UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☑			Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September~~June 30, ~~2022~~2023


☐			Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 1-35106

AMC Networks Inc.

(Exact name of registrant as specified in its charter)


Delaware		27-5403694
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

11 Penn Plaza,
New York,	NY	10001
(Address of principal executive offices)		(Zip Code)

(212) 324-8500

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.01 per share

AMCX

The

NASDAQ

Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company (as defined in Exchange Act Rule 12b-2).


Large accelerated filer	þ	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

The number of shares of common stock outstanding as of ~~October~~July 28, ~~2022:~~2023:


Class A Common Stock par value $0.01 per share			~~31,495,577~~32,020,270
Class B Common Stock par value $0.01 per share			11,484,408

AMC NETWORKS INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

AMC NETWORKS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share amounts)

(unaudited)


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current Assets:	Current Assets:					Current Assets:
Cash and cash equivalents	Cash and cash equivalents	$	790,930	$	892,221	Cash and cash equivalents	$	893,370	$	930,002
Accounts receivable, trade (less allowance for doubtful accounts of $8,549 and $8,030)		696,143		815,444
Accounts receivable, trade (less allowance for doubtful accounts of $8,962 and $8,725)						Accounts receivable, trade (less allowance for doubtful accounts of $8,962 and $8,725)	660,474		722,185
Current portion of program rights, net	Current portion of program rights, net	13,325		10,068		Current portion of program rights, net	11,162		10,807
Prepaid expenses and other current assets	Prepaid expenses and other current assets	414,640		282,453		Prepaid expenses and other current assets	275,490		286,875
Total current assets	Total current assets	1,915,038		2,000,186		Total current assets	1,840,496		1,949,869
Property and equipment, net of accumulated depreciation of $328,638 and $286,133		204,689		225,791
Property and equipment, net of accumulated depreciation of $376,464 and $344,906						Property and equipment, net of accumulated depreciation of $376,464 and $344,906	186,482		202,034
Program rights, net	Program rights, net	2,109,542		1,731,838		Program rights, net	1,884,392		1,762,939
Intangible assets, net	Intangible assets, net	360,184		399,434		Intangible assets, net	312,280		354,676
Goodwill	Goodwill	666,619		709,344		Goodwill	648,202		643,419
Deferred tax assets, net	Deferred tax assets, net	12,661		11,334		Deferred tax assets, net	14,898		13,618
Operating lease right-of-use assets	Operating lease right-of-use assets	109,301		125,866		Operating lease right-of-use assets	97,567		108,229
Other assets	Other assets	435,464		545,153		Other assets	486,164		599,052
Total assets	Total assets	$	5,813,498	$	5,748,946	Total assets	$	5,470,481	$	5,633,836
LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY					LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:	Current Liabilities:					Current Liabilities:
Accounts payable	Accounts payable	$	129,493	$	173,207	Accounts payable	$	112,315	$	172,009
Accrued liabilities	Accrued liabilities	309,144		340,407		Accrued liabilities	374,803		419,065
Current portion of program rights obligations	Current portion of program rights obligations	309,958		307,054		Current portion of program rights obligations	323,862		374,115
Deferred revenue	Deferred revenue	265,071		167,071		Deferred revenue	75,601		134,883
Current portion of long-term debt	Current portion of long-term debt	33,750		33,750		Current portion of long-term debt	450,625		33,750
Current portion of lease obligations	Current portion of lease obligations	35,726		36,596		Current portion of lease obligations	36,828		36,411
Total current liabilities	Total current liabilities	1,083,142		1,058,085		Total current liabilities	1,374,034		1,170,233
Program rights obligations	Program rights obligations	170,900		218,321		Program rights obligations	163,020		200,869
Long-term debt, net	Long-term debt, net	2,785,184		2,804,720		Long-term debt, net	2,349,121		2,778,703
Lease obligations	Lease obligations	128,832		151,839		Lease obligations	108,451		124,799
Deferred tax liabilities, net	Deferred tax liabilities, net	210,811		163,600		Deferred tax liabilities, net	113,110		112,642
Other liabilities	Other liabilities	112,652		165,860		Other liabilities	81,008		139,108
Total liabilities	Total liabilities	4,491,521		4,562,425		Total liabilities	4,188,744		4,526,354
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Redeemable noncontrolling interests	Redeemable noncontrolling interests	272,483		283,849		Redeemable noncontrolling interests	241,486		253,669
Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Class A Common Stock, $0.01 par value, 360,000 shares authorized, 66,077 and 65,485 shares issued and 31,484 and 30,892 shares outstanding, respectively		661		655
Class A Common Stock, $0.01 par value, 360,000 shares authorized, 66,613 and 66,118 shares issued and 32,020 and 31,525 shares outstanding, respectively						Class A Common Stock, $0.01 par value, 360,000 shares authorized, 66,613 and 66,118 shares issued and 32,020 and 31,525 shares outstanding, respectively	666		661
Class B Common Stock, $0.01 par value, 90,000 shares authorized, 11,484 shares issued and outstanding	Class B Common Stock, $0.01 par value, 90,000 shares authorized, 11,484 shares issued and outstanding	115		115		Class B Common Stock, $0.01 par value, 90,000 shares authorized, 11,484 shares issued and outstanding	115		115
Preferred stock, $0.01 par value, 45,000 shares authorized; none issued	Preferred stock, $0.01 par value, 45,000 shares authorized; none issued	—		—		Preferred stock, $0.01 par value, 45,000 shares authorized; none issued	—		—
Paid-in capital	Paid-in capital	347,204		347,971		Paid-in capital	366,553		360,251
Accumulated earnings	Accumulated earnings	2,370,330		2,098,047		Accumulated earnings	2,279,490		2,105,641
Treasury stock, at cost (34,593 and 34,593 shares Class A Common Stock, respectively)	Treasury stock, at cost (34,593 and 34,593 shares Class A Common Stock, respectively)	(1,419,882)		(1,419,882)		Treasury stock, at cost (34,593 and 34,593 shares Class A Common Stock, respectively)	(1,419,882)		(1,419,882)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(295,998)		(175,818)		Accumulated other comprehensive loss	(219,276)		(239,798)
Total AMC Networks stockholders' equity	Total AMC Networks stockholders' equity	1,002,430		851,088		Total AMC Networks stockholders' equity	1,007,666		806,988
Non-redeemable noncontrolling interests	Non-redeemable noncontrolling interests	47,064		51,584		Non-redeemable noncontrolling interests	32,585		46,825
Total stockholders' equity	Total stockholders' equity	1,049,494		902,672		Total stockholders' equity	1,040,251		853,813
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	5,813,498	$	5,748,946	Total liabilities and stockholders' equity	$	5,470,481	$	5,633,836

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 September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenues, net	Revenues, net	$	681,843	$	810,766	$	2,132,025	$	2,273,899	Revenues, net	$	678,628	$	738,025	$	1,396,075	$	1,450,182
Operating expenses:	Operating expenses:									Operating expenses:
Technical and operating (excluding depreciation and amortization)	Technical and operating (excluding depreciation and amortization)	293,459		378,264		903,468		997,677		Technical and operating (excluding depreciation and amortization)	321,961		325,772		648,690		610,009
Selling, general and administrative	Selling, general and administrative	207,972		220,011		670,444		610,164		Selling, general and administrative	194,298		231,819		379,904		462,472
Depreciation and amortization	Depreciation and amortization	29,735		23,411		79,556		71,261		Depreciation and amortization	25,745		27,231		51,620		49,821
Impairment and other charges	Impairment and other charges	—		—		—		158,973		Impairment and other charges	24,882		—		24,882		—
Restructuring and other related charges	Restructuring and other related charges	—		754		—		9,534		Restructuring and other related charges	6,041		—		11,974		—
Total operating expenses	Total operating expenses	531,166		622,440		1,653,468		1,847,609		Total operating expenses	572,927		584,822		1,117,070		1,122,302
Operating income	Operating income	150,677		188,326		478,557		426,290		Operating income	105,701		153,203		279,005		327,880
Other income (expense):	Other income (expense):									Other income (expense):
Interest expense	Interest expense	(34,308)		(31,413)		(97,085)		(97,674)		Interest expense	(38,930)		(31,980)		(76,547)		(62,777)
Interest income	Interest income	3,625		2,264		8,552		7,614		Interest income	7,342		2,467		15,258		4,927
Loss on extinguishment of debt		—		—		—		(22,074)

Miscellaneous, net	Miscellaneous, net	(1,546)		54		3,540		19,634		Miscellaneous, net	10,140		(742)		14,729		5,086
Total other expense	Total other expense	(32,229)		(29,095)		(84,993)		(92,500)		Total other expense	(21,448)		(30,255)		(46,560)		(52,764)
Income from operations before income taxes	Income from operations before income taxes	118,448		159,231		393,564		333,790		Income from operations before income taxes	84,253		122,948		232,445		275,116
Income tax expense	Income tax expense	(28,456)		(40,744)		(103,118)		(77,980)		Income tax expense	(22,155)		(33,028)		(59,054)		(74,662)
Net income including noncontrolling interests	Net income including noncontrolling interests	89,992		118,487		290,446		255,810		Net income including noncontrolling interests	62,098		89,920		173,391		200,454
Net income attributable to noncontrolling interests		(5,326)		(7,836)		(18,163)		(22,253)
Net (income) loss attributable to noncontrolling interests										Net (income) loss attributable to noncontrolling interests	8,141		(6,491)		458		(12,837)
Net income attributable to AMC Networks' stockholders	Net income attributable to AMC Networks' stockholders	$	84,666	$	110,651	$	272,283	$	233,557	Net income attributable to AMC Networks' stockholders	$	70,239	$	83,429	$	173,849	$	187,617
																			Net income per share attributable to AMC Networks' stockholders:
Basic	Basic	$	1.96	$	2.60	$	6.32	$	5.52	Basic	$	1.60	$	1.93	$	3.98	$	4.36
Diluted	Diluted	$	1.94	$	2.55	$	6.23	$	5.39	Diluted	$	1.60	$	1.91	$	3.97	$	4.29

Weighted average common shares:	Weighted average common shares:									Weighted average common shares:
Basic	Basic	43,238		42,506		43,070		42,308		Basic	43,842		43,192		43,702		42,987
Diluted	Diluted	43,732		43,440		43,707		43,332		Diluted	43,900		43,679		43,835		43,697

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 September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income including noncontrolling interests	Net income including noncontrolling interests	$	89,992	$	118,487	$	290,446	$	255,810	Net income including noncontrolling interests	$	62,098	$	89,920	$	173,391	$	200,454
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Foreign currency translation adjustment	Foreign currency translation adjustment	(54,896)		(17,933)		(125,229)		(32,282)		Foreign currency translation adjustment	9,826		(51,740)		21,644		(70,333)
Unrealized gain on interest rate swaps		—		620		—		1,828
Other comprehensive income (loss), before income taxes		(54,896)		(17,313)		(125,229)		(30,454)
Income tax expense		—		(146)		—		(430)
Other comprehensive income (loss), net of income taxes		(54,896)		(17,459)		(125,229)		(30,884)

Comprehensive income	Comprehensive income	35,096		101,028		165,217		224,926		Comprehensive income	71,924		38,180		195,035		130,121
Comprehensive income attributable to noncontrolling interests		(3,136)		(7,109)		(13,114)		(21,318)
Comprehensive (income) loss attributable to noncontrolling interests										Comprehensive (income) loss attributable to noncontrolling interests	7,509		(4,463)		(664)		(9,978)
Comprehensive income attributable to AMC Networks' stockholders	Comprehensive income attributable to AMC Networks' stockholders	$	31,960	$	93,919	$	152,103	$	203,608	Comprehensive income attributable to AMC Networks' stockholders	$	79,433	$	33,717	$	194,371	$	120,143

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			Class A Common Stock		Class B Common Stock		Paid-in Capital		Accumulated Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		AMC Networks Stockholders’ Equity		Noncontrolling Interests		Total Stockholders' Equity
Balance, June 30, 2022		$	660	$	115	$	341,403	$	2,285,664	$	(1,419,882)	$	(243,292)	$	964,668	$	48,778	$	1,013,446
Balance, March 31, 2023																				Balance, March 31, 2023	$	665	$	115	$	360,117	$	2,209,251	$	(1,419,882)	$	(228,470)	$	921,796	$	47,246	$	969,042
Net income attributable to AMC Networks’ stockholders	Net income attributable to AMC Networks’ stockholders	—		—		—		84,666		—		—		84,666		—		84,666		Net income attributable to AMC Networks’ stockholders	—		—		—		70,239		—		—		70,239		—		70,239
Net income attributable to non-redeemable noncontrolling interests		—		—		—		—		—		—		—		883		883
Net income (loss) attributable to non-redeemable noncontrolling interests																				Net income (loss) attributable to non-redeemable noncontrolling interests	—		—		—		—		—		—		—		(14,941)		(14,941)

Distribution to noncontrolling member	Distribution to noncontrolling member	—		—		—		—		—		—		—		(407)		(407)		Distribution to noncontrolling member	—		—		—		—		—		—		—		(352)		(352)

Other comprehensive income		—		—		—		—		—		(52,706)		(52,706)		(2,190)		(54,896)
Other comprehensive income (loss)																				Other comprehensive income (loss)	—		—		—		—		—		9,194		9,194		632		9,826
Share-based compensation expenses	Share-based compensation expenses	—		—		7,050		—		—		—		7,050		—		7,050		Share-based compensation expenses	—		—		7,648		—		—		—		7,648		—		7,648

Net share issuances under employee stock plans	Net share issuances under employee stock plans	1		—		(1,249)		—		—		—		(1,248)		—		(1,248)		Net share issuances under employee stock plans	1		—		(1,212)		—		—		—		(1,211)		—		(1,211)
Balance, September 30, 2022		$	661	$	115	$	347,204	$	2,370,330	$	(1,419,882)	$	(295,998)	$	1,002,430	$	47,064	$	1,049,494
Balance, June 30, 2023																				Balance, June 30, 2023	$	666	$	115	$	366,553	$	2,279,490	$	(1,419,882)	$	(219,276)	$	1,007,666	$	32,585	$	1,040,251


		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			Class A Common Stock		Class B Common Stock		Paid-in Capital		Accumulated Earnings		Treasury Stock		Accumulated Other Comprehensive Loss		AMC Networks Stockholders’ Equity		Noncontrolling Interests		Total Stockholders' Equity
Balance, June 30, 2021		$	653	$	115	$	330,593	$	1,970,357	$	(1,419,882)	$	(148,167)	$	733,669	$	49,873	$	783,542
Balance, March 31, 2022																				Balance, March 31, 2022	$	660	$	115	$	335,803	$	2,202,235	$	(1,419,882)	$	(193,580)	$	925,351	$	51,627	$	976,978
Net income attributable to AMC Networks’ stockholders	Net income attributable to AMC Networks’ stockholders	—		—		—		110,651		—		—		110,651		—		110,651		Net income attributable to AMC Networks’ stockholders	—		—		—		83,429		—		—		83,429		—		83,429
Net income attributable to non-redeemable noncontrolling interests	Net income attributable to non-redeemable noncontrolling interests	—		—		—		—		—		—		—		2,856		2,856		Net income attributable to non-redeemable noncontrolling interests	—		—		—		—		—		—		—		1,870		1,870

Distributions to noncontrolling member	Distributions to noncontrolling member	—		—		—		—		—		—		—		(431)		(431)		Distributions to noncontrolling member	—		—		—		—		—		—		—		(1,394)		(1,394)
Purchase of noncontrolling interest, net of tax																				Purchase of noncontrolling interest, net of tax	—		—		(3,066)		—		—		—		(3,066)		(1,297)		(4,363)

Other comprehensive income		—		—		—		—		—		(16,732)		(16,732)		(727)		(17,459)
Other comprehensive income (loss)																				Other comprehensive income (loss)	—		—		—		—		—		(49,712)		(49,712)		(2,028)		(51,740)

Share-based compensation expenses	Share-based compensation expenses	—		—		9,455		—		—		—		9,455		—		9,455		Share-based compensation expenses	—		—		8,683		—		—		—		8,683		—		8,683

Net share issuances under employee stock plans	Net share issuances under employee stock plans	—		—		(15)		—		—		—		(15)		—		(15)		Net share issuances under employee stock plans	—		—		(17)		—		—		—		(17)		—		(17)
Balance, September 30, 2021		$	653	$	115	$	340,033	$	2,081,008	$	(1,419,882)	$	(164,899)	$	837,028	$	51,571	$	888,599
Balance, June 30, 2022																				Balance, June 30, 2022	$	660	$	115	$	341,403	$	2,285,664	$	(1,419,882)	$	(243,292)	$	964,668	$	48,778	$	1,013,446

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			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, 2021		$	655	$	115	$	347,971	$	2,098,047	$	(1,419,882)	$	(175,818)	$	851,088	$	51,584	$	902,672
Balance, December 31, 2022																				Balance, December 31, 2022	$	661	$	115	$	360,251	$	2,105,641	$	(1,419,882)	$	(239,798)	$	806,988	$	46,825	$	853,813
Net income attributable to AMC Networks’ stockholders	Net income attributable to AMC Networks’ stockholders	—		—		—		272,283		—		—		272,283		—		272,283		Net income attributable to AMC Networks’ stockholders	—		—		—		173,849		—		—		173,849		—		173,849
Net income attributable to non-redeemable noncontrolling interests		—		—		—		—		—		—		—		5,192		5,192
Purchase of noncontrolling interests, net of tax		—		—		(3,066)		—		—		—		(3,066)		(1,297)		(4,363)
Net income (loss) attributable to non-redeemable noncontrolling interests																				Net income (loss) attributable to non-redeemable noncontrolling interests	—		—		—		—		—		—		—		(13,528)		(13,528)

Distributions to noncontrolling member	Distributions to noncontrolling member	—		—		—		—		—		—		—		(3,366)		(3,366)		Distributions to noncontrolling member	—		—		—		—		—		—		—		(1,834)		(1,834)

Other comprehensive income (loss)	Other comprehensive income (loss)	—		—		—		—		—		(120,180)		(120,180)		(5,049)		(125,229)		Other comprehensive income (loss)	—		—		—		—		—		20,522		20,522		1,122		21,644
Share-based compensation expenses	Share-based compensation expenses	—		—		23,862		—		—		—		23,862		—		23,862		Share-based compensation expenses	—		—		13,530		—		—		—		13,530		—		13,530

Net share issuances under employee stock plans	Net share issuances under employee stock plans	6		—		(21,563)		—		—		—		(21,557)		—		(21,557)		Net share issuances under employee stock plans	5		—		(7,228)		—		—		—		(7,223)		—		(7,223)
Balance, September 30, 2022		$	661	$	115	$	347,204	$	2,370,330	$	(1,419,882)	$	(295,998)	$	1,002,430	$	47,064	$	1,049,494
Balance, June 30, 2023																				Balance, June 30, 2023	$	666	$	115	$	366,553	$	2,279,490	$	(1,419,882)	$	(219,276)	$	1,007,666	$	32,585	$	1,040,251


		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			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, 2020		$	646	$	115	$	323,425	$	1,847,451	$	(1,419,882)	$	(134,950)	$	616,805	$	26,296	$	643,101
Balance, December 31, 2021																				Balance, December 31, 2021	$	655	$	115	$	347,971	$	2,098,047	$	(1,419,882)	$	(175,818)	$	851,088	$	51,584	$	902,672
Net income attributable to AMC Networks’ stockholders	Net income attributable to AMC Networks’ stockholders	—		—		—		233,557		—		—		233,557		—		233,557		Net income attributable to AMC Networks’ stockholders	—		—		—		187,617		—		—		187,617		—		187,617
Net income attributable to non-redeemable noncontrolling interests	Net income attributable to non-redeemable noncontrolling interests	—		—		—		—		—		—		—		7,134		7,134		Net income attributable to non-redeemable noncontrolling interests	—		—		—		—		—		—		—		4,309		4,309
Contributions from noncontrolling member		—		—		—		—		—		—		—		709		709
Distributions to noncontrolling member																				Distributions to noncontrolling member	—		—		—		—		—		—		—		(2,959)		(2,959)
Purchase of noncontrolling interest, net of tax																				Purchase of noncontrolling interest, net of tax	—		—		(3,066)		—		—		—		(3,066)		(1,297)		(4,363)

Transfer from redeemable noncontrolling interest		—		—		—						—		—		18,367		18,367

Other comprehensive income (loss)	Other comprehensive income (loss)	—		—		—		—		—		(29,949)		(29,949)		(935)		(30,884)		Other comprehensive income (loss)	—		—		—		—		—		(67,474)		(67,474)		(2,859)		(70,333)
Share-based compensation expenses	Share-based compensation expenses	—		—		39,163		—		—		—		39,163		—		39,163		Share-based compensation expenses	—		—		16,812		—		—		—		16,812		—		16,812
Proceeds from the exercise of stock options		—		—		9,795		—		—		—		9,795		—		9,795

Net share issuances under employee stock plans	Net share issuances under employee stock plans	7		—		(32,350)		—		—		—		(32,343)		—		(32,343)		Net share issuances under employee stock plans	5		—		(20,314)		—		—		—		(20,309)		—		(20,309)
Balance, September 30, 2021		$	653	$	115	$	340,033	$	2,081,008	$	(1,419,882)	$	(164,899)	$	837,028	$	51,571	$	888,599
Balance, June 30, 2022																				Balance, June 30, 2022	$	660	$	115	$	341,403	$	2,285,664	$	(1,419,882)	$	(243,292)	$	964,668	$	48,778	$	1,013,446

See accompanying notes to condensed consolidated financial statements.

