UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 10-Q
 
þQuarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended March 31, 20182019
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)
 
Delaware27-5403694
(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 classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01 per shareAMCXThe 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 and posted on its corporate Web site, if any, 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 filerþAccelerated 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 May 4, 2018:April 26, 2019:
Class A Common Stock par value $0.01 per share45,975,46745,326,464
Class B Common Stock par value $0.01 per share11,484,408







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







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

March 31, 2018 December 31, 2017March 31, 2019 December 31, 2018
ASSETS      
Current Assets:      
Cash and cash equivalents$529,200
 $558,783
$683,682
 $554,886
Accounts receivable, trade (including amounts due from related parties, net, less allowance for doubtful accounts of $9,687 and $9,691)793,275
 775,891
Accounts receivable, trade (less allowance for doubtful accounts of $9,267 and $10,788)829,704
 835,977
Current portion of program rights, net464,921
 453,450
433,862
 440,739
Prepaid expenses and other current assets102,058
 91,726
157,972
 131,809
Total current assets1,889,454
 1,879,850
2,105,220
 1,963,411
Property and equipment, net of accumulated depreciation of $271,443 and $259,919185,440
 183,514
Property and equipment, net of accumulated depreciation of $308,699 and $293,918251,841
 246,262
Program rights, net1,279,589
 1,319,279
1,154,265
 1,214,051
Deferred carriage fees, net27,172
 29,924
14,871
 16,831
Intangible assets, net452,395
 457,242
569,527
 578,907
Goodwill707,654
 695,158
797,793
 798,037
Deferred tax asset, net21,731
 20,081
19,927
 19,272
Operating lease right-of-use asset174,563
 
Other assets549,932
 447,937
433,907
 441,792
Total assets$5,113,367
 $5,032,985
$5,521,914
 $5,278,563
LIABILITIES AND STOCKHOLDERS' EQUITY      
Current Liabilities:      
Accounts payable$96,816
 $102,197
$107,392
 $107,066
Accrued liabilities235,301
 263,076
249,950
 264,918
Current portion of program rights obligations326,862
 327,549
321,914
 343,589
Deferred revenue51,916
 46,433
51,261
 55,424
Current portion of capital lease obligations4,771
 4,847
Current portion of long-term debt30,125
 21,334
Current portion of lease obligations31,341
 5,090
Total current liabilities715,666
 744,102
791,983
 797,421
Program rights obligations491,527
 534,980
342,173
 373,249
Long-term debt3,101,138
 3,099,257
3,080,800
 3,088,221
Capital lease obligations25,233
 26,277
Lease obligations224,684
 21,427
Deferred tax liability, net145,159
 109,698
137,567
 145,443
Other liabilities153,167
 136,122
160,368
 208,036
Total liabilities4,631,890
 4,650,436
4,737,575
 4,633,797
Commitments and contingencies

 



 


Redeemable noncontrolling interests220,366
 218,604
299,802
 299,558
Stockholders' equity:      
Class A Common Stock, $0.01 par value, 360,000 shares authorized, 63,139 and 62,721 shares issued and 48,372 and 49,601 shares outstanding, respectively631
 627
Class A Common Stock, $0.01 par value, 360,000 shares authorized, 63,851 and 63,255 shares issued and 45,326 and 44,749 shares outstanding, respectively634
 633
Class B Common Stock, $0.01 par value, 90,000 shares authorized, 11,484 shares issued and outstanding115
 115
115
 115
Preferred stock, $0.01 par value, 45,000 shares authorized; none issued
 

 
Paid-in capital182,278
 191,303
242,322
 239,767
Accumulated earnings936,379
 766,725
1,372,339
 1,228,942
Treasury stock, at cost (14,767 and 13,120 shares Class A Common Stock, respectively)(793,078) (709,440)
Treasury stock, at cost (18,525 and 18,507 shares Class A Common Stock, respectively)(993,574) (992,583)
Accumulated other comprehensive loss(95,581) (114,386)(166,446) (160,194)
Total AMC Networks stockholders' equity230,744
 134,944
455,390
 316,680
Non-redeemable noncontrolling interests30,367
 29,001
29,147
 28,528
Total stockholders' equity261,111
 163,945
484,537
 345,208
Total liabilities and stockholders' equity$5,113,367
 $5,032,985
$5,521,914
 $5,278,563
See accompanying notes to condensed consolidated financial statements.


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

Three Months Ended March 31,Three Months Ended March 31,
2018 20172019 2018
Revenues, net (including revenues, net from related parties of $1,627 and $1,567, respectively)$740,823
 $720,189
Revenues, net$784,221
 $740,823
Operating expenses:      
Technical and operating (excluding depreciation and amortization)320,365
 298,612
340,148
 320,365
Selling, general and administrative (including charges from related parties of $462 and $575, respectively)166,449
 163,709
Selling, general and administrative172,512
 166,449
Depreciation and amortization20,354
 23,493
24,056
 20,354
Restructuring expense
 2,704
2,642
 
Total operating expenses507,168
 488,518
539,358
 507,168
Operating income233,655
 231,671
244,863
 233,655
Other income (expense):      
Interest expense(38,205) (30,500)(39,645) (38,205)
Interest income5,019
 3,493
4,200
 5,019
Miscellaneous, net16,946
 11,049
(12,785) 16,946
Total other income (expense)(16,240) (15,958)(48,230) (16,240)
Income from operations before income taxes217,415
 215,713
196,633
 217,415
Income tax expense(56,879) (73,082)(46,476) (56,879)
Net income including noncontrolling interests160,536
 142,631
150,157
 160,536
Net income attributable to noncontrolling interests(3,666) (6,414)(6,760) (3,666)
Net income attributable to AMC Networks' stockholders$156,870
 $136,217
$143,397
 $156,870
      
Net income per share attributable to AMC Networks' stockholders:   Net income per share attributable to AMC Networks' stockholders:
Basic$2.57
 $2.00
$2.53
 $2.57
Diluted$2.54
 $1.98
$2.48
 $2.54
      
Weighted average common shares:      
Basic weighted average common shares60,967
 68,020
Diluted weighted average common shares61,719
 68,764
Basic56,588
 60,967
Diluted57,725
 61,719
See accompanying notes to condensed consolidated financial statements.


AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
Three Months Ended March 31,Three Months Ended March 31,
2018 20172019 2018
Net income including noncontrolling interests$160,536
 $142,631
$150,157
 $160,536
Other comprehensive income (loss):      
Foreign currency translation adjustment18,805
 9,864
(5,762) 18,805
Unrealized gain on interest rate swaps
 319
Unrealized gain on available for sale securities
 4,021
Unrealized loss on interest rate swaps(639) 
Other comprehensive income, before income taxes18,805
 14,204
(6,401) 18,805
Income tax expense
 (1,597)149
 
Other comprehensive income, net of income taxes18,805
 12,607
(6,252) 18,805
Comprehensive income179,341
 155,238
143,905
 179,341
Comprehensive income attributable to noncontrolling interests(4,563) (6,805)(6,722) (4,563)
Comprehensive income attributable to AMC Networks' stockholders$174,778
 $148,433
$137,183
 $174,778
See accompanying notes to condensed consolidated financial statements.


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, December 31, 2018$633
 $115
 $239,767
 $1,228,942
 $(992,583) $(160,194) $316,680
 $28,528
 $345,208
Net income attributable to AMC Networks’ stockholders
 
 
 143,397
 
 
 143,397
 
 143,397
Net income attributable to non-redeemable noncontrolling interests
 
 
 
 
 
 
 942
 942
Distributions to noncontrolling member
 
 
 
 
 
 
 (361) (361)
Settlement of treasury stock
 
 985
 
 
 
 985
 
 985
Other comprehensive income
 
 
 
 
 (6,252) (6,252) 38
 (6,214)
Share-based compensation expense
 
 19,899
 
 
 
 19,899
 
 19,899
Proceeds from the exercise of stock options
 
 4,630
 
 
 
 4,630
 
 4,630
Treasury stock acquired
 
 
 
 (991) 
 (991) 
 (991)
Restricted stock units converted to shares1
 
 (22,959) 
 
 
 (22,958) 
 (22,958)
Balance, March 31, 2019$634
 $115
 $242,322
 $1,372,339
 $(993,574) $(166,446) $455,390
 $29,147
 $484,537

 Class A
Common
Stock
 Class B
Common
Stock
 Paid-in
Capital
 Accumulated Earnings Treasury
Stock
 Accumulated
Other
Comprehensive
Loss
 AMC Networks Stockholders’
Equity
 Noncontrolling Interests Total Stockholders' Equity
Balance, December 31, 2017$627
 $115
 $191,303
 $766,725
 $(709,440) $(114,386) $134,944
 $29,001
 $163,945
Net income attributable to AMC Networks’ stockholders
 
 
 156,870
 
 
 156,870
 
 156,870
Net income attributable to non-redeemable noncontrolling interests
 
 
 
 
 
 
 469
 469
Cumulative effects of adoption of accounting standards
 
 
 12,784
   
 12,784
 
 12,784
Treasury stock not yet settled
 
 (9,980) 
 
 
 (9,980) 
 (9,980)
Settlement of treasury stock
 
 995
 
 
 
 995
 
 995
Other comprehensive income
 
 
 
 
 18,804
 18,804
 897
 19,701
Share-based compensation expense
 
 15,319
 
 
 
 15,319
 
 15,319
Treasury stock acquired
 
 
 
 (83,637) 
 (83,637) 
 (83,637)
Restricted stock units converted to shares4
 
 (15,359) 
 
 
 (15,355) 
 (15,355)
Balance, March 31, 2018$631
 $115
 $182,278
 $936,379
 $(793,077) $(95,582) $230,744
 $30,367
 $261,111

See accompanying notes to consolidated financial statements.

AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended March 31,Three Months Ended March 31,
2018 20172019 2018
Cash flows from operating activities:      
Net income including noncontrolling interests$160,536
 $142,631
$150,157
 $160,536
Adjustments to reconcile income from operations to net cash from operating activities:   
Adjustments to reconcile net income to net cash from operating activities:   
Depreciation and amortization20,354
 23,493
24,056
 20,354
Share-based compensation expense related to equity classified awards15,319
 12,464
19,899
 15,319
Non-cash restructuring charges1,171
 
Amortization and write-off of program rights218,626
 199,517
205,275
 218,626
Amortization of deferred carriage fees4,401
 4,401
2,710
 4,401
Unrealized foreign currency transaction gain(4,582) (754)(4,501) (4,582)
Unrealized gain on derivative contracts, net(13,984) (11,486)
 (13,984)
Amortization of deferred financing costs and discounts on indebtedness1,881
 2,282
1,954
 1,881
Bad debt expense914
 961
2,353
 914
Deferred income taxes31,800
 4,061
(8,858) 31,800
Write-down of non-marketable equity securities and note receivable17,741
 
Other, net(2,348) 278
1,142
 (2,348)
Changes in assets and liabilities:      
Accounts receivable, trade (including amounts due from related parties, net)(17,877) (15,980)(1,429) (17,877)
Prepaid expenses and other assets(5,512) (18,160)(26,233) (5,512)
Program rights and obligations, net(248,642) (211,280)(190,651) (248,642)
Income taxes payable15,723
 57,627
40,114
 15,723
Deferred revenue4,980
 (11,104)(4,200) 4,980
Deferred carriage fees, net(1,610) (430)(422) (1,610)
Accounts payable, accrued liabilities and other liabilities(63,007) (33,651)(58,591) (63,007)
Net cash provided by operating activities116,972
 144,870
171,687
 116,972
Cash flows from investing activities:      
Capital expenditures(11,942) (20,206)(22,053) (11,942)
Return of capital from investees172
 
3,908
 172
Investment in and loans to investees(42,318) (28,000)
 (42,318)
Net cash used in investing activities(54,088) (48,206)(18,145) (54,088)
Cash flows from financing activities:      
Proceeds from the issuance of long-term debt2,521
 
Principal payments on long-term debt
 (55,500)(3,238) 
Deemed repurchases of restricted stock units(15,354) (12,796)(22,959) (15,354)
Purchase of treasury stock(83,637) (91,423)(991) (83,637)
Principal payments on capital lease obligations(1,406) (1,401)
Proceeds from stock option exercises4,630
 
Principal payments on finance lease obligations(1,309) (1,406)
Distributions to noncontrolling interests(1,435) (11,712)(5,629) (1,435)
Net cash used in financing activities(101,832) (172,832)(26,975) (101,832)
Net decrease in cash and cash equivalents from operations(38,948) (76,168)
Net increase (decrease) in cash and cash equivalents from operations126,567
 (38,948)
Effect of exchange rate changes on cash and cash equivalents9,365
 (1,573)2,229
 9,365
Cash and cash equivalents at beginning of period558,783
 481,389
554,886
 558,783
Cash and cash equivalents at end of period$529,200
 $403,648
$683,682
 $529,200


See accompanying notes to condensed consolidated financial statements.
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 in the U.S.; and AMC and IFC in Canada. Our AMC Studios operations produces original programming for our programming networks and also licenses such program rights worldwide. AMC Networks Broadcasting & Technology is our technical services business, which primarily services most of the national programming networks.
International and Other: Principally includes AMC Networks International (AMCNI), the Company's international programming businesses consisting of a portfolio of channels in Europe, Latin America, the Middle East and parts of Asia and Africa; IFC Films, the Company's independent film distribution business; and our subscription streaming services, Sundance Now and Shudder. AMCNI – DMC, the broadcast solutions unit of certain networks of AMCNI and third-party networks is included through the date sold, July 12, 2017.
National Networks: Includes activities of our five national programming networks, AMC Studios operations and AMC Broadcasting & Technology. Our national programming networks are AMC, WE tv, BBC AMERICA, IFC and SundanceTV in the U.S.; and AMC and IFC in Canada. Our AMC Studios operations produces original programming for our programming networks and also licenses such program rights worldwide. AMC Networks Broadcasting & Technology is our technical services business, which primarily services most of the national programming networks.
International and Other: Principally includes AMC Networks International (AMCNI), the Company's international programming businesses consisting of a portfolio of channels around the world; IFC Films, the Company's independent film distribution business; Levity Entertainment Group LLC ("Levity"), acquired April 20, 2018, our production services and comedy venues company; RLJ Entertainment Inc. ("RLJE"), acquired October 1, 2018, a content distribution company that also includes the subscription streaming services Acorn TV and Urban Movie Channel ("UMC") and our subscription streaming services, Sundance Now and Shudder.
Basis of Presentation
Principles of Consolidation
These unaudited condensedThe consolidated financial statements include the accounts of AMC Networks and its majority ownedsubsidiaries in which a controlling voting interest is maintained or controlled subsidiaries.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, 20172018 contained in the Company's Annual Report on Form 10-K ("20172018 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, 20182019.
Program Rights
The Company periodically reviews the programming usefulness of its licensed and owned original program rights based on a series of 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, a write-off of the unamortized cost is included in technical and operating expense. Program rights write-offs were $5.2$3.3 million and $0.4$5.2 million for the three months ended March 31, 20182019 and March 31, 2017,2018, respectively.
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 derivative assets and liabilities, certain stock compensation awards, 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 and income tax assets and liabilities.
Financial Assets and Liabilities
The Company adopted Accounting Standards Update ("ASU") No. 2016-01 Financial Instruments-Recognition and Measurement of Financial Assets and Financial Liabilities on January 1, 2018, which requires that investments in equity securitiesassets.
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)

