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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 September 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 October 23, 2020:
Class A Common Stock par value $0.01 per share 29,754,780
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)

September 30, 2020 December 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents $ 1,071,860  $ 816,170 
Accounts receivable, trade (less allowance for doubtful accounts of $9,345 and $5,733)
768,506  857,143 
Current portion of program rights, net 17,933  426,624 
Prepaid expenses and other current assets 174,682  230,360 
Total current assets 2,032,981  2,330,297 
Property and equipment, net of accumulated depreciation of $254,312 and $347,302
255,729  283,752 
Program rights, net 1,336,612  1,038,060 
Intangible assets, net 417,778  524,531 
Goodwill 673,810  701,980 
Deferred tax asset, net 39,778  51,545 
Operating lease right-of-use asset 151,801  170,056 
Other assets 477,938  496,465 
Total assets $ 5,386,427  $ 5,596,686 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 80,967  $ 94,306 
Accrued liabilities 281,023  251,214 
Current portion of program rights obligations 302,061  304,692 
Deferred revenue 61,557  63,921 
Current portion of long-term debt 76,000  56,250 
Current portion of lease obligations 33,519  33,959 
Total current liabilities 835,127  804,342 
Program rights obligations 198,197  239,813 
Long-term debt 2,791,091  3,039,979 
Lease obligations 209,549  211,047 
Deferred tax liability, net 135,476  136,911 
Other liabilities 130,244  163,638 
Total liabilities 4,299,684  4,595,730 
Commitments and contingencies
Redeemable noncontrolling interests 314,397  309,451 
Stockholders' equity:
Class A Common Stock, $0.01 par value, 360,000 shares authorized, 63,348 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 320,681  286,491 
Accumulated earnings 1,752,740  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 (160,457) (167,711)
Total AMC Networks stockholders' equity 747,603  665,781 
Non-redeemable noncontrolling interests 24,743  25,724 
Total stockholders' equity 772,346  691,505 
Total liabilities and stockholders' equity $ 5,386,427  $ 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 September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
Revenues, net
$ 654,015  $ 718,597  $ 2,034,681  $ 2,275,117 
Operating expenses:
Technical and operating (excluding depreciation and amortization)
333,816  354,992  960,379  1,080,763 
Selling, general and administrative
148,769  159,357  488,581  505,233 
Depreciation and amortization 27,547  25,619  80,182  75,568 
Impairment charges —  —  130,411  — 
Restructuring and other related charges 4,406  10,191  13,879  29,995 
Total operating expenses 514,538  550,159  1,673,432  1,691,559 
Operating income 139,477  168,438  361,249  583,558 
Other income (expense):
Interest expense (33,418) (39,621) (105,283) (118,982)
Interest income 2,994  4,626  11,276  13,571 
Loss on extinguishment of debt —  —  (2,908) — 
Miscellaneous, net 11,138  (1,490) (10,088) (16,972)
Total other (expense) income (19,286) (36,485) (107,003) (122,383)
Income from operations before income taxes 120,191  131,953  254,246  461,175 
Income tax expense (52,195) (8,727) (95,490) (53,807)
Net income including noncontrolling interests 67,996  123,226  158,756  407,368 
Net income attributable to noncontrolling interests (6,356) (6,303) (13,488) (18,305)
Net income attributable to AMC Networks' stockholders $ 61,640  $ 116,923  $ 145,268  $ 389,063 
Net income per share attributable to AMC Networks' stockholders:
Basic $ 1.18  $ 2.09  $ 2.72  $ 6.91 
Diluted $ 1.17  $ 2.07  $ 2.69  $ 6.80 
Weighted average common shares:
Basic 52,346  55,847  53,374  56,339 
Diluted 52,904  56,605  53,917  57,218 
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 September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
Net income including noncontrolling interests $ 67,996  $ 123,226  $ 158,756  $ 407,368 
Other comprehensive income (loss):
Foreign currency translation adjustment 21,475  (33,281) 7,383  (38,490)
Unrealized gain (loss) on interest rate swaps 615  (187) (1,041) (2,076)
Other comprehensive income (loss), before income taxes 22,090  (33,468) 6,342  (40,566)
Income tax (expense) benefit (144) 335  242  483 
Other comprehensive income (loss), net of income taxes 21,946  (33,133) 6,584  (40,083)
Comprehensive income 89,942  90,093  165,340  367,285 
Comprehensive income attributable to noncontrolling interests
(6,648) (5,217) (12,818) (17,048)
Comprehensive income attributable to AMC Networks' stockholders
$ 83,294  $ 84,876  $ 152,522  $ 350,237 
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, June 30, 2020 $ 643  $ 115  $ 308,288  $ 1,691,100  $ (1,166,119) $ (182,111) $ 651,916  $ 23,229  $ 675,145 
Net income attributable to AMC Networks’ stockholders —  —  —  61,640  —  —  61,640  —  61,640 
Net income attributable to non-redeemable noncontrolling interests —  —  —  —  —  —  —  1,785  1,785 
Distributions to noncontrolling member —  —  —  —  —  —  —  (563) (563)
Other comprehensive income —  —  —  —  —  21,654  21,654  292  21,946 
Share-based compensation expense —  —  12,393  —  —  —  12,393  —  12,393 
Balance, September 30, 2020 $ 643  $ 115  $ 320,681  $ 1,752,740  $ (1,166,119) $ (160,457) $ 747,603  $ 24,743  $ 772,346 