AMC NETWORKS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands) / (unaudited)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income including noncontrolling interests	Net income including noncontrolling interests	$	290,446	$	255,810	Net income including noncontrolling interests	$	173,391	$	200,454
Adjustments to reconcile net income to net cash from operating activities:	Adjustments to reconcile net income to net cash from operating activities:					Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	Depreciation and amortization	79,556		71,261		Depreciation and amortization	51,620		49,821
Impairment and other charges	Impairment and other charges	—		16,055		Impairment and other charges	24,882		—
Share-based compensation expenses related to equity classified awards	Share-based compensation expenses related to equity classified awards	23,862		39,163		Share-based compensation expenses related to equity classified awards	13,293		16,812
Non-cash restructuring and other related charges		—		4,329

Amortization of program rights	Amortization of program rights	610,099		601,640		Amortization of program rights	430,386		396,890
Amortization of deferred carriage fees	Amortization of deferred carriage fees	24,747		16,138		Amortization of deferred carriage fees	10,992		16,902
Unrealized foreign currency transaction gain		(1,098)		(10,025)
Unrealized foreign currency transaction loss/(gain)						Unrealized foreign currency transaction loss/(gain)	2,712		(554)
Amortization of deferred financing costs and discounts on indebtedness	Amortization of deferred financing costs and discounts on indebtedness	5,778		5,820		Amortization of deferred financing costs and discounts on indebtedness	3,905		3,828
Loss on extinguishment of debt		—		22,074

Bad debt expense	Bad debt expense	2,035		4,900		Bad debt expense	1,070		1,165
Deferred income taxes	Deferred income taxes	46,292		31,765		Deferred income taxes	(725)		34,115
Gain on investments	Gain on investments	(4,084)		(4,554)		Gain on investments	—		(4,084)

Other, net	Other, net	(7,854)		(3,429)		Other, net	(2,201)		(4,955)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Accounts receivable, trade (including amounts due from related parties, net)		99,711		38,514
Accounts receivable, trade						Accounts receivable, trade	54,221		58,410
Prepaid expenses and other assets	Prepaid expenses and other assets	(18,174)		(62,799)		Prepaid expenses and other assets	133,471		(50,853)
Program rights and obligations, net	Program rights and obligations, net	(1,065,937)		(967,172)		Program rights and obligations, net	(644,114)		(667,492)
Income taxes payable	Income taxes payable	13,181		(5,235)		Income taxes payable	1,109		2,241
Deferred revenue	Deferred revenue	66,822		6,837		Deferred revenue	(59,828)		44,874
Deferred carriage fees, net	Deferred carriage fees, net	(22,285)		(29,207)		Deferred carriage fees, net	(6,129)		(11,686)
Accounts payable, accrued liabilities and other liabilities	Accounts payable, accrued liabilities and other liabilities	(106,506)		12,099		Accounts payable, accrued liabilities and other liabilities	(163,008)		(68,714)
Net cash provided by operating activities	Net cash provided by operating activities	36,591		43,984		Net cash provided by operating activities	25,047		17,174
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Capital expenditures	Capital expenditures	(33,510)		(29,969)		Capital expenditures	(21,450)		(21,554)
Return of capital from investees	Return of capital from investees	1,771		—		Return of capital from investees	—		1,771
Payments for acquisition of a business, net of cash acquired		—		(19,072)

Acquisition of investments	Acquisition of investments	(5,002)		(28,397)		Acquisition of investments	(283)		—
Cash paid on distribution of business		—		(7,052)
Loans to investees		(2,456)		—

Principal payment received on loan to investee	Principal payment received on loan to investee	720		20,000		Principal payment received on loan to investee	180		—
Proceeds from sale of investments	Proceeds from sale of investments	9,854		95,370		Proceeds from sale of investments	8,565		9,854
Net cash provided by (used in) investing activities		(28,623)		30,880
Net cash used in investing activities						Net cash used in investing activities	(12,988)		(9,929)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from the issuance of long-term debt		—		986,000
Payments for financing costs						Payments for financing costs	(342)		—
Principal payments on long-term debt	Principal payments on long-term debt	(25,313)		(1,015,000)		Principal payments on long-term debt	(16,875)		(16,875)
Deemed repurchases of restricted stock units	Deemed repurchases of restricted stock units	(21,557)		(32,343)		Deemed repurchases of restricted stock units	(7,223)		(20,309)
Proceeds from stock option exercises		—		9,795

Principal payments on finance lease obligations	Principal payments on finance lease obligations	(2,606)		(2,866)		Principal payments on finance lease obligations	(1,946)		(1,663)
Contributions from noncontrolling interests		—		2,701

Distributions to noncontrolling interests	Distributions to noncontrolling interests	(28,232)		(14,906)		Distributions to noncontrolling interests	(27,087)		(25,139)
Purchase of noncontrolling interests	Purchase of noncontrolling interests	(2,500)		—		Purchase of noncontrolling interests	(1,343)		(2,500)
Net cash used in financing activities	Net cash used in financing activities	(80,208)		(66,619)		Net cash used in financing activities	(54,816)		(66,486)
Net increase (decrease) in cash and cash equivalents from operations		(72,240)		8,245
Net decrease in cash and cash equivalents from operations						Net decrease in cash and cash equivalents from operations	(42,757)		(59,241)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(29,051)		(25,804)		Effect of exchange rate changes on cash and cash equivalents	6,125		(15,636)
Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	892,221		888,526		Cash and cash equivalents at beginning of period	930,002		892,221
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	790,930	$	870,967	Cash and cash equivalents at end of period	$	893,370	$	817,344

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," "we," "us," or "our") own and operate entertainment businesses and assets. The Company is comprised of two operating segments:

•Domestic Operations: Includes our programming services, ~~and AMC Broadcasting & Technology. Our programming services~~which consist of our five national programming networks, our global streaming services, our AMC Studios operation and IFC Films. Our national programming networks are AMC, WE tv, BBC AMERICA, IFC, and SundanceTV. Our global streaming services consist of our ~~global~~ targeted subscription streaming services (Acorn TV, Shudder, Sundance Now, ALLBLK, and HIDIVE), and AMC+ ~~and other streaming initiatives.~~. Our AMC Studios operation produces original programming for our programming networks and third parties and also licenses ~~such~~ programming worldwide, and IFC Films is our film distribution business. The operating segment also includes AMC Networks Broadcasting & Technology, our technical services business, which primarily services most of the national programming networks.

•International and Other: Includes AMC Networks International ("AMCNI"), our international programming businesses consisting of a portfolio of channels around the world, and 25/7 Media, our production services business.

Basis of Presentation

Principles of Consolidation

The consolidated financial statements include the accounts of AMC Networks and its subsidiaries in which a controlling financial interest is maintained or variable interest entities ("VIEs") in which the Company has determined it is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.

Investments in business entities in which the Company lacks control but does have the ability to exercise significant influence over operating and financial policies are accounted for using the equity method of accounting.

Unaudited Interim Financial Statements

These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the Company's consolidated financial statements and notes thereto for the year ended December 31, ~~2021~~2022 contained in the Company's Annual Report on Form 10-K ~~("2021~~(our "2022 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, ~~2022.~~2023.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include the useful lives and methodologies used to amortize and assess recoverability of program rights, the estimated useful lives of intangible assets and the valuation and recoverability of goodwill and intangible assets.

~~Reclassifications~~

~~Certain reclassifications were made to the prior period amounts to conform to the current period presentation.~~

Note 2. Revenue Recognition

Transaction Price Allocated to Future Performance Obligations

As of ~~September~~June 30, ~~2022,~~2023, other than contracts for which the Company has applied the practical expedients, the aggregate amount of transaction price allocated to future performance obligations was not material to our consolidated revenues.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Contract Balances from Contracts with Customers

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.


(In thousands)	(In thousands)	September 30, 2022		December 31, 2021		(In thousands)	June 30, 2023		December 31, 2022
Balances from contracts with customers:	Balances from contracts with customers:					Balances from contracts with customers:
Accounts receivable (including long-term receivables within Other assets)	Accounts receivable (including long-term receivables within Other assets)	$	925,137	$	1,106,225	Accounts receivable (including long-term receivables within Other assets)	$	783,422	$	1,003,505
Contract assets, short-term (included in Prepaid expenses and other current assets)	Contract assets, short-term (included in Prepaid expenses and other current assets)	179,443		69,351		Contract assets, short-term (included in Prepaid expenses and other current assets)	4,378		48,594
Contract assets, long-term (included in Other assets)		3,414		29,323

Contract liabilities, short-term (Deferred revenue)	Contract liabilities, short-term (Deferred revenue)	265,071		167,071		Contract liabilities, short-term (Deferred revenue)	75,601		134,883
Contract liabilities, long-term (Deferred revenue included in Other liabilities)	Contract liabilities, long-term (Deferred revenue included in Other liabilities)	673		31,832		Contract liabilities, long-term (Deferred revenue included in Other liabilities)	113		683

Revenue recognized for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 relating to the contract liability at December 31, 2022 and 2021 ~~and 2020~~ was ~~$63.1~~$97.4 million and ~~$24.4~~$45.7 million, respectively.

Note 3. Net Income per Share

The following is a reconciliation between basic and diluted weighted average common shares outstanding:


(In thousands)	(In thousands)	Three Months Ended September 30,		Nine Months Ended September 30,		(In thousands)	Three Months Ended June 30,		Six Months Ended June 30,
		2022	2021	2022	2021		2023	2022	2023	2022
Basic weighted average common shares outstanding	Basic weighted average common shares outstanding	43,238	42,506	43,070	42,308	Basic weighted average common shares outstanding	43,842	43,192	43,702	42,987
Effect of dilution:	Effect of dilution:					Effect of dilution:
Stock options		—	—	—	4

Restricted stock units	Restricted stock units	494	934	637	1,020	Restricted stock units	58	487	133	710
Diluted weighted average common shares outstanding	Diluted weighted average common shares outstanding	43,732	43,440	43,707	43,332	Diluted weighted average common shares outstanding	43,900	43,679	43,835	43,697

As of ~~September~~June 30, 2023 and June 30, 2022, ~~and September 30, 2021,~~ ~~0.9~~2.1 million and ~~0.3~~0.8 million, respectively, of restricted stock units have been excluded from diluted weighted average common shares outstanding, as their impact would have been anti-dilutive.

Stock Repurchase Program

The Company's Board of Directors previously authorized a program to repurchase up to $1.5 billion of its outstanding shares of common stock (the "Stock Repurchase Program"). The Stock Repurchase Program has no pre-established closing date and may be suspended or discontinued at any time. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, the Company did not repurchase any shares of its Class A Common Stock. As of ~~September~~June 30, ~~2022,~~2023, the Company had $135.3 million of authorization remaining for repurchase under the Stock Repurchase Program.

~~AMC NETWORKS INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(unaudited)~~

~~Note 4. Impairment and Other Charges~~

~~There were no impairment and other charges for the three and nine months ended September 30, 2022 or the three months ended September 30, 2021.~~

~~Impairment and other charges for the nine months ended September 30, 2021 were $159.0 million.~~

~~On July 16, 2021, the Company entered into a settlement agreement (the “Settlement Agreement”)~~ ~~with Frank Darabont, Ferenc, Inc., Darkwoods Productions, Inc., and Creative Artists Agency, LLC (together, the "Plaintiffs")~~ ~~in actions brought in connection with Frank Darabont’s rendering services as a writer, director and producer of the television series entitled~~ ~~The Walking Dead~~. ~~The Settlement Agreement provided for~~ ~~a cash payment of $200 million (the “Settlement Payment”) to the Plaintiffs~~ ~~and future revenue sharing related to certain future streaming exhibition of~~ ~~The Walking Dead~~ ~~and~~ ~~Fear The Walking Dead. With regard to the Settlement Payment,~~ ~~the Company recorded a charge of $143.0 million during the second quarter of 2021, included in Impairment and other charges~~ ~~in consideration for the extinguishment of Plaintiffs’ rights to any compensation in connection with~~ ~~The Walking Dead~~ ~~and any related programs and the dismissal of the actions with prejudice, which amount was net~~ ~~of $57.0 million of ordinary course accrued participations.~~

In March 2021, the Company completed a spin-off of the live comedy venue and talent management businesses ("LiveCo") of Levity Entertainment Group, LLC. In connection with the transaction, the Company effectively exchanged all of its rights and interests in LiveCo for the release of the Company's obligations, principally related to leases. As a result of this divestiture, the Company recognized a loss on the disposal of $16.1 million reflecting the net assets transferred (consisting of property and equipment, lease right-of-use assets and intangibles, partially offset by lease and other obligations), which is included in Impairment and other charges. The Company retained its interest in the production services business of Levity Entertainment Group, LLC, which was renamed 25/7 Media Holdings, LLC ("25/7 Media") following the spin-off.

Note 5.4. Restructuring and Other Related Charges

On November 28, 2022, the Company commenced a restructuring plan (the “Plan”) designed to achieve significant cost reductions in light of “cord cutting” and the related impacts being felt across the media industry as well as the broader economic outlook. The Plan encompasses initiatives that include, among other things, strategic programming assessments and organizational restructuring costs. The Plan is intended to improve the organizational design of the Company through the elimination of certain roles and centralization of certain functional areas of the Company. The programming assessments pertain to a broad mix of owned and licensed content, including legacy television series and films that will no longer be in active rotation on the Company’s linear or streaming platforms. As a result of the Plan, the Company recorded restructuring and other related charges of $6.0 million and $12.0 million for the three and six months ended June 30, 2023 consisting primarily of severance and other personnel costs.

There were no restructuring and other related charges for the three and ~~nine~~six months ended ~~September~~June 30, 2022.

~~Restructuring and other related charges of $0.8 million and $9.5 million for the three and nine months ended September 30, 2021, respectively, consisted of $0.8 million and $5.2 million~~ ~~at AMCNI related to severance costs and the termination of distribution in certain international territories for~~ ~~three and nine months ended September 30, 2021, respectively,~~ ~~and $4.3 million~~ ~~of severance costs associated with the~~ ~~restructuring plan announced in November 2020~~ ~~for the nine months ended September 30, 2021.~~

~~The following table summarizes the restructuring and other related charges recognized by operating segment:~~

(In thousands) Three Months Ended September 30, Nine Months Ended September 30,
2021 2021
Domestic Operations $ (135) $ 2,508
International and Other 800 5,273
Corporate / Inter-segment eliminations 89 1,753
Total restructuring and other related charges $ 754 $ 9,534

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

The following table summarizes the restructuring and other related charges recognized by operating segment:


(In thousands)	Three Months Ended June 30,		Six Months Ended June 30,
	2023			2023
Domestic Operations	$	3,905		$	4,723
International and Other	261			1,646
Corporate / Inter-segment eliminations	1,875			5,605
Total restructuring and other related charges	$	6,041		$	11,974

The following table summarizes the accrued restructuring and other related costs:


(In thousands)	Severance and Employee-Related Costs		Content Impairments and Other Exit Costs		Total
Balance at December 31, 2022	$	37,150	$	74,724	$	111,874
Charges (credits)	13,775		(1,801)		11,974

Cash payments	(36,270)		(52,236)		(88,506)

Other	(34)		685		651
Balance at June 30, 2023	$	14,621	$	21,372	$	35,993

Accrued restructuring and other related costs of $33.7 million and $2.3 million are included in Accrued liabilities and Other liabilities, respectively, in the consolidated balance sheet at June 30, 2023. Accrued restructuring and other related costs of $108.0 million and $3.9 million are included in Accrued liabilities and Other liabilities, respectively, in the consolidated balance sheet at December 31, 2022.

Note 6.5. Program Rights

Total capitalized produced and licensed content by predominant monetization strategy is as follows:

September 30, 2022
(In thousands) Predominantly Monetized Individually Predominantly Monetized as a Group Total
Owned original program rights, net:
Completed $ 299,048 $ 431,416 $ 730,464
In-production and in-development 62,711 349,453 412,164
Total owned original program rights, net $ 361,759 $ 780,869 $ 1,142,628
Licensed program rights, net:
Licensed film and acquired series $ 3,646 $ 573,355 $ 577,001
Licensed originals 77,466 207,016 284,482
Advances and content versioning costs — 118,756 118,756
Total licensed program rights, net 81,112 899,127 980,239
Program rights, net $ 442,871 $ 1,679,996 $ 2,122,867
Current portion of program rights, net $ 13,325
Program rights, net (long-term) 2,109,542
$ 2,122,867


		December 31, 2021							June 30, 2023
(In thousands)	(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total		(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Owned original program rights, net:	Owned original program rights, net:							Owned original program rights, net:
Completed	Completed	$	185,228	$	127,470	$	312,698	Completed	$	218,360	$	535,004	$	753,364
In-production and in-development	In-production and in-development	161,881		264,927		426,808		In-production and in-development	—		297,007		297,007
Total owned original program rights, net	Total owned original program rights, net	$	347,109	$	392,397	$	739,506	Total owned original program rights, net	$	218,360	$	832,011	$	1,050,371

Licensed program rights, net:	Licensed program rights, net:							Licensed program rights, net:
Licensed film and acquired series	Licensed film and acquired series	$	7,005	$	620,935	$	627,940	Licensed film and acquired series	$	1,633	$	594,451	$	596,084
Licensed originals	Licensed originals	61,923		148,063		209,986		Licensed originals	4,837		153,175		158,012
Advances and content versioning costs	Advances and content versioning costs	57,278		107,196		164,474		Advances and content versioning costs	—		91,087		91,087
Total licensed program rights, net	Total licensed program rights, net	126,206		876,194		1,002,400		Total licensed program rights, net	6,470		838,713		845,183
Program rights, net	Program rights, net	$	473,315	$	1,268,591	$	1,741,906	Program rights, net	$	224,830	$	1,670,724	$	1,895,554

Current portion of program rights, net	Current portion of program rights, net					$	10,068	Current portion of program rights, net					$	11,162
Program rights, net (long-term)	Program rights, net (long-term)					1,731,838		Program rights, net (long-term)					1,884,392
						$	1,741,906						$	1,895,554

109

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)


	December 31, 2022
(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Owned original program rights, net:
Completed	$	215,496	$	322,248	$	537,744
In-production and in-development	45,098		294,086		339,184
Total owned original program rights, net	$	260,594	$	616,334	$	876,928

Licensed program rights, net:
Licensed film and acquired series	$	3,092	$	642,768	$	645,860
Licensed originals	5,373		171,418		176,791
Advances and content versioning costs	—		74,167		74,167
Total licensed program rights, net	8,465		888,353		896,818
Program rights, net	$	269,059	$	1,504,687	$	1,773,746

Current portion of program rights, net					$	10,807
Program rights, net (long-term)					1,762,939
					$	1,773,746

Amortization of owned and licensed program rights, included in Technical and operating expenses in the condensed consolidated statements of income, is as follows:


		Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022							Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
(In thousands)	(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total		(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total

Owned original program rights	Owned original program rights	$	33,728	$	35,534	$	69,262	$	128,072	$	82,850	$	210,922	Owned original program rights	$	59,528	$	56,811	$	116,339	$	80,831	$	101,747	$	182,578
Licensed program rights	Licensed program rights	12,597		131,350		143,947		29,838		369,339		399,177		Licensed program rights	471		126,503		126,974		2,135		245,673		247,808
Program rights amortization	Program rights amortization	$	46,325	$	166,884	$	213,209	$	157,910	$	452,189	$	610,099	Program rights amortization	$	59,999	$	183,314	$	243,313	$	82,966	$	347,420	$	430,386


		Three Months Ended September 30, 2021						Nine Months Ended September 30, 2021							Three Months Ended June 30, 2022						Six Months Ended June 30, 2022
(In thousands)	(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total		(In thousands)	Predominantly Monetized Individually		Predominantly Monetized as a Group		Total		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total

Owned original program rights	Owned original program rights	$	112,620	$	12,912	$	125,532	$	197,447	$	25,049	$	222,496	Owned original program rights	$	44,504	$	30,381	$	74,885	$	94,344	$	47,316	$	141,660
Licensed program rights	Licensed program rights	19,579		123,181		142,760		65,464		313,680		379,144		Licensed program rights	9,633		119,520		129,153		17,241		237,989		255,230
Program rights amortization	Program rights amortization	$	132,199	$	136,093	$	268,292	$	262,911	$	338,729	$	601,640	Program rights amortization	$	54,137	$	149,901	$	204,038	$	111,585	$	285,305	$	396,890

For programming rights predominantly monetized individually or as a group, the Company periodically reviews the programming usefulness of licensed and owned original program rights based on several factors, including expected future revenue generation from airings on the Company's networks and streaming services and other exploitation opportunities, ratings, type and quality of program material, standards and practices, and fitness for exhibition through various forms of distribution. If events or changes in circumstances indicate that the fair value of a film predominantly monetized individually or a film group is less than its unamortized cost, the Company will write off the excess to technical and operating expenses in the consolidated statements of income. Program rights with no future programming usefulness are substantively abandoned resulting in the write-off of remaining unamortized cost. There were no significant program rights write-offs included in technical and operating ~~expense~~expenses for the three and ~~nine~~six months ended ~~September~~June 30, 2023 or 2022.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

In the normal course of business, the Company may qualify for tax incentives through eligible investments in productions. Receivables related to tax incentives earned on production spend were $188.0 million and $143.1 million as of June 30, 2023 and December 31, 2022, ~~or 2021.~~respectively, recorded in Prepaid expenses and other current assets, and $75.0 million and $104.5 million as of June 30, 2023 and December 31, 2022, respectively, recorded in Other assets.