(excluding equity method investments) be measured at fair value with changes in fair value recognized in net earnings. Under prior accounting guidance, changes in fair value of available-for-sale equity securities were recorded in other comprehensive income. The adoption did not have a significant impact to these condensed consolidated financial statements.
Adoption of New Revenue RecognitionLease Standard
The Company adopted ASU No. 2014-09, Revenue from Contracts with Customers2016-02, Leases (Topic 606)842) on January 1, 2018,2019, using the modified retrospective method for all contracts not completed asapproach and effective date method. In addition, the Company elected the package of practical expedients, permitted under the date of adoption. The reported results as of and for the three-month period ended March 31, 2018 reflect the application oftransition guidance within the new standard, whilewhich among other things, allowed for the reported results for 2017 have not been adjusted to reflectcarry forward of the new standard and were prepared under prior revenue recognition accounting guidance.
historical classification of leases. The adoption of the new standard did not resultresulted in significant changes in the way the Company records distribution and advertising revenues. However, as a resultadditional net lease assets of applying the new standard, there are certain components$180.0 million (which is net of the Company’s distribution revenues where the new standard generally results in earlier recognitionhistorical deferred rent liability balance of revenue compared to its historical policies due to: (i) the requirement to estimate$57.0 million) and recognize variable consideration prior to such amounts becoming fixed and determinable, (ii) recognitionlease liabilities of royalties in the period of usage, and (iii) recognition of certain arrangements with minimum guarantees on a time-based (straight-line) basis. See Note 2 for more information. As a result of adopting Topic 606, the Company recorded an increase to opening retained earnings of approximately $12.8$237.0 million, net of tax,respectively, as of January 1, 2018.
2019. The following table provides changes to the opening balances of current assets, total assets, current liabilities and total liabilities resulting from the adoption of the new guidance.
(In thousands) December 31,
2017
 Impact of
Adoption
 January 1,
2018
Current assets $1,879,850
 $3,658
 $1,883,508
Total assets 5,032,985
 19,899
 5,052,884
Current liabilities 744,102
 835
 744,937
Total liabilities 4,650,436
 7,115
 4,657,551
The amount by which each financial statement line item has been affected in the current reporting period by the application of Topic 606 compared to historical policies isstandard did not material, therefore, comparative disclosures have been omitted.materially impact our consolidated net income or cash flows. See Note 10 for further discussion regarding leases.
Recently Issued Accounting Pronouncements
In February 2016,August 2018, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-02, Leases2018-13, Fair Value Measurement (Topic 842)820). ASU 2016-02 requires lessees to record most of their leases on2018-13 changes the balance sheet, which will be recognized as a right-of-use assetdisclosure requirements for fair value measurements and a lease liability. The Company will be required to classify each separate lease component as an operating or finance lease at the lease commencement date. Initial measurement of the right-of-use asset and lease liability is the same for operating and finance leases, however expense recognition and amortization of the right-of-use asset differs. Operating leases will reflect lease expense on a straight-line basis similar to current operating leases. The straight-line expense will reflect the interest expense on the lease liability (effective interest method) and amortization of the right-of-use asset, which will be presented as a single line item in the operating expense section of the income statement. Finance leases will reflect a front-loaded expense pattern similar to the pattern for current capital leases. ASU 2016-02 is effective for the first quarter of 2020, with early adoption permitted. ASU 2018-13 changes 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 Company is currently evaluating the impact the adoption of the modified disclosure requirements will have on its consolidated financial statements.
In March 2019, the FASB issued ASU No. 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials. ASU 2019-02 aligns the accounting for production costs of episodic television series with the accounting for production costs of films. It also requires an entity to test a film or license agreement within the scope of Subtopic 920-350 for impairment at the film group level, when the film or license agreement is predominantly monetized with other films and/or license agreements. The changes in this standard are effective for the first quarter of 2020, with early adoption permitted. The Company is currently determining its implementation approach and assessingevaluating the impact the adoption of the prospective disclosure requirements will have on its consolidated financial statements.
Note 2. Revenue Recognition
Revenue is recognized when, or as, performance obligations under the terms of a contract are satisfied, which generally occurs when, or as, control of the promised products or services is transferred to customers. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products or services to a customer ("transaction price"). To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that should be included in the transaction price utilizing the most likely amount to which the Company expects to be entitled. Variable consideration is included in the transaction price if, in the Company’s judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of the Company’s anticipated performance and all information that is reasonably available. Amounts collected on behalf of others (including taxes), where the Company is an agent, are excluded from revenue.
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying a practical expedient in the new standard, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less.
Contracts with customers may contain multiple performance obligations. For such arrangements, the transaction price is allocated to each performance obligation based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price considering available information such as market conditions and internal pricing guidelines related to the performance obligations.
Contracts may be modified to account for changes in contract specifications and requirements. Contract modifications exist when the modification either creates new or changes existing enforceable rights and obligations. The effect of a contract modification on the transaction price and measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.
The Company primarily earns revenue from the distribution of its programming services, including licensing of its programming and other content, and advertising. The Company’s revenue recognition policies that summarize the nature, amount, timing and uncertainty associated with each major source of revenue from contracts with customers is described below.
Distribution
The majority of the Company’s distribution revenues relate to sales-based and usage-based royalties which are recognized the later of (i) when the subsequent sale or usage occurs and (ii) the performance obligation to which some or all of the sales-based or usage-based royalty has been allocated has been satisfied or partially satisfied. Occasionally, the Company incurs costs to obtain a distribution contract and these costs are amortized over the period of the related distribution contract as a reduction of revenue.
Subscription fee revenue: Subscription fees are earned from cable and other multichannel video programming distribution platforms, including direct broadcast satellite ("DBS"), platforms operated by telecommunications providers and virtual multichannel video programming distributors (collectively "distributors"), for the rights to use the Company's network programming under multi-year contracts, commonly referred to as "affiliation agreements." The Company's performance obligations under affiliation agreements are satisfied as the Company provides its programming over the term of the agreement. The transaction price is represented by subscription fees that are generally based upon (i) contractual rates applied to the number of the distributor's subscribers who receive or can receive our programming ("rate-per-subscriber"), or (ii) fixed contractual monthly fees ("fixed fee").
For rate-per-subscriber agreements, the Company applies the sales-based or usage-based royalty guidance, and accordingly, recognizes revenue in the period of the distributor’s usage, based on the subscription fee earned during the period.
Fixed fee affiliation agreements are generally billed in monthly installments, and such amounts may vary over the term of the contract. In cases where the invoice amount corresponds directly with the value to the affiliate of the performance to-date, the Company recognizes revenue based on the invoiced amount. In cases where changes in fees during the contract term do not correspond directly to the value of the performance to-date (for example, if the fees vary over the contract term due to a significant financing or credit risk component), the Company recognizes the total amount of fixed transaction price over the contract period using a time-based (e.g., straight-line) measure of progress.
Certain of the Company’s fixed fee affiliation agreements contain guaranteed minimum fees that are recoupable during the term of the agreement, and variable fees based on rates-per-subscriber after the guaranteed minimum is recouped. The Company recognizes revenue for the fixed consideration over the minimum guarantee period and recognizes variable fees only when cumulative consideration exceeds the minimum guarantee.
Subscription revenue from the Company's direct-to-consumer subscription streaming services is recognized as the streaming service is provided to customers.
Content licensing revenue: The Company licenses its original programming content to certain distributors under subscription video on-demand ("SVOD"), pay-per-view ("PPV") and electronic sell-through ("EST") arrangements. Under these arrangements, our performance obligation is to provide the distributor the right to use our programming as it exists at a point in time.
For SVOD arrangements, the Company adjusts the transaction price for the time value of money in cases where license fees are paid over several years. SVOD licensing revenue is recognized at the later of the beginning of the license period, or when we provide the programming to the distributor. The Company recognizes a contract asset for the difference between the revenue recognized and the amount we are permitted to invoice.
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)

For PPV and EST license fee arrangements, the Company applies the sales-based or usage-based royalty guidance and recognizes revenue in the period of end-customer purchases, based on the fees earned during the period.
The Company also licenses trademarks, logos, brands, derivative character copyrights, etc. under multi-year arrangements. Under these arrangements, the Company may receive a non-refundable minimum guarantee that is recoupable against a volume-based royalty throughout the term of the agreement. The Company adjusts the transaction price for the time value of money in cases where license fees are paid over several years. The Company recognizes revenue for the minimum guarantee on a straight-line basis over the term of the agreement, and recognizes variable fees only when cumulative consideration exceeds the minimum guarantee.
The Company’s payment terms vary by the type and location of customer. Generally, payment terms are 30-45 days after revenue is earned. In certain limited circumstances, agreements with customers have payment terms in excess of one-year after satisfaction of the performance obligation.
Advertising
The Company generates revenues from the sale of advertising time on its networks. In such arrangements, the Company generally promises to air a certain number of commercials (spots) and to generate guaranteed viewer ratings for an audience demographic (impressions) over a period that generally does not exceed one year. The promise to deliver impressions by airing spots represents the Company’s performance obligation. Advertising revenues are recognized, net of agency commissions, as commercials are aired, to the extent that guaranteed viewer ratings are achieved. A contract liability is recognized to the extent the guaranteed viewer ratings are not met, and is subsequently recognized as revenue either when the Company provides the required additional advertising or the guarantee obligation contractually expires, which is generally within one year. Generally, payment terms are 30 days after revenue is earned.
Transaction Price Allocated to Future Performance Obligations
The new standard requires disclosure of the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of March 31, 2018. However, the guidance does not apply to sales-based or usage-based royalty arrangements and also provides certain practical expedients that allow companies to omit this disclosure requirement for (i) contracts with an original expected length of one year or less, (ii) contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed and (iii) variable consideration related to a wholly unsatisfied performance obligation.
As of March 31, 2018,2019, other than contracts for which the Company has applied the practical expedients, the aggregate amount of transaction price allocated to remaining performance obligations was not material to our consolidated revenues.
Contract Balances from Contracts with Customers
The timing of revenue recognition, billings and cash collections results in billedfollowing table provides information about receivables, contract assets, and contract liabilities on the Consolidated Balance Sheet.
For certain types offrom contracts with customers,customers.
(In thousands) March 31, 2019 December 31, 2018
Balances from contracts with customers:    
     Accounts receivable (including long-term, included in Other assets) $1,029,236
 $1,018,105
     Contract assets, short-term (included in Other current assets) 14,616
 9,131
     Contract assets, long-term (included in Other assets) 8,696
 8,136
     Contract liabilities (Deferred revenue) 51,261
 55,424

Revenue recognized for the Company may recognize revenue in advance of the contractual rightthree months ended March 31, 2019 relating to invoice the customer, resulting in an amount recorded to contract assets. Once the Company has an unconditional right to consideration under a contract, the contract assets are reclassified to account receivables.liability at December 31, 2018 was $7.1 million.
When consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract, a contract liability is recorded. Contract liabilities are recognized as revenue when, or as, control of the products or services is transferred to the customer and all revenue recognition criteria have been met. The primary source of the Company’s contract liabilities relates to advertising sales arrangements and content licensing arrangements. As noted above, the Company’s programming networks generally guarantee viewer ratings for its programming. If these guaranteed viewer ratings are not met, the Company is required to provide additional advertising units to the advertiser. For these types of arrangements, a portion of the related revenue is deferred if the guaranteed ratings are not met, representing a contract liability, and is subsequently recognized either when the Company provides the required additional advertising time or the guarantee obligation contractually expires. In certain content licensing arrangements, payment may be received in advance of a distributor's ability to exhibit a program. Such payments are recorded as a contract liability and subsequently recognized when the program becomes available for exhibition.
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)


The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.
(In thousands) March 31, 2018 
December 31, 2017 (a)
Balances from contracts with customers:    
     Accounts receivable (including long-term, included in Other assets) $981,266
 $926,089
     Contract assets, short-term (included in Other current assets) 1,891
 
     Contract assets, long-term (included in Other assets) 14,646
 
    Contract liabilities (Deferred revenue) 51,916
 46,433
(a)As noted above, prior period amounts have not been adjusted under the modified retrospective method.
Revenue recognized for the three months ended March 31, 2018 relating to the contract liability at December 31, 2017 was $12.2 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 March 31,
2019 2018
Basic weighted average common shares outstanding56,588
 60,967
Effect of dilution:   
Stock options33
 
Restricted stock units1,104
 752
Diluted weighted average common shares outstanding57,725
 61,719

(In thousands)Three Months Ended March 31,
2018 2017
Basic weighted average common shares outstanding60,967
 68,020
Effect of dilution:   
Restricted stock units752
 744
Diluted weighted average common shares outstanding61,719
 68,764
For the three months ended March 31, 2018, there were 388,000 stock optionsApproximately 1.5 million and 170,0000.2 million restricted stock units that would have been anti-dilutive to the diluted weighted average common shares outstanding. Approximately 195,000 and 175,000 restricted stock units for the three months endedoutstanding as of March 31, 20182019 and March 31, 20172018, 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. The Company did not include performanceFor the three months ended March 31, 2018, there were 0.4 million stock options and 0.2 million restricted stock units inthat would have been anti-dilutive to the calculation of diluted EPS, since the performance conditions for these awards were not met.weighted average common shares outstanding.
Stock Repurchase Program
On March 7, 2016, the Company announced that itsThe Company's Board of Directors has authorized a program to repurchase up to $500 million$1.5 billion of its outstanding shares of common stock (the "2016 Stock"Stock Repurchase Program"). On June 6, 2017, the Board of Directors approved an increase of $500 million in the amount authorized for a total of $1.0 billion authorized under the 2016 Stock Repurchase Program. The 2016 Stock Repurchase Program has no pre-established closing date and may be suspended or discontinued at any time. For the three months ended March 31, 2018,2019, the Company repurchased 1.6 million18 thousand shares of its Class A common stockCommon Stock at an average purchase price of approximately $50.77$53.82 per share. As of March 31, 2018,2019, the Company has $258.9$558.4 million available for repurchase under the 2016 Stock Repurchase Program.
Note 4. InvestmentsRestructuring
During 2018, management commenced a restructuring initiative designed to reduce the cost structure of the Company. The restructuring was intended to improve organizational design of the Company through the elimination of certain roles, a reduction in the grade of certain roles, an increase in the span of responsibilities of certain senior managers, and the realignment of certain senior leaders to new or additional responsibilities.
Restructuring expense of $2.6 million for the three months ended March 31, 2019 primarily related to charges incurred at AMCNI for costs associated with the termination of distribution in certain territories.
The Company holds several investmentsfollowing table summarizes the accrued restructuring costs:
(In thousands)Severance and employee-related costs Other exit costs Total
Balance at December 31, 2018$33,774
 $1,415
 $35,189
Charges1,075
 1,567
 2,642
Cash payments(17,089) (333) (17,422)
Non-cash adjustments(737) (2,577) (3,314)
Currency translation45
 36
 81
Balance at March 31, 2019$17,068
 $108
 $17,176

Accrued restructuring costs of $11.7 million are included in accrued liabilities and loans$5.4 million are included in non-consolidated entities. Equity method investments were $81.4 millionother liabilities (long-term) in the consolidated balance sheet at March 31, 2018 and $61.3 million at December 31, 2017. Cost method investments were $71.8 million at March 31, 2018 and $46.8 million at December 31, 2017. Equity and cost method investments are included in Other assets in the condensed consolidated balance sheet.2019.
RLJE
On January 5,Note 5. Business Combinations
RLJ Entertainment
In October 2018, a subsidiary of the Company entered intoacquired a Stock Purchase Agreement (the "Stock Purchase Agreement") with JH Partners Evergreen Fund, L.P., Forrestal, LLC, JH Investment Partners III, L.P.,controlling interest in RLJE, a premium subscription streaming services company that operates Acorn TV and JH Investment Partners GP Fund III, LLC (collectively, "JH Partners"). Under the terms of the Stock Purchase Agreement, the Company purchased (i) 678,095 shares of common stock of RLJ Entertainment, Inc., ("RLJE"), (ii) 747,945 warrants to purchase shares of common stock of RLJE with an adjusted exercise price of $1.50 per share issued,UMC. Acorn TV features high-quality British and (iii) 7,479.432 shares of Series D-1 preferred stock of RLJE. The total purchase price was $17.2 million.International mysteries and dramas. UMC showcases quality urban programming including feature films, documentaries, original series, stand-up comedy and other exclusive content
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)


for African-American and urban audiences. In addition, RLJE owns a majority interest in Agatha Christie Ltd., a popular world-class franchise. 
RLJE also controls, co-produces, and either owns or has long-term distribution rights to a large library of content primarily consisting of British mysteries and dramas, independent feature films and urban content. In addition to supporting its streaming services, the company monetizes its library through distribution operations across virtually all available media platforms and is distributed in the United States, Canada, U.K. and Australia.
The Company accounted for the acquisition of RLJE using the acquisition method of accounting. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their estimated respective fair values as of the closing date of the acquisition. Goodwill recognized in connection with this transaction represents primarily the potential economic benefits that the Company believes may arise from the acquisition. The goodwill associated with the RLJE acquisition is generally not deductible for tax purposes.
The acquisition accounting for RLJE as reflected in these consolidated financial statements is preliminary and based on current estimates and currently available information, and is subject to revision based on final determinations of fair value and final allocations of purchase price to the identifiable assets and liabilities acquired. The primary estimated fair values that are not yet finalized relate to the valuation of intangible assets, other assets, current and noncurrent liabilities, and redeemable noncontrolling interests.
The following table summarizes the preliminary valuation of the tangible and identifiable intangible assets acquired and liabilities assumed as of October 1, 2018, the date the Company obtained a controlling interest (in thousands).
Fair value of equity consideration transferred$41,513
Fair value of previously held equity interest130,890
Fair value of redeemable noncontrolling interest103,359
 $275,762
Allocation to net assets acquired: 
Cash3,360
Accounts receivable16,316
Prepaid expenses and other current assets963
Programming rights69,775
Property and equipment2,841
Other assets (equity method investments)36,700
Intangible assets126,600
Accounts payable(12,008)
Accrued liabilities(41,501)
Debt(25,187)
 177,859
Goodwill97,903
 $275,762

Levity Entertainment Group LLC
On February 26,April 20, 2018, the Company deliveredacquired a letter to RLJE pursuant to which the Company proposed to acquire all of the outstanding shares of RLJE not currently owned by the Company or entities affiliated with Robert L. Johnson57% controlling interest in Levity, a production services and comedy venues company, for a total purchase price of $4.25 per share$48.4 million. The purchase price consisted of a $35.0 million payment for the outstanding Class B Common Units of Levity and the acquisition of Series L Preferred Units for $13.4 million. The Company has entered into arrangements with the noncontrolling members related to the governance of Levity following the acquisition. The Company views this acquisition as complementary to its business and programming content strategy.
The Company accounted for the acquisition of Levity using the acquisition method of accounting. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in cash. Througha business combination be measured at their estimated respective fair values as of the closing date of the acquisition. Goodwill recognized in connection with this offer,transaction represents primarily the potential economic benefits that the Company intendsbelieves may arise from the acquisition. The goodwill associated with the Levity acquisition is generally deductible for RLJE to become a majority-owned subsidiarytax purposes.
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)

The following table summarizes the valuation of the Company, with a minority stake held by Mr. Johnson. tangible and identifiable intangible assets acquired and liabilities assumed (in thousands).
Cash paid for controlling interest$48,350
Redeemable noncontrolling interest30,573
 $78,923
Allocation to net assets acquired: 
Cash13,471
Other current assets17,251
Property and equipment20,663
Intangible assets46,413
Other noncurrent assets3,306
Current liabilities(23,647)
Noncurrent liabilities(21,394)
Noncontrolling interests acquired(1,354)
Fair value of net assets acquired54,709
Goodwill24,214
 $78,923

Unaudited Pro forma financial information
The boardfollowing unaudited pro forma financial information is based on (i) the historical financial statements of directorsAMC Networks, (ii) the historical financial statements of RLJE and (iii) the historical financial statements of Levity and is intended to provide information about how the acquisitions may have affected the Company's historical consolidated financial statements if they had occurred as of January 1, 2018. The unaudited pro forma information has formedbeen prepared for comparative purposes only and includes adjustments for estimated additional depreciation and amortization expense as a special committeeresult of independent directorstangible and identifiable intangible assets acquired. The pro forma information is not necessarily indicative of the results of operations that would have been achieved had the acquisition taken place on the date indicated or that may result in the future.
 (In thousands, except per share data)
Pro Forma Financial Information
 For the Three Months Ended March 31, 2018
 
 Revenues, net$799,137
 
 Income from operations before income taxes$148,210
 
 Net income per share, basic$2.43
 
 Net income per share, diluted$2.40
 

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 $85.8 million at March 31, 2019 and $90.9 million at December 31, 2018.
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 considerfair value at each reporting period. The changes in fair value between measurement dates are recorded in realized and unrealized gains (losses) on equity securities, included in Miscellaneous, net in the proposal. There cancondensed consolidated statement of income. Investments in marketable equity securities were $1.4 million at March 31, 2019 and $1.2 million at December 31, 2018.
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 no assurance thatrecorded at
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)

cost and adjusted to fair value at each reporting period. However, the proposal made byguidance 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 to RLJE will resultestimates 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 a transaction orrights and obligations. The changes in value are recorded in realized and unrealized gains (losses) on equity securities, included in Miscellaneous, net in the terms upon which any transaction may occur.condensed consolidated statement of income.
Other Investments in non-marketable equity securities were $61.8 million at March 31, 2019 and $71.8 million at December 31, 2018.
OnFor the three months ended March 5, 2018,31, 2019, the Company made an investmentrecognized impairment charges of $17.7 million related to the partial write-down of certain non-marketable equity securities and a note receivable, included in fuboTV Inc.Miscellaneous, net in the condensed consolidated statement of $25.0 million, which is accounted for as a cost method investment.income.
Note 5.7. 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, 2018$238,431
 $559,606
 $798,037
Puchase accounting adjustments
 (1,748) (1,748)
Amortization of "second component" goodwill(332) 
 (332)
Foreign currency translation
 1,836
 1,836
March 31, 2019$238,099
 $559,694
 $797,793