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 —  —  —  145,268  —  —  145,268  —  145,268 
Net income attributable to non-redeemable noncontrolling interests —  —  —  —  —  —  —  700  700 
Adoption of ASU 2016-13, credit losses
—  —  —  (1,956) —  —  (1,956) —  (1,956)
Distributions to noncontrolling member —  —  —  —  —  —  —  (1,011) (1,011)
Other comprehensive income (loss) —  —  —  —  —  7,254  7,254  (670) 6,584 
Share-based compensation expense —  —  43,141  —  —  —  43,141  —  43,141 
Treasury stock acquired —  —  —  —  (102,938) —  (102,938) —  (102,938)
Restricted stock units converted to shares —  (8,951) —  —  —  (8,947) —  (8,947)
Balance, September 30, 2020 $ 643  $ 115  $ 320,681  $ 1,752,740  $ (1,166,119) $ (160,457) $ 747,603  $ 24,743  $ 772,346 









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, June 30, 2019 $ 639  $ 115  $ 258,150  $ 1,501,082  $ (1,051,022) $ (167,144) $ 541,820  $ 26,693  $ 568,513 
Net income attributable to AMC Networks’ stockholders —  —  —  116,923  —  —  116,923  —  116,923 
Net income attributable to non-redeemable noncontrolling interests —  —  —  —  —  —  —  1,772  1,772 
Distributions to noncontrolling member —  —  —  —  —  —  —  (705) (705)
Settlement of treasury stock —  —  832  —  —  —  832  —  832 
Other comprehensive loss —  —  —  —  —  (33,133) (33,133) (1,085) (34,218)
Share-based compensation expense —  —  13,841  —  —  —  13,841  —  13,841 
Treasury stock acquired —  —  —  —  (12,159) —  (12,159) —  (12,159)
Balance, September 30, 2019 $ 639  $ 115  $ 272,823  $ 1,618,005  $ (1,063,181) $ (200,277) $ 628,124  $ 26,675  $ 654,799 


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 —  —  —  389,063  —  —  389,063  —  389,063 
Net income attributable to non-redeemable noncontrolling interests —  —  —  —  —  —  —  2,842  2,842 
Distributions to noncontrolling member —  —  —  —  —  —  —  (3,439) (3,439)
Other comprehensive loss —  —  —  —  —  (40,083) (40,083) (1,256) (41,339)
Share-based compensation expense —  —  50,465  —  —  —  50,465  —  50,465 
Proceeds from the exercise of stock options —  —  4,630  —  —  —  4,630  —  4,630 
Treasury stock acquired —  —  985  —  (70,598) —  (69,613) —  (69,613)
Restricted stock units converted to shares —  (23,024) —  —  —  (23,018) —  (23,018)
Balance, September 30, 2019 $ 639  $ 115  $ 272,823  $ 1,618,005  $ (1,063,181) $ (200,277) $ 628,124  $ 26,675  $ 654,799 