Note 7.6. Investments

The Company holds several investments in and loans to non-consolidated entities which are included in Other assets in the condensed consolidated balance sheet.

Equity Method Investments

Equity method investments were $~~79.0~~83.3 million and ~~$93.7~~$79.6 million at ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

Marketable Equity Securities

The Company classifies publicly traded investments with readily determinable fair values that are not accounted for under the equity method as marketable equity securities. Marketable equity securities are recorded at cost and adjusted to fair value at each reporting period. The changes in fair value between measurement dates are recorded in miscellaneous, net in the condensed consolidated ~~statement~~statements of income.

There were no investments in marketable equity securities at June 30, 2023 or December 31, 2022.

There were no realized or unrealized gains or losses on marketable equity securities for the three and six months ended June 30, 2023. In April 2022, the Company sold its interest in a marketable equity security for $9.9 million. ~~No gains or losses were recorded on marketable equity securities for the three months ended September 30, 2022 and $4.1 million~~The Company recognized a loss of ~~gains were recorded for the nine months ended September 30, 2022. There were losses of $0.8~~$0.2 million and ~~$8.6~~a gain of $4.1 million on marketable equity securities for the three and ~~nine~~six months ended ~~September 30, 2021, respectively. There were~~ no ~~investments in marketable equity securities at September~~June 30, 2022, ~~and $5.8 million~~respectively, included in miscellaneous, net in the condensed consolidated statements of ~~investments in marketable equity securities at December 31, 2021.~~income.

Non-marketable Equity Securities

The Company classifies investments without readily determinable fair values that are not accounted for under the equity method as non-marketable equity securities. ~~During the third quarter of 2022, the Company made a $5.0 million investment in a targeted streaming service.~~

Investments in non-marketable equity securities were $~~42.7~~41.3 million and ~~$37.7~~$42.7 million at ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively. The changes in value as a result of observable price changes, if any, are recorded in miscellaneous, net in the condensed consolidated statement of income. During the three and six months ended June 30, 2023, the Company recognized impairment charges of $0.5 million and $1.7 million, respectively, on certain investments, which were included in miscellaneous, net in the consolidated statements of income.

~~AMC NETWORKS INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(unaudited)~~

Note 8.7. Goodwill and Other Intangible Assets

The carrying amount of goodwill, by operating segment is as follows:


(In thousands)	(In thousands)	Domestic Operations		International and Other		Total		(In thousands)	Domestic Operations		International and Other		Total
December 31, 2021		$	353,470	$	355,874	$	709,344
December 31, 2022								December 31, 2022	$	349,292	$	294,127	$	643,419

Purchase accounting adjustments		(1,086)		—		(1,086)

Impairment charge								Impairment charge	—		(1,877)		(1,877)
Amortization of "second component" goodwill	Amortization of "second component" goodwill	(1,008)		—		(1,008)		Amortization of "second component" goodwill	(560)		—		(560)
Foreign currency translation	Foreign currency translation	—		(40,631)		(40,631)		Foreign currency translation	—		7,220		7,220
September 30, 2022		$	351,376	$	315,243	$	666,619
June 30, 2023								June 30, 2023	$	348,732	$	299,470	$	648,202

As of ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, accumulated impairment charges in the International and Other segment totaled $165.7 million and $~~123.1~~163.8 million, respectively.

The ~~purchase accounting adjustments of $1.1~~$1.9 million impairment charge for International and Other relates to the ~~carrying amount~~25/7 Media reporting unit. See "Impairment Test of ~~goodwill in Domestic Operations relate to the acquisition of Sentai Holdings, a global supplier of anime content, including its anime-focused HIDIVE subscription streaming service,~~Long-Lived Assets and Goodwill" below for which the allocation of goodwill is preliminary and is based on current estimates and currently available information, and is subject to revision based on final allocation of the purchase price to identifiable assets and liabilities acquired.more details.

The reduction of ~~$1.0~~$0.6 million in the carrying amount of goodwill for Domestic Operations 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. As of June 30, 2023, all tax benefits have been realized.

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)	(In thousands)	September 30, 2022							(In thousands)	June 30, 2023
		Gross		Accumulated Amortization		Net		Estimated Useful Lives		Gross		Accumulated Amortization		Net		Estimated Useful Lives
Amortizable intangible assets:	Amortizable intangible assets:								Amortizable intangible assets:
Affiliate and customer relationships	Affiliate and customer relationships	$	622,495	$	(357,809)	$	264,686	6 to 25 years	Affiliate and customer relationships	$	639,664	$	(407,959)	$	231,705	6 to 25 years
Advertiser relationships	Advertiser relationships	46,282		(33,391)		12,891		11 years	Advertiser relationships	46,282		(36,546)		9,736		11 years
Trade names and other amortizable intangible assets	Trade names and other amortizable intangible assets	105,652		(42,945)		62,707		3 to 20 years	Trade names and other amortizable intangible assets	106,755		(55,816)		50,939		3 to 20 years

Total amortizable intangible assets	Total amortizable intangible assets	774,429		(434,145)		340,284			Total amortizable intangible assets	792,701		(500,321)		292,380
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:								Indefinite-lived intangible assets:
Trademarks	Trademarks	19,900		—		19,900			Trademarks	19,900		—		19,900
Total intangible assets	Total intangible assets	$	794,329	$	(434,145)	$	360,184		Total intangible assets	$	812,601	$	(500,321)	$	312,280

(In thousands)	(In thousands)	December 31, 2021							(In thousands)	December 31, 2022
		Gross		Accumulated Amortization		Net				Gross		Accumulated Amortization		Net
Amortizable intangible assets:	Amortizable intangible assets:								Amortizable intangible assets:
Affiliate and customer relationships	Affiliate and customer relationships	$	649,543	$	(354,673)	$	294,870		Affiliate and customer relationships	$	634,000	$	(373,240)	$	260,760
Advertiser relationships	Advertiser relationships	46,282		(30,235)		16,047			Advertiser relationships	46,282		(34,443)		11,839
Trade names and other amortizable intangible assets	Trade names and other amortizable intangible assets	111,151		(42,534)		68,617			Trade names and other amortizable intangible assets	105,338		(43,161)		62,177

Total amortizable intangible assets	Total amortizable intangible assets	806,976		(427,442)		379,534			Total amortizable intangible assets	785,620		(450,844)		334,776
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:								Indefinite-lived intangible assets:
Trademarks	Trademarks	19,900		—		19,900			Trademarks	19,900		—		19,900
Total intangible assets	Total intangible assets	$	826,876	$	(427,442)	$	399,434		Total intangible assets	$	805,520	$	(450,844)	$	354,676

Aggregate amortization expense for amortizable intangible assets for the three months ended June 30, 2023 and 2022 was $10.5 millionand $10.4 million, respectively, and for the six months ended June 30, 2023 and 2022 was $20.9 million and $21.0 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,
2023	$	40,615
2024	39,404
2025	37,667
2026	33,294
2027	28,540

Impairment Test of Long-Lived Assets and Goodwill

25/7 Media is our production services business and is part of our International and Other operating segment. See "Item 1. Business - International and Other" in our 2022 Form 10-K for further details. During the second quarter of 2023, given the impact of market challenges at 25/7 Media, specifically as it relates to reduced demand for new content and series cancellations from third parties, the Company revised its outlook for the 25/7 Media business, resulting in lower expected future cash flows.As a result, the Company determined that sufficient indicators of potential impairment of long-lived assets existed at 25/7 Media. The Company performed a recoverability test and determined that the carrying amount of the 25/7 Media asset group was not recoverable. The carrying value of the asset group exceeded its fair value, therefore an impairment charge of $23.0 million was recorded for identifiable intangible assets, which is included in impairment and other charges in the consolidated statement of income within the International and Other operating segment. Fair values used to determine the impairment charge were determined using an income approach, specifically a discounted cash flow ("DCF") model, and a

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

~~Aggregate amortization expense for amortizable intangible assets for~~market comparables approach. The DCF model includes significant assumptions about revenue growth rates, long-term growth rates and enterprise specific discount rates. Given the ~~three months ended September 30, 2022~~uncertainty in determining assumptions underlying the DCF approach, actual results may differ from those used in the valuations.

During the second quarter of 2023, the Company also determined that a triggering event had occurred with respect to the 25/7 Media reporting unit, which required an interim goodwill impairment test to be performed. Accordingly, the Company performed a quantitative assessment using an income approach, specifically a DCF model, and ~~2021~~a market comparables approach. Based on the valuations performed, a $1.9 million goodwill impairment charge was ~~$10.2 million~~recorded, which is included in impairment and ~~$10.2 million, respectively,~~other charges in the consolidated statement of income, within the International and ~~for the nine months ended September 30, 2022 and 2021 was~~ ~~$31.2 million~~ ~~and $29.1 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,
2022 $ 41,093
2023 40,743
2024 40,659
2025 39,026
2026 34,603
Other operating segment.

Note 9.8. Accrued Liabilities

Accrued liabilities consist of the following:


(In thousands)	(In thousands)	September 30, 2022		December 31, 2021		(In thousands)	June 30, 2023		December 31, 2022
Employee related costs	Employee related costs	$	104,410	$	128,388	Employee related costs	$	70,760	$	97,362
Participations and residuals	Participations and residuals	137,626		133,988		Participations and residuals	160,736		138,384
Interest	Interest	21,851		36,922		Interest	37,008		37,105

Restructuring and other related charges						Restructuring and other related charges	33,718		107,998
Other accrued expenses	Other accrued expenses	45,257		41,109		Other accrued expenses	72,581		38,216
Total accrued liabilities	Total accrued liabilities	$	309,144	$	340,407	Total accrued liabilities	$	374,803	$	419,065

Note ~~10.~~9. Long-term Debt

The Company's long-term debt consists of the following:


(In thousands)	(In thousands)	September 30, 2022		December 31, 2021		(In thousands)	June 30, 2023		December 31, 2022
Senior Secured Credit Facility: (a)	Senior Secured Credit Facility: (a)					Senior Secured Credit Facility: (a)
Term Loan A Facility	Term Loan A Facility	$	649,688	$	675,000	Term Loan A Facility	$	624,375	$	641,250
Senior Notes:	Senior Notes:					Senior Notes:

5.00% Notes due April 2024	5.00% Notes due April 2024	400,000		400,000		5.00% Notes due April 2024	400,000		400,000
4.75% Notes due August 2025	4.75% Notes due August 2025	800,000		800,000		4.75% Notes due August 2025	800,000		800,000
4.25% Notes due February 2029	4.25% Notes due February 2029	1,000,000		1,000,000		4.25% Notes due February 2029	1,000,000		1,000,000

Total long-term debt	Total long-term debt	2,849,688		2,875,000		Total long-term debt	2,824,375		2,841,250
Unamortized discount	Unamortized discount	(19,853)		(23,167)		Unamortized discount	(16,425)		(18,718)
Unamortized deferred financing costs	Unamortized deferred financing costs	(10,901)		(13,363)		Unamortized deferred financing costs	(8,204)		(10,079)
Long-term debt, net	Long-term debt, net	2,818,934		2,838,470		Long-term debt, net	2,799,746		2,812,453
Current portion of long-term debt	Current portion of long-term debt	33,750		33,750		Current portion of long-term debt	450,625		33,750
Noncurrent portion of long-term debt	Noncurrent portion of long-term debt	$	2,785,184	$	2,804,720	Noncurrent portion of long-term debt	$	2,349,121	$	2,778,703

(a)The Company's ~~$500 million~~ revolving credit facility remains undrawn at ~~September~~June 30, ~~2022.~~2023. Total undrawn revolver commitments are available to be drawn for general corporate purposes of the Company.

During the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, the Company repaid a total of ~~$25.3~~$16.9 million of the principal amount of the Term Loan A Facility in accordance with the terms of the agreement.

In April 2023, the Company entered into Amendment No. 2 ("Amendment No. 2") to the Second Amended and Restated Credit Agreement (the "Credit Agreement"). Amendment No. 2 (i) reduced the aggregate principal amount of the revolving loan commitments under the Credit Agreement from $500 million to $400 million, (ii) replaced the interest rate based on London Interbank Offered Rate with an interest rate based on the Secured Overnight Financing Rate, (iii) increased the Company's ability to incur additional debt in the future to provide additional flexibility for future financings, including increasing the amount of the incremental debt basket to the greater of $1.2 billion and the amount that would not cause the senior secured leverage ratio to exceed 3.00 to 1.00 on a pro forma basis and (iv) made certain other modifications to the Credit Agreement. The maturity date of the Term Loan A Facility and revolving credit facility under the Credit Agreement is

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

February 8, 2026. In connection with the modification of the revolving loan commitments, the Company recorded $0.6 million to write-off a portion of the unamortized deferred financing costs, which is included in interest expense within the consolidated statements of income.

Other Debt

During the second quarter of 2023, a majority owned subsidiary of the Company extended its credit facility totaling $4.5 million to July 21, 2024. The facility bears interest at the greater of 3.5% or the prime rate plus 1%. There were no outstanding borrowings under the credit facility as of June 30, 2023.

Note ~~11.~~10. Leases

The following table summarizes the leases included in the condensed consolidated balance sheets as follows:


(In thousands)	(In thousands)	Balance Sheet Location	September 30, 2022		December 31, 2021		(In thousands)	Balance Sheet Location	June 30, 2023		December 31, 2022
Assets	Assets						Assets
Operating	Operating	Operating lease right-of-use assets	$	109,301	$	125,866	Operating	Operating lease right-of-use assets	$	97,567	$	108,229
Finance	Finance	Property and equipment, net	11,257		12,080		Finance	Property and equipment, net	10,433		10,982
Total lease assets	Total lease assets		$	120,558	$	137,946	Total lease assets		$	108,000	$	119,211
Liabilities	Liabilities						Liabilities
Current:	Current:						Current:
Operating	Operating	Current portion of lease obligations	$	31,736	$	32,929	Operating	Current portion of lease obligations	$	32,383	$	32,207
Finance	Finance	Current portion of lease obligations	3,990		3,667		Finance	Current portion of lease obligations	4,445		4,204
			$	35,726	$	36,596			$	36,828	$	36,411
Noncurrent:	Noncurrent:						Noncurrent:
Operating	Operating	Lease obligations	$	109,015	$	128,319	Operating	Lease obligations	$	91,640	$	105,768
Finance	Finance	Lease obligations	19,817		23,520		Finance	Lease obligations	16,811		19,031
			$	128,832	$	151,839			$	108,451	$	124,799

Total lease liabilities	Total lease liabilities		$	164,558	$	188,435	Total lease liabilities		$	145,279	$	161,210

Note ~~12.~~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 ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021:~~2022:


(In thousands)	(In thousands)	Level I		Level II		Level III		Total		(In thousands)	Level I		Level II		Level III		Total
At September 30, 2022:
At June 30, 2023:										At June 30, 2023:
Assets	Assets									Assets
Cash equivalents	Cash equivalents	$	10,045	$	—	$	—	$	10,045	Cash equivalents	$	80,000	$	—	$	—	$	80,000

Foreign currency derivatives	Foreign currency derivatives	—		509		—		509		Foreign currency derivatives	—		7,563		—		7,563

Liabilities	Liabilities									Liabilities

Foreign currency derivatives	Foreign currency derivatives	—		10,041		—		10,041		Foreign currency derivatives	—		4,762		—		4,762

At December 31, 2021:
At December 31, 2022:										At December 31, 2022:
Assets	Assets									Assets
Cash equivalents										Cash equivalents	$	80,000	$	—	$	—	$	80,000

Marketable securities		$	5,771	$	—	$	—	$	5,771

Foreign currency derivatives	Foreign currency derivatives	—		196		—		196		Foreign currency derivatives	—		536		—		536

Liabilities	Liabilities									Liabilities

Foreign currency derivatives	Foreign currency derivatives	—		5,911		—		5,911		Foreign currency derivatives	—		8,965		—		8,965

The Company's cash equivalents (comprised of money market mutual funds) ~~and marketable securities~~ are classified within Level I of the fair value hierarchy because they are valued using quoted market prices.

The Company's foreign currency derivatives are classified within Level II of the fair value hierarchy as their fair values are determined based on a market approach valuation technique that uses readily observable market parameters and the consideration of counterparty risk.

At ~~September~~June 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company did not have any material assets or liabilities measured at fair value on a recurring basis that would be considered Level III.

Fair value measurements are also used in nonrecurring valuations performed in connection with acquisition accounting and impairment testing. These nonrecurring valuations primarily include the valuation of program rights, goodwill, intangible assets and property and equipment. All of our nonrecurring valuations use significant unobservable inputs and therefore fall under Level III of the fair value hierarchy.

Credit Facility Debt and Senior Notes

The fair values of each of the Company's debt instruments are based on quoted market prices for the same or similar issues or on the current rates offered to the Company for instruments of the same remaining maturities.

The carrying values and estimated fair values of the Company's financial instruments, excluding those that are carried at fair value in the condensed consolidated balance sheets, are summarized as follows:


(In thousands)	(In thousands)	September 30, 2022				(In thousands)	June 30, 2023
		Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
Debt instruments:	Debt instruments:					Debt instruments:
Term loan A facility	Term loan A facility	$	641,260	$	623,700	Term loan A facility	$	618,169	$	590,034
5.00% Notes due April 2024	5.00% Notes due April 2024	398,429		380,000		5.00% Notes due April 2024	399,200		392,872
4.75% Notes due August 2025	4.75% Notes due August 2025	793,645		714,000		4.75% Notes due August 2025	795,244		693,000
4.25% Notes due February 2029	4.25% Notes due February 2029	985,600		745,000		4.25% Notes due February 2029	987,133		534,948

		$	2,818,934	$	2,462,700		$	2,799,746	$	2,210,854

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)


(In thousands)	(In thousands)	December 31, 2021				(In thousands)	December 31, 2022
		Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
Debt instruments:	Debt instruments:					Debt instruments:
Term loan A facility	Term loan A facility	$	664,581	$	670,781	Term loan A facility	$	633,486	$	615,600

5.00% Notes due April 2024	5.00% Notes due April 2024	397,693		403,500		5.00% Notes due April 2024	398,687		375,348
4.75% Notes due August 2025	4.75% Notes due August 2025	792,098		818,000		4.75% Notes due August 2025	794,171		607,000
4.25% Notes due February 2029	4.25% Notes due February 2029	984,098		997,500		4.25% Notes due February 2029	986,109		620,818

		$	2,838,470	$	2,889,781		$	2,812,453	$	2,218,766

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 ~~13.~~12. Derivative Financial Instruments

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 one of our subsidiaries' respective functional currencies (non-functional currency risk), such as affiliation agreements, programming contracts, certain accounts payable and trade receivables (including intercompany amounts) that are denominated in a currency other than the applicable functional currency.

The fair values of the Company's derivative financial instruments included in the condensed consolidated balance sheets are as follows:

(In thousands)

Balance Sheet Location

September 30, 2022

December 31, 2021

(In thousands)

Balance Sheet Location

June 30, 2023

December 31, 2022

Derivatives not designated as hedging instruments:

Assets:

Foreign currency derivatives

Prepaid expenses and other current assets

379

180

Foreign currency derivatives

Prepaid expenses and other current assets

254

141

Foreign currency derivatives

Other assets

130

Foreign currency derivatives

Other assets

7,309

395

Liabilities:

Foreign currency derivatives

Accrued liabilities

4,130

1,686

Foreign currency derivatives

Accrued liabilities

2,243

3,663

Foreign currency derivatives

Current portion of program rights obligations

389

—

Foreign currency derivatives

Current portion of program rights obligations

120

Foreign currency derivatives

Other liabilities

5,522

4,225

Foreign currency derivatives

Other liabilities

2,399

5,220

The amounts of gains and losses related to the Company's derivative financial instruments not designated as hedging instruments are as follows:


(In thousands)	(In thousands)	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives								(In thousands)	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
			Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended June 30,				Six Months Ended June 30,
			2022		2021		2022		2021				2023		2022		2023		2022

Foreign currency derivatives	Foreign currency derivatives	Miscellaneous, net	$	(2,947)	$	(1,072)	$	(6,708)	$	(1,167)	Foreign currency derivatives	Miscellaneous, net	$	4,908	$	(3,204)	$	9,813	$	(3,761)

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Note ~~14.~~13. Income Taxes

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, income tax expense was ~~$28.5~~$22.2 million and ~~$103.1~~$59.1 million, respectively, representing an effective tax rate of ~~24%~~26% and ~~26%~~25%, respectively. The items resulting in variances from the federal statutory rate of 21% for the three and ~~nine~~six months ended ~~September~~June 30, 2023 primarily consist of state and local income tax expense and tax expense related to non-deductible compensation.

