | $ 2,895,095 | $ 3,096,229 | |
Loss on extinguishment of debt | $ (2,908) | $ 0 | |
4.75% Notes due December 2022 | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.75% | ||
Senior Notes | 4.75% Notes due December 2022 | |||
Debt Instrument [Line Items] | |||
Interest rate | 4.75% | ||
Principal amount redeemed | $ 200,000 | ||
Principal amount | 600,000 | ||
Loss on extinguishment of debt | $ (2,900) |
Leases (Summary of Lease Assets
Leases (Summary of Lease Assets and Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease asset | $ 168,503 | $ 170,056 |
Finance lease asset | 27,853 | 15,713 |
Total lease assets | 196,356 | 185,769 |
Operating lease liability, current | 30,546 | 30,171 |
Finance lease liability, current | 3,311 | 3,788 |
Total lease liabilities, current | 33,857 | 33,959 |
Operating lease liability, noncurrent | 189,873 | 193,570 |
Finance lease liability, noncurrent | 29,836 | 17,477 |
Total lease liabilities, noncurrent | 219,709 | 211,047 |
Total lease liabilities | $ 253,566 | $ 245,006 |
Fair Value Measurement (Narrati
Fair Value Measurement (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Gain on derivative instrument | $ 408 | $ 457 |
Fair Value Measurement (Financi
Fair Value Measurement (Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets, Fair Value Disclosure [Abstract] | ||
Cash equivalents | $ 256,983 | $ 191,214 |
Marketable securities | 3,273 | 4,448 |
Derivatives | 3,366 | 1,884 |
Interest Rate Swap | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivatives | 3,963 | 1,966 |
Foreign Exchange Forward | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivatives | 3,018 | 1,888 |
Level I | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash equivalents | 256,983 | 191,214 |
Marketable securities | 3,273 | 4,448 |
Derivatives | 0 | 0 |
Level I | Interest Rate Swap | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivatives | 0 | 0 |
Level I | Foreign Exchange Forward | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivatives | 0 | 0 |
Level II | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
Derivatives | 3,366 | 1,884 |
Level II | Interest Rate Swap | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivatives | 3,963 | 1,966 |
Level II | Foreign Exchange Forward | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivatives | 3,018 | 1,888 |
Level III | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
Derivatives | 0 | 0 |
Level III | Interest Rate Swap | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivatives | 0 | 0 |
Level III | Foreign Exchange Forward | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
Derivatives | $ 0 | $ 0 |
Fair Value Measurement (Carryin
Fair Value Measurement (Carrying Values and Fair Values of the Company's Financial Instruments) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
4.75% Notes due August 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate | 4.75% | |
5.00% Notes due April 2024 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate | 5.00% | |
4.75% Notes due December 2022 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate | 4.75% | |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | $ 2,895,095 | $ 3,096,229 |
Carrying Amount | Term Loan A Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 714,999 | 723,560 |
Carrying Amount | 4.75% Notes due August 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 788,707 | 788,247 |
Carrying Amount | 5.00% Notes due April 2024 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 989,205 | 988,609 |
Carrying Amount | 4.75% Notes due December 2022 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 397,184 | 595,813 |
Carrying Amount | Other debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 5,000 | |
Estimated Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 2,829,857 | 3,152,553 |
Estimated Fair Value | Term Loan A Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 683,977 | 724,303 |
Estimated Fair Value | 4.75% Notes due August 2025 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 778,000 | 803,000 |
Estimated Fair Value | 5.00% Notes due April 2024 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 975,000 | 1,020,000 |
Estimated Fair Value | 4.75% Notes due December 2022 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | 387,880 | $ 605,250 |
Estimated Fair Value | Other debt | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt | $ 5,000 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Narrative) (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Interest Rate Swap | |
Derivative [Line Items] | |
Notional amounts | $ 100,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments (Fair Value of Derivative Instruments Included in Balance Sheets) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives designated as hedging instruments | Interest Rate Swap | Accrued liabilities | ||
