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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2020
or
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from   to
Commission File Number: 1-35106
AMC Networks Inc.
(Exact name of registrant as specified in its charter)

Delaware 27-5403694
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
11 Penn Plaza,
New York, NY 10001
(Address of principal executive offices) (Zip Code)
(212) 324-8500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share AMCX The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company (as defined in Exchange Act Rule 12b-2).
Large accelerated filer þ Accelerated filer ¨
Non-accelerated filer ¨ Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  þ
The number of shares of common stock outstanding as of July 24, 2020:
Class A Common Stock par value $0.01 per share 40,557,330
Class B Common Stock par value $0.01 per share 11,484,408




AMC NETWORKS INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
 




PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(unaudited)

June 30, 2020 December 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents $ 889,887    $ 816,170   
Accounts receivable, trade (less allowance for doubtful accounts of $9,440 and $5,733)
796,834    857,143   
Current portion of program rights, net 17,354    426,624   
Prepaid expenses and other current assets 189,683    230,360   
Total current assets 1,893,758    2,330,297   
Property and equipment, net of accumulated depreciation of $235,687 and $347,302
259,783    283,752   
Program rights, net 1,370,500    1,038,060   
Intangible assets, net 425,233    524,531   
Goodwill 665,890    701,980   
Deferred tax asset, net 55,792    51,545   
Operating lease right-of-use asset 154,676    170,056   
Other assets 480,324    496,465   
Total assets $ 5,305,956    $ 5,596,686   
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 89,971    $ 94,306   
Accrued liabilities 245,281    251,214   
Current portion of program rights obligations 286,143    304,692   
Deferred revenue 58,871    63,921   
Current portion of long-term debt 81,000    56,250   
Current portion of lease obligations 33,179    33,959   
Total current liabilities 794,445    804,342   
Program rights obligations 222,631    239,813   
Long-term debt 2,807,890    3,039,979   
Lease obligations 214,334    211,047   
Deferred tax liability, net 150,046    136,911   
Other liabilities 133,933    163,638   
Total liabilities 4,323,279    4,595,730   
Commitments and contingencies
Redeemable noncontrolling interests 307,532    309,451   
Stockholders' equity:
Class A Common Stock, $0.01 par value, 360,000 shares authorized, 64,348 and 63,886 shares issued and 40,557 and 44,078 shares outstanding, respectively
643    639   
Class B Common Stock, $0.01 par value, 90,000 shares authorized, 11,484 shares issued and outstanding
115    115   
Preferred stock, $0.01 par value, 45,000 shares authorized; none issued
—    —   
Paid-in capital 308,288    286,491   
Accumulated earnings 1,691,100    1,609,428   
Treasury stock, at cost (23,790 and 19,808 shares Class A Common Stock, respectively)
(1,166,119)   (1,063,181)  
Accumulated other comprehensive loss (182,111)   (167,711)  
Total AMC Networks stockholders' equity 651,916    665,781   
Non-redeemable noncontrolling interests 23,229    25,724   
Total stockholders' equity 675,145    691,505   
Total liabilities and stockholders' equity $ 5,305,956    $ 5,596,686   
See accompanying notes to condensed consolidated financial statements.
1


AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)

