Condensed Consolidating Financial Statements

3 Months Ended

Mar. 31, 2019

Condensed Financial Information Disclosure [Abstract]

Condensed Consolidating Financial Statements

Condensed Consolidating Financial Statements

Debt of AMC Networks includes $600 million of 4.75% senior notes due December 2022, $1 billion of 5.00% senior notes due April 2024 and $800 million of 4.75% senior notes due August 2025. All outstanding senior notes issued by AMC Networks (for purposes of this Note 20, "Parent Company") are guaranteed on a senior unsecured basis by certain of its existing and future domestic restricted subsidiaries (the "Guarantor Subsidiaries"). All Guarantor Subsidiaries are owned 100% by AMC Networks. The outstanding notes are fully and unconditionally guaranteed by the Guarantor Subsidiaries on a joint and several basis.

Set forth below are condensed consolidating financial statements presenting the financial position, results of operations, comprehensive income, and cash flows of (i) the Parent Company, (ii) the Guarantor Subsidiaries on a combined basis (as such

guarantees are joint and several), (iii) the direct and indirect non-guarantor subsidiaries of the Parent Company (the "Non-Guarantor Subsidiaries") on a combined basis and (iv) reclassifications and eliminations necessary to arrive at the information for the Company on a consolidated basis.

Basis of Presentation

 In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) the Parent Company's interests in the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries, and (ii) the Guarantor Subsidiaries' interests in the Non-Guarantor Subsidiaries, even though all such subsidiaries meet the requirements to be consolidated under GAAP. All intercompany balances and transactions between the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries have been eliminated, as shown in the column "Eliminations."

 The accounting basis in all subsidiaries, including goodwill and identified intangible assets, have been allocated to the applicable subsidiaries.

Condensed Consolidating Balance Sheet
March 31, 2019
(In thousands)	Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	827	$	477,816	$	205,039	$	—		$	683,682
Accounts receivable, trade (less allowance for doubtful accounts)	19		589,936		239,749		—			829,704
Current portion of program rights, net	—		293,477		140,586		(201		)	433,862
Prepaid expenses, other current assets and intercompany receivable	58		194,921		32,133		(69,140		)	157,972
Total current assets	904		1,556,150		617,507		(69,341		)	2,105,220
Property and equipment, net of accumulated depreciation	—		182,433		69,408		—			251,841
Investment in affiliates	3,844,267		1,637,988		—		(5,482,255		)	—
Program rights, net	—		918,943		236,759		(1,437		)	1,154,265
Long-term intercompany notes receivable	—		—		218		(218		)	—
Deferred carriage fees, net	—		14,055		816		—			14,871
Intangible assets, net	—		158,947		410,580		—			569,527
Goodwill	—		64,950		732,843		—			797,793
Deferred tax asset, net	—		—		19,927		—			19,927
Operating lease right-of-use asset	101,521		20,085		52,957		—			174,563
Other assets	—		171,200		262,707		—			433,907
Total assets	$	3,946,692	$	4,724,751	$	2,403,722	$	(5,553,251	)	$	5,521,914
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	—	$	38,969	$	68,423	$	—		$	107,392
Accrued liabilities and intercompany payable	79,873		116,858		124,069		(70,850		)	249,950
Current portion of program rights obligations	—		243,013		78,901		—			321,914
Deferred revenue	—		28,632		22,629		—			51,261
Current portion of long-term debt	28,125		—		2,000		—			30,125
Current portion of lease obligations	13,505		6,568		11,268		—			31,341
Total current liabilities	121,503		434,040		307,290		(70,850		)	791,983
Program rights obligations	—		323,343		18,830		—			342,173
Long-term debt, net	3,080,800		—		—		—			3,080,800
Lease obligations	125,814		21,833		77,037		—			224,684
Deferred tax liability, net	131,723		—		5,844		—			137,567
Other liabilities and intercompany notes payable	31,463		101,268		27,783		(146		)	160,368
Total liabilities	3,491,303		880,484		436,784		(70,996		)	4,737,575
Commitments and contingencies
Redeemable noncontrolling interests	—		—		299,802		—			299,802
Stockholders' equity:
AMC Networks stockholders' equity	455,389		3,844,267		1,637,989		(5,482,255		)	455,390
Non-redeemable noncontrolling interests	—		—		29,147		—			29,147
Total stockholders' equity	455,389		3,844,267		1,667,136		(5,482,255		)	484,537
Total liabilities and stockholders' equity	$	3,946,692	$	4,724,751	$	2,403,722	$	(5,553,251	)	$	5,521,914