Derivatives designated as hedging instruments: | ||
Interest rate swap contracts liabilities | $ 3,963 | $ 1,966 |
Derivatives not designated as hedging instruments | Foreign Exchange Forward | Prepaid expenses and other current assets | ||
Derivatives not designated as hedging instruments: | ||
Foreign currency derivative assets | 1,701 | 891 |
Derivatives not designated as hedging instruments | Foreign Exchange Forward | Other assets | ||
Derivatives not designated as hedging instruments: | ||
Foreign currency derivative assets | 1,665 | 993 |
Derivatives not designated as hedging instruments | Foreign Exchange Forward | Accrued liabilities | ||
Derivatives not designated as hedging instruments: | ||
Foreign currency derivative liabilities | 886 | 687 |
Derivatives not designated as hedging instruments | Foreign Exchange Forward | Other liabilities | ||
Derivatives not designated as hedging instruments: | ||
Foreign currency derivative liabilities | $ 2,132 | $ 1,202 |
Derivative Financial Instrume_5
Derivative Financial Instruments (Schedule of Gains and Losses Related to Derivative Instruments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative [Line Items] | ||
Gain or (Loss) on Derivatives Recognized in OCI | $ (1,997) | $ (639) |
Cash Flow Hedging | Interest expense | ||
Derivative [Line Items] | ||
Gain or (Loss) Reclassified from Accumulated OCI into Earnings | 237 | 12 |
Cash Flow Hedging | Interest Rate Swap | ||
Derivative [Line Items] | ||
Gain or (Loss) on Derivatives Recognized in OCI | $ (2,234) | $ (651) |
Derivative Financial Instrume_6
Derivative Financial Instruments (Schedule of Other Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain on derivative instrument | $ 408 | $ 457 |
Foreign Exchange Forward | Miscellaneous, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain on derivative instrument | $ 408 | $ 457 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 33,588 | $ 46,476 |
Effective tax rate | 31.00% | 24.00% |
Federal statutory rate | 21.00% | 21.00% |
Tax expense for excess tax deficiencies related to stock compensation | $ 4,600 | |
Tax expense from foreign operations | 4,000 | |
State and local income tax expense | 3,000 | $ 3,200 |
Tax expense (benefit) from change in valuation allowance | 2,700 | |
Tax benefit relating to uncertain tax positions | 2,800 | |
Foreign tax credit carry forwards | 30,300 | |
Valuation allowance | 28,900 | |
Second component of tax deductible goodwill, net of tax | $ 300 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Loss Contingencies [Line Items] | ||
Increase (decrease) in contractual obligations not reflected in the balance sheet | $ (74,800,000) | |
Contractual obligation | $ 859,100,000 | |
Threatened Litigation | ||
Loss Contingencies [Line Items] | ||
Claim for damages | 20,000,000 | |
Minimum | ||
Loss Contingencies [Line Items] | ||
Claim for damages | $ 280,000,000 |
Equity Plans (Narrative) (Detai
Equity Plans (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Deemed repurchases of restricted stock units | $ 8,858 | $ 22,959 | |
Share-based compensation expense | $ 15,512 | $ 19,899 | |
Total unrecognized share-based compensation costs, remaining period of recognition | 2 years | ||
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares surrendered to the Company for tax withholding | 197,824 | ||
Total unrecognized share-based compensation costs | $ 71,200 | $ 71,200 | |
RSUs | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares vested in period | 475,114 | ||
New shares of Company's Class A common stock issued | 277,290 | ||
PRSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares surrendered to the Company for tax withholding | 142,882 | ||
PRSUs | Class A Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares vested in period | 325,836 | ||
New shares of Company's Class A common stock issued | 182,954 | ||
2016 Employee Stock Plan | RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted in period (in units) | 1,171,956 | ||
Vesting period (in years) | 3 years | ||
Share-based Compensation Award, Tranche One | 2016 Employee Stock Plan | RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted in period (in units) | 380,142 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interests Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Beginning balance | $ 309,451 |
Net earnings | 5,126 |
Distributions | (2,633) |
Other | 23 |
Ending balance | $ 311,967 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Related Party Transactions [Abstract] | ||
Net revenues from related parties | $ 1.2 | $ 1.2 |
Selling, general and administrative charges from related parties | $ 0.1 | $ 0.7 |
Cash Flows (Summary of Non-Cash