Three Months Ended June 30, Six Months Ended June 30,
  2020 2019 2020 2019
Revenues, net
$ 646,291    $ 772,299    $ 1,380,666    $ 1,556,520   
Operating expenses:
Technical and operating (excluding depreciation and amortization)
282,503    385,623    626,563    725,771   
Selling, general and administrative
155,163    173,364    339,812    345,876   
Depreciation and amortization 25,905    25,893    52,635    49,949   
Impairment charges 130,411    —    130,411    —   
Restructuring and other related charges 3,507    17,162    9,473    19,804   
Total operating expenses 597,489    602,042    1,158,894    1,141,400   
Operating income 48,802    170,257    221,772    415,120   
Other income (expense):
Interest expense (34,301)   (39,716)   (71,865)   (79,361)  
Interest income 3,727    4,745    8,282    8,945   
Loss on extinguishment of debt —    —    (2,908)   —   
Miscellaneous, net 8,713    (2,697)   (21,226)   (15,482)  
Total other (expense) income (21,861)   (37,668)   (87,717)   (85,898)  
Income from operations before income taxes 26,941    132,589    134,055    329,222   
Income tax (expense) benefit (9,707)   1,396    (43,295)   (45,080)  
Net income including noncontrolling interests 17,234    133,985    90,760    284,142   
Net income attributable to noncontrolling interests (2,273)   (5,242)   (7,132)   (12,002)  
Net income attributable to AMC Networks' stockholders $ 14,961    $ 128,743    $ 83,628    $ 272,140   
Net income per share attributable to AMC Networks' stockholders:
Basic $ 0.29    $ 2.28    $ 1.55    $ 4.81   
Diluted $ 0.28    $ 2.25    $ 1.54    $ 4.73   
Weighted average common shares:
Basic 52,311    56,590    53,894    56,589   
Diluted 52,797    57,335    54,429    57,529   
See accompanying notes to condensed consolidated financial statements.
2


AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
Three Months Ended June 30, Six Months Ended June 30,
  2020 2019 2020 2019
Net income including noncontrolling interests $ 17,234    $ 133,985    $ 90,760    $ 284,142   
Other comprehensive income (loss):
Foreign currency translation adjustment 14,190    553    (14,092)   (5,210)  
Unrealized gain (loss) on interest rate swaps 341    (1,625)   (1,656)   (2,263)  
Other comprehensive income (loss), before income taxes 14,531    (1,072)   (15,748)   (7,473)  
Income tax (expense) benefit (79)   374    386    523   
Other comprehensive income (loss), net of income taxes 14,452    (698)   (15,362)   (6,950)  
Comprehensive income 31,686    133,287    75,398    277,192   
Comprehensive income attributable to noncontrolling interests
(2,472)   (5,033)   (6,170)   (11,831)  
Comprehensive income attributable to AMC Networks' stockholders
$ 29,214    $ 128,254    $ 69,228    $ 265,361   
See accompanying notes to condensed consolidated financial statements.
3


AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)
(unaudited)
Class A
Common
Stock
Class B
Common
Stock
Paid-in
Capital
Accumulated Earnings Treasury
Stock
Accumulated
Other
Comprehensive
Loss
AMC Networks Stockholders’
Equity
Noncontrolling Interests Total Stockholders' Equity
Balance, March 31, 2020 $ 643    $ 115    $ 282,153    $ 1,676,139    $ (1,149,138)   $ (196,364)   $ 613,548    $ 23,848    $ 637,396   
Net income attributable to AMC Networks’ stockholders —    —    —    14,961    —    —    14,961    —    14,961   
Net loss attributable to non-redeemable noncontrolling interests —    —    —    —    —    —    —    (818)   (818)  
Settlement of treasury stock —    —    10,988    —    —    —    10,988    —    10,988   
Other comprehensive income —    —    —    —    —    14,253    14,253    199    14,452   
Share-based compensation expense —    —    15,235    —    —    —    15,235    —    15,235   
Treasury stock acquired —    —    —    —    (16,981)   —    (16,981)   —    (16,981)  
Restricted stock units converted to shares —    —    (88)   —    —    —    (88)   —    (88)  
Balance, June 30, 2020 $ 643    $ 115    $ 308,288    $ 1,691,100    $ (1,166,119)   $ (182,111)   $ 651,916    $ 23,229    $ 675,145   