For the three and six months ended June 30, 2022, income tax expense was $33.0 million and $74.7 million, respectively, representing an effective tax rate of 27% for both periods. The items resulting in variances from the federal statutory rate of 21% for the three and six months ended June 30, 2022 primarily consist of state and local income tax

~~AMC NETWORKS INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(unaudited)~~

expense and tax expense for an increase in the valuation allowance for foreign ~~taxes and tax expense related to non-deductible compensation.~~

For the three and nine months ended September 30, 2021, income tax expense was $40.7 million and $78.0 million, respectively, representing an effective tax rate of 26% and 23%, respectively, as compared to the federal statutory rate of 21%. For the three and nine months ended September 30, 2021, the effective tax rate differs from the federal statutory rate due primarily to state and local income tax expense, tax expense related to non-deductible compensation and tax expense for an increase in valuation allowances for foreign taxes and U.S. foreign tax credits, partially offset by a discrete tax benefit for excess tax benefits related to stock compensation and a tax benefit from foreign operations.taxes.

At ~~September~~June 30, ~~2022,~~2023, the Company had foreign tax credit carry forwards of approximately ~~$44.7~~$52.5 million, expiring on various dates from ~~2022~~2024 through ~~2032.~~2033. These carryforwards have been reduced by a valuation allowance of ~~$44.7~~$52.5 million as it is more likely than not that these carry forwards will not be realized. For the ~~nine~~six months ended ~~September~~June 30, ~~2022, $1.0~~2023, $0.4 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).

As of June 30, 2023, approximately $198.0 million of cash and cash equivalents, previously held by foreign subsidiaries, was repatriated to the United States. Our consolidated cash and cash equivalents balance of $893.4 million, as of June 30, 2023, includes approximately $178.7 million held by foreign subsidiaries. Of this amount, approximately $60.0 million is expected to be repatriated to the United States with the remaining amount continuing to be reinvested in foreign operations. Tax expense related to the repatriated amount, as well as the expected remaining repatriation amount, has been accrued in the current period and the Company does not expect to incur any significant, additional taxes related to the remaining balance.

Note ~~15.~~14. Commitments and Contingencies

Commitments

As of ~~September~~June 30, ~~2022,~~2023, the Company's contractual obligations not reflected on the Company's condensed consolidated balance sheet ~~decreased~~increased ~~$93.2~~$5.2 million, as compared to December 31, ~~2021,~~2022, to $~~970.2~~917.4 million. The ~~decrease~~increase was primarily ~~relates to~~driven by the renewal of a third-party service contract and additional program rights commitments, partially offset by payments for program rights.

Legal Matters

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 "Plaintiffs") filed a complaint in California Superior Court in connection with Plaintiffs’ rendering of services as writers and producers of the television series entitled The Walking Dead, as well as Fear the Walking Dead and/or Talking Dead, and the agreements between the parties related thereto (the "Walking Dead Litigation"). The Plaintiffs asserted that the Company had been improperly underpaying the Plaintiffs under their contracts with the Company and they asserted claims for breach of contract, breach of the implied covenant of good faith and fair dealing, inducing breach of contract, and liability for violation of Cal. Bus. & Prof. Code § 17200. The Plaintiffs sought compensatory and punitive damages and restitution. On August 8, 2019, the judge in the Walking Dead Litigation ordered a trial to resolve certain issues of contract interpretation only. Following eight days of trial in February and March 2020, on July 22, 2020, the judge issued a Statement of Decision finding in the Company's favor on all seven matters of contract interpretation before the court in this first phase trial. On January 20, 2021, the Plaintiffs filed a second amended complaint, eliminating eight named defendants and their claims under Cal. Bus. & Prof. Code § 17200. On May 5, 2021, the Plaintiffs filed a third amended complaint, repleading in part their claims for alleged breach of the implied covenant of good faith and fair dealing, inducing breach of contract, and certain breach of contract claims. On June 2, 2021, the Company filed a demurrer and motion to strike seeking to dismiss the claim for breach of the implied covenant of good faith and fair dealing and certain tort and breach of contract claims asserted in the third amended complaint. On July 27, 2021, the court granted in part and denied in part the Company's motion. On January 12, 2022, the Company filed a motion for summary adjudication of many of the remaining claims. On April 6, 2022, the court granted the Company’s summary adjudication motion in part, dismissing the Plaintiffs’ claims for breach of the implied covenant of good faith and fair dealing and inducing breach of contract. ~~A trial~~In December 2022, the parties entered into an agreement to resolve through confidential binding arbitration the remaining claims in the litigation (consisting mainly of ordinary course profit participation audit claims), which had been scheduled for a February 2023 jury trial. The arbitration is expected to commence on October 16, 2023. As a result, on January 9, 2023, the

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Plaintiffs filed with the court a notice of dismissal of the ~~two~~ remaining claims, ~~is currently scheduled for February 2023.~~and on January 19, 2023, the court formally dismissed the case. On January, 26, 2023, the Plaintiffs filed a notice of appeal of the court’s post-trial, demurrer, and summary adjudication decisions. The Company believes the two remaining claims in the case for breach of contract, which will now be resolved through confidential binding arbitration, are without merit and is continuing to defend against them. 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 November 14, 2022, the Plaintiffs filed a separate complaint in California Superior Court (the “MFN Litigation”) in connection with the Company’s July 16, 2021 settlement agreement with Frank Darabont (“Darabont”), Ferenc, Inc., Darkwoods Productions, Inc., and Creative Artists Agency, LLC (the “Darabont Parties”), which resolved litigations the Darabont Parties had brought 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 “Darabont Settlement”). Plaintiffs assert claims for breach of contract, alleging that the Company breached the most favored nations (“MFN”) provisions of Plaintiffs’ contracts with the Company by failing to pay them additional contingent compensation as a result of the Darabont Settlement (the “MFN Litigation”). Plaintiffs claim in the MFN Litigation that they are entitled to actual and compensatory damages in excess of $200 million. The Plaintiffs also brought a cause of action to enjoin an arbitration the Company commenced in May 2022 concerning the same dispute. On December 15, 2022, the Company removed the MFN Litigation to the United States District Court for the Central District of California. On January 13, 2023, the Company filed a motion to dismiss the MFN Litigation and informed the court that the Company had withdrawn the arbitration Plaintiffs sought to enjoin. The motion is fully briefed and awaiting decision. The court has scheduled a trial date of September 17, 2024. The Company believes that the asserted claims are without merit and will vigorously defend against them if they are not dismissed. 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 actions and claims arising from alleged violation of the federal Video Privacy Protection Act (the “VPPA”) and analogous state laws. In addition to certain putative class actions currently pending, the Company is facing a series of arbitration claims managed by multiple plaintiffs’ law firms. The class action complaints and the arbitration claims all allege that the Company’s use of a Meta Platforms, Inc. pixel on the websites for certain of its subscription video services, including AMC+ and Shudder, violated the privacy protection provisions of the VPPA and its state law analogues. 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 Company’s business or financial position or the Company’s ability to meet its financial obligations as they become due.

The Company is party to various lawsuits and claims in the ordinary course of business, including the matters described ~~above.~~above, as well as other lawsuits and claims relating to employment, intellectual property, and privacy and data protection matters. 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 ~~16.~~15. Equity Plans

~~In August 2022,~~During the second quarter of 2023, AMC Networks granted ~~193,237~~1,792,097 restricted stock units ("RSUs") to certain executive officers and employees under the AMC Networks Inc. Amended and Restated 2016 Employee Stock Plan, ~~to an executive officer. The RSUs~~which vest ratably over a three-year ~~period.~~

~~In June 2022, AMC Networks granted 47,398~~period, and 131,640 RSUs under the 2011 Stock Plan for Non-Employee Directors to non-employee directors that vested on the date of grant.

~~AMC NETWORKS INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(unaudited)~~

In ~~March 2022,~~February 2023, AMC Networks granted ~~628,508~~297,325 RSUs ~~to certain executive officers and employees~~ under the AMC Networks Inc. Amended and Restated 2016 Employee Stock ~~Plan.~~Plan to its chief executive officer. The RSUs vest ratably over a three-year period.

During the three months ended ~~September~~June 30, ~~2022, 102,145~~2023, 135,243 RSUs~~of AMC Networks Class A Common Stock previously issued to an executive officer vested. On the vesting date, 52,145 RSUs~~ ~~were surrendered to the Company to cover the required statutory tax withholding obligations and 50,000 RSU~~ ~~new shares of AMC Networks Class A Common Stock were issued. During the nine months ended September 30, 2022,~~ ~~718,236 RSUs and 344,157 performance restricted stock units ("PRSUs")~~ of AMC Networks Class A Common Stock previously issued to employees of the Company vested. On the vesting date, ~~314,531~~71,801 RSUs ~~and 155,103~~ ~~PRSUs~~ were surrendered to the Company to cover the required statutory tax withholding obligations and ~~403,705 RSU and 189,054 PRS~~63,442~~U new~~ shares of AMC Networks Class A Common Stock were issued. During the six months ended June 30, 2023, 883,424 RSUs of AMC Networks Class A Common Stock previously issued to employees of the Company vested. On the vesting date, 387,675 RSUs were surrendered to the Company to cover the required statutory tax withholding obligations and 495,749 shares of AMC Networks Class A Common Stock were issued. Units are surrendered to satisfy the employees' statutory minimum tax withholding obligations for the applicable income and other employment tax. ~~All~~The units surrendered during the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 had an aggregate value of $~~21.6~~7.2 million,

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

which has been reflected as a financing activity in the condensed consolidated statement of cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2022.~~2023.

~~Share-based~~The Company recorded share-based compensation expenses ~~included in selling, general and administrative expenses were~~ ~~$7.1~~of $7.6 million and ~~$23.9~~$13.5 million (including $0.2 million recorded as part of Restructuring and other related charges) for the three and six months ended June 30, 2023, respectively, and $8.7 million and $16.8 million for the three and ~~nine~~six months ended ~~September~~June 30, 2022, respectively. Share-based compensation expenses are recognized in the consolidated statements of income as part of selling, general and ~~$9.5 million and $39.2 million for the three and nine months ended September 30, 2021, respectively.~~administrative expenses.

As of ~~September~~June 30, ~~2022,~~2023, there was $~~34.9~~40.5 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~~weighted average remaining period of approximately ~~2.2~~2.5 years.

Note ~~17.~~16. Noncontrolling Interests

Redeemable Noncontrolling Interests

In connection with the Company's previous acquisitions of New Video Channel America L.L.C (owner of the cable channel BBC America) and RLJ Entertainment, the terms of the acquisition agreements provide the noncontrolling members with a right to put all of their noncontrolling interest to subsidiaries of the Company at a future time. Since the exercise of these put rights is outside the Company's control, the noncontrolling interest in each entity is presented as a redeemable noncontrolling interest outside of stockholders' equity on the Company's consolidated balance sheet.

The following ~~table summarizes~~tables summarize activity related to redeemable noncontrolling interest for the ~~nine~~three and six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021:~~2022:


(In thousands)	~~Nine~~Three Months Ended ~~September~~June 30, 2023
March 31, 2023	$	249,919
Net earnings	6,800
Distributions	(15,233)


June 30, 2023	$	241,486


(In thousands)	Three Months Ended June 30, 2022
March 31, 2022	$	287,756
Net earnings	4,621
Distributions	(22,180)
Other	529

June 30, 2022	$	270,726


(In thousands)	Six Months Ended June 30, 2023
December 31, 2022	$	253,669
Net earnings	13,070
Distributions	(25,253)


June 30, 2023	$	241,486


(In thousands)	Six Months Ended June 30, 2022
December 31, 2021	$	283,849
Net earnings	~~12,971~~8,528
Distributions	~~(24,866)~~(22,180)
Other	529

~~September~~June 30, 2022	$	~~272,483~~270,726


~~(In thousands)~~	~~Nine Months Ended September 30, 2021~~
~~December 31, 2020~~	$	~~315,649~~
~~Net earnings~~	~~15,119~~
~~Distributions~~	~~(12,914)~~
~~Distribution related to spin-off transaction~~	~~(8,040)~~
~~Transfer to noncontrolling interest~~	~~(18,367)~~
~~September 30, 2021~~	$	~~291,447~~

In connection with the spin-off of the live comedy venue and talent management businesses of Levity Entertainment Group, LLC (see Note 4), $8.0 million of redeemable noncontrolling interests was distributed to the noncontrolling partners. In addition, as part of the transaction, the preexisting put rights of the noncontrolling interest holders were terminated. Accordingly, the remaining $18.4 million of noncontrolling interests was transferred from Redeemable noncontrolling interests to Noncontrolling interests in the condensed consolidated balance sheet.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

~~Non-redeemable Noncontrolling Interests~~

In April 2022, 25/7 Media entered into a purchase agreement to acquire the remaining 50% interest of a consolidated subsidiary. Under the terms of the agreement, 25/7 Media agreed to pay up to $7.1 million, of which $2.5 million was paid in cash upon closing and an additional $4.6 million represents an earn-out that is contingent on the subsidiary exceeding specified profitability targets. Upon the effective date of the transaction, the estimated fair value of the purchase price, based on the weighted average probability of such profitability targets being met, was $4.4 million (net of tax of $0.9 million). The carrying amount of the noncontrolling interest was eliminated and the excess of consideration transferred was recorded as additional-paid-in capital in the condensed consolidated statement of stockholders' equity.

Note ~~18.~~17. Related Party Transactions

The Company and its related parties enter into transactions with each other in the ordinary course of business. Revenues, net from related parties amounted to $1.3 million and $1.2 million for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$3.8~~$2.6 million and ~~$3.7~~$2.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively. Amounts charged to the Company, included in selling, general and administrative expenses, pursuant to transactions with its related parties amounted to $3.3 million and ~~$0.5~~$0.7 million for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$4.6~~$6.6 million and ~~$1.5~~$1.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

As disclosed in Note 20 of ~~the Company’s 2021 Annual Report on~~our 2022 Form 10-K, from time to time the Company enters into arrangements with 605, LLC. James L. Dolan, the Non-Executive Chairman and a director of the Company, and his spouse, Kristin A. Dolan, ~~a director~~the Chief Executive Officer of the Company, own 50% of 605, LLC. Kristin A. Dolan is also the Non-executive Chairman and founder of 605, LLC, and served as its Chief Executive Officer ~~of 605, LLC.~~from its inception in 2016 until February 2023. 605, LLC provides audience measurement and data analytics services to the Company and its subsidiaries pursuant to a Master Services Agreement dated February 8, 2019 (the “Master Services Agreement").

On August 1, 2022, the Audit Committee authorized the Company to enter into a Statement of Work for Strategic Analytic Services (the “Statement of Work”) with 605, LLC under the Master Services Agreement. The fees payable to 605, LLC by the Company for these services ~~are~~were $10.5 million payable in five ~~installments with the first payment made upon execution of the agreement.~~installments. The initial term of the Statement of Work isran from August 1, 2022 to December 31, ~~2022, which~~2022. The term iswas automatically extended to June 30, 2023 ~~unless terminated~~per the terms of the agreement. The Statement of Work expired by ~~either party~~its terms on June 30, ~~days’ notice prior to December 31, 2022.~~2023.

Under the Statement of Work, 605, LLC ~~will engage~~was engaged in a strategic, research, market, business and financial assessment of the Company and its business, partnering with the Company’s management team. 605, LLC ~~will utilize~~utilized their expertise, including assessment of extensive real-time business intelligence and consumer research, to enable potential further acceleration of the Company’s long-term growth and value creation. Among the analytic services ~~to be~~ provided by 605, LLC ~~are~~were situation analysis, customer experience, data utilization, addressing the market, content strategy and overview, sales strategy, pricing analysis, customer profiles, content (by offering), marketing strategy and financial analysis.

Note ~~19.~~18. Cash Flows

The Company's non-cash investing and financing activities and other supplemental data are as follows:


(In thousands)	(In thousands)	Nine Months Ended September 30,				(In thousands)	Six Months Ended June 30,
		2022		2021			2023		2022
Non-Cash Investing and Financing Activities:	Non-Cash Investing and Financing Activities:					Non-Cash Investing and Financing Activities:

Operating lease additions	Operating lease additions	$	7,527	$	29,078	Operating lease additions	$	3,023	$	1,891
Capital expenditures incurred but not yet paid	Capital expenditures incurred but not yet paid	5,481		1,471		Capital expenditures incurred but not yet paid	1,402		6,002
Contingent consideration for purchase of noncontrolling interests	Contingent consideration for purchase of noncontrolling interests	2,806		—		Contingent consideration for purchase of noncontrolling interests	—		2,806
Supplemental Data:	Supplemental Data:					Supplemental Data:
Cash interest paid	Cash interest paid	$	105,827	$	99,890	Cash interest paid	71,993		58,539
Income taxes paid, net	Income taxes paid, net	39,322		48,941		Income taxes paid, net	31,438		33,793

~~AMC NETWORKS INC. AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)~~

~~(unaudited)~~

Note ~~20.~~19. Segment Information

The Company classifies its operations into two operating segments: Domestic Operations and International and Other. These operating segments represent strategic business units that are managed separately.

The Company evaluates segment performance based on several factors, of which the primary financial measure is operating segment adjusted operating income ("AOI"). The Company defines AOI as operating income (loss) before depreciation and amortization, cloud computing amortization, share-based compensation expenses or benefit, impairment and other charges (including gains or losses on sales or dispositions of businesses), restructuring and other related charges and including the Company’s proportionate share of adjusted operating income (loss) from majority-owned equity method investees. The Company has presented the components that reconcile adjusted operating income to operating income, and other information as to the continuing operations of the Company's operating segments below.

(In thousands) Three Months Ended September 30, 2022
Domestic Operations International
and Other Corporate / Inter-segment
Eliminations Consolidated
Revenues, net
Subscription $ 349,338 $ 52,765 $ — $ 402,103
Content licensing and other 57,793 29,124 (4,816) 82,101
Distribution and other 407,131 81,889 (4,816) 484,204
Advertising 180,258 17,381 — 197,639
Consolidated revenues, net $ 587,389 $ 99,270 $ (4,816) $ 681,843
Operating income (loss) $ 186,609 $ 8,291 $ (44,223) $ 150,677
Share-based compensation expenses 3,155 537 3,358 7,050
Depreciation and amortization 12,141 4,482 13,112 29,735
Cloud computing amortization 5 — 2,047 2,052
Majority-owned equity investees AOI 4,791 — — 4,791
Adjusted operating income (loss) $ 206,701 $ 13,310 $ (25,706) $ 194,305

(In thousands) Three Months Ended September 30, 2021
Domestic Operations International
and Other Corporate / Inter-segment
Eliminations Consolidated
Revenues, net
Subscription $ 324,644 $ 62,848 $ — $ 387,492
Content licensing and other 158,120 41,738 (1,920) 197,938
Distribution and other 482,764 104,586 (1,920) 585,430
Advertising 199,982 25,354 — 225,336
Consolidated revenues, net $ 682,746 $ 129,940 $ (1,920) $ 810,766
Operating income (loss) $ 213,299 $ 15,564 $ (40,537) $ 188,326
Share-based compensation expenses 4,174 545 4,736 9,455
Depreciation and amortization 11,589 5,200 6,622 23,411
Restructuring and other related charges (135) 800 89 754
Cloud computing amortization — — 596 596
Majority-owned equity investees AOI 2,149 — — 2,149
Adjusted operating income (loss) $ 231,076 $ 22,109 $ (28,494) $ 224,691

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)


(In thousands)	(In thousands)	Nine Months Ended September 30, 2022								(In thousands)	Three Months Ended June 30, 2023
		Domestic Operations		International and Other		Corporate / Inter-segment Eliminations		Consolidated			Domestic Operations		International and Other		Corporate / Inter-segment Eliminations		Consolidated
Revenues, net	Revenues, net									Revenues, net
Subscription	Subscription	$	1,040,110	$	169,879	$	—	$	1,209,989	Subscription	$	333,754	$	57,280	$	—	$	391,034
Content licensing and other	Content licensing and other	191,473		103,513		(16,901)		278,085		Content licensing and other	80,914		21,658		(2,495)		100,077
Distribution and other	Distribution and other	1,231,583		273,392		(16,901)		1,488,074		Distribution and other	414,668		78,938		(2,495)		491,111
Advertising	Advertising	582,451		61,500		—		643,951		Advertising	167,151		20,366		—		187,517
Consolidated revenues, net	Consolidated revenues, net	$	1,814,034	$	334,892	$	(16,901)	$	2,132,025	Consolidated revenues, net	$	581,819	$	99,304	$	(2,495)	$	678,628
Operating income (loss)	Operating income (loss)	$	573,943	$	39,733	$	(135,119)	$	478,557	Operating income (loss)	$	162,530	$	(11,705)	$	(45,124)	$	105,701
Share-based compensation expenses	Share-based compensation expenses	10,000		1,758		12,104		23,862		Share-based compensation expenses	2,192		846		4,610		7,648
Depreciation and amortization	Depreciation and amortization	37,716		14,018		27,822		79,556		Depreciation and amortization	11,663		4,902		9,180		25,745

Impairment and other charges										Impairment and other charges	—		24,882		—		24,882
Restructuring and other related charges										Restructuring and other related charges	3,905		261		1,875		6,041
Cloud computing amortization	Cloud computing amortization	17		—		5,306		5,323		Cloud computing amortization	5		—		2,244		2,249
Majority-owned equity investees AOI	Majority-owned equity investees AOI	13,733		—		—		13,733		Majority-owned equity investees AOI	4,511		—		—		4,511
Adjusted operating income (loss)	Adjusted operating income (loss)	$	635,409	$	55,509	$	(89,887)	$	601,031	Adjusted operating income (loss)	$	184,806	$	19,186	$	(27,215)	$	176,777

(In thousands) Nine Months Ended September 30, 2021
Domestic Operations International
and Other Corporate / Inter-segment
Eliminations Consolidated
Revenues, net
Subscription $ 986,532 $ 188,800 $ — $ 1,175,332
Content licensing and other 297,792 127,692 (11,215) 414,269
Distribution and other 1,284,324 316,492 (11,215) 1,589,601
Advertising 611,406 72,892 — 684,298
Consolidated revenues, net $ 1,895,730 $ 389,384 $ (11,215) $ 2,273,899
Operating income (loss) $ 517,874 $ 32,365 $ (123,949) $ 426,290
Share-based compensation expenses 17,105 2,689 19,369 39,163
Depreciation and amortization 36,678 14,477 20,106 71,261
Impairment and other charges 143,000 15,973 — 158,973
Restructuring and other related charges 2,508 5,273 1,753 9,534
Cloud computing amortization — — 1,502 1,502
Majority-owned equity investees AOI 6,584 — — 6,584
Adjusted operating income (loss) $ 723,749 $ 70,777 $ (81,219) $ 713,307

Corporate overhead costs not allocated to the segments include 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).