(In thousands)National Networks 
International
and Other
 Total
December 31, 2017$239,759
 $455,399
 $695,158
Amortization of "second component" goodwill(328) 
 (328)
Foreign currency translation
 12,824
 12,824
March 31, 2018$239,431
 $468,223
 $707,654
Purchase accounting adjustments relate to the acquisition of RLJE (see Note 5).
The reduction of $0.3 million in the carrying amount of goodwill for the National Networks is due to the realization of a tax benefit for the amortization of "second component" goodwill at SundanceTV. Second component goodwill is the amount of tax deductible goodwill in excess of goodwill for financial reporting purposes. In accordance with the authoritative guidance at the time of the SundanceTV acquisition, the tax benefits associated with this excess are applied to first reduce the amount of goodwill, and then other intangible assets for financial reporting purposes, if and when such tax benefits are realized in the Company's tax returns.
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)March 31, 2019  
Gross Accumulated Amortization Net Estimated Useful Lives
Amortizable intangible assets:       
Affiliate and customer relationships$615,628
 $(205,195) $410,433
 6 to 25 years
Advertiser relationships46,282
 (18,665) 27,617
 11 years
Trade names124,453
 (19,756) 104,697
 3 to 20 years
Other amortizable intangible assets13,428
 (6,548) 6,880
 5 to 15 years
Total amortizable intangible assets799,791
 (250,164) 549,627
  
Indefinite-lived intangible assets:       
Trademarks19,900
 
 19,900
  
Total intangible assets$819,691
 $(250,164) $569,527
  
(In thousands)December 31, 2018  
Gross Accumulated Amortization Net  
Amortizable intangible assets:       
Affiliate and customer relationships$620,771
 $(198,500) $422,271
  
Advertiser relationships46,282
 (17,613) 28,669
  
Trade names118,772
 (17,971) 100,801
  
Other amortizable intangible assets13,643
 (6,377) 7,266
  
Total amortizable intangible assets799,468
 (240,461) 559,007
  
Indefinite-lived intangible assets:       
Trademarks19,900
 
 19,900
  
Total intangible assets$819,368
 $(240,461) $578,907
  

(In thousands)March 31, 2018  
Gross 
Accumulated
Amortization
 Net Estimated Useful Lives
Amortizable intangible assets:       
Affiliate and customer relationships$532,555
 $(177,019) $355,536
 6 to 25 years
Advertiser relationships46,282
 (14,457) 31,825
 11 years
Trade names55,201
 (15,422) 39,779
 20 years
Other amortizable intangible assets11,704
 (6,349) 5,355
 2 to 15 years
Total amortizable intangible assets645,742
 (213,247) 432,495
  
Indefinite-lived intangible assets:       
Trademarks19,900
 
 19,900
  
Total intangible assets$665,642
 $(213,247) $452,395
  
(In thousands)December 31, 2017  
Gross 
Accumulated
Amortization
 Net  
Amortizable intangible assets:       
Affiliate and customer relationships$527,713
 $(167,911) $359,802
  
Advertiser relationships46,282
 (13,405) 32,877
  
Trade names53,761
 (14,420) 39,341
  
Other amortizable intangible assets11,401
 (6,079) 5,322
  
Total amortizable intangible assets639,157
 (201,815) 437,342
  
Indefinite-lived intangible assets:       
Trademarks19,900
 
 19,900
  
Total intangible assets$659,057
 $(201,815) $457,242
  
Aggregate amortization expense for amortizable intangible assets for the three months ended March 31, 20182019 and 20172018 was $9.3$10.3 million and $9.1$9.3 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, 
2019$44,784
202047,216
202146,422
202246,159
202346,076
(In thousands) 
Years Ending December 31, 
2018$36,491
201936,488
202036,102
202136,099
202236,087

Note 6.8. Accrued Liabilities
Accrued liabilities consist of the following:
(In thousands)March 31, 2019 December 31, 2018
Interest$40,066
 $30,018
Employee related costs58,202
 100,729
Income taxes payable41,425
 1,527
Other accrued expenses110,257
 132,644
Total accrued liabilities$249,950
 $264,918

(In thousands)March 31, 2018 December 31, 2017
Interest$40,093
 $30,262
Employee related costs55,181
 117,850
Income taxes payable35,025
 19,558
Other accrued expenses105,002
 95,406
Total accrued liabilities$235,301
 $263,076
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)


Note 7.9. Long-term Debt
The Company's long-term debt consists of the following:
(In thousands)March 31, 2018 December 31, 2017March 31, 2019 December 31, 2018
Senior Secured Credit Facility: (a)
      
Term Loan A Facility$750,000
 $750,000
$750,000
 $750,000
Senior Notes:      
4.75% Notes due August 2025800,000
 800,000
800,000
 800,000
5.00% Notes due April 20241,000,000
 1,000,000
1,000,000
 1,000,000
4.75% Notes due December 2022600,000
 600,000
600,000
 600,000
Other debt2,000
 2,584
Total long-term debt3,150,000
 3,150,000
3,152,000
 3,152,584
Unamortized discount(32,663) (33,776)(28,010) (29,181)
Unamortized deferred financing costs(16,199) (16,967)(13,065) (13,848)
Long-term debt, net$3,101,138
 $3,099,257
3,110,925
 3,109,555
Current portion of long-term debt30,125
 21,334
Noncurrent portion of long-term debt$3,080,800
 $3,088,221
(a)The Company's $500 million revolving credit facility remains undrawn at March 31, 2018.2019. Total undrawn revolver commitments are available to be drawn for general corporate purposes of the Company.
Note 10. Leases
Certain subsidiaries of the Company lease office space and equipment under long-term non-cancelable lease agreements which expire at various dates through 2034. Leases with an initial term of 12 months or less are not recorded on the balance sheet, instead the lease expense is recorded on a straight-line basis over the lease term. For lease agreements entered into, we combine lease and non-lease components. Some leases include options to extend the lease term or terminate the lease prior to the end of the lease term. The exercise of lease renewal options is at the Company's sole discretion, as such, these options are generally not recognized as part of our right-of-use asset or lease liabilities. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.
The leases generally provide for fixed annual rentals plus certain other costs or credits. Some leases include rental payments based on a percentage of revenue over contractual levels or based on an index or rate. Our lease agreements do not include any material residual value guarantees or material restrictive covenants. We rent or sublease one real estate property to a third party, which constitutes an immaterial portion of our lease portfolio.
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)

The following table summarizes the leases included in the consolidated balance sheets as follows:
(In thousands)
Balance Sheet 
Location
 March 31, 2019
Assets   
OperatingOperating lease right-of-use asset $174,563
FinanceProperty and equipment, net 18,502
Total lease assets  $193,065
Liabilities   
Current:   
OperatingCurrent portion of lease obligations $26,633
FinanceCurrent portion of lease obligations 4,708
   $31,341
Noncurrent:   
OperatingLease obligations $204,336
FinanceLease obligations 20,348
   224,684
    
Total lease liabilities  $256,025

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date. Upon transition to ASC Topic 842, the Company used the incremental borrowing rate on January 1, 2019 for all operating leases that commenced prior to that date.
The following table summarizes the lease costs included in the condensed consolidated statement of income:
(In thousands)Income Statement Location March 31, 2019
Operating lease costsSG&A expenses $8,206
Finance lease costs:   
Amortization of leased assetsDepreciation and amortization 673
Interest on lease liabilitiesNet interest expense 678
Short term lease costsSG&A expenses 1,590
Variable lease costsSG&A expenses 308
Total net lease cost  $11,455
The following table summarizes the maturity of lease liabilities for operating and finance leases:
(In thousands)Operating Leases Finance Leases Total
2019$27,419
 $5,627
 $33,046
202035,909
 5,862
 41,771
202131,248
 4,388
 35,636
202233,309
 4,414
 37,723
202333,766
 4,441
 38,207
Thereafter118,885
 9,673
 128,558
Total lease payments280,536
 34,405
 314,941
Less: Interest49,568
 9,348
 58,916
Present value of lease liabilities$230,968
 $25,057
 $256,025



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



The following table summarizes the weighted average remaining lease term and discount rate for operating and finance leases:
March 31, 2019
Weighted average remaining lease term (years):
Operating leases8.31
Finance leases6.08
Weighted average discount rate:
Operating leases4.75%
Finance leases10.21%

The following table summarizes the supplemental cash paid for amounts in the measurement of lease liabilities:
 March 31, 2019
Operating cash flows from operating leases$8,240
Financing cash flows from finance leases$1,309

Note 8.11. 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.
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 March 31, 20182019 and December 31, 2017:2018:
(In thousands) Level I Level II Level III Total
At March 31, 2019:        
Assets        
Cash equivalents $120,119
 $
 $
 $120,119
Marketable securities 1,405
 
 
 1,405
Foreign currency derivatives 
 2,957
 
 2,957
Liabilities        
Interest rate swap contracts $
 $995
 $
 $995
Foreign currency derivatives 
 $2,247
 $
 2,247
At December 31, 2018:        
Assets        
Cash equivalents $68,498
 $
 $
 $68,498
Marketable securities 1,173
 
 
 1,173
Foreign currency derivatives 
 3,509
 
 3,509
Liabilities        
Interest rate swap contracts $
 $356
 $
 $356
Foreign currency derivatives 
 $3,121
 $
 3,121
(In thousands) Level I Level II Level III Total
At March 31, 2018:        
Assets:        
Cash equivalents 
 $65,955
 $
 $
 $65,955
Marketable securities 8,457
 
 
 8,457
Investments 31,632
 
 
 31,632
Interest rate swap contracts 
 1,298
 
 1,298
Foreign currency derivatives 
 3,027
 
 3,027
Other derivatives 
 9,712
 41,097
 50,809
Liabilities:        
Foreign currency derivatives $
 $4,064
 $
 $4,064
At December 31, 2017:        
Assets:        
Cash equivalents $100,615
 $
 $
 $100,615
Marketable securities 10,709
 
 
 10,709
Investments 9,948
 
 
 9,948
Interest rate swap contracts 
 1,444
 
 1,444
Foreign currency derivatives 
 3,801
 
 3,801
Other derivatives 
 6,174
 30,891
 37,065
Liabilities:        
Foreign currency derivatives $
 $4,475
 $
 $4,475

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 and the embedded derivative for the interest on the RLJE Term Loans to be paid in shares of RLJE common stock (see Note 9) are classified within Level II of the fair value hierarchy andas their fair values are determined based on a market approach valuation technique that uses readily observable market parameters and the consideration of counterparty risk.
On October 14, 2016, Digital Entertainment Holdings LLC (“DEH”), a wholly-owned subsidiary of the Company, and RLJE entered into a Credit and Guaranty Agreement pursuant to which DEH provided term loans to RLJE (the “RLJE Term Loans”). In connection with the RLJE Credit and Guaranty Agreement, DEH received warrants to purchase at least 20 million shares of RLJE’s common stock, at a price of $3.00 per share (the “RLJE Warrants”). The RLJE Warrants held by the Company are classified within Level III of the fair value hierarchy and the Company determines the value of the RLJE Warrants using a Black Scholes option pricing model. Inputs to the model are stock price volatility, contractual warrant terms (remaining life of the warrants), exercise price, risk-free interest rate, and the RLJE stock price. The equity volatility used is based on the equity volatility of RLJE with an adjustment for the changes in the capital structure of RLJE. In arriving at the concluded value of the warrants, a discount for the lack of marketability (DLOM) of 32% was applied. The DLOM, which is unobservable, is determined using the Finnerty Average-Strike Put Option Marketability Discount Model (Finnerty Model), which was applied with a security-specific volatility for the warrants. For the three months ended March 31, 2018, and 2017, the Company recorded a gain of $8.1 million and $8.9 million, respectively, related to the RLJE Warrants which is included in Miscellaneous, net in the condensed consolidated statement of income.
At March 31, 2018,2019, the Company does not have any other assets or liabilities measured at fair value on a recurring basis that would be considered Level III.
Fair value measurements are also used in nonrecurring valuations performed in connection with acquisition accounting. These nonrecurring valuations primarily include the valuation of affiliate and customer relationships intangible assets, advertiser relationship intangible assets and property and equipment. All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level III of the fair value hierarchy.
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)

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

The carrying values and estimated fair values of the Company's financial instruments, excluding those that are carried at fair value in the condensed consolidated balance sheets, are summarized as follows:
(In thousands)March 31, 2019
Carrying
Amount
 
Estimated
Fair Value
Debt instruments:   
Term loan A facility$740,352
 $736,875
4.75% Notes due August 2025786,894
 794,000
5.00% Notes due April 2024986,838
 1,004,900
4.75% Notes due December 2022594,841
 606,750
Other debt$2,000
 $2,000
 $3,110,925
 $3,142,525
(In thousands)March 31, 2018
Carrying
Amount
 
Estimated
Fair Value
Debt instruments:   
Term Loan A Facility$737,774
 $748,125
4.75% Notes due August 2025785,171
 771,000
5.00% Notes due April 2024984,591
 988,750
4.75% Notes due December 2022593,602
 604,500
 $3,101,138
 $3,112,375

(In thousands)December 31, 2018
Carrying
Amount
 
Estimated
Fair Value
Debt instruments:   
Term loan A facility$739,710
 $738,750
4.75% Notes due August 2025786,458
 720,000
5.00% Notes due April 2024986,275
 947,500
4.75% Notes due December 2022594,528
 580,500
Other debt$2,584
 $2,584
 $3,109,555
 $2,989,334
(In thousands)December 31, 2017
Carrying
Amount
 
Estimated
Fair Value
Debt instruments:   
Term Loan A Facility$737,140
 $748,125
4.75% Notes due August 2025784,757
 793,000
5.00% Notes due April 2024984,056
 1,012,500
4.75% Notes due December 2022593,304
 612,750
 $3,099,257
 $3,166,375

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 9.12. 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 March 31, 2018,2019, the Company had interest rate swap contracts outstanding with notional amounts aggregating $200.0$100.0 million that are not designated as hedging instruments. The Company's outstanding interest rate swap contracts mature in October 2018.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.
Other Derivatives
The RLJE Warrants held by the Company meet the definition of a derivative and are included in Other assets in the consolidated balance sheet. In addition, the interest on the RLJE Term Loans to be paid in shares of RLJE common stock is an embedded derivative. Both the RLJE Warrants and the embedded derivative for the future interest to be paid in shares of RLJE common stock are remeasured at the end of each period with changes in fair value recorded in the consolidated statements of income. For the three months ended March 31, 2018 and 2017, the Company recorded a gain of $11.7 million and $11.1 million, respectively, related to these derivatives, which is included in Miscellaneous, net in the condensed consolidated statement of income.
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)


The fair values of the Company's derivative financial instruments not designated as hedging instruments included in the condensed consolidated balance sheets are as follows:
(In thousands)
Balance Sheet 
Location
 March 31, 2019 December 31, 2018
Derivatives designated as hedging instruments:     
Liabilities:     
Interest rate swap contractsAccrued liabilities $995
 $356
Derivatives not designated as hedging instruments:     
Assets:     
Foreign currency derivativesPrepaid expenses and other current assets $1,270
 $1,452
Foreign currency derivativesOther assets 1,687
 2,057
Liabilities:     
Foreign currency derivativesAccrued liabilities $597
 $700
Foreign currency derivativesOther liabilities 1,650
 2,421
(In thousands)
Balance Sheet 
Location
 March 31, 2018 December 31, 2017
Derivatives not designated as hedging instruments:    
Assets:     
Foreign currency derivativesPrepaid expenses and other current assets $785
 $943
Foreign currency derivativesOther assets 2,241
 2,858
Interest rate swap contractsPrepaid expenses and other current assets 1,298
 1,444
Other derivativesOther assets 50,809
 37,065
Liabilities:     
Foreign currency derivativesAccrued liabilities 1,069
 1,223
Foreign currency derivativesOther liabilities 2,995
 3,252

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 March 31,   Three Months Ended March 31,
2019 2018   2019 2018
Derivatives in cash flow hedging relationships:         
Interest rate swap contracts$(651) $
 Interest expense $12
 $

(In thousands)Gain or (Loss) on Derivatives
 Recognized in OCI
 Location of Gain or (Loss) in Earnings 
Gain or (Loss) Reclassified 
from Accumulated OCI
 into Earnings (a)
Three Months Ended March 31,   Three Months Ended March 31,
2018 2017   2018 2017
Derivatives in cash flow hedging relationships:         
Interest rate swap contracts$
 $321
 Interest expense $
 $2

(a)There were no gains or losses recognized in earnings related to any ineffective portion of hedging relationships or related to any amount excluded from the assessment of hedge effectiveness for the three months ended March 31, 2018 and 2017.
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 March 31,
  2019 2018
Interest rate swap contractsInterest expense $
 $(146)
Foreign currency derivativesMiscellaneous, net 457
 (293)
Other derivativesMiscellaneous, net 
 11,687
Total  $457
 $11,248
(In thousands)
Location of Gain or (Loss) Recognized in Earnings
 on Derivatives
 Amount of Gain or (Loss) Recognized in Earnings on Derivatives
  Three Months Ended March 31,
  2018 2017
Derivatives not designated as hedging relationships:     
Interest rate swap contractsInterest expense $(146) $2
Foreign currency derivativesMiscellaneous, net (293) (267)
Other derivativesMiscellaneous, net 11,687
 11,117
Total  $11,248
 $10,852