Class A
Common
Stock
Class B
Common
Stock
Paid-in
Capital
Accumulated Earnings Treasury
Stock
Accumulated
Other
Comprehensive
Loss
AMC Networks Stockholders’
Equity
Noncontrolling Interests Total Stockholders' Equity
Balance, December 31, 2019 $ 639    $ 115    $ 286,491    $ 1,609,428    $ (1,063,181)   $ (167,711)   $ 665,781    $ 25,724    $ 691,505   
Net income attributable to AMC Networks’ stockholders —    —    —    83,628    —    —    83,628    —    83,628   
Net loss attributable to non-redeemable noncontrolling interests —    —    —    —    —    —    —    (1,085)   (1,085)  
Adoption of ASU 2016-13, credit losses
—    —    —    (1,956)   —    —    (1,956)   —    (1,956)  
Distributions to noncontrolling member —    —    —    —    —    —    —    (448)   (448)  
Other comprehensive loss —    —    —    —    —    (14,400)   (14,400)   (962)   (15,362)  
Share-based compensation expense —    —    30,747    —    —    —    30,747    —    30,747   
Treasury stock acquired —    —    —    —    (102,938)   —    (102,938)   —    (102,938)  
Restricted stock units converted to shares   —    (8,950)   —    —    —    (8,946)   —    (8,946)  
Balance, June 30, 2020 $ 643    $ 115    $ 308,288    $ 1,691,100    $ (1,166,119)   $ (182,111)   $ 651,916    $ 23,229    $ 675,145   









See accompanying notes to consolidated financial statements.
4



AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)
(unaudited)
Class A
Common
Stock
Class B
Common
Stock
Paid-in
Capital
Accumulated Earnings Treasury
Stock
Accumulated
Other
Comprehensive
Loss
AMC Networks Stockholders’
Equity
Noncontrolling Interests Total Stockholders' Equity
Balance, March 31, 2019 $ 634    $ 115    $ 242,322    $ 1,372,339    $ (993,574)   $ (166,446)   $ 455,390    $ 29,147    $ 484,537   
Net income attributable to AMC Networks’ stockholders —    —    —    128,743    —    —    128,743    —    128,743   
Net income attributable to non-redeemable noncontrolling interests —    —    —    —    —    —    —    128    128   
Distributions to noncontrolling member —    —    —    —    —    —    —    (2,374)   (2,374)  
Treasury stock not yet settled —    —    (832)   —    —    —    (832)   —    (832)  
Other comprehensive loss —    —    —    —    —    (698)   (698)   (208)   (906)  
Share-based compensation expense —    —    16,725    —    —    —    16,725    —    16,725   
Treasury stock acquired —    —    —    —    (57,448)   —    (57,448)   —    (57,448)  
Restricted stock units converted to shares   —    (65)   —    —    —    (60)   —    (60)  
Balance, June 30, 2019 $ 639    $ 115    $ 258,150    $ 1,501,082    $ (1,051,022)   $ (167,144)   $ 541,820    $ 26,693    $ 568,513   


Class A
Common
Stock
Class B
Common
Stock
Paid-in
Capital
Accumulated Earnings Treasury
Stock
Accumulated
Other
Comprehensive
Loss
AMC Networks Stockholders’
Equity
Noncontrolling Interests Total Stockholders' Equity
Balance, December 31, 2018 $ 633    $ 115    $ 239,767    $ 1,228,942    $ (992,583)   $ (160,194)   $ 316,680    $ 28,528    $ 345,208   
Net income attributable to AMC Networks’ stockholders —    —    —    272,140    —    —    272,140    —    272,140   
Net income attributable to non-redeemable noncontrolling interests —    —    —    —    —    —    —    1,070    1,070   
Distributions to noncontrolling member —    —    —    —    —    —    —    (2,735)   (2,735)  
Treasury stock not yet settled —    —    (832)   —    —    —    (832)   —    (832)  
Other comprehensive loss —    —    —    —    —    (6,950)   (6,950)   (170)   (7,120)  
Share-based compensation expense —    —    36,624    —    —    —    36,624    —    36,624   
Proceeds from the exercise of stock options —    —    4,630    —    —    —    4,630    —    4,630   
Treasury stock acquired —    —    986    —    (58,439)   —    (57,453)   —    (57,453)  
Restricted stock units converted to shares   —    (23,025)   —    —    —    (23,019)   —    (23,019)  
Balance, June 30, 2019 $ 639    $ 115    $ 258,150    $ 1,501,082    $ (1,051,022)   $ (167,144)   $ 541,820    $ 26,693    $ 568,513   