(In thousands)	Three Months Ended June 30, 2022
	Domestic Operations		International and Other		Corporate / Inter-segment Eliminations		Consolidated
Revenues, net
Subscription	$	347,024	$	56,702	$	—	$	403,726
Content licensing and other	72,426		47,335		(8,848)		110,913
Distribution and other	419,450		104,037		(8,848)		514,639
Advertising	201,652		21,734		—		223,386
Consolidated revenues, net	$	621,102	$	125,771	$	(8,848)	$	738,025
Operating income (loss)	$	188,812	$	14,087	$	(49,696)	$	153,203
Share-based compensation expenses	3,172		467		5,044		8,683
Depreciation and amortization	13,439		4,633		9,159		27,231


Cloud computing amortization	5		—		2,359		2,364
Majority-owned equity investees AOI	4,061		—		—		4,061
Adjusted operating income (loss)	$	209,489	$	19,187	$	(33,134)	$	195,542

~~Inter-segment eliminations are primarily licensing revenues recognized between the Domestic Operations and International and Other segments.~~

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

(In thousands) Three Months Ended September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Inter-segment revenues
Domestic Operations $ (3,864) $ (1,641) $ (14,308) $ (8,567)
International and Other (952) (279) (2,593) (2,648)
$ (4,816) $ (1,920) $ (16,901) $ (11,215)


(In thousands)	Six Months Ended June 30, 2023
	Domestic Operations		International and Other		Corporate / Inter-segment Eliminations		Consolidated
Revenues, net
Subscription	$	681,284	$	113,970	$	—	$	795,254
Content licensing and other	184,177		54,518		(4,974)		233,721
Distribution and other	865,461		168,488		(4,974)		1,028,975
Advertising	328,212		38,888		—		367,100
Consolidated revenues, net	$	1,193,673	$	207,376	$	(4,974)	$	1,396,075
Operating income (loss)	$	362,018	$	2,437	$	(85,450)	$	279,005
Share-based compensation expenses	6,639		1,685		4,969		13,293
Depreciation and amortization	23,517		9,673		18,430		51,620
Impairment and other charges	—		24,882		—		24,882
Restructuring and other related charges	4,723		1,646		5,605		11,974
Cloud computing amortization	10		—		4,469		4,479
Majority-owned equity investees AOI	7,287		—		—		7,287
Adjusted operating income (loss)	$	404,194	$	40,323	$	(51,977)	$	392,540


(In thousands)	Six Months Ended June 30, 2022
	Domestic Operations		International and Other		Corporate / Inter-segment Eliminations		Consolidated
Revenues, net
Subscription	$	690,772	$	117,114	$	—	$	807,886
Content licensing and other	133,680		74,389		(12,085)		195,984
Distribution and other	824,452		191,503		(12,085)		1,003,870
Advertising	402,193		44,119		—		446,312
Consolidated revenues, net	$	1,226,645	$	235,622	$	(12,085)	$	1,450,182
Operating income (loss)	$	387,334	$	31,442	$	(90,896)	$	327,880
Share-based compensation expenses	6,845		1,221		8,746		16,812
Depreciation and amortization	25,575		9,536		14,710		49,821


Cloud computing amortization	12		—		3,259		3,271
Majority-owned equity investees AOI	8,942		—		—		8,942
Adjusted operating income (loss)	$	428,708	$	42,199	$	(64,181)	$	406,726

Subscription revenues in the Domestic Operations segment include revenues related to the Company's streaming services of $137.4 million and $122.1 million for the three months ended June 30, 2023 and 2022, respectively, and $278.3 million and $231.7 million for the six months ended June 30, 2023 and 2022, respectively.

Corporate overhead costs not allocated to the segments include costs such as executive salaries and benefits and costs of maintaining corporate headquarters, facilities and common support functions.

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(unaudited)

Inter-segment eliminations are primarily licensing revenues recognized between the Domestic Operations and International and Other segments.


(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Inter-segment revenues
Domestic Operations	$	(2,412)	$	(7,442)	$	(4,626)	$	(10,444)
International and Other	(83)		(1,406)		(348)		(1,641)
	$	(2,495)	$	(8,848)	$	(4,974)	$	(12,085)

The table below summarizes revenues based on customer location:


(In thousands)	(In thousands)	Three Months Ended September 30,				Nine Months Ended September 30,				(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenues	Revenues									Revenues
United States	United States	$	569,996	$	655,427	$	1,761,430	$	1,844,901	United States	$	551,637	$	600,226	$	1,157,865	$	1,191,434
Europe	Europe	70,041		93,869		250,112		295,460		Europe	83,718		97,146		157,485		180,071
Other	Other	41,806		61,470		120,483		133,538		Other	43,273		40,653		80,725		78,677
		$	681,843	$	810,766	$	2,132,025	$	2,273,899		$	678,628	$	738,025	$	1,396,075	$	1,450,182

One ~~distributor~~customer within the Domestic Operations segment accounted for approximately ~~10%~~13% of consolidated revenues, net for the ~~nine~~three and six months ended ~~September~~June 30, ~~2022.~~

2023. For the three and six months ended June 30, 2022, no customer accounted for 10% or more of consolidated revenues, net.

The table below summarizes property and equipment based on asset location:


(In thousands)	(In thousands)	September 30, 2022		December 31, 2021		(In thousands)	June 30, 2023		December 31, 2022
Property and equipment, net	Property and equipment, net					Property and equipment, net
United States	United States	$	192,503	$	210,252	United States	$	173,096	$	187,833
Europe	Europe	10,946		14,510		Europe	11,973		12,520
Other	Other	1,240		1,029		Other	1,413		1,681
		$	204,689	$	225,791		$	186,482	$	202,034

2223

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 production services;

•demand for advertising inventory and our ability to deliver guaranteed viewer ratings;

•the highly competitive nature of the cable, telecommunications, streaming and programming industries;

•the cost of, and our ability to obtain or produce, desirable content for our programming services, other forms of distribution, including digital and licensing in international markets, as well as our film distribution businesses;

•market demand for our owned original programming and our film content;

•~~our ability to successfully launch our streaming services in countries outside of the United States;~~

•the loss of any of our key personnel and artistic talent;

•the impact of strikes, including those related to the Writers, Directors, and Screen Actors guilds;

•the security of our program rights and other electronic data;

•our ability to maintain and renew distribution or affiliation agreements with distributors;

•our ability to successfully launch our streaming services in countries outside of the United States;

•economic and business conditions and industry trends in the countries in which we operate, including increases in inflation rates and recession risk;

•fluctuations in currency exchange rates and interest rates;

•changes in domestic and foreign laws or regulations under which we operate;

•changes in laws or treaties relating to taxation, or the interpretation thereof, in the United States or in the countries in which we operate;

•the impact of existing and proposed federal, state and international laws and regulations relating to data protection, privacy and security, including the European Union's General Data Protection Regulation ("GDPR");

•our substantial debt and high leverage;

•reduced access to, or inability to access, capital or credit markets, or significant increases in costs to borrow;

•the level of our expenses;

•our ability to achieve the expected benefits of our restructuring plan;

•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 and streaming businesses;

•financial community and rating agency perceptions of our business, operations, financial condition and the industry in which we operate;

•the impact of ~~COVID-19~~pandemics or other health emergencies on the economy and our ~~business, including the measures taken by governmental authorities to address the pandemic, which may precipitate or exacerbate other risks and/or uncertainties;~~business;

•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 ~~2021~~2022 Annual Report on Form 10-K (the ~~"2021~~"2022 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 of Financial Condition and Results of Operations, or MD&A, is a supplement to and should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere herein and our ~~2021~~2022 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. The MD&A is organized as follows:

Business Overview. This section provides a general description of our business and our operating segments, as well as other matters that we believe are important in understanding our results of operations and financial condition and in anticipating future trends.

Consolidated Results of Operations. This section provides an analysis of our results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 compared to the three and ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022. Our discussion is presented on both a consolidated and segment basis. Our two segments are: (i) Domestic Operations and (ii) International and Other.

Liquidity and Capital Resources. This section provides a discussion of our financial condition as of ~~September~~June 30, ~~2022,~~2023, as well as an analysis of our cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2022~~2023 and ~~2021.~~2022. The discussion of our financial condition and liquidity includes summaries of (i) our primary sources of liquidity and (ii) our contractual obligations that existed at ~~September~~June 30, ~~2022~~2023 as compared to December 31, ~~2021.~~2022.

Critical Accounting Policies and Estimates. This section provides an update, if any, to our significant accounting policies or critical accounting estimates since December 31, ~~2021.~~2022.

Business Overview

Financial Highlights

The tables presented below set forth our consolidated revenues, net, operating income (loss) and adjusted operating income (loss) ("AOI")1, for the periods indicated.


(In thousands)	(In thousands)	Three Months Ended September 30,				Nine Months Ended September 30,				(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenues, net	Revenues, net									Revenues, net
Domestic Operations	Domestic Operations	$	587,389	$	682,746	$	1,814,034	$	1,895,730	Domestic Operations	$	581,819	$	621,102	$	1,193,673	$	1,226,645
International and Other	International and Other	99,270		129,940		334,892		389,384		International and Other	99,304		125,771		207,376		235,622
Inter-segment Eliminations	Inter-segment Eliminations	(4,816)		(1,920)		(16,901)		(11,215)		Inter-segment Eliminations	(2,495)		(8,848)		(4,974)		(12,085)
		$	681,843	$	810,766	$	2,132,025	$	2,273,899		$	678,628	$	738,025	$	1,396,075	$	1,450,182
Operating Income (Loss)	Operating Income (Loss)									Operating Income (Loss)
Domestic Operations	Domestic Operations	$	186,609	$	213,299	$	573,943	$	517,874	Domestic Operations	$	162,530	$	188,812	$	362,018	$	387,334
International and Other	International and Other	8,291		15,564		39,733		32,365		International and Other	(11,705)		14,087		2,437		31,442
Corporate / Inter-segment Eliminations	Corporate / Inter-segment Eliminations	(44,223)		(40,537)		(135,119)		(123,949)		Corporate / Inter-segment Eliminations	(45,124)		(49,696)		(85,450)		(90,896)
		$	150,677	$	188,326	$	478,557	$	426,290		$	105,701	$	153,203	$	279,005	$	327,880
Adjusted Operating Income (Loss)	Adjusted Operating Income (Loss)									Adjusted Operating Income (Loss)
Domestic Operations	Domestic Operations	$	206,701	$	231,076	$	635,409	$	723,749	Domestic Operations	$	184,806	$	209,489	$	404,194	$	428,708
International and Other	International and Other	13,310		22,109		55,509		70,777		International and Other	19,186		19,187		40,323		42,199
Corporate / Inter-segment Eliminations	Corporate / Inter-segment Eliminations	(25,706)		(28,494)		(89,887)		(81,219)		Corporate / Inter-segment Eliminations	(27,215)		(33,134)		(51,977)		(64,181)
		$	194,305	$	224,691	$	601,031	$	713,307		$	176,777	$	195,542	$	392,540	$	406,726

1 Adjusted Operating Income (Loss), is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section on page 3435 for additional information, including our definition and our use of this non-GAAP financial measure, and for a reconciliation to its most comparable GAAP financial measure.

2425

Segment Reporting

We manage our business through the following two operating segments:

•Domestic Operations: Includes our programming services, ~~and AMC Broadcasting & Technology. Our programming services~~which consist of our five national programming networks, our global streaming services, our AMC Studios operation and IFC Films. Our national programming networks are AMC, WE tv, BBC AMERICA, IFC, and SundanceTV. Our global streaming services consist of our ~~global~~ targeted subscription streaming services (Acorn TV, Shudder, Sundance Now, ALLBLK, and HIDIVE), and AMC+ ~~and other streaming initiatives.~~. Our AMC Studios operation produces original programming for our programming ~~networks~~services and third parties and also licenses ~~such~~ programming worldwide, and IFC Films is our film distribution business. The operating segment also includes AMC Networks Broadcasting & Technology, our technical services business, which primarily services most of the national programming networks.

Domestic Operations

In our Domestic Operations segment, we earn revenue principally from: (i) the distribution of our programming through our programming networks and streaming services, (ii) the sale of advertising, and (iii) the licensing of our original programming to distributors, including the distribution of programming of IFC Films. Subscription revenue includes fees paid by distributors and consumers for our programming networks and streaming services. Subscription fees paid by distributors represent the largest component of distribution revenue. Our subscription fee revenues for our programming networks are 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 programming services, but are generally based upon the number of each distributor's subscribers who receive our programming, referred to as viewing subscribers. Subscription fees for our streaming services are typically based on a per subscriber fee and are generally paid by distributors and consumers on a monthly basis.

Content licensing revenue is earned from the licensing of original programming for digital, foreign and home video distribution and is recognized upon availability or distribution by the ~~licensee.~~licensee, and to a lesser extent, is earned through the distribution of AMC Studios produced series to third parties.

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 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. Additionally, in these advertising sales arrangements, our programming networks generally guarantee specified viewer ratings for their programming.

Programming expenses, included in technical and operating expenses, represent the largest expenses of the Domestic Operations segment and primarily consists of amortization of ~~programming~~program 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 expenses primarily include distribution and production related costs and program operating costs including cost of delivery, such as origination, transmission, uplinking and encryption.

The success of our business depends on original programming, both scripted and unscripted, across all of our programming services. These original series generally result in higher ratings for our networks and higher viewership on our streaming services. 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 expect a continued increase in our investment in original programming.~~ There may be significant changes in the level of our technical and operating expenses due to the level of our content investment spend and the related amortization of content acquisition and/or original programming costs. Program rights that are predominantly monetized as a group are amortized based on projected usage, typically resulting in an accelerated amortization pattern and, to a lesser extent, program rights that are predominantly monetized individually are amortized based on the individual-film-forecast-computation method.

Most original series require us to make significant up-front ~~investments, which are often significant amounts. Not all of our~~investments. Our programming efforts are not always commercially successful, which could result in a write-off of program rights. If events or changes in circumstances indicate that the fair value of ~~a film~~program rights predominantly monetized individually or a film group is less than its unamortized cost, the Company will write off the excess to technical and operating expenses in the consolidated statements of income. Program rights with no future programming usefulness are substantively abandoned resulting in the write-off of remaining unamortized cost.

2526

International and Other

Our International and Other segment primarily includes the operations of AMCNI and 25/7 Media.

In our International and Other segment, we earn revenue principally from the international distribution of programming and, to a lesser extent, the sale of advertising from our AMCNI programming networks. We also earn revenue through production services from 25/7 Media. For the ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, distribution revenues represented ~~82%~~81% of the revenues of the International and Other segment. Distribution revenue primarily includes subscription fees paid by distributors to carry our programming networks and production services revenue generated from 25/7 Media. 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. Subscription revenues are derived from the distribution of our programming networks primarily in Europe, and to a lesser extent, Latin America. 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. ~~Distribution revenues are derived from the distribution of our programming networks primarily in Europe and to a lesser extent, Latin America.~~

Programming expenses, program operating costs and production costs incurred to produce content for third parties are included in technical and operating expenses, and represent the largest expense of the International and Other segment. Programming expenses primarily consist of amortization of acquired content, costs of dubbing and sub-titling of programs, ~~production costs,~~ and ~~participation and residual~~production 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~~Our programming efforts are not all commercially successful, which could result in a write-off of program rights. If events or changes in circumstances indicate that the fair value of ~~a film~~program rights predominantly monetized individually or a film group is less than its unamortized cost, the Company will write off the excess to technical and operating expenses in the consolidated statements of income. Program rights with no future programming usefulness are substantively abandoned resulting in the write-off of remaining unamortized cost.

Corporate / Inter-segment Eliminations

Corporate operations primarily consist of executive management and administrative support services, such as executive salaries and benefits costs, costs of maintaining corporate headquarters, facilities and common support ~~functions (such as human resources, legal, finance, strategic planning and information technology).~~functions. 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. Additionally, changes in macroeconomic facts and circumstances, particularly high inflation and the rise in interest rates, may adversely impact our results of operations, cash flows and financial position or our ability to refinance our indebtedness on terms favorable to us, or at all.

Capital and credit market disruptions, as well as other events such as ~~the COVID-19 pandemic,~~pandemics or other health emergencies, inflation, international conflict and recession, 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 services. Events such as these may adversely impact our results of operations, cash flows and financial position.

~~Impact of COVID-19 on Our Business~~

The Company continues to monitor the ongoing impact of the COVID-19 pandemic on all aspects of its business. The Company cannot reasonably predict the continuing impact of the COVID-19 pandemic, including the extent of any adverse impact on our business, results of operations and financial condition, which will depend on, among other things, whether there is a resurgence in cases, the impact of governmental regulations that have been, and may in the future be, imposed in response to the pandemic, the effectiveness of actions taken to contain or mitigate outbreaks, the acceptance, safety and efficacy of vaccines, and global economic conditions. The Company does not expect the COVID-19 pandemic and its related economic impact to affect its liquidity position or its ongoing ability to meet the covenants in its debt instruments.

2627

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~~income notwithstanding that a third-party owns an interest, which may be significant, in such entity. The noncontrolling owner's interest in the operating results of consolidated subsidiaries are reflected in net income attributable to noncontrolling interests in our consolidated statements of ~~operations.~~income.

Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022

The following table sets forth our consolidated results of operations for the periods indicated.