Note 10.13. Income Taxes
For the three months ended March 31, 2019, income tax expense was $46.5 million, representing an effective tax rate of 24%. The effective tax rate differs from the federal statutory rate of 21% due primarily to state income tax expense of $3.2 million.
For the three months ended March 31, 2018, income tax expense was $56.9 million, representing an effective tax rate of 26%. The effective tax rate differs from the federal statutory rate of 21% due primarily to tax expense of $16.4 million for an increase in valuation allowances for foreign taxes and U.S. foreign tax credits, tax benefit of $8.3 million for the one-time rate change on deferred tax assets and liabilities that resulted from the extension of certain television production cost deductions included in the Bipartisan Budget Act of 2018 (enacted February 9, 2018), tax benefit from foreign subsidiary earnings indefinitely reinvested outside the U.S. of $4.9 million and state income tax expense of $3.8 million.
For the three months ended March 31, 2017, income tax expense was $73.1 million, representing an effective tax rate of 34%. The effective tax rate differs from the federal statutory rate of 35% due primarily to tax benefit from domestic production activities deduction of $5.9 million, tax benefit from foreign subsidiary earnings indefinitely reinvested outside the U.S. of $4.1
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)


reinvested outside the U.S. of $4.9 million and state income tax expense of $3.4 million and tax expense of $2.3 million for an increase in valuation allowances for foreign taxes.$3.8 million.
At March 31, 2018,2019, the Company had foreign tax credit carry forwards of approximately $15.6$25.3 million, expiring on various dates from 20242022 through 2025.2029. These carryforwards have been reduced by a valuation allowance of $15.6$25.3 million as it is more likely than not that these carry forwards will not be realized. For the three months ended March 31, 2018,2019, $0.3 million relating to amortization of tax deductible second component goodwill was realized as a reduction in tax liability (as determined on a 'with-and-without' approach).
Note 11.14. Commitments and Contingencies
Commitments
As of March 31, 2018,2019, the Company's contractual obligations not reflected on the Company's condensed consolidated balance sheet decreased $154.7$200.7 million, as compared to $1.2 billion.December 31, 2018, to $923.1 million. The decrease relates primarily to the expirationadoption of payment guarantees to a production service company for certain production related costs.the new lease standard requiring the recognition of operating leases on the balance sheet rather than disclosed as contractual obligations.
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 millionmillion. 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, which will be fully submitted by May 21, 2018.briefing. A hearing on the supplemental summary judgment submissions will bewas held on June 13, 2018. The Company has opposedOn December 10, 2018, the Court denied Plaintiffs' claims.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 assertedremaining 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. Plaintiffs also seek a judicial determination that their contracts with the Company entitle them to an "actual fair market license fee" in connection with AMC Networks telecasting of The Walking Dead, which they allege is "substantially better than" what they received. The Company filefiled an Answer to the Complaint on April 16, 2018. On August 30, 2018, Plaintiff's filed an Amended Compliant, 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. The trial is scheduled to begin on May 4, 2020. The Company believes that the asserted claims are without merit, denies the allegations and will defend the case vigorously. The parties in the second action are presently engaged in fact discovery. 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 asFear the Walking Dead and/or Talking Dead, and the agreements between the parties related thereto (the "California Action"). The California Plaintiffs asserted that the Company has been improperly underpaying the California Plaintiffs under their contracts with the Company and they assert claims for breach of contract, breach of the covenant of good faith and fair dealing, inducing breach of contract, and liability for violation of Cal. Bus. & Prof. Code § 17200. On August 15, 2017, two of the California Plaintiffs, Gale Anne Hurd and David Alpert (and their associated productionloan-out companies), along with Charles Eglee and his productionloan-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
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)


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. The parties are presently engaged in fact discovery. 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 12.15. Equity Plans
In March 2018,2019, AMC Networks granted 684,737498,320 restricted stock units ("RSUs") and 537,403390,566 performance restricted stock units ("PRSUs") 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 195,028165,194 RSUs include the achievement of certain performance targets by the Company. The PRSUs vest on the third anniversary of the grant date.
The target number of PRSUs granted represents the right to receive a corresponding number of shares, subject to adjustment based on the performance of the Company against target performance criteria for a three-year period. The number of shares issuable at the end of the applicable measurement period ranges from 0% to 200% of the target PRSU award.
During the three months ended March 31, 2018, 707,6242019, 518,583 RSUs and 349,761 PRSUs of AMC Networks Class A Common Stock previously issued to employees of the Company vested. On the vesting date, 289,555217,265 RSUs and 150,771 PRSUs were surrendered to the Company to cover the required statutory tax withholding obligations and 418,069301,318 RSU and 198,990 PRSU new shares of AMC Networks Class A Common Stock were issued in respect of the remaining RSUs.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 $15.4$23.0 million, which has been reflected as a financing activity in the condensed consolidated statement of cash flows for the three months ended March 31, 2018.2019.
Share-based compensation expense included in selling, general and administrative expense, for the three months ended March 31, 20182019 and March 31, 20172018 was $15.3$19.9 million, and $12.5$15.3 million, respectively.
As of March 31, 2018,2019, there was $133.8$120.1 million of total unrecognized share-based compensation cost related to outstanding unvested share-based awards. The unrecognized compensation cost is expected to be recognized over a weighted-average remaining period of approximately 2.72.5 years.
Note 13.16. Redeemable Noncontrolling Interests
The following table summarizes activity related to redeemable noncontrolling interest for the three months ended March 31, 2018.2019.
(In thousands)Three Months Ended March 31, 2019
December 31, 2018$299,558
Net earnings5,819
Distributions(5,268)
Other(307)
March 31, 2019$299,802
(In thousands)Three Months Ended March 31, 2018
December 31, 2017$218,604
Net earnings3,197
Distributions(1,435)
March 31, 2018$220,366

Note 14.17. Related Party Transactions
Members of the Dolan Family, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, including trusts for the benefit of the Dolan Family, collectively beneficially own all of the AMC Networks outstanding Class B Common Stock and own approximately 2% of the AMC Networks' outstanding Class A Common Stock. Such shares of the AMC Networks Class A Common Stock and Class B Common Stock, collectively, represent approximately 71% of the aggregate voting power of AMC Networks' outstanding common stock. Members of the Dolan Family are also the controlling stockholders of The Madison Square Garden Company ("MSG") and MSG Networks Inc. ("MSG Networks").
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 $1.6 million for the three months ended March 31, 20182019 and 2017,March 31, 2018, respectively. Amounts charged to the Company, included in selling, general and administrative expenses, pursuant to transactions with its related parties amounted to $0.5$0.7 million and $0.6$0.5 million for the three months ended March 31, 2019 and 2018, and 2017, respectively.

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

On June 16, 2016, AMC Networks entered into an arrangement with the Dolan Family Office, LLC ("DFO"), MSG and MSG Networks providing for the sharing of certain expenses associated with executive office space which will be available to Charles F. Dolan (the Executive Chairman and a director of the Company and a director of MSG and MSG Networks), James L. Dolan (the Executive Chairman and a director of MSG and MSG Networks and a director of the Company), and the DFO which is controlled by Charles F. Dolan. The Company's share of office expenses is not material.

Note 15.18. Cash Flows
The Company's non-cash investing and financing activities and other supplemental data are as follows:
(In thousands)Three Months Ended March 31,
2019 2018
Non-Cash Investing and Financing Activities:   
Capital expenditures incurred but not yet paid$2,216
 $6,070
Treasury stock not yet settled
 9,980
Supplemental Data:   
Cash interest paid28,235
 25,634
Income taxes paid, net6,426
 6,243
(In thousands)Three Months Ended March 31,
2018 2017
Non-Cash Investing and Financing Activities:   
Treasury stock not yet settled9,980
 5,988
Capital expenditures incurred but not yet paid6,070
 3,362
Supplemental Data:   
Cash interest paid25,634
 8,605
Income taxes paid, net6,243
 7,498

Note 16.19. 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, definedmeasure. The Company defines AOI as operating income (loss) before depreciation and amortization, share-based compensation expense or benefit, impairment and related charges (including gains or losses on sales or dispositions of businesses), and restructuring expense or credit.credit and the Company's proportionate share of adjusted operating income (loss) from greater than 50% owned equity method investees. The Company has presented the components that reconcile adjusted operating income to operating income, an accepted GAAP measure, and other information as to the continuing operations of the Company's operating segments below.
(In thousands)Three Months Ended March 31, 2018Three Months Ended March 31, 2019
National
Networks
 
International
and Other
 
Inter-segment
eliminations
 Consolidated
National
Networks
 
International
and Other
 
Inter-segment
eliminations
 Consolidated
Revenues, net              
Advertising$225,730
 $22,510
 $
 $248,240
$239,089
 $21,206
 $
 $260,295
Distribution407,298
 88,880
 (3,595) 492,583
377,029
 149,882
 (2,985) 523,926
Consolidated revenues, net$633,028
 $111,390
 $(3,595) $740,823
$616,118
 $171,088
 $(2,985) $784,221
Operating income (loss)$249,852
 $(16,814) $617
 $233,655
$251,502
 $(13,748) $7,109
 $244,863
Share-based compensation expense12,527
 2,792
 
 15,319
16,269
 3,630
 
 19,899
Restructuring expense303
 3,035
 (696) 2,642
Depreciation and amortization8,495
 11,859
 
 20,354
8,612
 15,444
 
 24,056
Adjusted operating income (loss)$270,874
 $(2,163) $617
 $269,328
Capital expenditures$2,148
 $9,794
 $
 $11,942
Equity investees (>50% interest) AOI
 1,580
 
 1,580
Adjusted operating income$276,686
 $9,941
 $6,413
 $293,040
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)


(In thousands)Three Months Ended March 31, 2018
National
Networks
 
International
and Other
 
Inter-segment
eliminations
 Consolidated
Revenues, net       
Advertising$225,730
 $22,510
 $
 $248,240
Distribution407,298
 88,880
 (3,595) 492,583
Consolidated revenues, net$633,028
 $111,390
 $(3,595) $740,823
Operating income (loss)$249,852
 $(16,814) $617
 $233,655
Share-based compensation expense12,527
 2,792
 
 15,319
Depreciation and amortization8,495
 11,859
 
 20,354
Adjusted operating income$270,874
 $(2,163) $617
 $269,328
(In thousands)Three Months Ended March 31, 2017
National
Networks
 
International
and Other
 
Inter-segment
eliminations
 Consolidated
Revenues, net       
Advertising$247,542
 $20,070
 $
 $267,612
Distribution367,605
 86,727
 (1,755) 452,577
Consolidated revenues, net$615,147
 $106,797
 $(1,755) $720,189
Operating income (loss)$249,607
 $(19,217) $1,281
 $231,671
Share-based compensation expense9,908
 2,556
 
 12,464
Restructuring expense54
 2,650
 
 2,704
Depreciation and amortization8,404
 15,089
 
 23,493
Adjusted operating income$267,973
 $1,078
 $1,281
 $270,332
Capital expenditures$5,135
 $15,071
 $
 $20,206

Inter-segment eliminations are primarily licensing revenues recognized between the National Networks and International and Other segments as well as revenues recognized by AMC Networks Broadcasting & Technology for transmission revenues recognized from the International and Other operating segment.
(In thousands)Three Months Ended March 31,
2019 2018
Inter-segment revenues   
National Networks$(1,390) $(2,535)
International and Other(1,595) (1,060)
 $(2,985) $(3,595)
(In thousands)Three Months Ended March 31,
2018 2017
Inter-segment revenues   
National Networks$(2,535) $(1,724)
International and Other(1,060) (31)
 $(3,595) $(1,755)

The table below summarizes revenues based on customer location:
(In thousands)Three Months Ended March 31,
2019 2018
Revenues   
United States$662,464
 $586,568
Europe79,434
 86,264
Other42,323
 67,991
 $784,221
 $740,823
(In thousands)Three Months Ended March 31,
2018 2017
Revenues   
United States$586,568
 $600,055
Europe86,264
 78,675
Other67,991
 41,459
 $740,823
 $720,189

The table below summarizes property and equipment based on asset location:
(In thousands)March 31, 2019 December 31, 2018
Property and equipment, net   
United States$209,903
 $202,833
Europe26,554
 27,218
Other15,384
 16,211
 $251,841
 $246,262
(In thousands)March 31, 2018 December 31, 2017
Property and equipment, net   
United States$138,912
 $136,203
Europe28,449
 28,261
Other18,079
 19,050
 $185,440
 $183,514

Note 17.20. Condensed Consolidating Financial Statements
Debt of AMC Networks includes $600 million of 4.75% senior notes due December 2022, $1 billion of 5.00% senior notes due April 2024 and $800 million of 4.75% senior notes due August 2025. All outstanding senior notes issued by AMC Networks (for purposes of this Note 18,20, "Parent Company") are guaranteed on a senior unsecured basis by certain of its existing and future domestic restricted subsidiaries (the "Guarantor Subsidiaries"). All Guarantor Subsidiaries are owned 100% by AMC Networks. The outstanding notes are fully and unconditionally guaranteed by the Guarantor Subsidiaries on a joint and several basis.
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)

Set forth below are condensed consolidating financial statements presenting the financial position, results of operations, comprehensive income, and cash flows of (i) the Parent Company, (ii) the Guarantor Subsidiaries on a combined basis (as such
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)

guarantees are joint and several), (iii) the direct and indirect non-guarantor subsidiaries of the Parent Company (the "Non-Guarantor Subsidiaries") on a combined basis and (iv) reclassifications and eliminations necessary to arrive at the information for the Company on a consolidated basis.
Basis of Presentation
 In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) the Parent Company's interests in the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries, and (ii) the Guarantor Subsidiaries' interests in the Non-Guarantor Subsidiaries, even though all such subsidiaries meet the requirements to be consolidated under GAAP. All intercompany balances and transactions between the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries have been eliminated, as shown in the column "Eliminations."
 The accounting basis in all subsidiaries, including goodwill and identified intangible assets, have been allocated to the applicable subsidiaries.
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)


Condensed Consolidating Balance Sheet
March 31, 2019
(In thousands) Parent Company  Guarantor Subsidiaries  Non- Guarantor Subsidiaries  Eliminations  Consolidated
ASSETS         
Current Assets:         
Cash and cash equivalents$827
 $477,816
 $205,039
 $
 $683,682
Accounts receivable, trade (less allowance for doubtful accounts)19
 589,936
 239,749
 
 829,704
Current portion of program rights, net
 293,477
 140,586
 (201) 433,862
Prepaid expenses, other current assets and intercompany receivable58
 194,921
 32,133
 (69,140) 157,972
Total current assets904
 1,556,150
 617,507
 (69,341) 2,105,220
Property and equipment, net of accumulated depreciation
 182,433
 69,408
 
 251,841
Investment in affiliates3,844,267
 1,637,988
 
 (5,482,255) 
Program rights, net
 918,943
 236,759
 (1,437) 1,154,265
Long-term intercompany notes receivable
 
 218
 (218) 
Deferred carriage fees, net
 14,055
 816
 
 14,871
Intangible assets, net
 158,947
 410,580
 
 569,527
Goodwill
 64,950
 732,843
 
 797,793
Deferred tax asset, net
 
 19,927
 
 19,927
Operating lease right-of-use asset101,521
 20,085
 52,957
 
 174,563
Other assets
 171,200
 262,707
 
 433,907
Total assets$3,946,692
 $4,724,751
 $2,403,722
 $(5,553,251) $5,521,914
LIABILITIES AND STOCKHOLDERS' EQUITY         
Current Liabilities:         
Accounts payable$
 $38,969
 $68,423
 $
 $107,392
Accrued liabilities and intercompany payable79,873
 116,858
 124,069
 (70,850) 249,950
Current portion of program rights obligations
 243,013
 78,901
 
 321,914
Deferred revenue
 28,632
 22,629
 
 51,261
Current portion of long-term debt28,125
 
 2,000
 
 30,125
Current portion of lease obligations13,505
 6,568
 11,268
 
 31,341
Total current liabilities121,503
 434,040
 307,290
 (70,850) 791,983
Program rights obligations
 323,343
 18,830
 
 342,173
Long-term debt, net3,080,800
 
 
 
 3,080,800
Lease obligations125,814
 21,833
 77,037
 
 224,684
Deferred tax liability, net131,723
 
 5,844
 
 137,567
Other liabilities and intercompany notes payable31,463
 101,268
 27,783
 (146) 160,368
Total liabilities3,491,303
 880,484
 436,784
 (70,996) 4,737,575
Commitments and contingencies

 

 

 

 

Redeemable noncontrolling interests
 
 299,802
 
 299,802
Stockholders' equity:         
AMC Networks stockholders' equity455,389
 3,844,267
 1,637,989
 (5,482,255) 455,390
Non-redeemable noncontrolling interests
 
 29,147
 
 29,147
Total stockholders' equity455,389
 3,844,267
 1,667,136
 (5,482,255) 484,537
Total liabilities and stockholders' equity$3,946,692
 $4,724,751
 $2,403,722
 $(5,553,251) $5,521,914

Condensed Consolidating Balance Sheet
March 31, 2018
(In thousands) Parent Company  Guarantor Subsidiaries  Non- Guarantor Subsidiaries  Eliminations  Consolidated
ASSETS         
Current Assets:         
Cash and cash equivalents$184
 $354,419
 $174,597
 $
 $529,200
Accounts receivable, trade (including amounts due from related parties, net,
less allowance for doubtful accounts)

 588,633
 204,642
 
 793,275
Current portion of program rights, net
 315,628
 149,293
 
 464,921
Prepaid expenses, other current assets and intercompany receivable1,419
 212,382
 10,592
 (122,335) 102,058
Total current assets1,603
 1,471,062
 539,124
 (122,335) 1,889,454
Property and equipment, net of accumulated depreciation
 138,866
 46,574
 
 185,440
Investment in affiliates3,616,931
 1,013,078
 
 (4,630,009) 
Program rights, net
 1,092,691
 186,898
 
 1,279,589
Long-term intercompany notes receivable
 490,380
 343
 (490,723) 
Deferred carriage fees, net
 26,008
 1,164
 
 27,172
Intangible assets, net
 168,117
 284,278
 
 452,395
Goodwill
 66,282
 641,372
 
 707,654
Deferred tax asset, net
 
 21,731
 
 21,731
Other assets
 173,988
 375,944
 
 549,932
Total assets$3,618,534
 $4,640,472
 $2,097,428
 $(5,243,067) $5,113,367
LIABILITIES AND STOCKHOLDERS' EQUITY         
Current Liabilities:         
Accounts payable$32
 $47,245
 $49,539
 $
 $96,816
Accrued liabilities and intercompany payable86,500
 121,433
 149,703
 (122,335) 235,301
Current portion of program rights obligations
 255,744
 71,118
 
 326,862
Deferred revenue
 34,738
 17,178
 
 51,916
Current portion of capital lease obligations
 3,001
 1,770
 
 4,771
Total current liabilities86,532
 462,161
 289,308
 (122,335) 715,666
Program rights obligations
 470,626
 20,901
 
 491,527
Long-term debt, net3,101,138
 
 
 
 3,101,138
Capital lease obligations
 2,963
 22,270
 
 25,233
Deferred tax liability, net150,247
 
 (5,088) 
 145,159
Other liabilities and intercompany notes payable49,873
 87,791
 506,226
 (490,723) 153,167
Total liabilities3,387,790
 1,023,541
 833,617
 (613,058) 4,631,890
Commitments and contingencies
 
 
 
 
Redeemable noncontrolling interests
 
 220,366
 
 220,366
Stockholders' equity:         
AMC Networks stockholders' equity230,744
 3,616,931
 1,013,078
 (4,630,009) 230,744
Non-redeemable noncontrolling interests
 
 30,367
 
 30,367
Total stockholders' equity230,744
 3,616,931
 1,043,445
 (4,630,009) 261,111
Total liabilities and stockholders' equity$3,618,534
 $4,640,472
 $2,097,428
 $(5,243,067) $5,113,367


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


Condensed Consolidating Balance Sheet
December 31, 2018
(In thousands) Parent Company  Guarantor Subsidiaries  Non- Guarantor Subsidiaries  Eliminations  Consolidated
ASSETS         
Current Assets:         
Cash and cash equivalents$121
 $368,151
 $186,614
 $
 $554,886
Accounts receivable, trade (including amounts due from related parties, net,
less allowance for doubtful accounts)
16
 600,121
 235,840
 