See accompanying notes to consolidated financial statements.
5


AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended September 30,
2020 2019
Cash flows from operating activities:
Net income including noncontrolling interests $ 158,756  $ 407,368 
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization 80,182  75,568 
Impairment charges 130,411  — 
Share-based compensation expense related to equity classified awards 43,141  50,465 
Non-cash restructuring and other related charges 6,126  14,026 
Amortization and write-off of program rights 622,204  696,326 
Amortization of deferred carriage fees 21,088  14,624 
Unrealized foreign currency transaction loss 9,242  489 
Amortization of deferred financing costs and discounts on indebtedness 6,039  5,970 
Loss on extinguishment of debt 2,908  — 
Bad debt expense 340  3,628 
Deferred income taxes 12,403  (65,245)
Write-down of non-marketable equity securities and note receivable 5,103  20,206 
Other, net (10,696) (8,481)
Changes in assets and liabilities:
Accounts receivable, trade (including amounts due from related parties, net) 92,328  6,993 
Prepaid expenses and other assets 79,098  (121,375)
Program rights and obligations, net (565,267) (676,718)
Income taxes payable 17,265  3,101 
Deferred revenue (2,234) 10,395 
Deferred carriage fees, net (15,057) (14,409)
Accounts payable, accrued liabilities and other liabilities (49,293) (22,534)
Net cash provided by operating activities 644,087  400,397 
Cash flows from investing activities:
Capital expenditures (34,990) (69,096)
Return of capital from investees 924  9,232 
Acquisition of investment securities (4,111) — 
Principal payment received on loan to investee 3,750  — 
Proceeds from sale of investments 10,000  — 
Net cash used in investing activities (24,427) (59,864)
Cash flows from financing activities:
Proceeds from the issuance of long-term debt 6,000  1,521 
Principal payments on long-term debt (242,500) (12,613)
Deemed repurchases of restricted stock units (8,947) (23,019)
Purchase of treasury stock (102,938) (70,598)
Proceeds from stock option exercises —  4,630 
Principal payments on finance lease obligations (2,404) (4,059)
Distributions to noncontrolling interests (13,955) (13,545)
Net cash used in financing activities (364,744) (117,683)
Net increase in cash and cash equivalents 254,916  222,850 
Effect of exchange rate changes on cash and cash equivalents 774  (4,350)
Cash and cash equivalents at beginning of period 816,170  554,886 
Cash and cash equivalents at end of period $ 1,071,860  $ 773,386 

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), AMC+ 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 a 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 has 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. In the third quarter of 2020, the Company commenced production activities, however substantially all Company employees continue to work remotely, and the Company continues to restrict 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 collectability 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 and does not expect it to have material impact on its consolidated financial statements.
Note 2. Revenue Recognition
Transaction Price Allocated to Future Performance Obligations
As of September 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) September 30, 2020 December 31, 2019
Balances from contracts with customers:
     Accounts receivable (including long-term, included in Other assets) $ 1,014,956  $ 1,121,834 
     Contract assets, short-term (included in Other current assets) 4,373  7,283 
     Contract assets, long-term (included in Other assets) 3,225  9,964 
     Contract liabilities (Deferred revenue) 61,557  63,921 
Revenue recognized for the nine months ended September 30, 2020 relating to the contract liability at December 31, 2019 was $37.0 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 September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Basic weighted average common shares outstanding 52,346  55,847  53,374  56,339 
Effect of dilution:
Stock options —  —  18 
Restricted stock units 558  751  543  861 
Diluted weighted average common shares outstanding 52,904  56,605  53,917  57,218 
Approximately 1.1 million and 1.5 million restricted stock units outstanding as of September 30, 2020 and September 30, 2019, respectively, have been excluded from diluted weighted average common shares outstanding since a performance condition for these awards had not been met in each of the respective periods. As of September 30, 2020 and September 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 nine months ended September 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 September 30, 2020, the Company had $385.9 million of authorization remaining for repurchase under the Stock Repurchase Program.
On September 16, 2020, the Company commenced a modified "Dutch auction" tender offer (the "Tender Offer") to purchase up to $250 million in value of shares of its Class A Common Stock, plus up to an additional 2% of the outstanding shares of Class A Common Stock, at a price not greater than $26.50 nor less than $22.50 per share. The Tender Offer expired on October 14, 2020. On October 21, 2020, the Company accepted for purchase 10.8 million shares of its Class A Common Stock, at a price of $23.20 per share, for an aggregate cost of $250.6 million. The cost of these shares, and the fees relating to the Tender Offer, will be classified in Treasury stock in the consolidated balance sheet. The settlement of the Tender Offer reduced the availability under the Stock Repurchase Program to $135.3 million.

Note 4. Restructuring and Other Related Charges
Restructuring and other related charges of $4.4 million and $13.9 million for the three and nine months ended September 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 restructuring activities.
Restructuring and other related charges of $10.2 million and $30.0 million for the three and nine months ended September 30, 2019, respectively, primarily related to the AMC Networks SVOD 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 September 30, Nine Months Ended September 30,
2020 2019 2020 2019
National Networks $ 5,991  $ 6,199  $ 8,714  $ 6,776 
International & Other (1,585) 3,992  5,165  23,915 
Inter-segment eliminations —  —  —  (696)
Total restructuring and other related charges $ 4,406  $ 10,191  $ 13,879  $ 29,995 


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 9,563  4,316  13,879 
Cash payments (26,763) (191) (26,954)
Non-cash adjustments (1,810) (4,316) (6,126)
Currency translation — 
Balance, September 30, 2020 $ 8,398  $ 30  $ 8,428 
Accrued restructuring costs of $8.4 million are included in accrued liabilities in the condensed consolidated balance sheet at September 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 AMC Networks SVOD).
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:

September 30, 2020
(In thousands)  Predominantly Monetized Individually  Predominantly Monetized as a Group  Total
Owned original program rights, net:
Completed $ 288,705  $ 33,288  $ 321,993 
In-production and in-development 145,228  14,209  159,437 
Total owned original program rights, net $ 433,933  $ 47,497  $ 481,430 
Licensed program rights, net:
Licensed film and acquired series $ 8,080  $ 581,253  $ 589,333 
Licensed originals 235,149  —  235,149 
Advances and content versioning costs —  48,633  48,633 
Total licensed program rights, net 243,229  629,886  873,115 
Program rights, net $ 677,162  $ 677,383  $ 1,354,545 
Current portion of program rights, net $ 17,933 
Program rights, net (long-term) 1,336,612 
$ 1,354,545 

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

Three Months Ended September 30, Nine Months Ended September 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 $ 74,597  $ 11,854  $ 86,451  $ 235,868  $ 27,831  $ 263,699 
Licensed program rights 20,479  100,019  120,498  61,741  296,764  358,505 
Program rights amortization $ 95,076  $ 111,873  $ 206,949  $ 297,609  $ 324,595  $ 622,204 

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 $24.8 million and $36.9 million for the three and nine months ended September 30, 2020, respectively, and $1.6 million and $15.2 million for the three and nine months ended September 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 $69.6 million at September 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 now classified within marketable equity securities. Investments in marketable equity securities were $39.7 million at September 30, 2020 and $4.4 million at December 31, 2019. For the three and nine months ended September 30, 2020, unrealized gains and losses on marketable equity securities were a loss of $3.7 million and a gain of $10.3 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 $34.5 million at September 30, 2020 and $61.8 million at December 31, 2019. For the nine months ended September 30, 2020 and September 30, 2019, the Company recognized impairment charges of $20.0 million and $20.2 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. Additionally, in September 2020, an observable price change occurred with respect to one of the Company's non-marketable equity securities, resulting in an unrealized gain of $14.9 million, included in miscellaneous, net in the condensed consolidated statement 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 (996) —  (996)
Foreign currency translation —  (2,112) (2,112)
September 30, 2020 $ 236,107  $ 437,703  $ 673,810 
As of September 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 $1.0 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) September 30, 2020
Gross Accumulated Amortization Net Estimated Useful Lives
Amortizable intangible assets:
Affiliate and customer relationships $ 617,178  $ (317,770) $ 299,408 
6 to 25 years
Advertiser relationships 46,282  (24,976) 21,306 
11 years
Trade names and other amortizable intangible assets 114,869  (37,705) 77,164 
3 to 20 years
Total amortizable intangible assets 778,329  (380,451) 397,878 
Indefinite-lived intangible assets:
Trademarks 19,900  —  19,900 
Total intangible assets $ 798,229  $ (380,451) $ 417,778 
(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 and other amortizable intangible assets 115,873  (19,708) 96,165 
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 nine months ended September 30, 2020 and 2019 was $32.6 million and $34.2 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 $ 42,325 
2021 37,808 
2022 37,763 
2023 37,687 
2024 37,618 

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) September 30, 2020 December 31, 2019
Employee related costs 81,830  $ 89,753 
Participations and residuals 91,411  70,682 
Interest 37,089  29,767 
Other accrued expenses 70,693  61,012 
Total accrued liabilities $ 281,023  $ 251,214 

Note 9. Long-term Debt
The Company's long-term debt consists of the following:
(In thousands) September 30, 2020 December 31, 2019
Senior Secured Credit Facility: (a)
Term Loan A Facility $ 693,750  $ 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)
1,000  — 
Total long-term debt 2,894,750  3,131,250 
Unamortized discount (19,527) (24,351)
Unamortized deferred financing costs (8,132) (10,670)
Long-term debt, net 2,867,091  3,096,229 
Current portion of long-term debt 76,000  56,250 
Noncurrent portion of long-term debt $ 2,791,091  $ 3,039,979 
(a)The Company's $500 million revolving credit facility remains undrawn at September 30, 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 plus 1% and mature on November 23, 2020. As of September 30, 2020, there was $1.0 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 December 2022. In connection with the redemption, the Company incurred a loss on extinguishment of debt for the nine months ended September 30, 2020 of $2.9 million representing the redemption premium and the write-off of a portion of the unamortized discount and deferred financing costs.

15

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
Note 10. Leases
The following table summarizes the leases included in the condensed consolidated balance sheets as follows:
(In thousands) Balance Sheet Location September 30, 2020 December 31, 2019
Assets
Operating Operating lease right-of-use asset $ 151,801  $ 170,056 
Finance Property and equipment, net 13,453  15,713 
Total lease assets $ 165,254  $ 185,769 
Liabilities
Current:
Operating Current portion of lease obligations $ 30,011  $ 30,171 
Finance Current portion of lease obligations 3,508  3,788 
$ 33,519  33,959 
Noncurrent:
Operating Lease obligations $ 181,032  193,570 
Finance Lease obligations 28,517  17,477 
209,549  211,047 
Total lease liabilities $ 243,068  $ 245,006 
For the nine months ended September 30, 2020, impairment charges were recorded related to certain operating lease right-of-use assets at the AMCNI business. See Note 7 for additional details regarding the impairment test of long-lived assets.