		Three Months Ended September 30,						Nine Months Ended September 30,							Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	(In thousands)	2022		2021		Change		2022		2021		Change		(In thousands)	2023		2022		Change		2023		2022		Change
Revenues, net:	Revenues, net:													Revenues, net:
Subscription	Subscription	$	402,103	$	387,492	3.8	%	$	1,209,989	$	1,175,332	2.9	%	Subscription	$	391,034	$	403,726	(3.1)	%	$	795,254	$	807,886	(1.6)	%
Content licensing and other	Content licensing and other	82,101		197,938		(58.5)	%	278,085		414,269		(32.9)	%	Content licensing and other	100,077		110,913		(9.8)	%	233,721		195,984		19.3	%
Distribution and other	Distribution and other	484,204		585,430		(17.3)	%	1,488,074		1,589,601		(6.4)	%	Distribution and other	491,111		514,639		(4.6)	%	1,028,975		1,003,870		2.5	%
Advertising	Advertising	197,639		225,336		(12.3)	%	643,951		684,298		(5.9)	%	Advertising	187,517		223,386		(16.1)	%	367,100		446,312		(17.7)	%
Total revenues, net	Total revenues, net	681,843		810,766		(15.9)	%	2,132,025		2,273,899		(6.2)	%	Total revenues, net	678,628		738,025		(8.0)	%	1,396,075		1,450,182		(3.7)	%
Operating expenses:	Operating expenses:													Operating expenses:
Technical and operating (excluding depreciation and amortization)	Technical and operating (excluding depreciation and amortization)	293,459		378,264		(22.4)	%	903,468		997,677		(9.4)	%	Technical and operating (excluding depreciation and amortization)	321,961		325,772		(1.2)	%	648,690		610,009		6.3	%
Selling, general and administrative	Selling, general and administrative	207,972		220,011		(5.5)	%	670,444		610,164		9.9	%	Selling, general and administrative	194,298		231,819		(16.2)	%	379,904		462,472		(17.9)	%
Depreciation and amortization	Depreciation and amortization	29,735		23,411		27.0	%	79,556		71,261		11.6	%	Depreciation and amortization	25,745		27,231		(5.5)	%	51,620		49,821		3.6	%
Impairment and other charges	Impairment and other charges	—		—		—		—		158,973		(100.0)	%	Impairment and other charges	24,882		—		n/m		24,882		—		n/m
Restructuring and other related charges	Restructuring and other related charges	—		754		(100.0)	%	—		9,534		(100.0)	%	Restructuring and other related charges	6,041		—		n/m		11,974		—		n/m
Total operating expenses	Total operating expenses	531,166		622,440		(14.7)	%	1,653,468		1,847,609		(10.5)	%	Total operating expenses	572,927		584,822		(2.0)	%	1,117,070		1,122,302		(0.5)	%
Operating income	Operating income	150,677		188,326		(20.0)	%	478,557		426,290		12.3	%	Operating income	105,701		153,203		(31.0)	%	279,005		327,880		(14.9)	%
Other income (expense):	Other income (expense):													Other income (expense):
Interest expense, net	Interest expense, net	(30,683)		(29,149)		5.3	%	(88,533)		(90,060)		(1.7)	%	Interest expense, net	(31,588)		(29,513)		7.0	%	(61,289)		(57,850)		5.9	%
Loss on extinguishment of debt		—		—		—		—		(22,074)		(100.0)	%

Miscellaneous, net	Miscellaneous, net	(1,546)		54		n/m		3,540		19,634		(82.0)	%	Miscellaneous, net	10,140		(742)		n/m		14,729		5,086		189.6	%
Total other expense	Total other expense	(32,229)		(29,095)		10.8	%	(84,993)		(92,500)		(8.1)	%	Total other expense	(21,448)		(30,255)		(29.1)	%	(46,560)		(52,764)		(11.8)	%
Income from operations before income taxes	Income from operations before income taxes	118,448		159,231		(25.6)	%	393,564		333,790		17.9	%	Income from operations before income taxes	84,253		122,948		(31.5)	%	232,445		275,116		(15.5)	%
Income tax expense	Income tax expense	(28,456)		(40,744)		(30.2)	%	(103,118)		(77,980)		32.2	%	Income tax expense	(22,155)		(33,028)		(32.9)	%	(59,054)		(74,662)		(20.9)	%
Net income including noncontrolling interests	Net income including noncontrolling interests	89,992		118,487		(24.0)	%	290,446		255,810		13.5	%	Net income including noncontrolling interests	62,098		89,920		(30.9)	%	173,391		200,454		(13.5)	%
Net income attributable to noncontrolling interests		(5,326)		(7,836)		(32.0)	%	(18,163)		(22,253)		(18.4)	%
Net (income) loss attributable to noncontrolling interests														Net (income) loss attributable to noncontrolling interests	8,141		(6,491)		(225.4)	%	458		(12,837)		(103.6)	%
Net income attributable to AMC Networks' stockholders	Net income attributable to AMC Networks' stockholders	$	84,666	$	110,651	(23.5)	%	$	272,283	$	233,557	16.6	%	Net income attributable to AMC Networks' stockholders	$	70,239	$	83,429	(15.8)	%	$	173,849	$	187,617	(7.3)	%

Revenues

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Subscription revenues de~~increased 7.6%~~creased 3.8% in our Domestic Operations segment primarily due to a decline in affiliate revenues, partially offset by an increase in streaming ~~revenues,~~revenues. The decrease in our Domestic Operations segment was partially offset by a ~~decline in affiliate revenue. Subscription revenues decreased 16.0%~~1.0% increase in our International and Other segment primarily due to the ~~unfavorable~~favorable impact of foreign currency translation at AMCNI.

Subscription revenues ~~may~~ vary ~~from quarter to quarter~~ based on the impact of renewals of affiliation agreements and the ~~level~~number of subscribers to our services.

Content licensing and other ~~revenues~~revenues decreased ~~63.4%~~ 54.2% in our International and Other segment primarily due to a reduction in the volume of productions at 25/7 Media driven by reduced demand for new content and series cancellations from third parties. The decrease in our International and Other segment was partially offset by an 11.7% increase in our Domestic Operations segment primarily due to the timing and availability of deliveries, ~~in the quarter,~~ including ~~the delivery of fewer episodes of~~ ~~The Walking Dead~~ ~~and~~ ~~Fear the Walking Dead, both of which were strong contributors in the prior year.~~ ~~Content licensing and other revenues decreased 30.2%~~a $20.3 million impact associated with

2728

the termination of an output agreement that resulted in ~~our International and Other segment primarily due~~the acceleration of revenue previously anticipated to be recognized in 2024.

Content licensing revenues vary based on the timing of availability of our programming to distributors, including AMC Studios produced series for third parties, and the timing and volume of productions at 25/7 Media. ~~Content licensing revenues vary from quarter to quarter based on the timing and availability of our programming to distributors.~~

Advertising revenues decreased ~~9.9%~~17.1% in our Domestic Operations segment primarily due to ~~lower~~ linear ratings ~~softer scatter and direct response markets~~declines, softness in the advertising market and fewer original ~~hours in~~programming episodes within the ~~third~~ quarter, partially offset by digital and advanced advertising revenue growth. Advertising revenues also decreased ~~31.4%~~6.3% in our International and Other segment primarily due to the impact of the ~~planned~~ wind-down of two channels in ~~the U.K., the unfavorable impact of foreign currency translation,~~2022 and ~~softer ratings~~marketplace declines in the U.K. ~~Most of our advertising~~

Advertising revenues vary based on the timing of our original programming series and the popularity of our programming as measured by Nielsen.

~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Subscription revenues de~~increased 5.4%~~creased 1.4% in our Domestic Operations segment primarily due to a decline in affiliate revenues, partially offset by an increase in streaming revenues, partially offset by a decline in affiliate revenue. Excluding the one-time beneficial impact of a distribution agreement renewal in the prior year, subscription revenues increased 6.9% in our Domestic Operations segment.revenues. Subscription revenues also decreased ~~10.0%~~2.7% in our International and Other segment primarily due to the unfavorable impact of foreign currency translation at AMCNI.

Content licensing and other revenues ~~decreased~~increased ~~35.7%~~37.8% in our Domestic Operations segment primarily due to the timing and availability of deliveries in the period, including $56.1 million for the delivery of ~~fewer~~the remaining episodes of ~~The Walking Dead~~an AMC Studios produced series to a third party and ~~Fear~~ the ~~Walking Dead, both~~$20.3 million impact associated with the termination of ~~which were strong contributors~~an output agreement that resulted in the ~~prior year. Content licensing~~acceleration of revenue previously anticipated to be recognized in 2024. The increase in our Domestic Operations segment was partially offset by a 26.7% decrease in our International and Other segment due to a reduction in the volume of productions at 25/7 Media driven by reduced demand for new content and series cancellations from third parties.~~other~~

Advertising revenues decreased ~~18.9%~~18.4% in our Domestic Operations segment primarily due to linear ratings declines, softness in the advertising market and fewer original programming episodes within the period, partially offset by digital and advanced advertising revenue growth. Advertising revenues also decreased 11.9% in our International and Other segment, primarily due to the ~~timing of productions at 25/7 Media.~~

Advertising revenues decreased 4.7% in our Domestic Operations segment primarily due to lower linear ratings, partially offset by continued digital and advanced advertising revenue growth and higher upfront pricing. Advertising revenues decreased 15.6% in our International and Other segment, primarily due to the unfavorable impact of foreign currency translation and the impact of the ~~planned~~ wind-down of two channels in 2022 and marketplace declines in the U.K.

Technical and operating expenses (excluding depreciation and amortization)

The components of technical and operating expenses primarily include the amortization of program rights, such as those for original programming, feature films and licensed series, and other direct programming costs, such as participation and residual costs, distribution and production related costs and program delivery costs, such as transmission, encryption, hosting, and formatting.

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Technical and operating expenses (excluding depreciation and amortization) decreased ~~21.4% in our Domestic Operations segment primarily due to a decrease in program rights amortization due to delivery of fewer episodes of~~ ~~The Walking Dead~~ ~~and~~ ~~Fear the Walking Dead.~~ ~~Technical and operating expenses (excluding depreciation and amortization) decreased 24.3%~~34.0% in our International and Other segment primarily due to ~~timing~~a reduction in the volume of productions at 25/7 Media driven by reduced demand for new content and series cancellations from third parties. The decrease in our International and Other segment was partially offset by an 8.1% increase in our Domestic Operations segment primarily due to an increase in program rights amortization primarily driven by the ~~favorable~~ impact associated with the termination of ~~foreign currency translation.~~an output agreement that resulted in the acceleration of program rights amortization previously anticipated to be recognized in 2024.

There may be significant changes in the level of our technical and operating expenses ~~from quarter to quarter and year to year~~ due to original programming costs and/or content acquisition costs. As ~~additional~~ competition for programming increases, costs for content acquisition and original programming may increase.

~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Technical and operating expenses (excluding depreciation and amortization) ~~decreased 8.1%~~increased 12.8% in our Domestic Operations segment primarily due to costs associated with the delivery of the remaining episodes of an AMC Studios produced series to a ~~decrease in other direct programming costs, partially offset by~~third party and an increase in program rights ~~amortization. Technical and operating expenses (excluding depreciation and amortization) decreased 14.7%~~amortization primarily driven by the impact associated with the termination of an output agreement that resulted in the acceleration of program rights amortization previously anticipated to be recognized in 2024. The increase in our Domestic Operations segment was partially offset by an 18.4% decrease in our International and Other segment primarily due to ~~timing~~a reduction in the volume of productions at 25/7 Media driven by reduced demand for new content and ~~the favorable impact of foreign currency translation.~~series cancellations from third parties.

Selling, general and administrative expenses

The components of selling, general and administrative expenses primarily include sales, marketing and advertising expenses, administrative costs and costs of non-production facilities.

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Selling, general and administrative expenses (including share-based compensation expenses) decreased ~~2.8%~~21.6% in our Domestic Operations segment primarily due to lower marketing and subscriber acquisition expenses related to our streaming services, and ~~linear networks, and~~ decreased ~~9.9%~~1.2% in our International and ~~other~~Other segment primarily due to lower advertising and marketing costs at AMCNI.

There may be significant changes in the level of our selling, general and administrative expenses due to the timing of promotions and marketing of original programming series.

Six months ended June 30, 2023 vs. 2022

Selling, general and administrative expenses (including share-based compensation expenses) decreased 21.6% in our Domestic Operations segment primarily due to lower marketing and subscriber acquisition expenses related to our streaming services, and decreased 1.8% in our International and Other segment primarily due to the favorable impact of foreign currency translation.

~~Nine months ended September 30, 2022 vs. 2021~~

Selling, general and administrative expenses (including share-based compensation expenses) increased 17.1% in our Domestic Operations segment primarily due to higher marketing and subscriber acquisition expenses related to our streaming services and linear networks, a~~nd decreased 7.1%~~ ~~in our International and other segment primarily related to the favorable impact of foreign currency translation and a decrease in administrative expenses at 25/7 Media.~~

Depreciation and amortization

Depreciation and amortization expenses include depreciation of fixed assets and amortization of finite-lived intangible assets.

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Depreciation and amortization expense decreased primarily due to the impact of fully depreciated equipment in our Domestic Operations segment.

Six months ended June 30, 2023 vs. 2022

Depreciation and amortization expense increased ~~in Corporate~~ due to higher depreciation of equipment ~~and~~in Corporate, partially offset by the impact of fully depreciated equipment in our Domestic Operations ~~segment due to the amortization of finite-lived intangible assets acquired in connection with the acquisition of Sentai Holdings in the fourth quarter of 2021.~~

~~Nine months ended September 30, 2022 vs. 2021~~

Depreciation and amortization expense increased in Corporate due to higher depreciation of equipment and in our Domestic Operations segment due to the amortization of finite-lived intangible assets acquired in connection with the acquisition of Sentai Holdings in the fourth quarter of 2021.segment.

Impairment and other charges

During the second quarter of 2023, given the impact of market challenges at 25/7 Media, specifically as it relates to reduced demand for new content and series cancellations from third parties, the Company revised its outlook for the 25/7 Media business, resulting in lower expected future cash flows. As a result, the Company determined that sufficient indicators of potential impairment of long-lived assets and goodwill existed at 25/7 Media and an impairment charge of $24.9 million was recorded. See Note 7, Goodwill and Other Intangible Assets to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

There were no impairment and other charges for the three and ~~nine~~six months ended ~~September~~June 30, 2022.

~~There were no impairment and other charges for the three months ended~~ ~~September 30, 2021.~~ ~~Impairment and other charges for the nine months ended September 30, 2021 were $159.0 million.~~

~~On July 16, 2021, the Company entered into a settlement agreement (the “Settlement Agreement”)~~ ~~with Frank Darabont, Ferenc, Inc., Darkwoods Productions, Inc., and Creative Artists Agency, LLC (together, the "Plaintiffs")~~ ~~in actions brought in connection with Frank Darabont’s rendering services as a writer, director and producer of the television series entitled~~ ~~The Walking Dead~~. ~~The Settlement Agreement provided for~~ ~~a cash payment of $200 million (the “Settlement Payment”) to the Plaintiffs~~ ~~and future revenue sharing related to certain future streaming exhibition of~~ ~~The Walking Dead~~ ~~and~~ ~~Fear The Walking Dead. With regard to the Settlement Payment,~~ ~~the Company recorded a charge of $143.0 million in the second quarter of 2021, included in Impairment and other charges~~ ~~in consideration for the extinguishment of Plaintiffs’ rights to any compensation in connection with~~ ~~The Walking Dead~~ ~~and any related programs and the dismissal of the actions with prejudice, which amount is net~~ ~~of $57.0 million of ordinary course accrued participations.~~

~~The remaining $16.1 million for the nine months ended September 30, 2021 related to the Company's March 2021~~ spin-off of the live comedy venue and talent management businesses ("LiveCo") of Levity Entertainment Group, LLC. In connection with the transaction, the Company effectively exchanged all of its rights and interests in LiveCo for the release of our obligations, principally related to leases. As a result of this divestiture, the Company recognized a loss on the disposal of $16.1 million reflecting the net assets transferred (consisting of property and equipment, lease right-of-use assets and intangibles, partially offset by lease and other obligations), which is included in Impairment and other charges. The Company retained its interest in the production services business of Levity Entertainment Group, LLC, which was renamed 25/7 Media Holdings LLC ("25/7 Media") following the spin-off.

Restructuring and other related charges

For the three months ended June 30, 2023, restructuring and other related charges of $6.0 million consisted primarily of severance and other employee-related costs, with $3.9 million related to our Domestic Operations segment, $0.2 million related to AMCNI and $1.9 million related to Corporate. For the six months ended June 30, 2023, restructuring and other related charges of $12.0 million consisted primarily of severance and other employee-related costs, with $4.7 million related to our Domestic Operations segment, $1.7 million related to AMCNI and $5.6 million related to Corporate.

There were no restructuring and other related charges for the three and ~~nine~~six months ended ~~September~~June 30, 2022.

~~Restructuring and other related charges of $0.8 million for the three months ended September 30, 2021 are associated with severance costs at AMCNI.~~

Restructuring and other related charges of $9.5 million for the nine months ended September 30, 2021 consisted of $4.3 million of severance costs associated with the restructuring plan announced in November 2020 and $5.2 million at AMCNI related to severance costs and the termination of distribution in certain international territories.

Operating income

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

The decrease in operating income was primarily attributable to a decrease in revenues, net of ~~$128.9~~$59.4 million and an ~~increase in depreciation and amortization expenses~~impairment charge of ~~$6.3~~$24.9 million, partially offset by ~~decreases~~a decrease in ~~technical and operating expenses of $84.8 million and~~ selling, general and administrative expenses of ~~$12.0~~$37.5 million.

~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

The ~~increase~~decrease in operating income was primarily attributable to ~~decreases~~a decrease in ~~impairment and other charges,~~revenues, net of $54.1 million, an increase in technical and operating expenses of $38.7 million, an impairment charge of $24.9 million, and restructuring and other related charges of ~~$159.0~~$12.0 million, ~~$94.2 million and $9.5 million, respectively,~~ partially offset by a decrease ~~in revenues of $141.9 million and increases~~ in selling, general and administrative expenses of ~~$60.3 million and depreciation and amortization expenses of $8.3~~$82.6 million.

Interest expense, net

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

The increase in interest expense, net was primarily due to higher interest rates on our Term Loan A ~~Facility.~~Facility, partially offset by higher interest income generated from our money market mutual fund accounts and bank deposits.

~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

The ~~decrease~~increase in interest expense, net was primarily due to ~~lower average daily balances and the refinancing of a portion of our outstanding Senior Notes at a lower interest rate in the first nine months of 2021, partially offset by~~ higher interest rates on our Term Loan A ~~Facility.~~

~~Loss on extinguishment of debt~~

~~There was no loss on extinguishment of debt for the three~~Facility, partially offset by higher interest income generated from our money market mutual fund accounts and ~~nine months ended~~ ~~September 30, 2022.~~

In February 2021, we redeemed (i) the remaining $400 million principal amount of our 4.75% senior notes due December 2022 and (ii) $600 million principal amount of our 5.00% senior notes due April 2024. In connection with the redemptions, we incurred a loss on extinguishment of debt for the quarter ended March 31, 2021 of $22.1 million representing a redemption premium on the 5.00% senior notes due 2024, and the write-off of a portion of the unamortized discount and deferred financing costs related to both issuances.bank deposits.

Miscellaneous, net

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

The ~~decrease~~increase in miscellaneous, net was primarily related to ~~increased losses~~$8.1 million of higher net gains on derivative financial instruments and an unfavorable variance in the foreign currency remeasurement of monetary assets and liabilities (principally intercompany loans) that are denominated in currencies other than the underlying functional currency of the applicable entity, partially offset by the impact of higher losses on certain marketable equity securities in the prior year.

~~Nine months ended September 30, 2022 vs. 2021~~

~~The decrease in miscellaneous, net was primarily related to the impact of~~ a ~~$12.3~~$2.1 million ~~gain recorded in the prior year in connection with the Company's acquisition of the remaining 50% interest in an equity method investment. The remaining decrease primarily relates to an unfavorable~~favorable variance in the foreign currency remeasurement of monetary assets and liabilities (principally intercompany loans) that are denominated in currencies other than the underlying functional currency of the applicable entity, and ~~increased losses~~$0.5 million of higher net earnings of equity method investees as compared to the three months ended June 30, 2022.

Six months ended June 30, 2023 vs. 2022

The increase in ~~connection with derivative financial instruments, partially offset by the impact~~miscellaneous, net was primarily related to $13.6 million of higher net gains ~~from~~on derivative financial instruments and a $1.6 million favorable variance in the ~~sale~~foreign currency remeasurement of monetary assets and liabilities (principally intercompany loans) that are denominated in currencies other than the underlying functional currency of the applicable entity as compared to the six months ended June 30, 2022. These increases were partially offset by $3.8 million of lower net gains on marketable securities and a $1.8 million impairment charge related to certain ~~marketable equity securities.~~investments in 2023.

Income tax expense

Three months ended June 30, 2023 vs. 2022

For the three months ended ~~September~~June 30, ~~2022,~~2023, income tax expense was $28.5 million representing an effective tax rate of 24%. The items resulting in variances from the federal statutory rate of 21% primarily consist of state and local income tax expense, tax expense for an increase in the valuation allowance for foreign taxes and tax expense related to non-deducible compensation. For the three months ended September 30, 2021, income tax expense was $40.7 million representing an effective tax rate of 26%. The effective tax rate differs from the federal statutory rate of 21% primarily due to state and local income tax expense, tax expense related to non-deductible compensation and tax expense for an increase in valuation allowances for foreign taxes and U.S. foreign tax credits, partially offset by a discrete tax benefit for excess tax benefits related to stock compensation and a tax benefit from foreign operations.

~~For the nine months ended September 30, 2022, income tax expense was $103.1~~$22.2 million representing an effective tax rate of 26%. The items resulting in variances from the federal statutory rate of 21% primarily consist of state and local income tax expense and tax expense related to non-deductible compensation. For the three months ended June 30, 2022, income tax expense was $33.0 million representing an effective tax rate of 27%. The items resulting in variances from the federal statutory rate of 21% primarily consist of state and local income tax expense and tax expense for an increase in the valuation allowance for foreign ~~taxes~~taxes.