 835,977
Current portion of program rights, net
 292,002
 148,955
 (218) 440,739
Prepaid expenses, other current assets and intercompany receivable6,543
 158,936
 23,549
 (57,219) 131,809
Total current assets6,680
 1,419,210
 594,958
 (57,437) 1,963,411
Property and equipment, net of accumulated depreciation
 175,040
 71,222
 
 246,262
Investment in affiliates3,656,003
 1,655,083
 
 (5,311,086) 
Program rights, net
 969,802
 245,862
 (1,613) 1,214,051
Long-term intercompany notes receivable
 
 190
 (190) 
Deferred carriage fees, net
 15,993
 838
 
 16,831
Intangible assets, net
 161,417
 417,490
 
 578,907
Goodwill
 65,282
 732,755
 
 798,037
Deferred tax asset, net
 
 19,272
 
 19,272
Other assets
 149,724
 292,068
 

 441,792
Total assets$3,662,683
 $4,611,551
 $2,374,655
 $(5,370,326) $5,278,563
LIABILITIES AND STOCKHOLDERS' EQUITY         
Current Liabilities:         
Accounts payable$
 $34,630
 $72,436
 $
 $107,066
Accrued liabilities and intercompany payable35,189
 173,836
 114,943
 (59,050) 264,918
Current portion of program rights obligations
 259,414
 84,175
 
 343,589
Deferred revenue
 34,608
 20,816
 
 55,424
Current portion of long-term debt18,750
 
 2,584
 
 21,334
Current portion of capital lease obligations
 2,941
 2,149
 
 5,090
Total current liabilities53,939
 505,429
 297,103
 (59,050) 797,421
Program rights obligations
 349,814
 23,435
 
 373,249
Long-term debt, net3,088,221
 
 
 
 3,088,221
Capital lease obligations
 1,420
 20,007
 
 21,427
Deferred tax liability, net140,474
 
 4,969
 
 145,443
Other liabilities and intercompany notes payable63,369
 98,885
 45,972
 (190) 208,036
Total liabilities3,346,003
 955,548
 391,486
 (59,240) 4,633,797
Commitments and contingencies         
Redeemable noncontrolling interests
 
 299,558
 
 299,558
Stockholders' equity:         
AMC Networks stockholders' equity316,680
 3,656,003
 1,655,083
 (5,311,086) 316,680
Non-redeemable noncontrolling interests
 
 28,528
 
 28,528
Total stockholders' equity316,680
 3,656,003
 1,683,611
 (5,311,086) 345,208
Total liabilities and stockholders' equity$3,662,683
 $4,611,551
 $2,374,655
 $(5,370,326) $5,278,563

Condensed Consolidating Balance Sheet
December 31, 2017
(In thousands) Parent Company  Guarantor Subsidiaries  Non- Guarantor Subsidiaries  Eliminations  Consolidated
ASSETS         
Current Assets:         
Cash and cash equivalents$320
 $391,248
 $167,215
 $
 $558,783
Accounts receivable, trade (including amounts due from related parties, net,
less allowance for doubtful accounts)

 581,270
 194,621
 
 775,891
Current portion of program rights, net
 304,149
 149,301
 
 453,450
Prepaid expenses, other current assets and intercompany receivable3,760
 183,815
 8,540
 (104,389) 91,726
Total current assets4,080
 1,460,482
 519,677
 (104,389) 1,879,850
Property and equipment, net of accumulated depreciation
 136,032
 47,482
 
 183,514
Investment in affiliates3,443,013
 934,612
 
 (4,377,625) 
Program rights, net
 1,128,021
 191,258
 
 1,319,279
Long-term intercompany notes receivable
 489,939
 436
 (490,375) 
Deferred carriage fees, net
 29,346
 578
 
 29,924
Intangible assets, net
 170,554
 286,688
 
 457,242
Goodwill
 66,609
 628,549
 
 695,158
Deferred tax asset, net
 
 20,081
 
 20,081
Other assets
 142,115
 305,822
 
 447,937
Total assets$3,447,093
 $4,557,710
 $2,000,571
 $(4,972,389) $5,032,985
LIABILITIES AND STOCKHOLDERS' EQUITY         
Current Liabilities:         
Accounts payable$350
 $50,282
 $51,565
 $
 $102,197
Accrued liabilities and intercompany payable51,692
 179,003
 136,770
 (104,389) 263,076
Current portion of program rights obligations
 262,004
 65,545
 
 327,549
Deferred revenue
 27,530
 18,903
 
 46,433
Current portion of long-term debt
 
 
 
 
Current portion of capital lease obligations
 2,939
 1,908
 
 4,847
Total current liabilities52,042
 521,758
 274,691
 (104,389) 744,102
Program rights obligations
 511,996
 22,984
 
 534,980
Long-term debt, net3,099,257
 
 
 
 3,099,257
Capital lease obligations
 3,745
 22,532
 
 26,277
Deferred tax liability, net114,717
 
 (5,019) 
 109,698
Other liabilities and intercompany notes payable46,133
 77,198
 503,166
 (490,375) 136,122
Total liabilities3,312,149
 1,114,697
 818,354
 (594,764) 4,650,436
Commitments and contingencies         
Redeemable noncontrolling interests
 
 218,604
 
 218,604
Stockholders' equity:         
AMC Networks stockholders' equity134,944
 3,443,013
 934,612
 (4,377,625) 134,944
Non-redeemable noncontrolling interests
 
 29,001
 
 29,001
Total stockholders' equity134,944
 3,443,013
 963,613
 (4,377,625) 163,945
Total liabilities and stockholders' equity$3,447,093
 $4,557,710
 $2,000,571
 $(4,972,389) $5,032,985

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


Condensed Consolidating Statement of Income
Three Months Ended March 31, 2018
Three Months Ended March 31, 2019Three Months Ended March 31, 2019
(In thousands)Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations ConsolidatedParent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated
Revenues, net$
 $574,917
 $170,386
 $(4,480) $740,823
$
 $574,230
 $212,760
 $(2,769) $784,221
Operating expenses:                  
Technical and operating (excluding depreciation and amortization)
 222,621
 98,522
 (778) 320,365

 220,488
 120,718
 (1,058) 340,148
Selling, general and administrative
 122,059
 48,089
 (3,699) 166,449

 111,581
 62,831
 (1,900) 172,512
Depreciation and amortization
 10,804
 9,550
 
 20,354

 12,537
 11,519
 
 24,056
Impairment charges
 
 
 
 
Restructuring expense
 (283) 2,925
 
 2,642
Total operating expenses
 355,484
 156,161
 (4,477) 507,168

 344,323
 197,993
 (2,958) 539,358
Operating income
 219,433
 14,225
 (3) 233,655

 229,907
 14,767
 189
 244,863
Other income (expense):                  
Interest expense, net(36,907) 11,897
 (8,176) 
 (33,186)(38,929) 3,183
 301
 
 (35,445)
Share of affiliates' income247,482
 17,498
 
 (264,980) 
Share of affiliates’ income (loss)224,244
 (7,311) 
 (216,933) 
Miscellaneous, net(206) 734
 16,415
 3
 16,946
(99) 709
 (13,206) (189) (12,785)
Total other income (expense)210,369
 30,129
 8,239
 (264,977) (16,240)185,216
 (3,419) (12,905) (217,122) (48,230)
Income from operations before income taxes210,369
 249,562
 22,464
 (264,980) 217,415
185,216
 226,488
 1,862
 (216,933) 196,633
Income tax expense(53,499) (2,080) (1,300) 
 (56,879)(41,819) (2,244) (2,413) 
 (46,476)
Net income including noncontrolling interests156,870
 247,482
 21,164
 (264,980) 160,536
143,397
 224,244
 (551) (216,933) 150,157
Net income attributable to noncontrolling interests
 
 (3,666) 
 (3,666)
 
 (6,760) 
 (6,760)
Net income attributable to Parent Company's stockholders$156,870
 $247,482
 $17,498
 $(264,980) $156,870
Net income attributable to AMC Networks’ stockholders$143,397
 $224,244
 $(7,311) $(216,933) $143,397


Condensed Consolidating Statement of Income
Three Months Ended March 31, 2017
Three Months Ended March 31, 2018Three Months Ended March 31, 2018
(In thousands)Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations ConsolidatedParent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated
Revenues, net$
 $579,382
 $143,132
 $(2,325) $720,189
$
 $574,917
 $170,386
 $(4,480) $740,823
Operating expenses:                  
Technical and operating (excluding depreciation and amortization)
 221,754
 77,617
 (759) 298,612

 222,621
 98,522
 (778) 320,365
Selling, general and administrative
 119,681
 45,479
 (1,451) 163,709

 122,059
 48,089
 (3,699) 166,449
Depreciation and amortization
 10,204
 13,289
 
 23,493

 10,804
 9,550
 
 20,354
Restructuring expense
 2,704
 
 
 2,704
Impairment and related charges
 
 
 
 
Restructuring (credit) expense
 
 
 
 
Total operating expenses
 354,343
 136,385
 (2,210) 488,518

 355,484
 156,161
 (4,477) 507,168
Operating income
 225,039
 6,747
 (115) 231,671

 219,433
 14,225
 (3) 233,655
Other income (expense):                  
Interest expense, net(29,412) 9,823
 (7,418) 
 (27,007)(36,907) 11,897
 (8,176) 
 (33,186)
Share of affiliates' income235,774
 3,145
 
 (238,919) 
Share of affiliates’ income247,482
 17,498
 
 (264,980) 
Loss on extinguishment of debt
 
 
 
 
Miscellaneous, net(112) 431
 10,615
 115
 11,049
(206) 734
 16,415
 3
 16,946
Total other income (expense)206,250
 13,399
 3,197
 (238,804) (15,958)210,369
 30,129
 8,239
 (264,977) (16,240)
Income from operations before income taxes206,250
 238,438
 9,944
 (238,919) 215,713
210,369
 249,562
 22,464
 (264,980) 217,415
Income tax expense(70,033) (2,664) (385) 
 (73,082)
Income tax (expense) benefit(53,499) (2,080) (1,300) 
 (56,879)
Net income including noncontrolling interests136,217
 235,774
 9,559
 (238,919) 142,631
156,870
 247,482
 21,164
 (264,980) 160,536
Net income attributable to noncontrolling interests
 
 (6,414) 
 (6,414)
 
 (3,666) 
 (3,666)
Net income attributable to Parent Company's stockholders$136,217
 $235,774
 $3,145
 $(238,919) $136,217
Net income attributable to AMC Networks’ stockholders$156,870
 $247,482
 $17,498
 $(264,980) $156,870
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)


Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2019
(In thousands)Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated
Net income including noncontrolling interests$143,397
 $224,244
 $(551) $(216,933) $150,157
Other comprehensive income (loss):         
Foreign currency translation adjustment(5,762) 
 (5,762) 5,762
 (5,762)
Unrealized loss on interest rate swaps(639) 
 
 
 (639)
Other comprehensive income, before income taxes(6,401) 
 (5,762) 5,762
 (6,401)
Income tax expense149
 
 
 
 149
Other comprehensive income, net of income taxes(6,252) 
 (5,762) 5,762
 (6,252)
Comprehensive income137,145
 224,244
 (6,313) (211,171) 143,905
Comprehensive income attributable to noncontrolling interests
 
 (6,722) 
 (6,722)
Comprehensive income attributable to AMC Networks' stockholders$137,145
 $224,244
 $(13,035) $(211,171) $137,183

Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2018
(In thousands)Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated
Net income including noncontrolling interest$156,870
 $247,482
 $21,164
 $(264,980) $160,536
Other comprehensive income (loss):         
Foreign currency translation adjustment18,805
 
 18,805
 (18,805) 18,805
Other comprehensive income, net of income taxes18,805
 
 18,805
 (18,805) 18,805
Comprehensive income175,675
 247,482
 39,969
 (283,785) 179,341
Comprehensive income attributable to noncontrolling interests
 
 (4,563) 
 (4,563)
Comprehensive income attributable to Parent Company's stockholders$175,675
 $247,482
 $35,406
 $(283,785) $174,778


Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2018
(In thousands)Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated
Net income including noncontrolling interest$156,870
 $247,482
 $21,164
 $(264,980) $160,536
Other comprehensive income (loss):         
Foreign currency translation adjustment18,805
 
 18,805
 (18,805) 18,805
Other comprehensive income, net of income taxes18,805
 
 18,805
 (18,805) 18,805
Comprehensive income175,675
 247,482
 39,969
 (283,785) 179,341
Comprehensive income attributable to noncontrolling interests
 
 (4,563) 
 (4,563)
Comprehensive income attributable to AMC Networks’ stockholders$175,675
 $247,482
 $35,406
 $(283,785) $174,778
Condensed Consolidating Statement of Comprehensive Income
Three Months Ended March 31, 2017
(In thousands)Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated
Net income including noncontrolling interest$136,217
 $235,774
 $9,559
 $(238,919) $142,631
Other comprehensive income (loss):         
Foreign currency translation adjustment9,864
 
 9,864
 (9,864) 9,864
Unrealized gain on interest rate swaps319
 
 
 
 319
Unrealized gain on available for sale securities4,021
 
 
 
 4,021
Other comprehensive income, before income taxes14,204
 
 9,864
 (9,864) 14,204
Income tax expense(1,597) 
 
 
 (1,597)
Other comprehensive income, net of income taxes12,607
 
 9,864
 (9,864) 12,607
Comprehensive income148,824
 235,774
 19,423
 (248,783) 155,238
Comprehensive income attributable to noncontrolling interests
 
 (6,805) 
 (6,805)
Comprehensive income attributable to Parent Company's stockholders$148,824
 $235,774
 $12,618
 $(248,783) $148,433


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


Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2019
(In thousands)Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated
Cash flows from operating activities:         
Net cash provided by (used in) operating activities$197,776
 $164,138
 $27,703
 $(217,930) $171,687
Cash flows from investing activities:         
Capital expenditures(26) (19,868) (2,159) 
 (22,053)
Return of capital from investees
 
 3,908
 
 3,908
Investment in and loans to investees
 
 
 
 
Payments for acquisition of a business, net of cash acquired
 
 
 
 
Increase (decrease) to investment in affiliates(177,117) 69,120
 (75,454) 183,451
 
Net cash (used in) provided by investing activities(177,143) 49,252
 (73,705) 183,451
 (18,145)
Cash flows from financing activities:         
Proceeds from the issuance of long-term debt
 
 2,521
 
 2,521
Repayment of long-term debt
 
 (3,238) 
 (3,238)
Deemed repurchases of restricted stock units(22,959) 
 
 
 (22,959)
Purchase of treasury stock(991) 
 
 
 (991)
Proceeds from stock option exercises4,630
 
 
 
 4,630
Principal payments on finance lease obligations
 (786) (523) 
 (1,309)
Distributions to noncontrolling interests
 
 (5,629) 
 (5,629)
Net cash used in financing activities(19,320) (786) (6,869) 
 (26,975)
Net increase (decrease) in cash and cash equivalents from operations1,313
 212,604
 (52,871) (34,479) 126,567
Effect of exchange rate changes on cash and cash equivalents(607) (102,939) 71,296
 34,479
 2,229
Cash and cash equivalents at beginning of period121
 368,151
 186,614
 
 554,886
Cash and cash equivalents at end of period$827
 $477,816
 $205,039
 $
 $683,682

Condensed Consolidating Statement of Cash Flows
Three Months Ended March 31, 2018
(In thousands)Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated
Cash flows from operating activities:         
Net cash provided by (used in) operating activities$234,947
 $154,495
 $(7,472) $(264,998) $116,972
Cash flows from investing activities:         
Capital expenditures
 (11,040) (902) 
 (11,942)
Return of capital from investees
 
 172
 
 172
Investment in investees
 
 (42,318) 
 (42,318)
Increase to investment in affiliates(141,109) (129,821) 67,191
 203,739
 
Net cash (used in) provided by investing activities(141,109) (140,861) 24,143
 203,739
 (54,088)
Cash flows from financing activities:         
Deemed repurchases of restricted stock units(15,354) 
 
 
 (15,354)
Purchase of treasury stock(83,637) 
 
 
 (83,637)
Principal payments on capital lease obligations
 (723) (683) 
 (1,406)
Distributions to noncontrolling interests
 
 (1,435) 
 (1,435)
Net cash used in financing activities(98,991) (723) (2,118) 
 (101,832)
Net (decrease) increase in cash and cash equivalents from operations(5,153) 12,911
 14,553
 (61,259) (38,948)
Effect of exchange rate changes on cash and cash equivalents5,017
 (49,740) (7,171) 61,259
 9,365
Cash and cash equivalents at beginning of period320
 391,248
 167,215
 
 558,783
Cash and cash equivalents at end of period$184
 $354,419
 $174,597
 $
 $529,200


Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, 2017
(In thousands)Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated
Cash flows from operating activities:         
Net cash provided by operating activities$224,091
 $138,889
 $21,097
 $(239,207) $144,870
Cash flows from investing activities:         
Capital expenditures
 (15,645) (4,561) 
 (20,206)
Investment in and loans to investees
 
 (28,000) 
 (28,000)
Increase to investment in affiliates(57,926) (36,982) 
 94,908
 
Net cash used in investing activities(57,926) (52,627) (32,561) 94,908
 (48,206)
Cash flows from financing activities:
 
 
 
 
Principal payments on long-term debt(55,500) 
 
 
 (55,500)
Deemed repurchases of restricted stock units(12,796) 
 
 
 (12,796)
Purchase of treasury stock(91,423) 
 
 
 (91,423)
Principal payments on capital lease obligations
 (657) (744) 
 (1,401)
Distributions to noncontrolling interests
 
 (11,712) 
 (11,712)
Net cash used in financing activities(159,719) (657) (12,456) 
 (172,832)
Net increase (decrease) in cash and cash equivalents from operations6,446
 85,605
 (23,920) (144,299) (76,168)
Effect of exchange rate changes on cash and cash equivalents(6,488) (144,299) 4,915
 144,299
 (1,573)
Cash and cash equivalents at beginning of period565
 320,950
 159,874
 
 481,389
Cash and cash equivalents at end of period$523
 $262,256
 $140,869
 $
 $403,648
AMC NETWORKS INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
(unaudited)


Note 18. Subsequent Event
Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, 2018
(In thousands)Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated
Cash flows from operating activities:         
Net cash provided by operating activities$234,947
 $154,495
 $(7,472) $(264,998) $116,972
Cash flows from investing activities:         
Capital expenditures
 (11,040) (902) 
 (11,942)
Return of capital from investees
 
 172
 
 172
Investment in investees
 
 (42,318) 
 (42,318)
Increase (decrease) to investment in affiliates(141,109) (129,821) 67,191
 203,739
 
Net cash (used in) provided by investing activities(141,109) (140,861) 24,143
 203,739
 (54,088)
Cash flows from financing activities:
 
 
 
 
Proceeds from the issuance of long-term debt
 
 
 
 
Principal payments on long-term debt
 
 
 
 
Payments for financing costs
 
 
 
 
Deemed repurchases of restricted stock units(15,354) 
 
 
 (15,354)
Purchase of treasury stock(83,637) 
 
 
 (83,637)
Principal payments on capital lease obligations
 (723) (683) 
 (1,406)
Distributions to noncontrolling interests
 
 (1,435) 
 (1,435)
Net cash used in financing activities(98,991) (723) (2,118) 
 (101,832)
Net increase (decrease) in cash and cash equivalents from operations(5,153) 12,911
 14,553
 (61,259) (38,948)
Effect of exchange rate changes on cash and cash equivalents5,017
 (49,740) (7,171) 61,259
 9,365
Cash and cash equivalents at beginning of period320
 391,248
 167,215
 
 558,783
Cash and cash equivalents at end of period$184
 $354,419
 $174,597
 $
 $529,200

On April 20, 2018, the Company acquired a majority ownership interest in Levity Entertainment Group LLC ("Levity"), a vertically integrated media company that owns and operates comedy venues as well as produces original content for distribution on multiple platforms, including live, digital and linear, for a total purchase price of $48.5 million.