Note 11. 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.
16

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
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 September 30, 2020 and December 31, 2019:
(In thousands) Level I Level II Level III Total
At September 30, 2020:
Assets
Cash equivalents $ 295,051  $ —  $ —  $ 295,051 
Marketable securities 39,699  —  —  39,699 
Foreign currency derivatives —  1,366  —  1,366 
Liabilities
Interest rate swap contracts $ —  $ 3,007  $ —  $ 3,007 
Foreign currency derivatives —  3,568  —  3,568 
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 September 30, 2020 and December 31, 2019, the Company did 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 and impairment testing. These nonrecurring valuations primarily include the valuation of 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) September 30, 2020
Carrying
Amount
Estimated
Fair Value
Debt instruments:
Term loan A facility $ 687,991  $ 679,875 
4.75% Notes due August 2025
789,648  828,160 
5.00% Notes due April 2024
990,436  1,019,700 
4.75% Notes due December 2022
398,016  400,000 
Other debt 1,000  1,000 
$ 2,867,091  $ 2,928,735 
17

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

(In thousands) December 31, 2019
Carrying
Amount
Estimated
Fair Value
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.
Note 12. 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 September 30, 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 included in the condensed consolidated balance sheets are as follows:
(In thousands) Balance Sheet 
Location
September 30, 2020 December 31, 2019
Derivatives designated as hedging instruments:
Liabilities:
Interest rate swap contracts Accrued liabilities $ 3,007  $ 1,966 
Derivatives not designated as hedging instruments:
Assets:
Foreign currency derivatives Prepaid expenses and other current assets $ 775  $ 891 
Foreign currency derivatives Other assets 591  993 
Liabilities:
Foreign currency derivatives Accrued liabilities $ 906  $ 687 
Foreign currency derivatives Other liabilities 2,662  1,202 
18

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
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
 Recognized in OCI
Location of Gain or (Loss) in Earnings Gain or (Loss) Reclassified 
from Accumulated OCI
 into Earnings
Three Months Ended September 30, Three Months Ended September 30,
2020 2019   2020 2019
Derivatives in cash flow hedging relationships:
Interest rate swap contracts $ $ (265) Interest expense $ 606  $ 78 

(In thousands) Gain or (Loss) on Derivatives
 Recognized in OCI
Location of Gain or (Loss) in Earnings Gain or (Loss) Reclassified 
from Accumulated OCI
 into Earnings
Nine Months Ended September 30, Nine Months Ended September 30,
2020 2019   2020 2019
Derivatives in cash flow hedging relationships:
Interest rate swap contracts $ (2,401) $ (2,190) Interest expense $ 1,360  $ 113 

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
on Derivatives
Amount of Gain or (Loss) Recognized in Earnings on Derivatives
Three Months Ended September 30, Nine Months Ended September 30,
  2020 2019 2020 2019
Foreign currency derivatives Miscellaneous, net $ (1,300) $ 510  $ (2,018) $ 556 

Note 13. Income Taxes
For the three and nine months ended September 30, 2020, income tax expense was $52.2 million and $95.5 million, respectively, representing an effective tax rate of 43% and 38%, respectively, as compared to the federal statutory rate of 21%. For the three and nine months ended September 30, 2020, the effective tax rate differs from the federal statutory rate due primarily to tax expense of $20.0 million and $25.6 million resulting from an increase in valuation allowances for foreign taxes and U.S. foreign tax credits, tax expense from foreign operations of $0.4 million and $9.8 million, state and local income tax expense of $3.5 million and $9.1 million, tax expense of $1.7 million and $4.7 million related to non-deductible compensation and tax expense of $2.7 million and tax benefit of $6.0 million relating to uncertain tax positions (including accrued interest), respectively. The tax benefit relating to uncertain tax positions for the nine months ended September 30, 2020 is primarily due to audit settlements and the filing of state income tax returns under voluntary disclosure agreements. The increase in valuation allowance is primarily due to a change in judgement about the realizability of foreign net operating losses and other deferred tax assets. Management considers the scheduled reversal of deferred tax liabilities (including the effect in available carryback and carryforward periods), projected taxable income, and tax-planning strategies in making this assessment.
For the three and nine months ended September 30, 2019, income tax expense was $8.7 million and $53.8 million, respectively, representing an effective tax rate of 7% and 12%, respectively, as compared to the federal statutory rate of 21%. For the three months ended September 30, 2019, the effective tax rate differs from the federal statutory rate due primarily to a tax benefit of $13.6 million from foreign operations and a tax benefit of $11.5 million from a deferred tax adjustment to record the impact of an investment tax credit under the deferral method of accounting, partially offset by state and local income tax expense of $4.3 million and tax expense of $2.0 million resulting from a net increase in valuation allowances for foreign tax assets. For the nine months ended September 30, 2019, the effective tax rate differs from the federal statutory rate primarily due to a tax benefit of $21.5 million resulting from a net decrease in valuation allowances for foreign tax assets, a tax benefit of
19