Cash Flows (Summary of Non-Cash Activities and Other Supplemental Data) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract] | ||
Treasury stock not yet settled | $ 10,988 | $ 0 |
Capital lease additions | 14,271 | 0 |
Capital expenditures incurred but not yet paid | 2,501 | 2,216 |
Supplemental Data: | ||
Cash interest paid | 27,873 | 28,235 |
Income taxes paid, net | $ 4,069 | $ 6,426 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information (Summary of
Segment Information (Summary of Continuing Operations by Reportable Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues, net | $ 734,375 | $ 784,221 |
Operating income | 172,970 | 244,863 |
Share-based compensation expense | 15,512 | 19,899 |
Depreciation and amortization | 26,730 | 24,056 |
Restructuring and other related charges | 5,966 | 2,642 |
Majority-owned equity investees AOI | 1,276 | 1,580 |
Adjusted operating income | 222,454 | 293,040 |
Operating segments | National Networks | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 566,939 | 616,118 |
Operating income | 195,224 | 251,502 |
Share-based compensation expense | 12,465 | 16,269 |
Depreciation and amortization | 8,389 | 8,612 |
Restructuring and other related charges | 1,509 | 303 |
Majority-owned equity investees AOI | 0 | 0 |
Adjusted operating income | 217,587 | 276,686 |
Operating segments | International & Other | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 170,494 | 171,088 |
Operating income | (19,450) | (13,748) |
Share-based compensation expense | 3,047 | 3,630 |
Depreciation and amortization | 18,341 | 15,444 |
Restructuring and other related charges | 4,457 | 3,035 |
Majority-owned equity investees AOI | 1,276 | 1,580 |
Adjusted operating income | 7,671 | 9,941 |
Inter-segment eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | (3,058) | (2,985) |
Operating income | (2,804) | 7,109 |
Share-based compensation expense | 0 | 0 |
Depreciation and amortization | 0 | 0 |
Restructuring and other related charges | 0 | (696) |
Majority-owned equity investees AOI | 0 | 0 |
Adjusted operating income | (2,804) | 6,413 |
Inter-segment eliminations | National Networks | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | (2,070) | (1,390) |
Inter-segment eliminations | International & Other | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | (988) | (1,595) |
Advertising | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 232,591 | 260,295 |
Advertising | Operating segments | National Networks | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 213,226 | 239,089 |
Advertising | Operating segments | International & Other | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 19,365 | 21,206 |
Advertising | Inter-segment eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 0 | 0 |
Distribution | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 501,784 | 523,926 |
Distribution | Operating segments | National Networks | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 353,713 | 377,029 |
Distribution | Operating segments | International & Other | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 151,129 | 149,882 |
Distribution | Inter-segment eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | $ (3,058) | $ (2,985) |
Segment Information (Summary _2
Segment Information (Summary of Inter-Segment Eliminations) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues, net | $ 734,375 | $ 784,221 |
Inter-segment eliminations | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | (3,058) | (2,985) |
Inter-segment eliminations | National Networks | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | (2,070) | (1,390) |
Inter-segment eliminations | International & Other | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | $ (988) | $ (1,595) |
Segment Information (Revenues b
Segment Information (Revenues by Geographic Region) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues, net | $ 734,375 | $ 784,221 |
United States | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 624,993 | 662,464 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | 72,479 | 79,434 |
Other Geographic Locations | ||
Segment Reporting Information [Line Items] | ||
Revenues, net | $ 36,903 | $ 42,323 |
Segment Information (Long-lived
Segment Information (Long-lived Assets by Geographic Location) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 289,519 | $ 283,752 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 252,702 | 244,175 |
Europe | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | 23,762 | 25,925 |
Other Geographic Locations | ||
Segment Reporting Information [Line Items] | ||
Property and equipment, net | $ 13,055 | $ 13,652 |
Uncategorized Items - amcx-2020
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,956,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (1,956,000) |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (1,956,000) |