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 level of our revenues;
market demand, including changes in viewer consumption patterns, for our programming networks, our subscription streaming services, our programming, and our programming;production services;
���    demand for advertising inventory and our ability to deliver guaranteed viewer ratings;
•    the highly competitive nature of the cable, telecommunications 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;
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 2017 Annual Report on Form 10-K (the "2017 Form 10-K"), as filed with the Securities and Exchange Commission ("SEC").
the factors described under Item 1A, "Risk Factors" in our 2018 Annual Report on Form 10-K (the "2018 Form 10-K"), as filed with the Securities and Exchange Commission ("SEC").
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 20172018 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 months ended March 31, 20182019 compared to the three months ended March 31, 20172018. 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 March 31, 20182019, as well as an analysis of our cash flows for the three months ended March 31, 20182019 and 20172018. 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 March 31, 20182019 as compared to December 31, 20172018.
Critical Accounting Policies and Estimates. This section provides an update, if any, to our significant accounting policies or critical accounting estimates since December 31, 20172018.
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 in the U.S.; and AMC and IFC in Canada. Our AMC Studios operations produces original programming for our programming networks and also licenses such program rights worldwide. AMC Networks Broadcasting & Technology is our technical services business, which primarily services most of the national programming networks.
International and Other: Principally includes AMC Networks International (AMCNI), the Company's international programming businesses consisting of a portfolio of channels around the world; IFC Films, the Company's independent film distribution business; Levity Entertainment Group ("Levity") (acquired April 20, 2018, see discussion below), our production services and comedy venues company; RLJ Entertainment Inc. ("RLJE"), acquired October 1, 2018, a content distribution company that also includes the subscription streaming services Acorn TV and UMC, and our wholly-owned subscription streaming services, Shudder and Sundance Now.
National Networks: Includes activities of our five national programming networks, AMC Studios operations and AMC Broadcasting & Technology. Our national programming networks are AMC, WE tv, BBC AMERICA, IFC and SundanceTV in the U.S.; and AMC and IFC in Canada. Our AMC Studios operations produces original programming for our programming networks and also licenses such program rights worldwide. AMC Networks Broadcasting & Technology is our technical services business, which primarily services most of the national programming networks.

International and Other: Principally includes AMC Networks International (AMCNI), the Company's international programming businesses consisting of a portfolio of channels in Europe, Latin America, the Middle East and parts of Asia and Africa; IFC Films, the Company's independent film distribution business; and our subscription streaming services, Sundance Now and Shudder. AMCNI – DMC, the broadcast solutions unit of certain networks of AMCNI and third-party networks is included through the date sold, July 12, 2017.




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.
(In thousands)Three Months Ended March 31,Three Months Ended March 31,
2018 20172019 2018
Revenues, net      
National Networks$633,028
 $615,147
$616,118
 $633,028
International and Other111,390
 106,797
171,088
 111,390
Inter-segment eliminations(3,595) (1,755)(2,985) (3,595)
Consolidated revenues, net$740,823
 $720,189
$784,221
 $740,823
Operating income (loss)      
National Networks$249,852
 $249,607
$251,502
 $249,852
International and Other(16,814) (19,217)(13,748) (16,814)
Inter-segment eliminations617
 1,281
7,109
 617
Consolidated operating income$233,655
 $231,671
$244,863
 $233,655
AOI      
National Networks$270,874
 $267,973
$276,686
 $270,874
International and Other(2,163) 1,078
9,941
 (2,163)
Inter-segment eliminations617
 1,281
6,413
 617
Consolidated AOI$269,328
 $270,332
$293,040
 $269,328
We evaluate segment performance based on several factors, of which the primary financial measure is operating segment AOI. We define AOI, which is a financial measure that is not calculated in accordance with generally accepted accounting principles ("GAAP"), as operating income (loss) before depreciation and amortization, share-based compensation expense or benefit, impairment and related charges (including gains or losses on sales or dispositions of businesses), and restructuring expense or credit.credit, and the Company's proportionate share of adjusted operating income (loss) from greater than 50% owned equity method investees.
We believe that AOI is an appropriate measure for evaluating the operating performance on both an operating segment and consolidated basis. AOI and similar measures with similar titles are common performance measures used by investors, analysts and peers to compare performance in the industry.
Internally, we use revenues, net and AOI measures as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. AOI should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities and other measures of performance and/or liquidity presented in accordance with GAAP. Since AOI is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies.
The following is a reconciliation of consolidated operating income to AOI for the periods indicated:
(In thousands)Three Months Ended March 31,Three Months Ended March 31,
2018 20172019 2018
Operating income$233,655
 $231,671
$244,863
 $233,655
Share-based compensation expense15,319
 12,464
19,899
 15,319
Restructuring expense
 2,704
2,642
 
Depreciation and amortization20,354
 23,493
24,056
 20,354
Equity investees (>50% interest) AOI1,580
 
AOI$269,328
 $270,332
$293,040
 $269,328

Items Impacting Comparability
RLJE
In October 2018, we acquired a controlling interest in RLJE. The operating results of RLJE are included in our International and Other segment in the consolidated statement of income from the acquisition date through March 31, 2019.
Levity
In April 2018, we acquired a controlling interest in Levity. The operating results of Levity are included in our International and Other segment in the consolidated statement of income from the acquisition date through March 31, 2019.
National Networks
In our National Networks segment, which accounted for 85%79% of our consolidated revenues for the three months ended March 31, 2018,2019, we earn revenue principally from the distribution of our programming and the sale of advertising. Distribution revenue primarily includes subscription fees paid by distributors to carry our programming networks and license fees paid to us forcontent licensing revenue from the licensing of original programming for digital, foreign and home video distribution. Subscription fees paid by distributors

represent the largest component of distribution revenue. Our subscription fee revenues are generally based on a per subscriber fee, and, to a lesser extent, fixed fees under multi-year contracts, commonly referred to as "affiliation agreements," which generally provide for annual rate increases. The specific subscription fee revenues we earn vary from period to period, distributor to distributor and also vary among our networks, but are generally based upon the number of each distributor’sdistributor's subscribers who receive our programming, referred to as viewing subscribers. The terms of certain other affiliation agreements provide that the subscription fee revenues we earn are a fixed contractual monthly fee, which could be adjusted for acquisitions and dispositions of multichannel video programming systems by the distributor. Content licensing revenue from the licensing of original programming for digital and foreign distribution is recognized upon availability or distribution by the licensee.
Under affiliation agreements with our distributors, we have the right to sell a specified amount of national advertising time on our programming networks. Our advertising revenues are more variable than subscription fee revenues because the majority of our advertising is sold on a short-term basis, not under long-term contracts. Our advertising arrangements with advertisers provide for a set number of advertising units to air over a specific period of time at a negotiated price per unit for whichunit. Additionally, in these advertising sales arrangements, our programming networks generally guarantee specified viewer ratings for their programming.
Our principal goal is to increase our revenues by increasing distribution and penetration of our services, and increasing our ratings. To do this, we must continue to contract for and produce high-quality, attractive programming. As competition for programming increases and alternative distribution technologies continue to expand in the industry, costs for content acquisition and original programming may increase. There is a concentration of subscribers in the hands of a few distributors, which could create disparate bargaining power between the largest distributors and us by giving those distributors greater leverage in negotiating the price and other terms of affiliation agreements.
Programming expense, included in technical and operating expense, represents the largest expense of the National Networks segment and primarily consists of amortization and write-offs of programming rights, such as those for original programming, feature films and licensed series, as well as participation and residual costs. The other components of technical and operating expense primarily include distribution and production related costs and program operating costs including cost of delivery, such as origination, transmission, uplinking and encryption.
To an increasing extent, the success of our business depends on original programming, both scripted and unscripted, across all of our networks. In recent years, we have introduced a number of scripted original series. These series generally result in higher ratings for our networks. Among other things, higher audience ratings drive increased revenues through higher advertising revenues. The timing of exhibition and distribution of original programming varies from period to period, which results in greater variability in our revenues, earnings and cash flows from operating activities. We will continue to increase our investment in programming across all of our channels.networks. There may be significant changes in the level of our technical and operating expenses due to the amortization of content acquisition and/or original programming costs and/or the impact of management’smanagement's periodic assessment of programming usefulness. Such costs will also fluctuate with the level of revenues derived from owned original programming in each period as these costs are amortized based on the film-forecast-computationindividual-film-forecast-computation method.
Most original series require us to make up-front investments, which are often significant amounts. Not all of our programming efforts are commercially successful, which could result in a write-off of program rights. If it is determined that programming rights have limited, or no, future programming usefulness based on actual demand or market conditions, a write-off of the unamortized cost is recorded in technical and operating expense. Program rights write-offs ofwere $3.3 million and $4.6 million and $0.4 million were recorded for the three months ended March 31, 20182019 and March 31, 2017,2018, respectively.
International and Other
Our International and Other segment primarily includes the operations of AMCNI, IFC Films and ourLevity, RLJE (which includes the subscription streaming services (i.e.Acorn TV and UMC), IFC Films, our independent film distribution business and our wholly-owned subscription streaming services, Shudder and Sundance Now and Shudder). The AMCNI – DMC business was sold on July 12, 2017.Now.
In our International and Other segment, which accounted for 15%22% of our consolidated revenues for the three months ended March 31, 2018,2019, we earn revenue principally from the international distribution of programming and, to a lesser extent, the sale of advertising.advertising from our AMCNI programming networks. We also earn revenue from production services from Levity, revenues from our wholly-owned subscription streaming services Shudder and Sundance Now, as well as subscription streaming services operated by RLJE; AcornTV and UMC, revenues from the distribution of content of IFC Films and RLJE, and Levity's operation of comedy venues. Distribution revenue primarily includes subscription fees paid by distributors or consumers to carry our

programming networks.networks or subscription-based streaming services and production services revenue generated from Levity. Our subscription revenues are generally based on either a per-subscriber fee or a fixed contractual annual fee, under multi-year affiliation agreements, which may provide for annual rate increases.increases, and a monthly fee paid by consumers for our subscription-based streaming services. Our production services revenues are based on master production agreements whereby a third-party engages us to produce content on its behalf. Production services revenues are recognized based on the percentage of cost incurred to total estimated cost of the contract. For the three months ended March 31, 2018,2019, distribution revenues represented 80%88% of the revenues of the International and Other segment. Most of these revenues are derived from the distribution of our programming networks primarily in Europe and to a lesser extent, Latin America, the Middle East and parts of Asia and Africa. The International and Other segment also includes IFC Films, our independent film distribution business where revenues are derived principally from theatrical, digital and licensing distribution.America. Our subscription streaming services are available in the United States, Canada, andLatin America, parts of Europe.Europe, India, Australia and New Zealand.
Programming, and program operating costs and production costs incurred to produce content for third parties are included in technical and operating expense, representsand represent the largest expense of the International and Other segment and primarily consistsconsist of amortization of acquired content, costs of dubbing and sub-titling of programs, andproduction costs, participation and residual costs. Program operating costs include costs such as origination, transmission, uplinking and encryption of our linear AMCNI channels as well as content hosting and delivery costs at our various on-line content distribution initiatives. Not all of our programming efforts are commercially successful, which could result in a write-off of program rights.

If it is determined that programming rights have limited, or no, future programming usefulness based on actual demand or market conditions, a write-off of the unamortized cost is recorded in technical and operating expense.
We view our investments in international expansion and our various developing on-line content distribution initiatives as important long-term strategies. We may experience an adverse impact to the International and Other segment's operating results and cash flows in periods of increased investment by the Company in these aforementioned initiatives.
Corporate Expenses
We allocate corporate overhead within operating expenses to each segment based upon its proportionate estimated usage of services. The segment financial information set forth below, including the discussion related to individual line items, does not reflect inter-segment eliminations unless specifically indicated.
Impact of Economic Conditions
Our future performance is dependent, to a large extent, on general economic conditions including the impact of direct competition, our ability to manage our businesses effectively, and our relative strength and leverage in the marketplace, both with suppliers and customers.
Capital and credit market disruptions could cause economic downturns, which may lead to lower demand for our products, such as lower demand for television advertising and a decrease in the number of subscribers receiving our programming networks from our distributors. Events such as these may adversely impact our results of operations, cash flows and financial position.



Consolidated Results of Operations
The amounts presented and discussed below represent 100% of each operating segment's revenues, net and expenses. Where we have management control of an entity, we consolidate 100% of such entity in our consolidated statements of operations notwithstanding that a third-party owns a significant interest in such entity. The noncontrolling owner's interest in the operating results of majority-owned or controlled subsidiaries are reflected in net income attributable to noncontrolling interests in our consolidated statements of operations.
Three Months Ended March 31, 20182019 Compared to Three Months Ended March 31, 20172018
The following table sets forth our consolidated results of operations for the periods indicated.
Three Months Ended March 31,    Three Months Ended March 31,    
2018 2017    2019 2018    
(In thousands)Amount 
% of
Revenues,
net
 Amount 
% of
Revenues,
net
 $ change % changeAmount 
% of
Revenues,
net
 Amount 
% of
Revenues,
net
 $ change % change
Revenues, net$740,823
 100.0 % $720,189
 100.0 % $20,634
 2.9 %$784,221
 100.0 % $740,823
 100.0 % $43,398
 5.9 %
Operating expenses:                      
Technical and operating (excluding depreciation and amortization)320,365
 43.2
 298,612
 41.5
 21,753
 7.3
340,148
 43.4
 320,365
 43.2
 19,783
 6.2
Selling, general and administrative166,449
 22.5
 163,709
 22.7
 2,740
 1.7
172,512
 22.0
 166,449
 22.5
 6,063
 3.6
Depreciation and amortization20,354
 2.7
 23,493
 3.3
 (3,139) (13.4)24,056
 3.1
 20,354
 2.7
 3,702
 18.2
Restructuring expense
 
 2,704
 0.4
 (2,704) n/m
2,642
 0.3
 
 
 2,642
 n/m
Total operating expenses507,168
 68.5
 488,518
 67.8
 18,650
 3.8
539,358
 68.8
 507,168
 68.5
 32,190
 6.3
Operating income233,655
 31.5
 231,671
 32.2
 1,984
 0.9
244,863
 31.2
 233,655
 31.5
 11,208
 4.8
Other income (expense):                      
Interest expense, net(33,186) (4.5) (27,007) (3.7) (6,179) 22.9
(35,445) (4.5) (33,186) (4.5) (2,259) 6.8
Miscellaneous, net16,946
 2.3
 11,049
 1.5
 5,897
 53.4
(12,785) (1.6) 16,946
 2.3
 (29,731) (175.4)
Total other income (expense)(16,240) (2.2) (15,958) (2.2) (282) 1.8
(48,230) (6.2) (16,240) (2.2) (31,990) 197.0
Net income from operations before income taxes217,415
 29.3
 215,713
 30.0
 1,702
 0.8
196,633
 25.1
 217,415
 29.3
 (20,782) (9.6)
Income tax expense(56,879) (7.7) (73,082) (10.1) 16,203
 (22.2)(46,476) (5.9) (56,879) (7.7) 10,403
 (18.3)
Net income including noncontrolling interests160,536
 21.7
 142,631
 19.8
 17,905
 12.6
150,157
 19.1
 160,536
 21.7
 (10,379) (6.5)
Net income attributable to noncontrolling interests(3,666) (0.5) (6,414) (0.9) 2,748
 (42.8)%(6,760) (0.9) (3,666) (0.5) (3,094) 84.4 %
Net income attributable to AMC Networks' stockholders$156,870
 21.2 % $136,217
 18.9 % $20,653
 15.2 %$143,397
 18.3 % $156,870
 21.2 % $(13,473) (8.6)%



National Networks Segment Results
The following table sets forth our National Networks segment results for the periods indicated.
Three Months Ended March 31,    Three Months Ended March 31,    
2018 2017    2019 2018    
(In thousands)Amount 
% of
Revenues,
net
 Amount 
% of
Revenues,
net
 $ change % changeAmount 
% of
Revenues,
net
 Amount 
% of
Revenues,
net
 $ change % change
Revenues, net$633,028
 100.0% $615,147
 100.0% $17,881
 2.9%$616,118
 100.0% $633,028
 100.0% $(16,910) (2.7)%
Operating expenses:                      
Technical and operating (excluding depreciation and amortization)249,786
 39.5
 233,808
 38.0
 15,978
 6.8
241,260
 39.2
 249,786
 39.5
 (8,526) (3.4)
Selling, general and administrative124,895
 19.7
 123,274
 20.0
 1,621
 1.3
114,441
 18.6
 124,895
 19.7
 (10,454) (8.4)
Depreciation and amortization8,495
 1.3
 8,404
 1.4
 91
 1.1
8,612
 1.4
 8,495
 1.3
 117
 1.4
Restructuring expense
 
 54
 
 (54) n/m
303
 
 
 
 303
 n/m
Operating income$249,852
 39.5% $249,607
 40.6% $245
 0.1%$251,502
 40.8% $249,852
 39.5% $1,650
 0.7 %
Share-based compensation expense12,527
 2.0
 9,908
 1.6
 2,619
 26.4
16,269
 2.6
 12,527
 2.0
 3,742
 29.9
Restructuring expense
 
 54
 
 (54) n/m
Restructuring credit303
 
 
 