See accompanying notes to consolidated financial statements.
5


AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June 30,
2020 2019
Cash flows from operating activities:
Net income including noncontrolling interests $ 90,760    $ 284,142   
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization 52,635    49,949   
Impairment charges 130,411    —   
Share-based compensation expense related to equity classified awards 30,747    36,624   
Non-cash restructuring and other related charges 6,126    14,026   
Amortization and write-off of program rights 415,255    468,987   
Amortization of deferred carriage fees 13,749    7,761   
Unrealized foreign currency transaction loss (gain) 13,941    (647)  
Amortization of deferred financing costs and discounts on indebtedness 4,088    3,947   
Loss on extinguishment of debt 2,908    —   
Bad debt expense 1,744    2,937   
Deferred income taxes 10,437    (40,065)  
Write-down of non-marketable equity securities and note receivable 20,000    17,741   
Other, net (15,943)   (2,057)  
Changes in assets and liabilities:
Accounts receivable, trade (including amounts due from related parties, net) 55,365    (9,011)  
Prepaid expenses and other assets 45,953    (40,017)  
Program rights and obligations, net (387,027)   (443,519)  
Income taxes payable 256    8,948   
Deferred revenue (5,086)   1,107   
Deferred carriage fees, net (15,995)   (13,597)  
Accounts payable, accrued liabilities and other liabilities (45,412)   (58,319)  
Net cash provided by operating activities 424,912    288,937   
Cash flows from investing activities:
Capital expenditures (22,172)   (49,463)  
Return of capital from investees 924    5,908   
Acquisition of investment securities (1,250)   —   
Principal payment received on loan to investee 2,500    —   
Proceeds from sale of investments 10,000    —   
Net cash used in investing activities (9,998)   (43,555)  
Cash flows from financing activities:
Proceeds from the issuance of long-term debt 6,000    —   
Principal payments on long-term debt (218,750)   (2,717)  
Deemed repurchases of restricted stock units (8,946)   (23,019)  
Purchase of treasury stock (102,938)   (58,440)  
Proceeds from stock option exercises —    4,630   
Principal payments on finance lease obligations (1,575)   (2,590)  
Distributions to noncontrolling interests (10,607)   (10,129)  
Net cash used in financing activities (336,816)   (92,265)  
Net increase in cash and cash equivalents 78,098    153,117   
Effect of exchange rate changes on cash and cash equivalents (4,381)   (1,661)  
Cash and cash equivalents at beginning of period 816,170    554,886   
Cash and cash equivalents at end of period $ 889,887    $ 706,342   

See accompanying notes to condensed consolidated financial statements.
6

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Note 1. Description of Business and Basis of Presentation
Description of Business
AMC Networks Inc. ("AMC Networks") and its subsidiaries (collectively referred to as the "Company") own and operate entertainment businesses and assets. 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, UMC) and other subscription video on demand ("SVOD") initiatives; 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, suspended content production, which has led to delays in the creation and availability of substantially all of its programming, and the temporary closure of its comedy venues. 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 (see Note 7) and indefinite-lived intangible assets and the fair value and collectibility of receivables. The COVID-19 pandemic has had a material impact on the Company's operations since mid-March 2020. The Company cannot reasonably predict the ultimate impact of the COVID-19 pandemic, including the extent of any adverse impact on our business, results of operations and financial condition, which will depend on, among other things, the duration and spread of the pandemic, the impact of governmental regulations that have been, and may
7

