Condensed Consolidating Financial Statements | Condensed Consolidating Financial Statements Debt of AMC Networks includes $600.0 million of 4.75% Notes due December 2022 and $1.0 billion of 5.00% Notes due April 2024 and $800.0 million of 4.75% Notes due August 2025. All outstanding senior notes issued by AMC Networks are guaranteed on a senior unsecured basis by certain of its existing and future domestic restricted subsidiaries (the "Guarantor Subsidiaries"). All Guarantor Subsidiaries are owned 100% by AMC Networks. The outstanding notes are fully and unconditionally guaranteed by the Guarantor Subsidiaries on a joint and several basis. Set forth below are condensed consolidating financial statements presenting the financial position, results of operations, comprehensive income, and cash flows of (i) the Parent Company, (ii) the Guarantor Subsidiaries on a combined basis (as such guarantees are joint and several), (iii) the direct and indirect non-guarantor subsidiaries of the Parent Company (the "Non-Guarantor Subsidiaries") on a combined basis and (iv) reclassifications and eliminations necessary to arrive at the information for the Company on a consolidated basis. Basis of Presentation In presenting the condensed consolidating financial statements, the equity method of accounting has been applied to (i) the Parent Company's interests in the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries, and (ii) the Guarantor Subsidiaries' interests in the Non-Guarantor Subsidiaries, even though all such subsidiaries meet the requirements to be consolidated under GAAP. All intercompany balances and transactions between the Parent Company, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries have been eliminated, as shown in the column "Eliminations." The accounting basis in all subsidiaries, including goodwill and identified intangible assets, have been allocated to the applicable subsidiaries. Condensed Consolidating Balance Sheet December 31, 2019 (In thousands) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ 169 $ 574,771 $ 241,230 $ — $ 816,170 Accounts receivable, trade (including amounts due from related parties, net, less allowance for doubtful accounts) — 588,715 268,428 — 857,143 Current portion of program rights, net — 270,909 156,385 (670) 426,624 Prepaid expenses, other current assets and intercompany receivable 30,359 257,022 (8,359) (48,662) 230,360 Total current assets 30,528 1,691,417 657,684 (49,332) 2,330,297 Property and equipment, net — 217,971 65,781 — 283,752 Investment in affiliates 3,910,121 1,612,507 — (5,522,628) — Program rights, net — 800,294 238,985 (1,219) 1,038,060 Long-term intercompany notes receivable — — 28 (28) — Operating lease right-of-use assets 94,263 19,000 56,793 — 170,056 Intangible assets, net — 151,538 372,993 — 524,531 Goodwill — 63,954 638,026 — 701,980 Deferred tax asset, net (66) — 51,611 — 51,545 Other assets 46,330 179,601 268,908 1,626 496,465 Total assets $ 4,081,176 $ 4,736,282 $ 2,350,809 $ (5,571,581) $ 5,596,686 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 49 $ 31,103 $ 63,154 $ — $ 94,306 Accrued liabilities and intercompany payable 29,770 152,680 117,426 (48,662) 251,214 Current portion of program rights obligations — 241,673 63,019 — 304,692 Deferred revenue — 37,775 26,409 (263) 63,921 Current portion of long-term debt 56,250 — — — 56,250 Current portion of capital lease obligations 14,012 6,796 13,151 — 33,959 Total current liabilities 100,081 470,027 283,159 (48,925) 804,342 Program rights obligations — 223,775 16,038 — 239,813 Long-term debt, net 3,039,979 — — — 3,039,979 Capital lease obligations 115,243 18,131 77,673 — 211,047 Deferred tax liability, net 134,899 — 2,012 — 136,911 Other liabilities and intercompany notes payable 25,193 119,418 19,055 (28) 163,638 Total liabilities 3,415,395 831,351 397,937 (48,953) 4,595,730 Commitments and contingencies Redeemable noncontrolling interests — (5,190) 314,641 — 309,451 Stockholders' equity: AMC Networks stockholders' equity 665,781 3,910,121 1,612,507 (5,522,628) 665,781 Non-redeemable noncontrolling interests — — 25,724 — 25,724 Total stockholders' equity 665,781 3,910,121 1,638,231 (5,522,628) 691,505 Total liabilities and stockholders' equity $ 4,081,176 $ 4,736,282 $ 2,350,809 $ (5,571,581) $ 5,596,686 Condensed Consolidating Balance Sheet December 31, 2018 (In thousands) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets: Cash and cash equivalents $ 121 $ 368,151 $ 186,614 $ — $ 554,886 Accounts receivable, trade (including amounts due from related parties, net, less allowance for doubtful accounts) 16 600,121 235,840 — 835,977 Current portion of program rights, net — 292,002 148,955 (218) 440,739 Prepaid expenses, other current assets and intercompany receivable 6,543 158,936 23,549 (57,219) 131,809 Total current assets 6,680 1,419,210 