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
$15.6 million from foreign operations, a tax benefit of $11.5 million from a deferred tax adjustment to record the impact of an investment tax credit under the deferral method of accounting, and a tax benefit of $5.6 million relating to uncertain tax positions (including accrued interest), partially offset by state and local income tax expense of $11.6 million. The decrease in the valuation allowance is primarily due to the expected utilization of foreign net operating loss carryforwards and the benefit of foreign operations is due to a deferred tax benefit resulting from the reorganization of intellectual property amongst the Company's international subsidiaries in the nine months ended September 30, 2019. The tax benefit relating to uncertain tax positions is primarily due to an audit settlement and the filing of state income tax returns under a voluntary disclosure agreement.
At September 30, 2020, the Company had foreign tax credit carry forwards of approximately $33.2 million, expiring on various dates from 2022 through 2030. These carryforwards have been reduced by a valuation allowance of $31.8 million as it is more likely than not that these carry forwards will not be realized. For the nine months ended September 30, 2020, $1.0 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).
Note 14. Commitments and Contingencies
Commitments
As of September 30, 2020, the Company's contractual obligations not reflected on the Company's condensed consolidated balance sheet increased $129.1 million, as compared to December 31, 2019, to $1,063.0 million. The increase primarily relates to additional commitments 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. Due to the continued impact of the Coronavirus pandemic on the New York State courts, the joint trial, originally scheduled to begin on June 1, 2020, has been further delayed and is currently scheduled to begin on April 26, 2021. 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
20

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
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. On July 22, 2020, the judge in the California Action issued a Statement of Decision finding in the Company's favor on all seven matters of contract interpretation before the court in this first phase trial. On October 30, 2020, the judge in the California Action set a tentative trial date of September 8, 2021 with regard to claims not addressed in the first phase trial. 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.
Note 15. Equity Plans
In June 2020, AMC Networks granted 54,535 restricted stock units ("RSUs") under the 2011 Stock Plan for Non-Employee Directors to non-employee directors that vested on the date of grant.
In March 2020, AMC Networks granted 1,171,956 RSUs to certain executive officers and employees under the AMC Networks Inc. 2016 Employee Stock Plan. The RSUs vest ratably over a three-year period and the vesting criteria for 380,142 RSUs include the achievement of certain performance targets by the Company.
During the nine months ended September 30, 2020, 477,764 RSUs and 325,836 PRSUs of AMC Networks Class A Common Stock previously issued to employees of the Company vested. On the vesting date, 199,377 RSUs and 142,882 PRSUs were surrendered to the Company to cover the required statutory tax withholding obligations and 278,387 RSU and 182,954 PRSU new shares of AMC Networks Class A Common Stock were issued. 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 nine months ended September 30, 2020.
Share-based compensation expense included in selling, general and administrative expense was $12.4 million and $43.1 million for the three and nine months ended September 30, 2020, respectively, and $13.8 million and $50.5 million the for three and nine months ended September 30, 2019, respectively.
As of September 30, 2020, there was $47.4 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 1.7 years.
Note 16. Redeemable Noncontrolling Interests
The following table summarizes activity related to redeemable noncontrolling interest for the nine months ended September 30, 2020.
(In thousands) Nine Months Ended September 30, 2020
December 31, 2019 $ 309,451 
Net earnings 12,788 
Distributions (12,945)
Other 5,103 
September 30, 2020 $ 314,397 

21

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
Note 17. 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 September 30, 2020 and 2019, respectively, and $3.6 million and $3.5 million for the nine months ended September 30, 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 $0.5 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and $0.6 million and $1.0 million for the nine months ended September 30, 2020 and 2019, respectively.
Note 18. Cash Flows
The Company's non-cash investing and financing activities and other supplemental data are as follows:
(In thousands) Nine Months Ended September 30,
2020 2019
Non-Cash Investing and Financing Activities:
Finance lease additions $ 14,260  $ — 
Capital expenditures incurred but not yet paid 2,105  1,659 
Supplemental Data:
Cash interest paid 91,940  104,698 
Income taxes paid, net 60,335  121,110 