Condensed Consolidating Balance Sheet
December 31, 2018
(In thousands)	Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Current Assets:
Cash and cash equivalents	$	121	$	368,151	$	186,614	$	—		$	554,886
Accounts receivable, trade (including amounts due from related parties, net, less allowance for doubtful accounts)	16		600,121		235,840		—			835,977
Current portion of program rights, net	—		292,002		148,955		(218		)	440,739
Prepaid expenses, other current assets and intercompany receivable	6,543		158,936		23,549		(57,219		)	131,809
Total current assets	6,680		1,419,210		594,958		(57,437		)	1,963,411
Property and equipment, net of accumulated depreciation	—		175,040		71,222		—			246,262
Investment in affiliates	3,656,003		1,655,083		—		(5,311,086		)	—
Program rights, net	—		969,802		245,862		(1,613		)	1,214,051
Long-term intercompany notes receivable	—		—		190		(190		)	—
Deferred carriage fees, net	—		15,993		838		—			16,831
Intangible assets, net	—		161,417		417,490		—			578,907
Goodwill	—		65,282		732,755		—			798,037
Deferred tax asset, net	—		—		19,272		—			19,272
Other assets	—		149,724		292,068					441,792
Total assets	$	3,662,683	$	4,611,551	$	2,374,655	$	(5,370,326	)	$	5,278,563
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	—	$	34,630	$	72,436	$	—		$	107,066
Accrued liabilities and intercompany payable	35,189		173,836		114,943		(59,050		)	264,918
Current portion of program rights obligations	—		259,414		84,175		—			343,589
Deferred revenue	—		34,608		20,816		—			55,424
Current portion of long-term debt	18,750		—		2,584		—			21,334
Current portion of capital lease obligations	—		2,941		2,149		—			5,090
Total current liabilities	53,939		505,429		297,103		(59,050		)	797,421
Program rights obligations	—		349,814		23,435		—			373,249
Long-term debt, net	3,088,221		—		—		—			3,088,221
Capital lease obligations	—		1,420		20,007		—			21,427
Deferred tax liability, net	140,474		—		4,969		—			145,443
Other liabilities and intercompany notes payable	63,369		98,885		45,972		(190		)	208,036
Total liabilities	3,346,003		955,548		391,486		(59,240		)	4,633,797
Commitments and contingencies
Redeemable noncontrolling interests	—		—		299,558		—			299,558
Stockholders' equity:
AMC Networks stockholders' equity	316,680		3,656,003		1,655,083		(5,311,086		)	316,680
Non-redeemable noncontrolling interests	—		—		28,528		—			28,528
Total stockholders' equity	316,680		3,656,003		1,683,611		(5,311,086		)	345,208
Total liabilities and stockholders' equity	$	3,662,683	$	4,611,551	$	2,374,655	$	(5,370,326	)	$	5,278,563