594,958 (57,437) 1,963,411 Property and equipment, net — 175,040 71,222 — 246,262 Investment in affiliates 3,656,003 1,655,083 — (5,311,086) — Program rights, net — 969,802 245,862 (1,613) 1,214,051 Long-term intercompany notes receivable — — 190 (190) — Intangible assets, net — 161,417 417,490 — 578,907 Goodwill — 65,282 732,755 — 798,037 Deferred tax asset, net — — 19,272 — 19,272 Other assets — 165,717 292,906 — 458,623 Total assets $ 3,662,683 $ 4,611,551 $ 2,374,655 $ (5,370,326) $ 5,278,563 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ — $ 34,630 $ 72,436 $ — $ 107,066 Accrued liabilities and intercompany payable 35,189 173,836 114,943 (59,050) 264,918 Current portion of program rights obligations — 259,414 84,175 — 343,589 Deferred revenue — 34,608 20,816 — 55,424 Current portion of long-term debt 18,750 — 2,584 — 21,334 Current portion of capital lease obligations — 2,941 2,149 — 5,090 Total current liabilities 53,939 505,429 297,103 (59,050) 797,421 Program rights obligations — 349,814 23,435 — 373,249 Long-term debt, net 3,088,221 — — — 3,088,221 Capital lease obligations — 1,420 20,007 — 21,427 Deferred tax liability, net 140,474 — 4,969 — 145,443 Other liabilities and intercompany notes payable 63,369 98,885 45,972 (190) 208,036 Total liabilities 3,346,003 955,548 391,486 (59,240) 4,633,797 Commitments and contingencies Redeemable noncontrolling interests — — 299,558 — 299,558 Stockholders' deficiency: AMC Networks stockholders' equity 316,680 3,656,003 1,655,083 (5,311,086) 316,680 Non-redeemable noncontrolling interests — — 28,528 — 28,528 Total stockholders' equity 316,680 3,656,003 1,683,611 (5,311,086) 345,208 Total liabilities and stockholders' equity $ 3,662,683 $ 4,611,551 $ 2,374,655 $ (5,370,326) $ 5,278,563 Condensed Consolidating Statement of Income Year Ended December 31, 2019 (In thousands) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Revenues, net $ — $ 2,122,212 $ 954,534 $ (16,425) $ 3,060,321 Operating expenses: Technical and operating (excluding depreciation and amortization) — 939,507 572,733 (5,255) 1,506,985 Selling, general and administrative 19 429,732 260,433 (10,740) 679,444 Depreciation and amortization — 49,794 51,304 — 101,098 Impairment and related charges — — 106,603 — 106,603 Restructuring and other related charges — 35,507 5,407 — 40,914 Total operating expenses 19 1,454,540 996,480 (15,995) 2,435,044 Operating income (19) 667,672 (41,946) (430) 625,277 Other income (expense): Interest expense, net (154,718) 14,078 7,549 — (133,091) Share of affiliates' income (loss) 623,278 (49,205) — (574,073) — Miscellaneous, net (525) 749 (6,654) 430 (6,000) Total other income (expense) 468,035 (34,378) 895 (573,643) (139,091) Income from operations before income taxes 468,016 633,294 (41,051) (574,073) 486,186 Income tax expense (87,531) (10,016) 19,077 — (78,470) Net income including noncontrolling interests 380,485 623,278 (21,974) (574,073) 407,716 Net income attributable to noncontrolling interests — — (27,230) — (27,230) Net income attributable to AMC Networks' stockholders $ 380,485 $ 623,278 $ (49,204) $ (574,073) $ 380,486 Condensed Consolidating Statement of Income Year Ended December 31, 2018 (In thousands) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Revenues, net $ — $ 2,166,686 $ 820,532 $ (15,289) $ 2,971,929 Operating expenses: Technical and operating (excluding depreciation and amortization) — 956,272 493,751 (4,074) 1,445,949 Selling, general and administrative — 450,880 216,608 (10,031) 657,457 Depreciation and amortization — 45,204 46,077 — 91,281 Impairment and related charges — — 4,486 4,486 Restructuring and other related charges — 29,277 16,570 — 45,847 Total operating expenses — 1,481,633 777,492 (14,105) 2,245,020 Operating income — 685,053 43,040 (1,184) 726,909 Other income (expense): Interest expense, net (151,751) 28,460 (12,522) — (135,813) Share of affiliates' income (loss) 734,472 32,874 — (767,346) — Miscellaneous, net (151) (1,876) 30,020 1,184 29,177 Total other income (expense) 582,570 59,458 17,498 (766,162) (106,636) Income from operations before income taxes 582,570 744,511 60,538 (767,346) 620,273 Income tax (expense) benefit (136,383) (10,039) (9,884) — (156,306) Net income including noncontrolling interests 446,187 734,472 50,654 (767,346) 463,967 Net income attributable to noncontrolling interests — — (17,780) — (17,780) Net income attributable to AMC Networks' stockholders $ 446,187 $ 734,472 $ 32,874 $ (767,346) $ 446,187 Condensed Consolidating Statement of Comprehensive Income Year Ended December 31, 2019 (In thousands) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Net income including noncontrolling interest $ 380,485 $ 623,278 $ (21,974) $ (574,073) $ 407,716 Other comprehensive income (loss): Foreign currency translation adjustment (6,272) — (6,272) 6,272 (6,272) Unrealized loss on interest rate swaps (1,609) — — — (1,609) Amounts reclassified from accumulated other comprehensive loss — — — — — Other comprehensive (loss) income, before income taxes (7,881) — (6,272) 6,272 (7,881) Income tax expense 364 — — — 364 Other comprehensive (loss) income, net of income taxes (7,517) — (6,272) 6,272 (7,517) Comprehensive income (loss) 372,968 623,278 (28,246) (567,801) 400,199 Comprehensive income attributable to noncontrolling interests — — (27,078) — (27,078) Comprehensive income (loss) attributable to AMC Networks' stockholders $ 372,968 $ 623,278 $ (55,324) $ (567,801) $ 373,121 Condensed Consolidating Statement of Comprehensive Income Year Ended December 31, 2018 (In thousands) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Net income (loss) including noncontrolling interest $ 446,187 $ 734,472 $ 50,654 $ (767,346) $ 463,967 Other comprehensive income (loss): Foreign currency translation adjustment (41,716) — (41,716) 41,716 (41,716) Unrealized loss on interest rate swaps (356) — — — (356) Unrealized gain on available for sale securities — — — — — Amounts reclassified from accumulated other comprehensive loss (370) — — — (370) Other comprehensive income, before income taxes (42,442) — (41,716) 41,716 (42,442) Income tax expense 45 — — — 45 Other comprehensive income, net of income taxes (42,397) — (41,716) 41,716 (42,397) Comprehensive income 403,790 734,472 8,938 (725,630) 421,570 Comprehensive income attributable to noncontrolling interests — — (16,044) — (16,044) Comprehensive income attributable to AMC Networks' stockholders $ 403,790 $ 734,472 $ (7,106) $ (725,630) $ 405,526 Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2019 (In thousands) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash provided by operating activities $ 365,846 $ 69,276 $ 639,239 $ (590,613) $ 483,748 Cash flows from investing activities: Capital expenditures — (81,486) (10,118) — (91,604) Return of capital from investees — 1,354 4,026 — 5,380 Investments in and loans to investees — — (3,483) — (3,483) (Increase) decrease to investment in affiliates (283,060) 15,149 — 267,911 — Net cash (used in) provided by investing activities (283,060) (64,983) (9,575) 267,911 (89,707) Cash flows from financing activities: Proceeds from the issuance of long-term debt — — 1,521 — 1,521 Principal payments on long-term debt (18,750) 0 — 0 (4,238) 0 — (22,988) Deemed repurchases of restricted stock/units (23,019) — 1 — (23,018) Purchase of treasury stock (70,598) — — — (70,598) Proceeds from stock option exercises 4,630 — — — 4,630 Principal payments on finance lease obligations — (2,985) (2,130) — (5,115) Distributions to noncontrolling interest — — (15,558) — (15,558) Net cash used in financing activities (107,737) (2,985) (20,404) — (131,126) Net (decrease) increase in cash and cash equivalents from operations (24,951) 1,308 609,260 (322,702) 262,915 Effect of exchange rate changes on cash and cash equivalents 24,999 205,312 (554,644) 322,702 (1,631) Cash and cash equivalents at beginning of period 121 368,151 186,614 — 554,886 Cash and cash equivalents at end of period $ 169 $ 574,771 $ 241,230 $ — $ 816,170 Condensed Consolidating Statement of Cash Flows Year Ended December 31, 2018 (In thousands) Parent Company Guarantor Subsidiaries Non- Guarantor Subsidiaries Eliminations Consolidated Cash flows from operating activities: Net cash provided by (used in) operating activities $ 503,796 $ 1,351,256 $ (476,129) $ (772,376) $ 606,547 Cash flows from investing activities: Capital expenditures — (74,710) (15,092) — (89,802) Return of capital from investees — — 4,088 — 4,088 Payments for acquisitions, net of cash acquired (675) (83,714) — (84,389) Investments in and loans to investees — — (90,081) — (90,081) (Increase) decrease to investment in affiliates (215,862) (2,646,335) 1,813,007 1,049,190 — Net cash (used in) provided by investing activities (215,862) (2,721,720) 1,628,208 1,049,190 (260,184) Cash flows from financing activities: Proceeds from the issuance of long-term debt 289 — — — 289 Deemed repurchases of restricted stock/units (16,836) — — — (16,836) Purchase of treasury stock (283,143) — — — (283,143) Proceeds from stock option exercises 4,317 — — — 4,317 Principal payments on capital lease obligations — (3,000) (1,938) — (4,938) Distributions to noncontrolling interest — — (14,296) — (14,296) Net cash used in financing activities (295,373) (3,000) (16,234) — (314,607) Net increase (decrease) in cash and cash equivalents from operations (7,439) (1,373,464) 1,135,845 276,814 31,756 Effect of exchange rate changes on cash and cash equivalents 7,240 1,350,367 (1,116,446) (276,814) (35,653) Cash and cash equivalents at beginning of period 320 391,248 167,215 — 558,783 Cash and cash equivalents at end of period $ 121 $ 368,151 $ 186,614 $ — $ 554,886 |