 303
 n/m
Depreciation and amortization8,495
 1.3
 8,404
 1.4
 91
 1.1
8,612
 1.4
 8,495
 1.3
 117
 1.4
AOI$270,874
 42.8% $267,973
 43.6% $2,901
 1.1%$276,686
 44.9% $270,874
 42.8% $5,812
 2.1 %
International and Other Segment Results
The following table sets forth our International Networksand Other segment results for the periods indicated.
Three Months Ended March 31,    Three Months Ended March 31,    
2018 2017    2019 2018    
(In thousands)Amount 
% of
Revenues,
net
 Amount 
% of
Revenues,
net
 $ change % changeAmount 
% of
Revenues,
net
 Amount 
% of
Revenues,
net
 $ change % change
Revenues, net$111,390
 100.0 % $106,797
 100.0 % $4,593
 4.3 %$171,088
 100.0 % $111,390
 100.0 % $59,698
 53.6 %
Operating expenses:                      
Technical and operating (excluding depreciation and amortization)74,763
 67.1
 67,838
 63.5
 6,925
 10.2
108,272
 63.3
 74,763
 67.1
 33,509
 44.8
Selling, general and administrative41,582
 37.3
 40,437
 37.9
 1,145
 2.8
58,085
 34.0
 41,582
 37.3
 16,503
 39.7
Depreciation and amortization11,859
 10.6
 15,089
 14.1
 (3,230) (21.4)15,444
 9.0
 11,859
 10.6
 3,585
 30.2
Restructuring expense
 
 2,650
 2.5
 (2,650) n/m
3,035
 1.8
 
 
 3,035
 n/m
Operating loss$(16,814) (15.1)% $(19,217) (18.0)% $2,403
 (12.5)%$(13,748) (8.0)% $(16,814) (15.1)% $3,066
 (18.2)%
Share-based compensation expense2,792
 2.5
 2,556
 2.4
 236
 9.2
3,630
 2.1
 2,792
 2.5
 838
 30.0
Restructuring expense
 
 2,650
 2.5
 (2,650) n/m
3,035
 1.8
 
 
 3,035
 n/m
Depreciation and amortization11,859
 10.6
 15,089
 14.1
 (3,230) (21.4)15,444
 9.0
 11,859
 10.6
 3,585
 30.2
Equity investees (>50% interest) AOI1,580
 0.9
 
 
 1,580
 n/m
AOI$(2,163) (1.9)% $1,078
 1.0 % $(3,241) (300.6)%$9,941
 5.8 % $(2,163) (1.9)% $12,104
 (559.6)%

Revenues, net
Revenues, net increased $20.6$43.4 million to $740.8$784.2 million for the three months ended March 31, 20182019 as compared to the three months ended March 31, 2017.2018. The net change by segment was as follows:
Three Months Ended March 31,    Three Months Ended March 31,    
(In thousands)2018 
% of
total
 2017 
% of
total
 $ change % change2019 % of total 2018 % of total $ change % change
National Networks$633,028
 85.4 % $615,147
 85.4 % $17,881
 2.9%$616,118
 78.6 % $633,028
 85.4 % $(16,910) (2.7)%
International and Other111,390
 15.0
 106,797
 14.8
 4,593
 4.3
171,088
 21.8
 111,390
 15.0
 59,698
 53.6
Inter-segment eliminations(3,595) (0.5) (1,755) (0.2) (1,840) 104.8
(2,985) (0.4) (3,595) (0.4) 610
 (17.0)
Consolidated revenues, net$740,823
 100.0 % $720,189
 100.0 % $20,634
 2.9%$784,221
 100.0 % $740,823
 100.0 % $43,398
 5.9 %
National Networks
The increasedecrease in National Networks revenues, net was attributable to the following:
Three Months Ended March 31,    Three Months Ended March 31,    
(In thousands)2018 
% of
total
 2017 
% of
total
 $ change % change2019 % of total 2018 % of total $ change % change
Advertising$225,730
 35.7% $247,542
 40.2% $(21,812) (8.8)%$239,089
 38.8% $225,730
 35.7% $13,359
 5.9 %
Distribution407,298
 64.3
 367,605
 59.8
 39,693
 10.8
377,029
 61.2
 407,298
 64.3
 (30,269) (7.4)
$633,028
 100.0% $615,147
 100.0% $17,881
 2.9 %$616,118
 100.0% $633,028
 100.0% $(16,910) (2.7)%
The decreaseincrease of $21.8$13.4 million in advertising revenues was driven by a decreasethe timing of $26.7 million at AMC due to lower ratings,our original programming and pricing increases across all of our networks, partially offset by pricing. The decrease at AMC was partially offset by increases at our other networks.lower ratings. Most of our advertising revenues vary based on the timing of our original programming series and the popularity of our programming as measured by Nielsen. Due to these factors, we expect advertising revenues to vary from quarter to quarter.
Distribution revenues increased $39.7decreased $30.3 million due to an increasea decrease in content licensing revenues of $31.7$35.0 million primarily from digitallower foreign distribution revenues derived from our original programming, principallyprimarily at AMC, due to certain programming that became available for distribution in the first quarter of 2018 as compared to the second quarter in 2017.AMC. Subscription revenues increased $8.0$4.7 million across all of our networks resulting from an increase in rates. Distributionrates, partially offset by lower subscribers. Subscription revenues may vary based on the impact of renewals of affiliation agreements and content licensing revenues vary based on the timing of availability of our programming to distributors. Because of these factors, we expect distribution revenues to vary from quarter to quarter.
International and Other
The increase in International and Other revenues, net was attributable to the following:
Three Months Ended March 31,    Three Months Ended March 31,    
(In thousands)2018 
% of
total
 2017 
% of
total
 $ change % change2019 % of total 2018 % of total $ change % change
Advertising$22,510
 20.2% $20,070
 18.8% $2,440
 12.2%$21,206
 12.4% $22,510
 20.2% $(1,304) (5.8)%
Distribution88,880
 79.8
 86,727
 81.2
 2,153
 2.5
149,882
 87.6
 88,880
 79.8
 61,002
 68.6
$111,390
 100.0% $106,797
 100.0% $4,593
 4.3%$171,088
 100.0% $111,390
 100.0% $59,698
 53.6 %
The increasedecrease of $1.3 million in advertising revenues was principally due to the favorableunfavorable impact of foreign currency translation of $2.3 million. The$1.9 million, partially offset by a slight increase in distribution revenue was principallydemand in certain international markets. Distribution revenues increased primarily due to an increasea $64.7 million impact from the acquisitions of $2.7Levity and RLJE. In addition, distribution revenues increased $3.3 million in revenues from our subscription streaming services. Foreign currency translation had a favorablean unfavorable impact to distribution revenuerevenues of $9.3 million which was offset by a decrease of $5.3 million due to the absence of revenue from the sale of AMCNI – DMC (sold in July 2017), a decrease at IFC Films of $1.3 million due to the timing of release of certain films and a decrease in distribution revenues at AMCNI.$5.8 million.
Technical and operating expense (excluding depreciation and amortization)
The components of technical and operating expense primarily include the amortization and impairments or write-offs of program rights, such as those for original programming, feature films and licensed series, participation and residual costs, distribution and production related costs and program operatingdelivery costs, such as origination, transmission, uplinkingencryption, hosting, and encryption.

formatting.
Technical and operating expense (excluding depreciation and amortization) increased $21.8$19.8 million to $320.4$340.1 million for the three months ended March 31, 20182019 as compared to the three months ended March 31, 2017.2018. The net change by segment was as follows:

Three Months Ended March 31,    Three Months Ended March 31,    
(In thousands)2018 2017 $ change % change2019 2018 $ change % change
National Networks$249,786
 $233,808
 $15,978
 6.8%$241,260
 $249,786
 $(8,526) (3.4)%
International and Other74,763
 67,838
 6,925
 10.2
108,272
 74,763
 33,509
 44.8
Inter-segment eliminations(4,184) (3,034) (1,150) 37.9
(9,384) (4,184) (5,200) 124.3
Total$320,365
 $298,612
 $21,753
 7.3%$340,148
 $320,365
 $19,783
 6.2 %
Percentage of revenues, net43.2% 41.5%    43.4% 43.2%    
National Networks
The increasedecrease in technical and operating expense was primarily attributable to ana decrease of $10.0 million in other direct programming costs, partially offset by a slight increase of $12.4$1.5 million in program rights amortization expense and an increase of $3.6 million in other direct programming costs.expense. Program rights amortization expense includes write-offs, based on management's assessment of programming usefulness, of $3.3 million for the three months ended March 31, 2019 related to certain original programming, as compared to program rights write-offs of $4.6 million for the three months ended March 31, 2018 primarily based on management's assessment of programming usefulness ofrelated to certain scripted series and development costs at AMC, as compared to program rights write-offs of $0.4 million for the three months ended March 31, 2017.costs.
There may be significant changes in the level of our technical and operating expenses due to content acquisition and/or original programming costs and/or the impact of management's periodic assessment of programming usefulness. Such costs will also fluctuate with the level of revenues derived from owned original programming in each period as these costs are amortized based on the film-forecast-computation method. As additional competition for programming increases and alternate distribution technologies continue to develop in the industry, costs for content acquisition and original programming may increase.
International and Other
The increase in technicalTechnical and operating expense was primarilyincreased due to an increased investmenta $40.1 million impact from the acquisitions of Levity and RLJE, partially offset by a decrease in programming and other direct programming costs, including transmission,program rights amortization expense at AMCNI of $8.8 million as well as an increase of $2.1 million at our subscription streaming services, partially offset by the absence of $4.2 million in costs related to AMCNI – DMC (sold in July 2017).$10.3 million. Foreign currency translation had an unfavorablefavorable impact to the change in technical and operating expense of $6.5$4.8 million.
Selling, general and administrative expense
The components of selling, general and administrative expense primarily include sales, marketing and advertising expenses, administrative costs and costs of non-production facilities.
Selling, general and administrative expense increased $2.7$6.1 million to $166.4$172.5 million for the three months ended March 31, 2018,2019, as compared to the three months ended March 31, 2017.2018. The net change by segment was as follows:
Three Months Ended March 31,    Three Months Ended March 31,    
(In thousands)2018 2017 $ change % change2019 2018 $ change % change
National Networks$124,895
 $123,274
 $1,621
 1.3%$114,441
 $124,895
 $(10,454) (8.4)%
International and Other41,582
 40,437
 1,145
 2.8
58,085
 41,582
 16,503
 39.7
Inter-segment eliminations(28) (2) (26) n/m
(14) (28) 14
 (50.0)
Total$166,449
 $163,709
 $2,740
 1.7%$172,512
 $166,449
 $6,063
 3.6 %
Percentage of revenues, net22.5% 22.7%    22.0% 22.5%    
National Networks
Selling, general and administrative expense increased $1.6decreased $10.5 million principally as a result of a $4.9 million increase in general and administrative costs, including a $1.9 million increase in long-term incentive compensation expense, partially offset bydue to a decrease in sales and marketing related costs of $3.3 million related to the timing of the promotion and marketing of our original programming.
There may be significant changes in the level of our selling, general and administrative expense from quarter to quarter and year to year due to the timing of promotion and marketing of original programming series and subscriber retention marketing efforts.

International and Other    
Selling, general and administrative expense increased $1.1$16.5 million primarily related to an increase in marketing costs at IFC Films of $2.4 million due to a $22.8 million impact from the promotionacquisitions of certain films,Levity and RLJE, partially offset by a decrease in sales and marketing costs of $2.8 million and administrative costs of $3.4 million at AMCNI due to the absence of costs related to AMCNI – DMC (sold in July 2017).AMCNI. Foreign currency translation had an unfavorablea favorable impact to the change in selling, general and administrative expense of $2.5$1.9 million.

Depreciation and amortization
Depreciation and amortization expense decreased $3.1increased $3.7 million to $20.4$24.1 million for the three months ended March 31, 2018,2019, as compared to the three months ended March 31, 2017.2018. The net change by segment was as follows:
Three Months Ended March 31,    Three Months Ended March 31,    
(In thousands)2018 2017 $ change % change2019 2018 $ change % change
National Networks$8,495
 $8,404
 $91
 1.1 %$8,612
 $8,495
 $117
 1.4%
International and Other11,859
 15,089
 (3,230) (21.4)15,444
 11,859
 3,585
 30.2
$20,354
 $23,493
 $(3,139) (13.4)%$24,056
 $20,354
 $3,702
 18.2%
The decreaseincrease in depreciation and amortization expense in the International and Other segment was attributableprimarily due to a $2.3 million impact from the absenceacquisitions of AMCNI – DMC (soldLevity and RLJE as well as an increase in July 2017).depreciation expense of $1.7 million related to leasehold additions.
Restructuring expense
Restructuring expense of $2.7$2.6 million for the three months ended March 31, 20172019 primarily consisted of charges incurred at AMCNI of $3.0 million related to corporate headquarter severance charges in connectioncosts associated with the restructuring initiative launched during the second halftermination of 2016.distribution in certain territories.
Operating Income
Three Months Ended March 31,    Three Months Ended March 31,    
(In thousands)2018 2017 $ change % change2019 2018 $ change % change
National Networks$249,852
 $249,607
 $245
 0.1 %$251,502
 $249,852
 $1,650
 0.7 %
International and Other(16,814) (19,217) 2,403
 (12.5)(13,748) (16,814) 3,066
 (18.2)
Inter-segment Eliminations617
 1,281
 (664) (51.8)7,109
 617
 6,492
 n/m
$233,655
 $231,671
 $1,984
 0.9 %$244,863
 $233,655
 $11,208
 4.8 %
The increase in operating income at the National Networks segment was primarily attributable to an increase in revenues of $17.9 million, partially offset by an increasea decrease in technical and operating expense of $16.0$8.5 million and an increasea decrease in selling, general and administrative expense of $1.6$10.5 million, partially offset by a decrease in revenues of $16.9 million.
The decrease in operating losses inat the International and Other segment was primarily attributable to an increase in revenues of $4.6 million, a decrease in depreciation and amortization of $3.2 million, a decrease in restructuring expense of $2.7$59.7 million, partially offset by an increase in technical and operating expense of $6.9$33.5 million, and an increase in selling, general and administrative expense of $1.1 million. Foreign currency translation had a favorable impact to the change$16.5 million, restructuring expense of $3.0 million and an increase in operating incomedepreciation and amortization of $1.3$3.6 million.
AOI
The following is a reconciliation of our consolidated operating income to AOI:
Three Months Ended March 31,    Three Months Ended March 31,    
(In thousands)2018 2017 $ change % change2019 2018 $ change % change
Operating income$233,655
 $231,671
 $1,984
 0.9 %$244,863
 $233,655
 $11,208
 4.8%
Share-based compensation expense15,319
 12,464
 2,855
 22.9
19,899
 15,319
 4,580
 29.9
Restructuring expense
 2,704
 (2,704) n/m
2,642
 
 2,642
 n/m
Depreciation and amortization20,354
 23,493
 (3,139) (13.4)24,056
 20,354
 3,702
 18.2
Equity investees (>50% interest) AOI1,580
 
 1,580
 n/m
AOI$269,328
 $270,332
 $(1,004) (0.4)%$293,040
 $269,328
 $23,712
 8.8%
AOI decreased $1.0increased $23.7 million for the three months ended March 31, 20182019 as compared to the three months ended March 31, 2017.2018. The net change by segment was as follows:

Three Months Ended March 31,    Three Months Ended March 31,    
(In thousands)2018 2017 $ change % change2019 2018 $ change % change
National Networks$270,874
 $267,973
 $2,901
 1.1 %$276,686
 $270,874
 $5,812
 2.1 %
International and Other(2,163) 1,078
 (3,241) (300.6)9,941
 (2,163) 12,104
 (559.6)
Inter-segment eliminations617
 1,281
 (664) (51.8)6,413
 617
 5,796
 939.4
AOI$269,328
 $270,332
 $(1,004) (0.4)%$293,040
 $269,328
 $23,712
 8.8 %
National Networks AOI increased principally due to anthe increase in revenuesoperating income of $17.9$1.7 million and a decrease in selling, general and administrative expenses (excluding stock based compensation) of $1.0 million, partially offset by an increase in technical and operating expenses of $16.0 million resulting primarilyas well as the impact from an increase in program rights amortization.share-based compensation expense of $3.7 million.
International and Other AOI decreased primarilyincreased $12.1 million due to the decrease in operating loss of $3.1 million as well as the impact from an increase in technicaldepreciation and operating expensesamortization of $6.9$3.6 million primarily due to an increase in programmingfrom the acquisitions of Levity and transmission related costs at AMCNIRLJE, restructuring expense of $3.0 million, and an increase in selling, general and administrative expenses (excluding stock based compensation) of $0.9$1.6 million partially offset by an increase in revenuesrelated to the AOI of $4.6 million.majority-owned equity method investees. Foreign currency translation had a favorablean unfavorable impact into the change in AOI of $2.7$1.0 million.
As a result of the factors discussed above impacting the variability in revenues and operating expenses, we expect AOI to vary from quarter to quarter.
Interest expense, net
The increase in interest expense, net of $6.2$2.3 million is driven by ana $1.4 million increase in interest expense of $7.7 million primarilydriven by a higher variable interest rate on our term loan as well as a result of the issuance of our $800 million aggregate principal amounts of 4.75% Senior Notes due 2025 on July 28, 2017, partially offset by an increasedecrease in interest income of $1.5$0.8 million.
Miscellaneous, net
The decrease in miscellaneous, net of $29.7 million for the three months ended March 31, 2019 as compared to the three months ended March 31, 2018 was primarily driven by impairment charges of $17.7 million recorded for the three months ended March 31, 2018,2019 for the partial write-down of certain of our non-marketable equity securities and a note receivable. In addition, miscellaneous, net decreased $10.9 million related to gains associated with the increase in connection with increased cash balancesfair value of our investment in RLJE recorded for the three months ended March 31, 2018 versus the same period in 2017 as well as interest income earned on term loans entered into with RLJ Entertainment, Inc. ("RLJE") in October 2016.2018.
Miscellaneous, netIncome tax expense
The increase in miscellaneous, net of $5.9 million forFor the three months ended March 31, 2018 as compared2019, income tax expense was $46.5 million, representing an effective tax rate of 24%. The effective tax rate differs from the federal statutory rate of 21% due primarily to the three months ended March 31, 2017 is primarily driven by $3.0 million in a favorable variance in the foreign currency remeasurementstate income tax expense of monetary assets and liabilities (principally intercompany loans) that are denominated in currencies other than the underlying functional currency of the applicable entity and $3.2 million in gains driven by an increase in the fair market value of RLJE common shares held by the Company which started to be recognized during the second quarter 2017 upon meeting the criteria to be accounted for as an equity method investment following the exercise of warrants, for which we have elected the fair value option.
Income tax expensemillion.
For the three months ended March 31, 2018, income tax expense was $56.9 million, representing an effective tax rate of 26%. The effective tax rate differs from the federal statutory rate of 21% due primarily to tax expense of $16.4 million for an increase in valuation allowances for foreign taxes and U.S. foreign tax credits, tax benefit of $8.3 million for the one-time rate change on deferred tax assets and liabilities that resulted from the extension of certain television production cost deductions included in the Bipartisan Budget Act of 2018 (enacted February 9, 2018), tax benefit from foreign subsidiary earnings indefinitely reinvested outside the U.S. of $4.9 million and state income tax expense of $3.8 million.
The Tax Cuts and Jobs Act ("TCJA") was enacted on December 22, 2017. The TCJA introduces significant changes in tax law, with certain provisions being effective for the year ended December 31, 2017, however most are effective for tax years beginning after December 31, 2017. Companies are required to recognize the effect of tax law changes in the period of enactment, however, due to the complexities involved in accounting for the enactment of TCJA, SEC Staff Accounting Bulletin ("SAB") 118 allows us to record provisional amounts to reflect the impacts of the TCJA during a one year "measurement period". The Company has recorded a provisional amount related to the one-time transition tax in the year ended December 31, 2017 and there has been no change to this amount as of March 31, 2018. .
In continuing our analysis of the impact of the TCJA on deferred tax amounts, we have recorded a discrete tax expense of $15.6 million in the period ended March 31, 2018, resulting from an updated assessment in response to guidance contained in a recently issued IRS notice. This expense relates to a valuation allowance against foreign tax credit carry forwards. This is a provisional amount that will continue to be evaluated based on the consideration of other aspects of the TCJA as well as the issuance of additional guidance.  Since the Company has recorded other provisional amounts related to the TCJA, any corresponding determination of the need for or change to the valuation allowance is also provisional.