Note 19. 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 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 September 30, 2020
National
Networks
International
and Other
Inter-segment
eliminations
Consolidated
Revenues, net
Advertising $ 164,216  $ 18,923  $ (37) $ 183,102 
Distribution 297,933  180,369  (7,389) 470,913 
Consolidated revenues, net $ 462,149  $ 199,292  $ (7,426) $ 654,015 
Operating income (loss) $ 129,842  $ 11,198  $ (1,563) $ 139,477 
Share-based compensation expense 9,922  2,472  —  12,394 
Depreciation and amortization 13,422  14,125  —  27,547 
Restructuring and other related charges 5,991  (1,585) —  4,406 
Majority-owned equity investees AOI —  1,667  —  1,667 
Adjusted operating income $ 159,177  $ 27,877  $ (1,563) $ 185,491 

22

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
(In thousands) Three Months Ended September 30, 2019
National
Networks
International
and Other
Inter-segment
eliminations
Consolidated
Revenues, net
Advertising $ 194,452  $ 18,872  $ (24) 213,300 
Distribution 364,540  163,967  (23,210) 505,297 
Consolidated revenues, net $ 558,992  $ 182,839  $ (23,234) $ 718,597 
Operating income (loss) $ 182,479  $ (11,501) $ (2,540) 168,438 
Share-based compensation expense 11,684  2,157  —  13,841 
Depreciation and amortization 8,048  17,571  —  25,619 
Restructuring and other related charges 6,199  3,992  —  10,191 
Majority-owned equity investees AOI —  1,246  —  1,246 
Adjusted operating income $ 208,410  $ 13,465  $ (2,540) $ 219,335 

(In thousands) Nine Months Ended September 30, 2020
National
Networks
International
and Other
Inter-segment
eliminations
Consolidated
Revenues, net
Advertising $ 564,876  $ 53,097  $ (38) $ 617,935 
Distribution 960,062  477,668  (20,984) 1,416,746 
Consolidated revenues, net $ 1,524,938  $ 530,765  $ (21,022) $ 2,034,681 
Operating income (loss) $ 512,598  $ (147,226) $ (4,123) $ 361,249 
Share-based compensation expense 34,754  8,387  —  43,141 
Depreciation and amortization 30,633  49,549  —  80,182 
Impairment charges —  130,411  —  130,411 
Restructuring and other related charges 8,714  5,165  —  13,879 
Majority-owned equity investees AOI —  4,361  —  4,361 
Adjusted operating income $ 586,699  $ 50,647  $ (4,123) $ 633,223 

(In thousands) Nine Months Ended September 30, 2019
National
Networks
International
and Other
Inter-segment
eliminations
Consolidated
Revenues, net
Advertising $ 653,031  $ 63,613  $ (75) $ 716,569 
Distribution 1,126,819  469,841  (38,112) 1,558,548 
Consolidated revenues, net $ 1,779,850  $ 533,454  $ (38,187) $ 2,275,117 
Operating income (loss) $ 648,180  $ (52,532) $ (12,090) $ 583,558 
Share-based compensation expense 41,774  8,691  —  50,465 
Depreciation and amortization 24,839  50,729  —  75,568 
Restructuring and other related charges 6,776  23,915  (696) 29,995 
Majority-owned equity investees AOI —  4,434  —  4,434 
Adjusted operating income $ 721,569  $ 35,237  $ (12,786) $ 744,020 
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.
23

AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)
(In thousands) Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Inter-segment revenues
National Networks $ (7,166) $ (18,140) $ (17,346) $ (29,790)
International and Other (260) (5,094) (3,676) (8,397)
$ (7,426) $ (23,234) $ (21,022) $ (38,187)
The table below summarizes revenues based on customer location:
(In thousands) Three Months Ended September 30, Nine Months Ended September 30,
2020 2019 2020 2019
Revenues
United States $ 497,677  $ 579,913  $ 1,646,065  $ 1,847,491 
Europe 110,448  108,365  274,763  299,782 
Other 45,890  30,319  113,853  127,844 
$ 654,015  $ 718,597  $ 2,034,681  $ 2,275,117 