Six months ended June 30, 2023 vs. 2022

For the six months ended June 30, 2023, income tax expense was $59.1 million representing an effective tax rate of 25%. The items resulting in variances from the federal statutory rate of 21% primarily consist of state and local income tax expense and tax expense related to non-deductible compensation. For the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, income tax expense was ~~$78.0~~$74.7 million representing an effective tax rate of ~~23%~~27%. The ~~effective tax rate differs~~items resulting in variances from the federal statutory rate of 21% primarily ~~due to~~consist of state and local income tax expense ~~tax expense related to non-deductible compensation~~ and tax expense for an increase in the valuation ~~allowances~~allowance for foreign ~~taxes and U.S. foreign tax credits, partially offset by a discrete tax benefit for excess tax benefits related to stock compensation and a tax benefit from foreign operations.~~taxes.

3031

Segment Results of Operations

Our segment operating results are presented based on how we assess operating performance and internally report financial information. We use segment adjusted operating income as the measure of profit or loss for our operating segments. See Non-GAAP Financial Measures section below for our definition of Adjusted Operating Income and a reconciliation from Operating Income to Adjusted Operating Income on a segment and consolidated basis.

Domestic Operations

The following table sets forth our Domestic Operations segment results for the periods indicated.


		Three Months Ended September 30,						Nine Months Ended September 30,					Three Months Ended June 30,								Six Months Ended June 30,
(In thousands)	(In thousands)	2022		2021		Change			2022		2021			Change		(In thousands)	2023		2022			Change		2023		2022		Change
Revenues, net:	Revenues, net:															Revenues, net:
Subscription	Subscription	$	349,338	$	324,644	7.6	%		$	1,040,110	$	986,532		5.4	%	Subscription	$	333,754	$	347,024		(3.8)	%	$	681,284	$	690,772	(1.4)	%
Content licensing and other	Content licensing and other	57,793		158,120		(63.4)			191,473		297,792			(35.7)		Content licensing and other	80,914		72,426			11.7		184,177		133,680		37.8
Distribution and other	Distribution and other	407,131		482,764		(15.7)			1,231,583		1,284,324			(4.1)		Distribution and other	414,668		419,450			(1.1)		865,461		824,452		5.0
Advertising	Advertising	180,258		199,982		(9.9)			582,451		611,406			(4.7)		Advertising	167,151		201,652			(17.1)		328,212		402,193		(18.4)
Total revenues, net	Total revenues, net	587,389		682,746		(14.0)			1,814,034		1,895,730			(4.3)		Total revenues, net	581,819		621,102			(6.3)		1,193,673		1,226,645		(2.7)
Technical and operating (excluding depreciation and amortization)(a)		(238,752)		(303,868)		(21.4)			(720,558)		(784,228)			(8.1)
Selling, general and administrative(b)		(146,727)		(149,951)		(2.2)			(471,800)		(394,337)			19.6
Technical and operating expenses (excluding depreciation and amortization)(a)																Technical and operating expenses (excluding depreciation and amortization)(a)	274,233		253,699			8.1		543,243		481,806		12.8
Selling, general and administrative expenses(b)																Selling, general and administrative expenses(b)	127,291		161,975			(21.4)		253,523		325,073		(22.0)
Majority-owned equity investees AOI	Majority-owned equity investees AOI	4,791		2,149		122.9			13,733		6,584			108.6		Majority-owned equity investees AOI	4,511		4,061			11.1		7,287		8,942		(18.5)
Segment adjusted operating income	Segment adjusted operating income	$	206,701	$	231,076	(10.5)	%		$	635,409	$	723,749		(12.2)	%	Segment adjusted operating income	$	184,806	$	209,489		(11.8)	%	$	404,194	$	428,708	(5.7)	%
(a) Technical and operating excludes cloud computing amortization
(b) Selling, general and administrative excludes share-based compensation expenses
(a) Technical and operating expenses exclude cloud computing amortization																(a) Technical and operating expenses exclude cloud computing amortization
(b) Selling, general and administrative expenses exclude share-based compensation expenses																(b) Selling, general and administrative expenses exclude share-based compensation expenses

Revenues

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Subscription revenues ~~increased~~decreased primarily due to a ~~41.0% increase~~12.7% decline in ~~streaming~~affiliate revenues, ~~driven by streaming subscriber growth,~~ partially offset by a ~~mid single-digit decline~~12.5% increase in ~~affiliate revenue.~~streaming revenues. Affiliate ~~revenue~~revenues decreased due to basic subscriber declines inand a 3% impact of a strategic non-renewal that occurred at the ~~linear subscriber universe,~~end of 2022, partially offset by contractual ~~affiliate~~ rate increases. Streaming revenues increased due to year-over-year subscriber growth and 2022 price increases. Subscription revenues include revenues related to the Company's streaming services of $137.4 million and $122.1 million for the three months ended June 30, 2023 and 2022, respectively. Aggregate paid subscribers2 to our streaming services increased ~~44%~~6% to ~~11.1~~11.0 million at ~~September~~June 30, ~~2022~~2023 compared to ~~September~~10.3 million at June 30, ~~2021.~~2022.

Content licensing and other revenues ~~decreased~~increased primarily due to the timing and availability of deliveries, including a $20.3 million impact associated with the termination of an output agreement that resulted in the ~~quarter, including the delivery~~acceleration of ~~fewer episodes of~~ ~~The Walking Dead~~ ~~and~~ ~~Fear the Walking Dead, both of which were strong contributors~~revenue previously anticipated to be recognized in ~~the prior year.~~2024.

Advertising revenues decreased ~~primarily~~ due to ~~lower~~ linear ratings ~~softer scatter and direct response markets~~declines, softness in the advertising market and fewer original ~~hours in~~programming episodes within the ~~third~~ quarter, partially offset by digital and advanced advertising revenue growth.

~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Subscription revenues ~~increased~~decreased primarily due to a ~~33.5% increase~~12.2% decline in ~~streaming~~affiliate revenues, ~~driven by streaming subscriber growth,~~ partially offset by a ~~mid single-digit decline~~20.1% increase in ~~affiliate revenue.~~streaming revenues. Affiliate ~~revenue~~revenues decreased due to basic subscriber declines inand a 3% impact of a strategic non-renewal that occurred at the ~~linear subscriber universe,~~end of 2022, partially offset by contractual ~~affiliate~~ rate increases. ~~Excluding the one-time beneficial impact of a distribution agreement renewal in the prior year, subscription~~Streaming revenues increased ~~6.9%, including an increase in~~due to year-over-year subscriber growth and 2022 price increases. Subscription revenues include revenues related to the Company's streaming ~~revenues~~services of ~~39.6%.~~$278.3 million and $231.7 million for the six months ended June 30, 2023 and 2022, respectively.

Content licensing and other revenues ~~decreased~~increased primarily due to the timing and availability of deliveries, ~~in the period,~~ including $56.1 million for the delivery of ~~fewer~~the remaining episodes of ~~The Walking Dead~~an AMC Studios produced series to a third party and ~~Fear~~a $20.3 million impact associated with the ~~Walking Dead, both~~termination of ~~which were strong contributors~~an output agreement that resulted in the ~~prior year.~~

~~Advertising revenues decreased primarily due~~acceleration of revenue previously anticipated to ~~lower linear ratings, partially offset by continued digital and advanced advertising revenue growth and higher upfront pricing.~~be recognized in 2024.

2 A paid subscription is defined as a subscription to a direct-to-consumer service or a subscription received through distributor arrangements, in which we receive a fee for the distribution of our streaming ~~services, and includes an estimate of subscribers converting to paying status in the subsequent period based on historical conversion percentages.~~services.

3132

Advertising revenues decreased due to linear ratings declines, softness in the advertising market and fewer original programming episodes within the period, partially offset by digital and advanced advertising revenue growth.

Technical and operating expenses (excluding depreciation and amortization)

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Technical and operating expenses (excluding depreciation and amortization) increased primarily due to an increase in program rights amortization, including the impact associated with the termination of an output agreement that resulted in the acceleration of program rights amortization previously anticipated to be recognized in 2024.

Six months ended June 30, 2023 vs. 2022

Technical and operating expenses (excluding depreciation and amortization) ~~decreased~~increased primarily due to ~~a decrease in program rights amortization due to~~ costs associated with the delivery of ~~fewer~~the remaining episodes of ~~The Walking Dead~~ ~~and~~ ~~Fear the Walking Dead.~~

~~Nine months ended September 30, 2022 vs. 2021~~

~~Technical and operating expenses (excluding depreciation and amortization) decreased primarily due~~an AMC Studios produced series to a ~~decrease in other direct programming costs, partially offset by~~third party and an increase in program rights ~~amortization.~~amortization, including the impact associated with the termination of an output agreement that resulted in the acceleration of program rights amortization previously anticipated to be recognized in 2024.

Selling, general and administrative expenses

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Selling, general and administrative expenses ~~(excluding share-based compensation expenses)~~primarily decreased ~~primarily~~ due to lower marketing and subscriber acquisition expenses related to our streaming ~~services and linear networks, partially offset by higher employee related costs.~~services.

~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Selling, general and administrative expenses ~~(excluding share-based compensation expenses) increased~~ primarily decreased due to ~~higher~~lower marketing and subscriber acquisition expenses related to our streaming ~~services and linear networks, as well as higher employee related costs.~~services.

Segment adjusted operating income

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

The decrease in segment adjusted operating income was primarily attributable to a decrease in revenues, net of ~~$95.4~~$39.3 million ~~partially offset by decreases~~and an increase in technical and operating expenses of ~~$65.1~~$20.5 million, ~~and~~partially offset by a decrease in selling, general and administrative expenses of ~~$3.2~~$34.7 million.

~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

The decrease in segment adjusted operating income was primarily attributable to a decrease in revenues, net of ~~$81.7~~$33.0 million and an increase in technical and operating expenses of $61.4 million, partially offset by a decrease in selling, general and administrative expenses of ~~$77.5 million, partially offset by a decrease in technical and operating expenses of $63.7~~$71.6 million.

International and Other

The following table sets forth our International and Other segment results for the periods indicated.


		Three Months Ended September 30,						Nine Months Ended September 30,					Three Months Ended June 30,								Six Months Ended June 30,
(In thousands)	(In thousands)	2022		2021		Change			2022		2021			Change		(In thousands)	2023		2022			Change		2023		2022		Change
Revenues, net:	Revenues, net:															Revenues, net:
Subscription	Subscription	$	52,765	$	62,848	(16.0)	%		$	169,879	$	188,800		(10.0)	%	Subscription	$	57,280	$	56,702		1.0	%	$	113,970	$	117,114	(2.7)	%
Content licensing and other	Content licensing and other	29,124		41,738		(30.2)			103,513		127,692			(18.9)		Content licensing and other	21,658		47,335			(54.2)		54,518		74,389		(26.7)
Distribution and other	Distribution and other	81,889		104,586		(21.7)			273,392		316,492			(13.6)		Distribution and other	78,938		104,037			(24.1)		168,488		191,503		(12.0)
Advertising	Advertising	17,381		25,354		(31.4)			61,500		72,892			(15.6)		Advertising	20,366		21,734			(6.3)		38,888		44,119		(11.9)
Total revenues, net	Total revenues, net	99,270		129,940		(23.6)			334,892		389,384			(14.0)		Total revenues, net	99,304		125,771			(21.0)		207,376		235,622		(12.0)
Technical and operating (excluding depreciation and amortization)		(58,528)		(77,333)		(24.3)			(193,924)		(227,437)			(14.7)
Selling, general and administrative(a)		(27,432)		(30,498)		(10.1)			(85,459)		(91,170)			(6.3)
Technical and operating expenses (excluding depreciation and amortization)																Technical and operating expenses (excluding depreciation and amortization)	49,980		75,701			(34.0)		110,541		135,396		(18.4)
Selling, general and administrative expenses(a)																Selling, general and administrative expenses(a)	30,138		30,883			(2.4)		56,512		58,027		(2.6)

Segment adjusted operating income	Segment adjusted operating income	$	13,310	$	22,109	(39.8)	%		$	55,509	$	70,777		(21.6)	%	Segment adjusted operating income	$	19,186	$	19,187		—	%	$	40,323	$	42,199	(4.4)	%
(a) Selling, general and administrative excludes share-based compensation expenses
(a) Selling, general and administrative expenses exclude share-based compensation expenses																(a) Selling, general and administrative expenses exclude share-based compensation expenses

Revenues

Three months ended ~~September~~June 30, 2023 vs. 2022

Subscription revenues increased primarily due to the favorable impact of foreign currency translation at AMCNI.

Content licensing and other revenues decreased due to a reduction in the volume of productions at 25/7 Media driven by reduced demand for new content and series cancellations from third parties.

Advertising revenues decreased primarily due to the impact of the wind-down of two channels in 2022 and marketplace declines in the U.K.

Six months ended June 30, 2023 vs. ~~2021~~2022

Subscription revenues decreased primarily due to the unfavorable impact of foreign currency translation at AMCNI.

Content licensing and other revenues decreased ~~primarily~~ due to a reduction in the ~~timing~~volume of productions at 25/7 ~~Media.~~

~~Advertising revenues decreased primarily due to the the impact of the planned wind-down of two channels in the U.K., the unfavorable impact of foreign currency translation at AMCNI,~~Media driven by reduced demand for new content and ~~softer ratings in the U.K.~~

~~Nine months ended September 30, 2022 vs. 2021~~

~~Subscription revenues decreased primarily due to the unfavorable impact of foreign currency translation at AMCNI.~~

~~Content licensing and other revenues decreased primarily due to the timing of productions at 25/7 Media.~~series cancellations from third parties.

Advertising revenues decreased primarily due to the ~~unfavorable impact of foreign currency translation and the~~ impact of the ~~planned~~ wind-down of two channels in 2022 and marketplace declines in the U.K.

Technical and operating expenses (excluding depreciation and amortization)

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

~~Nine~~Six months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Technical and operating expenses (excluding depreciation and amortization) decreased due to~~timing~~ a reduction in the volume of productions at 25/7 Media driven by reduced demand for new content and series cancellations from third parties, as well as lower program rights amortization at AMCNI, primarily resulting from the ~~favorable~~ impact of ~~foreign currency translation at AMCNI.~~the wind-down of two channels in 2022 in the U.K.

Selling, general and administrative expenses

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Selling, general and administrative expenses ~~(excluding share-based compensation expenses)~~decreased primarily due to lower advertising and marketing costs at AMCNI.

Six months ended June 30, 2023 vs. 2022

Selling, general and administrative expenses decreased primarily due to the favorable impact of foreign currency translation at AMCNI.

~~Nine months ended September 30, 2022 vs. 2021~~

Selling, general and administrative expenses (excluding share-based compensation expenses) decreased primarily due to the favorable impact of foreign currency translation at AMCNI and a decrease in administrative expenses at 25/7 Media related to the March 2021 spin off of the comedy venues, partially offset by higher advertising and marketing costs.

Segment adjusted operating income

Three months ended ~~September~~June 30, ~~2022~~2023 vs. ~~2021~~2022

Segment adjusted operating income was flat as a decrease in revenues, net of $26.5 million, was offset by decreases in technical and operating expenses of $25.7 million and selling, general and administrative expenses of $0.7 million.

Six months ended June 30, 2023 vs. 2022

The decrease in segment adjusted operating income was primarily attributable to a decrease in revenues, net of ~~$30.7~~$28.2 million, partially offset by decreases in technical and operating expenses of ~~$18.8~~$24.9 million and selling, general and administrative expenses of ~~$3.1~~$1.5 million.

~~Nine months ended September 30, 2022 vs. 2021~~

The decrease in segment adjusted operating income was primarily attributable to a decrease in revenues, net of $54.5 million, partially offset by decreases in technical and operating expenses of $33.5 million and selling, general and administrative expenses of $5.7 million.

Corporate and Inter-segment Elimination

The following table sets forth our Corporate and Inter-segment Eliminations segment results for the periods indicated.

Three Months Ended September 30, Nine Months Ended September 30,
(In thousands) 2022 2021 Change 2022 2021 Change
Revenues, net: $ (4,816) $ (1,920) 150.8 % $ (16,901) $ (11,215) 50.7 %
Technical and operating (excluding depreciation and amortization)(a)
3,912 2,937 33.2 % 11,295 13,988 (19.3)
Selling, general and administrative(b)
(24,802) (29,511) (16.0) % (84,281) (83,992) 0.3
Segment adjusted operating income $ (25,706) $ (28,494) (9.8) % $ (89,887) $ (81,219) 10.7 %
(a) Technical and operating excludes cloud computing amortization
(b) Selling, general and administrative excludes share-based compensation expenses and cloud computing amortization


	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2023		2022		Change		2023		2022		Change





Revenues, net:	$	(2,495)	$	(8,848)	(71.8)	%	$	(4,974)	$	(12,085)	(58.8)	%
Technical and operating expenses (excluding depreciation and amortization)(a)	(2,316)		(3,811)		(39.2)	%	(5,222)		(7,383)		(29.3)
Selling, general and administrative expenses(b)	27,036		28,097		(3.8)	%	52,225		59,479		(12.2)

Segment adjusted operating income	$	(27,215)	$	(33,134)	(17.9)	%	$	(51,977)	$	(64,181)	(19.0)	%
(a) Technical and operating expenses exclude cloud computing amortization
(b) Selling, general and administrative expenses exclude share-based compensation expenses and cloud computing amortization

Revenues, net

Revenue eliminations are primarily related to inter-segment licensing revenues recognized between the Domestic Operations and International and Other segments.

Technical and operating expenses (excluding depreciation and amortization)

Technical and operating expense eliminations are primarily related to inter-segment programming amortization recognized between the Domestic Operations and International and Other segments.

Selling, general and administrative expenses

Corporate overhead costs not allocated to the segments include 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).~~functions.

Selling, general and administrative expenses for the three and six months ended ~~September~~June 30, ~~2022~~2023 compared to ~~2021~~2022 decreased primarily due to lower ~~long-term incentive compensation.~~

~~Selling, general and administrative expenses for the ninemonths ended September 30, 2022 compared to 2021 increased primarily due to an increase in expenses associated with technology investments.~~employee related costs.

Non-GAAP Financial Measures

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 share-based compensation expenses or benefit, depreciation and amortization, impairment and other charges (including gains or losses on sales or dispositions of businesses), restructuring and other related charges, cloud computing amortization and including the Company’s proportionate share of adjusted operating income (loss) from majority-owned equity method investees. From time to time, we may exclude the impact of certain events, gains, losses or other charges (such as significant legal settlements) from AOI that affect our operating performance.

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 operating income (loss) to AOI for the periods indicated:


		Three Months Ended September 30, 2022									Three Months Ended June 30, 2023
(In thousands)	(In thousands)	Domestic Operations		International and Other		Corporate / Inter-segment Eliminations		Consolidated		(In thousands)	Domestic Operations		International and Other		Corporate / Inter-segment Eliminations		Consolidated
Operating income (loss)	Operating income (loss)	$	186,609	$	8,291	$	(44,223)	$	150,677	Operating income (loss)	$	162,530	$	(11,705)	$	(45,124)	$	105,701
Share-based compensation expenses	Share-based compensation expenses	3,155		537		3,358		7,050		Share-based compensation expenses	2,192		846		4,610		7,648
Depreciation and amortization	Depreciation and amortization	12,141		4,482		13,112		29,735		Depreciation and amortization	11,663		4,902		9,180		25,745

Restructuring and other related charges										Restructuring and other related charges	3,905		261		1,875		6,041
Impairment and other charges										Impairment and other charges	—		24,882		—		24,882
Cloud computing amortization	Cloud computing amortization	5		—		2,047		2,052		Cloud computing amortization	5		—		2,244		2,249
Majority owned equity investees AOI	Majority owned equity investees AOI	4,791		—		—		4,791		Majority owned equity investees AOI	4,511		—		—		4,511
Adjusted operating income (loss)	Adjusted operating income (loss)	$	206,701	$	13,310	$	(25,706)	$	194,305	Adjusted operating income (loss)	$	184,806	$	19,186	$	(27,215)	$	176,777


	Three Months Ended June 30, 2022
(In thousands)	Domestic Operations		International and Other		Corporate / Inter-segment Eliminations		Consolidated
Operating income (loss)	$	188,812	$	14,087	$	(49,696)	$	153,203
Share-based compensation expenses	3,172		467		5,044		8,683
Depreciation and amortization	13,439		4,633		9,159		27,231


Cloud computing amortization	5		—		2,359		2,364
Majority owned equity investees AOI	4,061		—		—		4,061
Adjusted operating income (loss)	$	209,489	$	19,187	$	(33,134)	$	195,542


	Six Months Ended June 30, 2023
(In thousands)	Domestic Operations		International and Other		Corporate / Inter-segment Eliminations		Consolidated
Operating income (loss)	$	362,018	$	2,437	$	(85,450)	$	279,005
Share-based compensation expenses	6,639		1,685		4,969		13,293
Depreciation and amortization	23,517		9,673		18,430		51,620
Restructuring and other related charges	4,723		1,646		5,605		11,974
Impairment and other charges	—		24,882		—		24,882
Cloud computing amortization	10		—		4,469		4,479
Majority owned equity investees AOI	7,287		—		—		7,287
Adjusted operating income (loss)	$	404,194	$	40,323	$	(51,977)	$	392,540


	Six Months Ended June 30, 2022
(In thousands)	Domestic Operations		International and Other		Corporate / Inter-segment Eliminations		Consolidated
Operating income (loss)	$	387,334	$	31,442	$	(90,896)	$	327,880
Share-based compensation expenses	6,845		1,221		8,746		16,812
Depreciation and amortization	25,575		9,536		14,710		49,821


Cloud computing amortization	12		—		3,259		3,271
Majority owned equity investees AOI	8,942		—		—		8,942
Adjusted operating income (loss)	$	428,708	$	42,199	$	(64,181)	$	406,726

3436

Three Months Ended September 30, 2021
(In thousands) Domestic Operations International and Other Corporate / Inter-segment Eliminations Consolidated
Operating income (loss) $ 213,299 $ 15,564 $ (40,537) $ 188,326
Share-based compensation expenses 4,174 545 4,736 9,455
Depreciation and amortization 11,589 5,200 6,622 23,411
Restructuring and other related charges (135) 800 89 754
Cloud computing amortization — — 596 596
Majority owned equity investees AOI 2,149 — — 2,149
Adjusted operating income (loss) $ 231,076 $ 22,109 $ (28,494) $ 224,691

Nine Months Ended September 30, 2022
(In thousands) Domestic Operations International and Other Corporate / Inter-segment Eliminations Consolidated
Operating income (loss) $ 573,943 $ 39,733 $ (135,119) $ 478,557
Share-based compensation expenses 10,000 1,758 12,104 23,862
Depreciation and amortization 37,716 14,018 27,822 79,556
Cloud computing amortization 17 — 5,306 5,323
Majority owned equity investees AOI 13,733 — — 13,733
Adjusted operating income (loss) $ 635,409 $ 55,509 $ (89,887) $ 601,031

Nine Months Ended September 30, 2021
(In thousands) Domestic Operations International and Other Corporate / Inter-segment Eliminations Consolidated
Operating income (loss) $ 517,874 $ 32,365 $ (123,949) $ 426,290
Share-based compensation expenses 17,105 2,689 19,369 39,163
Depreciation and amortization 36,678 14,477 20,106 71,261
Restructuring and other related charges 2,508 5,273 1,753 9,534
Impairment and other charges 143,000 15,973 — 158,973
Cloud computing amortization — — 1,502 1,502
Majority owned equity investees AOI 6,584 — — 6,584
Adjusted operating income (loss) $ 723,749 $ 70,777 $ (81,219) $ 713,307

Liquidity and Capital Resources

Our operations ~~have historically generated~~typically generate positive net cash flow from operating activities. However, each of our programming businesses has substantial programming acquisition and production expenditure requirements.