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
continue to be, imposed in response to the pandemic, the effectiveness of actions taken to contain or mitigate the outbreak, the availability, safety and efficacy of a vaccine, and global economic conditions. The Company does not expect the COVID-19 pandemic and its related economic impact to affect its liquidity position or its ongoing ability to meet the covenants in its debt instruments.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include the useful lives and methodologies used to amortize and assess recoverability of program rights, the estimated useful lives of intangible assets and the valuation and recoverability of goodwill and intangible assets.
Recently Adopted Accounting Standards
Effective January 1, 2020, the Company adopted Financial Accounting Standard Board (“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.
Note 2. Revenue Recognition
Transaction Price Allocated to Future Performance Obligations
As of June 30, 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.
8

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
Contract Balances from Contracts with Customers
The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.
(In thousands) June 30, 2020 December 31, 2019
Balances from contracts with customers:
     Accounts receivable (including long-term, included in Other assets) $ 1,056,628    $ 1,121,834   
     Contract assets, short-term (included in Other current assets) 5,011    7,283   
     Contract assets, long-term (included in Other assets) 2,547    9,964   
     Contract liabilities (Deferred revenue) 58,871    63,921   
Revenue recognized for the six months ended June 30, 2020 relating to the contract liability at December 31, 2019 was $28.5 million.
Note 3. Net Income per Share
The following is a reconciliation between basic and diluted weighted average shares outstanding:
(In thousands) Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Basic weighted average common shares outstanding 52,311    56,590    53,894    56,589   
Effect of dilution:
Stock options —    15    —    24   
Restricted stock units 486    730    535    916   
Diluted weighted average common shares outstanding 52,797    57,335    54,429    57,529   
Approximately 1.2 million and 1.5 million restricted stock units outstanding as of June 30, 2020 and June 30, 2019, respectively, 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 June 30, 2020 and June 30, 2019, 0.7 million and 0.3 million, respectively, of restricted stock units and stock options have been excluded from diluted weighted average common shares outstanding, as their impact would have been anti-dilutive.
Stock Repurchase Program
The Company's Board of Directors has authorized a program to repurchase up to $1.5 billion of its outstanding shares of common stock (the "Stock Repurchase Program"). The Stock Repurchase Program has no pre-established closing date and may be suspended or discontinued at any time. For the six months ended June 30, 2020, the Company repurchased 4.0 million shares of its Class A Common Stock at an average purchase price of approximately $25.85 per share. As of June 30, 2020, the Company has $385.9 million of authorization remaining for repurchase under the Stock Repurchase Program.
Note 4. Restructuring and Other Related Charges
Restructuring and other related charges of $3.5 million and $9.5 million for the three and six months ended June 30, 2020, respectively, 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.
Restructuring and other related charges of $17.2 million and $19.8 million for the three and six months ended June 30, 2019, respectively, primarily related to the direct to consumer re-organization as well as severance and other personnel related costs incurred at AMCNI associated with the termination of distribution in certain territories.

9

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
The following table summarizes the restructuring and other related charges recognized by operating segment:
(In thousands) Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
National Networks $ 1,214    $ 274    $ 2,723    $ 576   
International & Other 2,293    16,888    6,750    19,923   
Inter-segment eliminations —    —    —    (695)  
Total restructuring and other related charges $ 3,507    $ 17,162    $ 9,473    $ 19,804   


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 5,157    4,316    9,473   
Cash payments (22,181)   (191)   (22,372)  
Non-cash adjustments (1,810)   (4,316)   (6,126)  
Currency translation   (1)   —   
Balance, June 30, 2020 $ 8,574    $ 29    $ 8,603   
Accrued restructuring costs of $8.6 million are included in accrued liabilities in the condensed consolidated balance sheet at June 30, 2020.
Note 5. 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.
10

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
Total capitalized produced and licensed content by predominant monetization strategy is as follows:

 As of June 30, 2020
(In thousands)  Predominantly Monetized Individually  Predominantly Monetized as a Group  Total
Owned original program rights, net:
Completed $ 324,669    $ 39,631    $ 364,300   
In-production and in-development 132,161    12,254    144,415   
Total owned original program rights, net $ 456,830    $ 51,885    $ 508,715   
Licensed program rights, net:
Licensed film and acquired series $ 11,817    $ 595,252    $ 607,069   
Licensed originals 229,345    —    229,345   
Advances and content versioning costs —    42,725    42,725   
Total licensed program rights, net 241,162    637,977    879,139   
Program rights, net $ 697,992    $ 689,862    $ 1,387,854   
Current portion of program rights, net $ 17,354   
Program rights, net (long-term) 1,370,500   
$ 1,387,854   

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

Three Months Ended June 30, Six Months Ended June 30,
(In thousands) Predominantly Monetized Individually Predominantly Monetized as a Group Total Predominantly Monetized Individually Predominantly Monetized as a Group Total
Owned original program rights $ 62,229    $ 9,458    $ 71,687    $ 161,271    $ 15,977    $ 177,248   
Licensed program rights 19,910    99,678    119,588    41,262    196,745    238,007   
Program rights amortization $ 82,139    $ 109,136    $ 191,275    $ 202,533    $ 212,722    $ 415,255   

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
11

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
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.
The Company periodically reviews the programming usefulness of its licensed and owned original program rights based on several factors, including expected future revenue generation from airings on the Company's networks and other exploitation opportunities, ratings, type and quality of program material, standards and practices, and fitness for exhibition through various forms of distribution. If it is determined that film or other program rights have limited, or no, future programming usefulness, the useful life is updated, which generally results in a write-off of the unamortized cost to technical and operating expense in the consolidated statements of income. Program rights write-offs, included in technical and operating expense, were $7.9 million and $12.1 million for the three and six months ended June 30, 2020, respectively, and $10.3 million and $13.6 million for the three and six months ended June 30, 2019, respectively.
Note 6. 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 $68.2 million at June 30, 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 Miscellaneous, net in the condensed consolidated statement of income. In April 2020, one of our investments with a cost of $25.0 million, previously classified as a non-marketable equity security, became a publicly traded company. Accordingly, the investment is classified within marketable equity securities as of June 30, 2020. Investments in marketable equity securities were $43.3 million at June 30, 2020 and $4.4 million at December 31, 2019. For the three and six months ended June 30, 2020, unrealized gains on marketable equity securities were $15.0 million and $14.0 million, respectively, included in miscellaneous, net in the condensed consolidated statement of income.
Non-marketable Equity Securities
The Company classifies investments without readily determinable fair values that are not accounted for under the equity method as non-marketable equity securities. The accounting guidance requires non-marketable equity securities to be recorded at cost and adjusted to fair value at each reporting period. However, the guidance allows for a measurement alternative, which is to record the investments at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer. The Company applies this measurement alternative to its non-marketable equity securities. When an observable event occurs, the Company estimates the fair values of its non-marketable equity securities based on Level 2 inputs that are derived from observable price changes of similar securities adjusted for insignificant differences in rights and obligations. The changes in value are recorded in miscellaneous, net in the condensed consolidated statement of income.
Investments in non-marketable equity securities were $16.8 million at June 30, 2020 and $61.8 million at December 31, 2019. For the six months ended June 30, 2020 and June 30, 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 statements of income.
12

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
Note 7. Goodwill and Other Intangible Assets
The carrying amount of goodwill, by operating segment is as follows:
(In thousands) National Networks International
and Other
Total
December 31, 2019 $ 237,103    $ 464,877    $ 701,980   
Impairment charge —    (25,062)   (25,062)  
Amortization of "second component" goodwill (664)   —    (664)  
Foreign currency translation —    (10,364)   (10,364)  
June 30, 2020 $ 236,439    $ 429,451    $ 665,890   