The table below summarizes property and equipment based on asset location:
(In thousands) September 30, 2020 December 31, 2019
Property and equipment, net
United States $ 241,541  $ 244,175 
Europe 13,985  25,925 
Other 203  13,652 
$ 255,729  $ 283,752 
For the nine months ended September 30, 2020, impairment charges were recorded related to certain property and equipment in Europe and Other. See Note 7 for additional details regarding the impairment test of long-lived assets.
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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations.
This Management's Discussion and Analysis of Financial Condition and Results of Operations contains statements that constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. In this Management's Discussion and Analysis of Financial Condition and Results of Operations there are statements concerning our future operating results and future financial performance. Words such as "expects," "anticipates," "believes," "estimates," "may," "will," "should," "could," "potential," "continue," "intends," "plans" and similar words and terms used in the discussion of future operating results and future financial performance identify forward-looking statements. You are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties and that actual results or developments may differ materially from the forward-looking statements as a result of various factors. Factors that may cause such differences to occur include, but are not limited to:
the impact of COVID-19 on the economy and our business, including the measures taken by governmental authorities to address the pandemic, which may precipitate or exacerbate other risks and/or uncertainties;
the level of our revenues;
market demand, including changes in viewer consumption patterns, for our programming networks, our subscription streaming services, our programming, and our production services;
demand for advertising inventory and our ability to deliver guaranteed viewer ratings;
the highly competitive nature of the cable, telecommunications, SVOD and programming industries;
our ability to maintain and renew distribution or affiliation agreements with distributors;
the cost of, and our ability to obtain or produce, desirable programming content for our networks, other forms of distribution, including digital and licensing in international markets, as well as our independent film distribution businesses;
market demand for our owned original programming and our independent film content;
changes in consumer demand for our comedy venues;
the security of our program rights and other electronic data;
the loss of any of our key personnel and artistic talent;
changes in domestic and foreign laws or regulations under which we operate;
economic and business conditions and industry trends in the countries in which we operate;
fluctuations in currency exchange rates and interest rates;
changes in laws or treaties relating to taxation, or the interpretation thereof, in the U.S. or in the countries in which we operate, including the impact of the Tax Cuts and Jobs Act and the Bipartisan Budget Act of 2018;
the impact of new and proposed federal, state and international laws and regulations relating to data protection, privacy and security, including the E.U. General Data Protection Regulation;
the impact of Brexit, particularly in the event of the U.K.'s departure from the E.U. without an agreement on terms;
our substantial debt and high leverage;
reduced access to capital markets or significant increases in costs to borrow;
the level of our expenses;
the level of our capital expenditures;
future acquisitions and dispositions of assets;
our ability to successfully acquire new businesses and, if acquired, to integrate, and implement our plan with respect to businesses we acquire;
problems we may discover post-closing with the operations, including the internal controls and financial reporting process, of businesses we acquire;
uncertainties regarding the financial results of equity method investees, issuers of our investments in marketable equity securities and non-marketable equity securities and changes in the nature of key strategic relationships with partners and joint ventures;
the outcome of litigation and other proceedings;
whether pending uncompleted transactions, if any, are completed on the terms and at the times set forth (if at all);
other risks and uncertainties inherent in our programming businesses;
financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate;
25


events that are outside our control, such as political unrest in international markets, terrorist attacks, natural disasters and other similar events; and
the factors described under Item 1A, "Risk Factors" in our 2019 Annual Report on Form 10-K (the "2019 Form 10-K"), as filed with the Securities and Exchange Commission ("SEC") and under 1A, "Risk Factors" in this Quarterly Report on Form 10-Q.
We disclaim any obligation to update or revise the forward-looking statements contained herein, except as otherwise required by applicable federal securities laws.
Introduction
Management's discussion and analysis, or MD&A, of our results of operations and financial condition is provided as a supplement to, and should be read in conjunction with, the unaudited condensed consolidated financial statements and notes thereto included elsewhere herein and our 2019 Form 10-K to enhance the understanding of our financial condition, changes in financial condition and results of our operations. Unless the context otherwise requires, all references to "we," "us," "our," "AMC Networks" or the "Company" refer to AMC Networks Inc., together with its subsidiaries. MD&A is organized as follows:
Business Overview. This section provides a general description of our business and our operating segments, as well as other matters that we believe are important in understanding our results of operations and financial condition and in anticipating future trends.
Consolidated Results of Operations. This section provides an analysis of our results of operations for the three and nine months ended September 30, 2020 compared to the three and nine months ended September 30, 2019. Our discussion is presented on both a consolidated and operating segment basis. Our two operating segments are: (i) National Networks and (ii) International and Other.
Liquidity and Capital Resources. This section provides a discussion of our financial condition as of September 30, 2020, as well as an analysis of our cash flows for the nine months ended September 30, 2020 and 2019. The discussion of our financial condition and liquidity includes summaries of (i) our primary sources of liquidity and (ii) our contractual obligations that existed at September 30, 2020 as compared to December 31, 2019.
Critical Accounting Policies and Estimates. This section provides an update, if any, to our significant accounting policies or critical accounting estimates since December 31, 2019.
Business Overview
We manage our business through the following 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 operation produces original programming for our programming networks and also licenses such programming 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), AMC+ and other subscription video on demand ("SVOD") initiatives; Levity, our production services and comedy venues business; and IFC Films, our independent film distribution business.

26


Financial Results Overview
The tables presented below set forth our consolidated revenues, net, operating income (loss) and adjusted operating income ("AOI"), defined below, for the periods indicated.