Our primary source of cash typically includes cash flow from operations. Sources of cash also include amounts available under our revolving credit facility and, subject to market conditions, access to capital and credit 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 capital and credit markets, although adverse conditions in the financial markets have in the past impacted, and are expected in the future to impact, access to those markets.

Our Board of Directors previously authorized a program to repurchase up to $1.5 billion of our outstanding shares of common stock (the "Stock Repurchase Program"). The Stock Repurchase Program has no pre-established closing date and may be suspended or discontinued at any time. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, we did not repurchase any

of our Class A common stock. As of ~~September~~June 30, ~~2022,~~2023, we had $135.3 million of authorization remaining for repurchase under the Stock Repurchase Program.

Our principal uses of cash include the production, acquisition and promotion of programming, technology investments, debt service and payments for income taxes. We continue to ~~increase our investment~~invest in original programming, the funding of which generally occurs ~~six to~~a minimum of nine months in advance of a program's airing.

As of ~~September~~June 30, ~~2022, our~~2023, approximately $198.0 million of cash and cash equivalents, previously held by foreign subsidiaries, was repatriated to the United States. Our consolidated cash and cash equivalents balance of ~~$790.9~~$893.4 million, as of June 30, 2023, includes approximately ~~$294.6~~$178.7 million held by foreign subsidiaries. ~~Most or all of the earnings of our foreign subsidiaries will continue~~Of this amount, approximately $60.0 million is expected to be ~~permanently~~repatriated to the United States with the remaining amount continuing to be reinvested in foreign ~~operations~~operations. Tax expense related to the repatriated amount, as well as the expected remaining repatriation amount, has been accrued in the current period and ~~we do~~the Company does not expect to incur any significant, additional taxes related to ~~such amounts, nor have any been provided for in~~ the ~~current period.~~remaining balance.

We believe that a combination of cash-on-hand, cash generated from operating activities, ~~and~~ availability under our revolving credit facility, borrowings under additional financing facilities and, when we have access to capital and credit markets, proceeds from the sale of new debt, 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.~~debt at the applicable maturity dates. As a result, we will ~~then~~ be dependent upon our ability to access the capital and credit markets in order to repay, refinance, repurchase through privately negotiated transactions, open market repurchases, tender offers or ~~refinance~~otherwise or redeem the outstanding balances of our indebtedness. Given the maturity dates of our 5.00% senior notes due 2024 and our 4.75% senior notes due 2025, we may access the capital or credit markets in the near term to refinance those senior notes through privately negotiated transactions, open market repurchases, tender offers or redemptions.

Failure to raise significant amounts of funding to repay ~~these~~our outstanding debt obligations at their respective maturity dates 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 ~~2021~~2022 Form 10-K.

In addition, economic or market disruptions could lead to lower demand for our services, such as loss of subscribers and 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 ~~September~~June 30, ~~2022.~~2023. The total undrawn revolver commitment is available to be drawn for our general corporate purposes.

off a portion of the unamortized deferred financing costs, which is included in interest expense within the consolidated statements of income.

AMC Networks was in compliance with all of its debt covenants as of ~~September~~June 30, ~~2022.~~2023.

Cash Flow Discussion

The following table is a summary of cash flows provided by (used in) operating, investing and financing activities for the periods indicated:


(In thousands)	(In thousands)	Nine Months Ended September 30,				(In thousands)	Six Months Ended June 30,
		2022		2021			2023		2022
Cash provided by operating activities	Cash provided by operating activities	$	36,591	$	43,984	Cash provided by operating activities	$	25,047	$	17,174
Cash (used in) provided by investing activities		(28,623)		30,880
Cash used in investing activities						Cash used in investing activities	(12,988)		(9,929)
Cash used in financing activities	Cash used in financing activities	(80,208)		(66,619)		Cash used in financing activities	(54,816)		(66,486)
Net (decrease) increase in cash and cash equivalents from operations		$	(72,240)	$	8,245
Net decrease in cash and cash equivalents from operations						Net decrease in cash and cash equivalents from operations	$	(42,757)	$	(59,241)

Operating Activities

Net cash provided by operating activities for the six months ended June 30, 2023 and 2022 amounted to ~~$36.6~~$25.0 million ~~for~~ and $17.2 million, respectively.

For the ~~nine~~six months ended ~~September~~June 30, 2023, net cash provided by operating activities primarily resulted from $709.3 million of net income before amortization of program rights, depreciation and amortization, and other non-cash items, partially offset by payments for program rights of $644.1 million and restructuring initiatives of $88.5 million. Changes in all other assets and liabilities during the quarter resulted in a net cash inflow of $48.3 million.

For the six months ended June 30, 2022, ~~and~~net cash provided by operating activities primarily resulted from net income before amortization of program rights, depreciation and amortization, and other non-cash items of~~$1,069.8~~ $710.4 million, partially offset by payments for program rights of ~~$1,065.9~~$667.5 million. Changes in all other assets and liabilities resulted in a net cash ~~inflow of $32.7 million.~~

Net cash provided by operating activities amounted to $44.0 million for the nine months ended September 30, 2021 and primarily resulted from net income before amortization of program rights, depreciation and amortization, and other non-cash items of $1,050.9 million, partially offset by payments for program rights of $967.2 million. ~~Changes in all other assets and liabilities resulted in net cash~~ outflow of ~~$39.7~~$25.7 million.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2023 and 2022 amounted to ~~$28.6~~$13.0 million ~~for~~and $9.9 million, respectively.

For the ~~nine~~six months ended ~~September~~June 30, 2023, net cash used in investing activities consisted primarily of capital expenditures of $21.5 million, partially offset by proceeds from the sale of investments of $8.6 million.

For the six months ended June 30, 2022, ~~and primarily~~net cash used in investing activities consisted of capital expenditures of ~~$33.5 million and an additional investment in an equity security of $5.0~~$21.6 million, partially offset by proceeds from the sale of a marketable equity security of $9.9 ~~million.~~

~~Net cash provided by investing activities for the nine months ended September 30, 2021 was $30.9~~ million and ~~included proceeds received~~a return of capital from ~~the sale~~investees of an investment of $95.4 million and the collection of a loan for $20.0 million, partially offset by the acquisition of equity securities of $28.4 million, payments for the acquisition of a business of $19.1 million, and capital expenditures of $30.0 million. All other changes in investing activities resulted in an decrease of $7.0$1.8 million.

Financing Activities

Net cash used in financing activities for the six months ended June 30, 2023 and 2022 amounted to ~~$80.2~~$54.8 million ~~for~~and $66.5 million, respectively.

For the ~~nine~~six months ended ~~September~~June 30, ~~2022 and~~2023, net cash used in financing activities primarily consisted of distributions to noncontrolling interests of ~~$28.2~~$27.1 million, principal payments on the Term Loan A Facility of ~~$25.3~~$16.9 million, and taxes paid in lieu of shares issued for equity-based compensation of $7.2 million.

For the six months ended June 30, 2022, net cash used in financing activities consisted of distributions to noncontrolling interests of $25.1 million, taxes paid in lieu of shares issued for equity-based compensation of ~~$21.6~~$20.3 million, principal payments on ~~finance leases~~long-term debt of ~~$2.6~~$16.9 million, ~~and the~~ purchase of noncontrolling interests of $2.5 ~~million.~~

Net cash used in financing activities amounted to $66.6 million for the nine months ended September 30, 2021 and primarily consisted of principal payments, net of proceeds, on long-term debt (including the redemption of $400 million of 4.75% Notes due December 2022 and $600 million of 5.00% Notes due April 2024) of $29.0 million, taxes paid in lieu of shares issued for equity-based compensation of $32.3 million, distributions to noncontrolling interests of $14.9 million and payments on finance leases of ~~$2.9 million, partially offset by proceeds from the exercise of stock options of $9.8 million and contributions from noncontrolling interests of $2.7~~$1.7 million.

Contractual Obligations

As of ~~September~~June 30, ~~2022,~~2023, our contractual obligations not reflected on the condensed consolidated balance sheet ~~decreased $93.2~~increased $5.2 million, as compared to December 31, ~~2021,~~2022, to ~~$970.2~~$917.4 million. The ~~decrease~~increase was primarily ~~relates to~~driven by the renewal of a third-party service contract and additional program rights commitments, partially offset by payments for program rights.

Supplemental Guarantor Financial Information

The following is a description of the terms and conditions of the guarantees with respect to the outstanding notes for which AMC Networks is the issuer.

Note Guarantees

Debt of AMC Networks as of ~~September~~June 30, ~~2022~~2023 included $400.0 million of 5.00% Notes due April 2024, $800.0 million of 4.75% Notes due August 2025 and $1.0 billion of 4.25% Notes due February 2029 (collectively, the “notes”). The notes were issued by AMC Networks and are unconditionally guaranteed, jointly and severally, on an unsecured basis, by each of AMC Networks’ existing and future domestic restricted subsidiaries, subject to certain exceptions (each, a “Guarantor Subsidiary,” and collectively, the “Guarantor Subsidiaries”). The obligations of each Guarantor Subsidiary under its note guarantee are limited as necessary to prevent such note guarantee from constituting a fraudulent conveyance under applicable law. A guarantee of the notes by a Guarantor Subsidiary is subject to release in the following circumstances: (i) any sale or other disposition of all of the capital stock of a Guarantor Subsidiary to a person that is not (either before or after giving effect to such transaction) a restricted subsidiary, in compliance with the terms of the applicable indenture; (ii) the designation of a restricted subsidiary as an “Unrestricted Subsidiary” under the applicable indenture; or (iii) the release or discharge of the guarantee (including the guarantee under the AMC Networks’ credit agreement) which resulted in the creation of the note guarantee (provided that such Guarantor Subsidiary does not have any preferred stock outstanding at such time that is not held by AMC Networks or another Guarantor Subsidiary).

Foreign subsidiaries of AMC Networks do not and will not guarantee the notes.

The following tables present the summarized financial information specified in Rule 1-02(bb)(1) of Regulation S-X for AMC Networks and each Guarantor Subsidiary. The summarized financial information has been prepared in accordance with Rule 13-01 of Regulation S-X.

Summarized Financial Information


Income Statement	Income Statement									Income Statement
(In thousands)	(In thousands)	Nine Months Ended September 30, 2022				Nine Months Ended September 30, 2021				(In thousands)	Six Months Ended June 30, 2023				Six Months Ended June 30, 2022
		Parent Company		Guarantor Subsidiaries		Parent Company		Guarantor Subsidiaries			Parent Company		Guarantor Subsidiaries		Parent Company		Guarantor Subsidiaries
Revenues	Revenues	$	—	$	1,513,831	$	—	$	1,572,327	Revenues	$	—	$	1,009,946	$	—	$	1,020,245
Operating expenses	Operating expenses	—		1,104,348		—		1,211,830		Operating expenses	—		753,189		—		743,394
Operating income	Operating income	$	—	$	409,483	$	—	$	360,497	Operating income	$	—	$	256,757	$	—	$	276,851
Income before income taxes	Income before income taxes	$	365,942	$	467,752	$	297,357	$	422,489	Income before income taxes	$	223,608	$	304,027	$	255,211	$	321,509
Net income	Net income	272,283		461,433		233,557		415,950		Net income	173,849		299,434		187,617		316,942


Balance Sheet	Balance Sheet	September 30, 2022				December 31, 2021				Balance Sheet	June 30, 2023				December 31, 2022
(In thousands)	(In thousands)	Parent Company		Guarantor Subsidiaries		Parent Company		Guarantor Subsidiaries		(In thousands)	Parent Company		Guarantor Subsidiaries		Parent Company		Guarantor Subsidiaries
Assets	Assets									Assets
Amounts due from subsidiaries	Amounts due from subsidiaries	$	—	$	124,774	$	—	$	—	Amounts due from subsidiaries	$	—	$	23,497	$	—	$	79,020
Current assets	Current assets	2,806		1,372,733		9,991		1,242,724		Current assets	15,624		1,323,359		44,045		1,258,759
Non-current assets	Non-current assets	4,297,423		3,875,345		4,010,028		3,633,383		Non-current assets	4,078,771		3,573,422		3,893,205		3,706,858

Liabilities and equity:	Liabilities and equity:									Liabilities and equity:
Amounts due to subsidiaries	Amounts due to subsidiaries	$	129,127	$	1,656	$	12,797	$	5,324	Amounts due to subsidiaries	$	48,254	$	7,715	$	68,682	$	6,783
Current liabilities	Current liabilities	216,308		816,767		100,969		671,041		Current liabilities	554,558		701,717		157,658		872,109
Non-current liabilities	Non-current liabilities	3,081,490		267,475		3,067,962		331,860		Non-current liabilities	2,532,171		241,606		2,972,602		330,467

Critical Accounting Policies and Estimates

We describe our significant accounting policies in Note 2 to the Company's Consolidated Financial Statements included in our ~~2021~~2022 Form 10-K. There have been no significant changes in our significant accounting policies since December 31, ~~2021.~~2022.

We discuss our critical accounting estimates in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in our ~~2021~~2022 Form 10-K. There have been no significant changes in our critical accounting estimates since December 31, ~~2021.~~2022.

25/7 Media is our production services business and is part of our International and Other segment. See "Item 1. Business - International and Other" in our 2022 Form 10-K for further details. During the second quarter of 2023, given the impact of market challenges at 25/7 Media, specifically as it relates to reduced demand for new content and series cancellations from third parties, the Company revised its outlook for the 25/7 Media business, resulting in lower expected future cash flows.As a result, the Company determined that sufficient indicators of potential impairment of long-lived assets existed at 25/7 Media. The Company performed a recoverability test and determined that the carrying amount of the 25/7 Media asset group was not recoverable. The carrying value of the asset group exceeded its fair value, therefore an impairment charge of $23.0 million was recorded for identifiable intangible assets, which is included in impairment and other charges in the consolidated statement of income within the International and Other operating segment. Fair values used to determine the impairment charge were determined using an income approach, specifically a discounted cash flow ("DCF") model, and a market comparables approach. The DCF model includes significant assumptions about revenue growth rates, long-term growth rates and enterprise specific discount rates. Given the uncertainty in determining assumptions underlying the DCF approach, actual results may differ from those used in the valuations.

Based on the valuations performed, a $1.9 million goodwill impairment charge was recorded, which is included in impairment and other charges in the consolidated statement of income, within the International and Other operating segment.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Fair Value of Debt

Based on the level of interest rates prevailing at ~~September~~June 30, ~~2022,~~2023, the carrying value of our fixed rate debt of $2.18 billion was more than its fair value of ~~$1.84~~$1.62 billion by approximately ~~$338.7~~$560.8 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 ~~September~~June 30, ~~2022~~2023 would increase the estimated fair value of our fixed rate debt by approximately ~~$63.5~~$38.8 million to approximately ~~$1.90~~$1.66 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 credit 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. For the ~~nine~~three and six months ended ~~September~~June 30, ~~2022,~~2023, we did not have any interest rate swap contracts outstanding.

As of ~~September~~June 30, ~~2022,~~2023, we had $2.8 billion of debt outstanding (excluding finance leases), of which ~~$0.6 billion~~$624.4 million is outstanding under our loan facility and is subject to variable interest rates. A hypothetical 100 basis point increase in interest rates prevailing at ~~September~~June 30, ~~2022~~2023 would increase our annual interest expense by approximately ~~$6.5~~$6.2 million. The interest rate paid on approximately ~~77%~~78% of our debt (excluding finance leases) as of ~~September~~June 30, ~~2022~~2023 is fixed.

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 ~~losses~~gains of ~~$1.0~~$3.1 million and $2.5 million ~~and $0.1 million~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2022,~~2023, respectively, and ~~a $0.4~~gains of $1.0 million ~~loss~~and $0.9 million ~~and a $6.1 million gain~~ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, respectively, related to foreign currency transactions. Such amounts are included in miscellaneous, net in the condensed consolidated statements of income.

To manage foreign currency exchange rate risk, we 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 ~~September~~June 30, ~~2022,~~2023, 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 ~~September~~June 30, ~~2022,~~2023, 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.

4042

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

See Note ~~15,~~14, Commitments and Contingencies to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for a description of our legal proceedings.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company's Board of Directors has authorized a program to repurchase up to $1.5 billion of its outstanding shares of common stock (the "Stock Repurchase Program"). The authorization of up to $500 million was announced on March 7, 2016, an additional authorization of $500 million was announced on June 7, 2017, and an additional authorization of $500 million was announced on June 13, 2018. The Stock Repurchase Program has no pre-established closing date and may be suspended or discontinued at any time.

For the ~~nine~~three and six months ended ~~September~~June 30, ~~2022,~~2023, the Company did not repurchase any of its Class A common stock. As of ~~September~~June 30, ~~2022,~~2023, the Company had $135.3 million of authorization remaining for repurchase under the Stock Repurchase Program.

Item 6. Exhibits.

(a)Index to Exhibits.


10.1			~~Employment~~Amendment No. 2, dated as of April 19, 2023, to the Second Amended and Restated Credit Agreement, dated ~~August 4, 2022,~~as of July 28, 2017, as amended by that certain Amendment No. 1 to the Second Amended and Restated Credit Agreement, dated as of February 8, 2021, by and ~~between~~among AMC Networks ~~Inc.~~ and ~~Christina Spade~~its subsidiary, AMC Network Entertainment LLC, as the initial borrowers, certain of AMC Networks’ subsidiaries, as restricted subsidiaries, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent and Collateral Agent (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on April 24, 2023).

10.2			Amended & Restated Employment Agreement dated ~~August 4,~~September 2, 2022, ~~by and~~ between AMC Networks Inc. and ~~Patrick O'Connell~~

~~10.3~~			~~Employment Agreement, dated October 19, 2022, by and between AMC Networks Inc. and James G. Gallagher~~Kim Kelleher.

22			Guarantor Subsidiaries of the Registrant

31.1			Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2			Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32			Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.



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101.CAL			XBRL Taxonomy Extension Calculation Linkbase Document.

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4143

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

AMC Networks Inc.

Date:

~~November~~August 4, ~~2022~~2023

By:

/s/ Patrick O'Connell

Patrick O'Connell

Executive Vice President and Chief Financial Officer

~~Date:~~

~~November 4, 2022~~

~~By:~~

~~/s/ Michael J. Sherin III~~

~~Michael J. Sherin III~~

~~Executive Vice President and Chief Accounting Officer~~

4244


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets			1
Condensed Consolidated Statements of Income			2
Condensed Consolidated Statements of Comprehensive Income			3
Condensed Consolidated Statements of Stockholders' Equity			4
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2324
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3941
Item 4. Controls and Procedures			4041
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			4143
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4143

Item 6. Exhibits			4143
SIGNATURES			4244