The Company will continue to analyze the effects of the TCJA on its financial statements and operations. Additional impacts from the enactment of the TCJA will be recorded as they are identified during the measurement period as provided for in SAB 118.
Judgment is required in determining the provision for income taxes and related accruals, deferred tax assets and liabilities. Consequently, changes in our estimates regarding uncertain tax positions and the realization of deferred tax assets will impact our results of operations and financial position. Deferred tax assets are evaluated quarterly for expected future realization and reduced by a valuation allowance to the extent management believes it is more likely than not that a portion will not be realized. See Note 10 to the accompanying consolidated financial statements for further discussion of the Company's income taxes.
For the three months ended March 31, 2017, income tax expense was $73.1 million, representing an effective tax rate of 34%. The effective tax rate differs from the federal statutory rate of 35% due primarily to tax benefit from domestic production activities deduction of $5.9 million, tax benefit from foreign subsidiary earnings indefinitely reinvested outside the U.S. of $4.1 million, state income tax expense of $3.4 million and tax expense of $2.3 million for an increase in valuation allowances for foreign taxes.
Liquidity and Capital Resources
Our operations have historically generated positive net cash flow from operating activities. However, each of our programming businesses has substantial programming acquisition and production expenditure requirements.
Sources of cash primarily include cash flow from operations, amounts available under our revolving credit facility and access to capital markets. Although we currently believe that amounts available under our revolving credit facility will be available when and if needed, we can provide no assurance that access to such funds will not be impacted by adverse conditions in the financial markets. The obligations of the financial institutions under our revolving credit facility are several and not joint and, as a result, a funding default by one or more institutions does not need to be made up by the others. As a public company, we may have access to other sources of capital such as the public bond markets.
On March 7, 2016, the Company announced that its Board of Directors authorized a program to repurchase up to $500 million of its outstanding shares of common stock (the "2016 Stock"Stock Repurchase Program"). On June 6, 2017, the Board of Directors approved an increase of $500 million. On June 13, 2018, the Board of Directors approved a further increase of $500 million in the amount authorized for a total of $1.0$1.5 billion authorized under the 2016 Stock Repurchase Program. The Company determines the timing and the amount of any repurchases based on its evaluation of market conditions, share price, and other factors. The 2016 Stock Repurchase Program has no pre-established closing date and may be suspended or discontinued at any time. For the three months ended March 31, 2018,2019, the Company repurchased 1.618.4 million shares of its Class A common stock at an average purchase price of approximately $50.77$53.82 per share. As of March 31, 2018,2019, the Company has $258.9$558.4 million available for repurchase under the 2016 Stock Repurchase Program. For the period April 1, 2018 through May 4, 2018, we repurchased approximately 2.4 million additional shares for $124.8 million.

Our principal uses of cash include the acquisition and production of programming, investments and acquisitions, repurchases of outstanding debt and common stock, debt service, and payments for income taxes. We continue to increase our investment in original programming, the funding of which generally occurs six to nine months in advance of a program's airing. We expect this increased investment to continue in 2018.2019.
As of March 31, 2018,2019, our consolidated cash and cash equivalents balance includes approximately $119.8$134.4 million held by foreign subsidiaries. Most or all of the earnings of our foreign subsidiaries will continue to be permanently reinvested in foreign operations and we do not expect to incur any significant, additional taxes related to such amounts, nor have any been provided for in the current period. The Company is still evaluating whether to change its indefinite reinvestment assertion due to certain provisions of the TCJA. Any potential changes to the assertion would be made within the measurement period and accounted for as part of the change in tax law.
We believe that a combination of cash-on-hand, cash generated from operating activities and availability under our revolving credit facility will provide sufficient liquidity to service the principal and interest payments on our indebtedness, along with our other funding and investment requirements over the next twelve months and over the longer term. However, we do not expect to generate sufficient cash from operations to repay at maturity the entirety of the then outstanding balances of our debt. As a result, we will then be dependent upon our ability to access the capital and credit markets in order to repay or refinance the outstanding balances of our indebtedness. Failure to raise significant amounts of funding to repay these obligations at maturity would adversely affect our business. In such a circumstance, we would need to take other actions including selling assets, seeking strategic investments from third parties or reducing other discretionary uses of cash.
Our level of debt could have important consequences on our business including, but not limited to, increasing our vulnerability to general adverse economic and industry conditions, limiting the availability of our cash flow to fund future programming investments, capital expenditures, working capital, business activities and other general corporate requirements and limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate. For information relating

to our outstanding debt obligations, refer to Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Debt Financing Agreements" of our 20172018 Form 10-K.
In addition, economic or market disruptions could lead to lower demand for our services, such as lower levels of advertising. These events would adversely impact our results of operations, cash flows and financial position.
The revolving credit facility was not drawn upon at March 31, 2018.2019. The total undrawn revolver commitment is available to be drawn for our general corporate purposes.
AMC Networks was in compliance with all of its debt covenants as of March 31, 2018.
Other Matters
On February 26, 2018, the Company delivered a letter to RLJ Entertainment, Inc. ("RLJE") pursuant to which the Company proposed to acquire the outstanding shares of RLJE not currently owned by the Company or entities affiliated with Robert L. Johnson for a purchase price of $4.25 per share in cash. Through this offer, the Company intends for RLJE to become a majority-owned subsidiary of the Company, with a minority stake held by Mr. Johnson. The board of directors of RLJE has formed a special committee of independent directors to consider the proposal. There can be no assurance that the proposal made by the Company to RLJE will result in a transaction or the terms upon which any transaction may occur.
On April 20, 2018, the Company acquired a majority ownership interest in Levity Entertainment Group LLC ("Levity"), a vertically integrated media company that owns and operates comedy venues as well as produces original content for distribution on multiple platforms, including live, digital and linear, for a total purchase price of $48.5 million.2019.
Cash Flow Discussion
The following table is a summary of cash flows provided by (used in) operating, investing and financing activities for the three months ended March 31:
(In thousands)Three Months Ended March 31,Three Months Ended March 31,
2018 20172019 2018
Cash provided by operating activities$116,972
 $144,870
$171,687
 $116,972
Cash used in investing activities(54,088) (48,206)(18,145) (54,088)
Cash used in financing activities(101,832) (172,832)(26,975) (101,832)
Net decrease in cash and cash equivalents(38,948) (76,168)
Net increase (decrease) in cash and cash equivalents126,567
 (38,948)
Operating Activities
Net cash provided by operating activities amounted to $171.7 million for the three months ended March 31, 2019 as compared to $117.0 million for the three months ended March 31, 2018 as compared to $144.9 million2018. Net cash provided by operating activities for the three months ended March 31, 2017. 2019 primarily resulted from $413.1 million of net income before amortization of program rights, depreciation and amortization, and other non-cash items, as well as an increase in income taxes payable of $40.1 million, which was partially offset by payments for program rights of $190.7 million, an increase in prepaid expense and other assets of $26.2 million primarily related to an increase in long-term receivables and a decrease in accounts payable, accrued expenses and other liabilities of $58.6 million primarily related to lower employee related liabilities. Changes in all other assets and liabilities resulted in a decrease of $6.1 million.
Net cash provided by operating activities for the three months ended March 31, 2018 primarily resulted from $432.9 million of net income before amortization of program rights, depreciation and amortization, and other non-cash items, as well as an increase in taxes payable of $15.7 million, which was partially offset by payments for program rights of $248.6 million, a decrease in accounts payable, accrued expenses and other liabilities of $63.0 million primarily related to lower employee related liabilities and an increase in receivables of $17.9 million primarily related to timing of cash receipts. Changes in all other assets and liabilities resulted in a decrease of $2.1 million.
Net cash provided by operating activities amounted to $144.9 million for the three months ended March 31, 2017 and primarily resulted from $377.8 million of net income before amortization of program rights, depreciation and amortization, and other non-cash items, which was partially offset by payments for program rights of $211.3 million, a decrease in accounts payable, accrued expenses and other liabilities of $33.7 million primarily related to lower employee related liabilities, an increase in prepaid expense and other assets of $18.2 million, an increase in accounts receivable, trade of $16.0 million primarily related to timing of cash receipts and a decrease in deferred revenue of $11.1 million. Additionally, net cash provided by operating activities increased due to an increase in taxes payable of $57.6 million.
Investing Activities
Net cash used in investing activities for the three months ended March 31, 2019 and 2018 was $18.1 million and 2017 was $54.1 million, and $48.2respectively. For the three months ended March 31, 2019, cash used in investing activities included capital expenditures of $22.1 million, respectively.partially offset by a return of capital from investees of $3.9 million. For the three months ended March 31, 2018, cash used in investing activities included investments of $42.3 million and capital expenditures of $11.9 million.
Financing Activities
Net cash used in financing activities amounted to $27.0 million for the three months ended March 31, 2019 as compared to $101.8 million for the three months ended March 31, 2018. For the three months ended March 31, 2017, cash used2019, financing activities primarily consisted of taxes paid in investing activities included investmentslieu of $28.0shares issued for equity-based compensation of $23.0 million, distributions to noncontrolling interests of $5.6 million, principal payments on finance leases of $1.3 million, and capital expenditurespurchases of $20.2our common stock of $1.0 million, partially offset by proceeds from stock option exercises of $4.6 million.
Financing Activities
Net cash used in financing activities amounted to $101.8 million for the three months ended March 31, 2018 as compared to $172.8 million for the three months ended March 31, 2017. For the three months ended March 31, 2018, financing activities

and primarily consisted of purchases of our common stock of $83.6 million under our 2016 Stock Repurchase Program.million. In addition, net cash used in financing activities for the three months ended March 31, 2018 includes taxes paid in lieu of shares issued for equity-based compensation of $15.4 million and distributions to noncontrolling interests of $1.4 million.
Net cash used in financing activities amounted to $172.8 million for the three months ended March 31, 2017 and primarily consisted of purchases of our common stock of $91.4 million under our 2016 Stock Repurchase Program and scheduled repayments of principal on the Company’s loan facility of $55.5 million. In addition, net cash used in financing activities for the three months ended March 31, 2017 includes taxes paid in lieu of shares issued for equity-based compensation of $12.8 million and distributions to noncontrolling interests of $11.7 million.
Contractual Obligations
As of March 31, 2018,2019, our contractual obligations not reflected on the condensed consolidated balance sheet decreased $154.7$200.7 million, as compared to$1.2 December 31, 2018, to $0.9 billion. The decrease relates primarily to the expirationadoption of payment guarantees to a production service company for certain production related costs.the new lease standard requiring the recognition of operating leases on the balance sheet rather than disclosed as contractual obligations.
Critical Accounting Policies and Estimates
We describe our significant accounting policies in Note 2 to the Company's Consolidated Financial Statements included in our 20172018 Form 10-K. Other than the adoption of the new lease standard as described in Note 10 to the accompanying condensed consolidated financial statements of the Company included herein, there have been no significant changes in our significant accounting policies since December 31, 2018.
We discuss our critical accounting estimates in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the same 20172018 Form 10-K. Other than certain judgments and estimates related to the new revenue recognition standard as described in Note 2 to the accompanying Condensed Consolidated Financial Statements of the Company included herein, thereThere have been no significant changes in our significant accounting policies or critical accounting estimates since December 31, 2017.2018.
Recently Issued Accounting Pronouncements
See Note 1 to the accompanying Condensed Consolidated Financial Statements of the Company for a discussion of recently issued accounting pronouncements.
Item 3.Quantitative and Qualitative Disclosures About Market Risk.
Fair Value of Debt
Based on the level of interest rates prevailing at March 31, 2018,2019, the faircarrying value of our fixed rate debt of $2.36$2.37 billion was equal toless than its carrying value.fair value of $2.41 billion by approximately $37 million. The fair value of these financial instruments is estimated based on reference to quoted market prices for these or comparable securities. A hypothetical 100 basis point decrease in interest rates prevailing at March 31, 20182019 would increase the estimated fair value of our fixed rate debt by approximately $115.6$82.5 million to approximately $2.5 billion.
Managing our Interest Rate Risk
To manage interest rate risk, we enter into interest rate swap contracts from time to time to adjust the amount of total debt that is subject to variable interest rates. Such contracts effectively fix the borrowing rates on floating rate debt to limit the exposure against the risk of rising rates. We do not enter into interest rate swap contracts for speculative or trading purposes and we only enter into interest rate swap contracts with financial institutions that we believe are creditworthycredit worthy counterparties. We monitor the financial institutions that are counterparties to our interest rate swap contracts and to the extent possible diversify our swap contracts among various counterparties to mitigate exposure to any single financial institution.
As of March 31, 2018,2019, we had $3.1 billion of debt outstanding (excluding capitalfinance leases), of which $0.7 billion is outstanding under our loan facility and is subject to variable interest rates (before consideration of the interest rate swaps contracts described below).

As of March 31, 2018,2019, we had interest rate swap contracts outstanding with notional amounts aggregating $200.0$100.0 million. The aggregate fair value of interest rate swap contracts at March 31, 20182019 was a net assetliability of $1.3$1.0 million. As a result of these transactions, the interest rate paid on approximately 83%79% of our debt (excluding capitalfinance leases) as of March 31, 20182019 is effectively fixed (76% being fixed rate obligations and 7%3% effectively fixed through utilization of these interest rate swap contracts).
A hypothetical 100 basis point increase in interest rates prevailing at March 31, 20182019 would not have a material impact on our annual interest expense.
Managing our 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 subsidiaries' respective functional currencies (non-functional currency risk), such as affiliation agreements, programming contracts, certain trade receivables and accounts payable (including intercompany amounts) that are denominated in a currency other than the applicable functional currency. Changes in exchange rates with respect to amounts recorded in our consolidated balance sheets related to these items will result in unrealized (based upon period-end exchange rates) or realized foreign currency transaction gains and losses upon settlement of the transactions. Moreover, to the extent that our revenue, costs and expenses are

denominated in currencies other than our respective functional currencies, we will experience fluctuations in our revenue, costs and expenses solely as a result of changes in foreign currency exchange rates. The Company recognized $3.4$5.8 million of foreign currency transaction gains,losses, net for the three months ended March 31, 2018.2019. Such amount is included in miscellaneous, net in the condensed consolidated statement of income.
To manage foreign currency exchange rate risk, we may enter into foreign currency contracts from time to time with financial institutions to limit our exposure to fluctuations in foreign currency exchange rates. We do not enter into foreign currency contracts for speculative or trading purposes.
We also are exposed to fluctuations of the U.S. dollar (our reporting currency) against the currencies of our operating subsidiaries when their respective financial statements are translated into U.S. dollars for inclusion in our condensed consolidated financial statements. Cumulative translation adjustments are recorded in accumulated other comprehensive income (loss) as a separate component of equity. Any increase (decrease) in the value of the U.S. dollar against any foreign currency that is the functional currency of one of our operating subsidiaries will cause us to experience unrealized foreign currency translation losses (gains) with respect to amounts already invested in such foreign currencies. Accordingly, we may experience a negative impact on our comprehensive income (loss) and equity with respect to our holdings solely as a result of changes in foreign currency exchange rates.
Item 4.Controls and Procedures.
Disclosure Controls and Procedures
An evaluation was carried out under the supervision and with the participation of the Company's management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation as of March 31, 20182019, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective.
Changes in Internal Control over Financial Reporting
During the three months ended March 31, 2018,2019, there were no changes in the Company's internal control over financial reporting, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.


PART II. OTHER INFORMATION
Item 1.Legal Proceedings.
Since our 20172018 Form 10-K, there have been no material developments in legal proceedings in which we are involved. See Note 11,14, Commitments and Contingencies to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
On March 7, 2016, the Company announced that itsThe Company's Board of Directors has authorized a program to repurchase up to $500 million$1.5 billion of its outstanding shares of common stock (the "2016 Stock"Stock Repurchase Program"). On June 6, 2017, the BoardThe authorization of Directors approvedup to $500 million was announced on March 7, 2016, an increaseadditional authorization of $500 million in the amount authorized for a totalwas announced on June 7, 2017, and an additional authorization of $1.0 billion authorized under the 2016 Stock Repurchase Program.$500 million was announced on June 13, 2018. The 2016 Stock Repurchase Program has no pre-established closing date and may be suspended or discontinued at any time.
Set forth below is information concerning acquisitions of AMC Networks Class A Common Stock by the Company during the three months ended March 31, 2018.2019.
Period 
Total Number of Shares
(or Units) Purchased
 Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 1, 2018 to January 31, 2018 196,265
 $52.89
 196,265
 $332,171,914
February 1, 2018 to February 28, 2018 221,520
 $51.40
 221,520
 $320,785,352
March 1, 2018 to March 31, 2018 1,229,672
 $50.31
 1,229,672
 $258,915,269
Total 1,647,457
 $50.77
 1,647,457
  

Period 
Total Number of Shares
(or Units) Purchased
 Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 1, 2019 to January 31, 2019 18,411
 $53.82
 18,411
 $558,419,334
February 1, 2019 to February 28, 2019 
 $
 
 $558,419,334
March 1, 2019 to March 31, 2019 
 $
 
 $558,419,334
Total 18,411
 $53.82
 18,411
  
Item 6.Exhibits.
(a)Index to Exhibits.
10.1
10.2
31.1
  
31.2
  
32
  
101.INSXBRL Instance Document.
  
101.SCHXBRL Taxonomy Extension Schema Document.
  
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.
  
101.DEFXBRL Taxonomy Extension Definition Linkbase.
  
101.LABXBRL Taxonomy Extension Label Linkbase Document.
  
101.PREXBRL Taxonomy Extension Presentation Linkbase Document.




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on theirits behalf by the undersigned thereunto duly authorized.
 
    AMC Networks Inc.
     
Date:May 10, 20181, 2019 By:/s/ Sean S. Sullivan
    Sean S. Sullivan
    Executive Vice President and Chief Financial Officer




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