Condensed Consolidating Statement of Income
Three Months Ended March 31, 2019
(In thousands)	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	—		$	574,230		$	212,760		$	(2,769	)	$	784,221
Operating expenses:
Technical and operating (excluding depreciation and amortization)	—			220,488			120,718			(1,058		)	340,148
Selling, general and administrative	—			111,581			62,831			(1,900		)	172,512
Depreciation and amortization	—			12,537			11,519			—			24,056
Impairment charges	—			—			—			—			—
Restructuring expense	—			(283		)	2,925			—			2,642
Total operating expenses	—			344,323			197,993			(2,958		)	539,358
Operating income	—			229,907			14,767			189			244,863
Other income (expense):
Interest expense, net	(38,929		)	3,183			301			—			(35,445		)
Share of affiliates’ income (loss)	224,244			(7,311		)	—			(216,933		)	—
Miscellaneous, net	(99		)	709			(13,206		)	(189		)	(12,785		)
Total other income (expense)	185,216			(3,419		)	(12,905		)	(217,122		)	(48,230		)
Income from operations before income taxes	185,216			226,488			1,862			(216,933		)	196,633
Income tax expense	(41,819		)	(2,244		)	(2,413		)	—			(46,476		)
Net income including noncontrolling interests	143,397			224,244			(551		)	(216,933		)	150,157
Net income attributable to noncontrolling interests	—			—			(6,760		)	—			(6,760		)
Net income attributable to AMC Networks’ stockholders	$	143,397		$	224,244		$	(7,311	)	$	(216,933	)	$	143,397

Condensed Consolidating Statement of Income
Three Months Ended March 31, 2018
(In thousands)	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Revenues, net	$	—		$	574,917		$	170,386		$	(4,480	)	$	740,823
Operating expenses:
Technical and operating (excluding depreciation and amortization)	—			222,621			98,522			(778		)	320,365
Selling, general and administrative	—			122,059			48,089			(3,699		)	166,449
Depreciation and amortization	—			10,804			9,550			—			20,354
Impairment and related charges	—			—			—			—			—
Restructuring (credit) expense	—			—			—			—			—
Total operating expenses	—			355,484			156,161			(4,477		)	507,168
Operating income	—			219,433			14,225			(3		)	233,655
Other income (expense):
Interest expense, net	(36,907		)	11,897			(8,176		)	—			(33,186		)
Share of affiliates’ income	247,482			17,498			—			(264,980		)	—
Loss on extinguishment of debt	—			—			—			—			—
Miscellaneous, net	(206		)	734			16,415			3			16,946
Total other income (expense)	210,369			30,129			8,239			(264,977		)	(16,240		)
Income from operations before income taxes	210,369			249,562			22,464			(264,980		)	217,415
Income tax (expense) benefit	(53,499		)	(2,080		)	(1,300		)	—			(56,879		)
Net income including noncontrolling interests	156,870			247,482			21,164			(264,980		)	160,536
Net income attributable to noncontrolling interests	—			—			(3,666		)	—			(3,666		)
Net income attributable to AMC Networks’ stockholders	$	156,870		$	247,482		$	17,498		$	(264,980	)	$	156,870

Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2019
(In thousands)	Parent Company			Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income including noncontrolling interests	$	143,397		$	224,244	$	(551	)	$	(216,933	)	$	150,157
Other comprehensive income (loss):
Foreign currency translation adjustment	(5,762		)	—		(5,762		)	5,762			(5,762		)
Unrealized loss on interest rate swaps	(639		)	—		—			—			(639		)
Other comprehensive income, before income taxes	(6,401		)	—		(5,762		)	5,762			(6,401		)
Income tax expense	149			—		—			—			149
Other comprehensive income, net of income taxes	(6,252		)	—		(5,762		)	5,762			(6,252		)
Comprehensive income	137,145			224,244		(6,313		)	(211,171		)	143,905
Comprehensive income attributable to noncontrolling interests	—			—		(6,722		)	—			(6,722		)
Comprehensive income attributable to AMC Networks' stockholders	$	137,145		$	224,244	$	(13,035	)	$	(211,171	)	$	137,183

Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2018
(In thousands)	Parent Company		Guarantor Subsidiaries		Non- Guarantor Subsidiaries			Eliminations			Consolidated
Net income including noncontrolling interest	$	156,870	$	247,482	$	21,164		$	(264,980	)	$	160,536
Other comprehensive income (loss):
Foreign currency translation adjustment	18,805		—		18,805			(18,805		)	18,805
Other comprehensive income, net of income taxes	18,805		—		18,805			(18,805		)	18,805
Comprehensive income	175,675		247,482		39,969			(283,785		)	179,341
Comprehensive income attributable to noncontrolling interests	—		—		(4,563		)	—			(4,563		)
Comprehensive income attributable to AMC Networks’ stockholders	$	175,675	$	247,482	$	35,406		$	(283,785	)	$	174,778

Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2019
(In thousands)	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	197,776		$	164,138		$	27,703		$	(217,930	)	$	171,687
Cash flows from investing activities:
Capital expenditures	(26		)	(19,868		)	(2,159		)	—			(22,053		)
Return of capital from investees	—			—			3,908			—			3,908
Investment in and loans to investees	—			—			—			—			—
Payments for acquisition of a business, net of cash acquired	—			—			—			—			—
Increase (decrease) to investment in affiliates	(177,117		)	69,120			(75,454		)	183,451			—
Net cash (used in) provided by investing activities	(177,143		)	49,252			(73,705		)	183,451			(18,145		)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	—			—			2,521			—			2,521
Repayment of long-term debt	—			—			(3,238		)	—			(3,238		)
Deemed repurchases of restricted stock units	(22,959		)	—			—			—			(22,959		)
Purchase of treasury stock	(991		)	—			—			—			(991		)
Proceeds from stock option exercises	4,630			—			—			—			4,630
Principal payments on finance lease obligations	—			(786		)	(523		)	—			(1,309		)
Distributions to noncontrolling interests	—			—			(5,629		)	—			(5,629		)
Net cash used in financing activities	(19,320		)	(786		)	(6,869		)	—			(26,975		)
Net increase (decrease) in cash and cash equivalents from operations	1,313			212,604			(52,871		)	(34,479		)	126,567
Effect of exchange rate changes on cash and cash equivalents	(607		)	(102,939		)	71,296			34,479			2,229
Cash and cash equivalents at beginning of period	121			368,151			186,614			—			554,886
Cash and cash equivalents at end of period	$	827		$	477,816		$	205,039		$	—		$	683,682

Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, 2018
(In thousands)	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net cash provided by operating activities	$	234,947		$	154,495		$	(7,472	)	$	(264,998	)	$	116,972
Cash flows from investing activities:
Capital expenditures	—			(11,040		)	(902		)	—			(11,942		)
Return of capital from investees	—			—			172			—			172
Investment in investees	—			—			(42,318		)	—			(42,318		)
Increase (decrease) to investment in affiliates	(141,109		)	(129,821		)	67,191			203,739			—
Net cash (used in) provided by investing activities	(141,109		)	(140,861		)	24,143			203,739			(54,088		)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt	—			—			—			—			—
Principal payments on long-term debt	—			—			—			—			—
Payments for financing costs	—			—			—			—			—
Deemed repurchases of restricted stock units	(15,354		)	—			—			—			(15,354		)
Purchase of treasury stock	(83,637		)	—			—			—			(83,637		)
Principal payments on capital lease obligations	—			(723		)	(683		)	—			(1,406		)
Distributions to noncontrolling interests	—			—			(1,435		)	—			(1,435		)
Net cash used in financing activities	(98,991		)	(723		)	(2,118		)	—			(101,832		)
Net increase (decrease) in cash and cash equivalents from operations	(5,153		)	12,911			14,553			(61,259		)	(38,948		)
Effect of exchange rate changes on cash and cash equivalents	5,017			(49,740		)	(7,171		)	61,259			9,365
Cash and cash equivalents at beginning of period	320			391,248			167,215			—			558,783
Cash and cash equivalents at end of period	$	184		$	354,419		$	174,597		$	—		$	529,200