As of June 30, 2020 and December 31, 2019, accumulated impairment charges in the International and Other segment totaled $123.1 million and $98.0 million, respectively.
The reduction of $0.7 million in the carrying amount of goodwill for 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. As a result of the continuing impact of the COVID-19 pandemic, the Company qualitatively assessed whether it was more likely than not that goodwill and long-lived assets were impaired as of June 30, 2020. 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. In connection with the preparation of the second quarter financial information, the Company determined that a triggering event had occurred with respect to its AMCNI reporting unit, which required an interim impairment test to be performed as of June 30, 2020. As such, the Company performed a quantitative assessment for its AMCNI reporting unit. The fair value was determined using a combination of an income approach, using a discounted cash flow (DCF) model, and a market comparables approach. The DCF model includes significant assumptions about revenue growth rates, long-term growth rates and enterprise specific discount rates. Additionally, the market comparables approach is determined using guideline company financial multiples. Given the uncertainty in determining assumptions underlying the DCF approach, actual results may differ from those used in the valuations.
Based on the valuations performed, in response to current and expected trends across the International television broadcasting markets, the fair value of the Company's AMCNI reporting unit declined below its carrying amount. As a result, in June 2020, the Company recognized an impairment charge of $25.1 million related to the AMCNI reporting unit, included in impairment charges in the condensed consolidated income statement.

No impairment charge was required for any of the Company's other reporting units.

The determination of fair value of the Company's AMCNI reporting unit represents a Level 3 fair value measurement in the fair value hierarchy due to its use of internal projections and unobservable measurement inputs. Changes in significant judgments and estimates could significantly impact the concluded fair value of the reporting unit or the valuation of intangible assets. Changes to assumptions that would decrease the fair value of the reporting unit would result in corresponding increases to the impairment of goodwill at the reporting unit.
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 additional impairment charges related to goodwill.
13

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
The following tables summarize information relating to the Company's identifiable intangible assets:
(In thousands) June 30, 2020
Gross Accumulated Amortization Net Estimated Useful Lives
Amortizable intangible assets:
Affiliate and customer relationships $ 611,324    $ (306,696)   $ 304,628   
6 to 25 years
Advertiser relationships 46,282    (23,924)   22,358   
11 years
Trade names 110,918    (32,778)   78,140   
3 to 20 years
Other amortizable intangible assets 2,799    (2,592)   207   
5 to 15 years
Total amortizable intangible assets 771,323    (365,990)   405,333   
Indefinite-lived intangible assets:
Trademarks 19,900    —    19,900   
Total intangible assets $ 791,223    $ (365,990)   $ 425,233   
(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 six months ended June 30, 2020 and 2019 was $23.1 million and $22.3 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 $ 41,779   
2021 37,567   
2022 37,394   
2023 37,288   
2024 37,220   

Impairment Test of Long-Lived Assets
In June 2020, given the continuing and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact, the Company revised its outlook for the AMCNI business, resulting in lower expected future cash flows. As a result, the Company determined that sufficient indicators of potential impairment of long-lived assets existed and the Company performed a recoverability test of the long-lived asset groups within the AMCNI business. Based on the recoverability tests performed, the Company determined that certain long-lived assets were not recoverable and recognized an impairment charge of $105.3 million related primarily to certain identifiable intangible assets, as well as property and equipment, and operating lease right-of-use assets, which is included in impairment charges in the condensed consolidated statement of income.
14

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
Note 8. Accrued Liabilities
Accrued liabilities consist of the following:
(In thousands) June 30, 2020 December 31, 2019
Employee related costs $ 72,114    $ 89,753   
Participations and residuals 91,620    70,682   
Interest 29,340    29,767   
Other accrued expenses 52,207    61,012   
Total accrued liabilities $ 245,281    $ 251,214   

Note 9. Long-term Debt
The Company's long-term debt consists of the following:
(In thousands) June 30, 2020 December 31, 2019
Senior Secured Credit Facility: (a)
Term Loan A Facility $ 712,500    $ 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