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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
 
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 2019
or
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from   to
Commission File Number: 1-35106
 
AMC Networks Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
27-5403694
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
 
 
11 Penn Plaza,
 
New York,
NY
10001
(Address of principal executive offices)
(Zip Code)
(212) 324-8500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share
AMCX
The
NASDAQ
Stock Market LLC
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company (as defined in Exchange Act Rule 12b-2).
Large accelerated filer
þ
Accelerated filer
¨
 
 
 
 
Non-accelerated filer
¨
Smaller reporting company
 
 
 
 
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  þ
The number of shares of common stock outstanding as of July 26, 2019:
Class A Common Stock par value $0.01 per share
44,159,318
Class B Common Stock par value $0.01 per share
11,484,408




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




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

 
June 30, 2019
 
December 31, 2018
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
706,342

 
$
554,886

Accounts receivable, trade (less allowance for doubtful accounts of $9,029 and $10,788)
838,287

 
835,977

Current portion of program rights, net
433,769

 
440,739

Prepaid expenses and other current assets
166,181

 
131,809

Total current assets
2,144,579

 
1,963,411

Property and equipment, net of accumulated depreciation of $321,719 and $293,918
264,616

 
246,262

Program rights, net
1,114,038

 
1,214,051

Deferred carriage fees, net
23,320

 
16,831

Intangible assets, net
557,371

 
578,907

Goodwill
792,083

 
798,037

Deferred tax asset, net
48,998

 
19,272

Operating lease right-of-use asset
175,677

 

Other assets
441,052

 
441,792

Total assets
$
5,561,734

 
$
5,278,563

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Current Liabilities:
 
 
 
Accounts payable
$
105,353

 
$
107,066

Accrued liabilities
231,859

 
264,918

Current portion of program rights obligations
345,799

 
343,589

Deferred revenue
56,577

 
55,424

Current portion of long-term debt
37,500

 
21,334

Current portion of lease obligations
31,445

 
5,090

Total current liabilities
808,533

 
797,421

Program rights obligations
289,728

 
373,249

Long-term debt
3,073,419

 
3,088,221

Lease obligations
223,335

 
21,427

Deferred tax liability, net
135,001

 
145,443

Other liabilities
160,417

 
208,036

Total liabilities
4,690,433

 
4,633,797

Commitments and contingencies


 


Redeemable noncontrolling interests
302,788

 
299,558

Stockholders' equity:
 
 
 
Class A Common Stock, $0.01 par value, 360,000 shares authorized, 63,851 and 63,255 shares issued and 44,275 and 44,749 shares outstanding, respectively
639

 
633

Class B Common Stock, $0.01 par value, 90,000 shares authorized, 11,484 shares issued and outstanding
115

 
115

Preferred stock, $0.01 par value, 45,000 shares authorized; none issued

 

Paid-in capital
258,150

 
239,767

Accumulated earnings
1,501,082

 
1,228,942

Treasury stock, at cost (19,577 and 18,507 shares Class A Common Stock, respectively)
(1,051,022
)
 
(992,583
)
Accumulated other comprehensive loss
(167,144
)
 
(160,194
)
Total AMC Networks stockholders' equity
541,820

 
316,680

Non-redeemable noncontrolling interests
26,693

 
28,528

Total stockholders' equity
568,513

 
345,208

Total liabilities and stockholders' equity
$
5,561,734

 
$
5,278,563

See accompanying notes to condensed consolidated financial statements.

1


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

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Revenues, net
$
772,299

 
$
761,385

 
$
1,556,520

 
$
1,502,208

Operating expenses:
 
 
 
 
 
 
 
Technical and operating (excluding depreciation and amortization)
385,623

 
376,809

 
725,771

 
697,174

Selling, general and administrative
173,364

 
171,376

 
345,876

 
337,825

Depreciation and amortization
25,893

 
21,669

 
49,949

 
42,023

Restructuring and other related charges
17,162

 

 
19,804

 

Total operating expenses
602,042

 
569,854

 
1,141,400

 
1,077,022

Operating income
170,257

 
191,531

 
415,120

 
425,186

Other income (expense):
 
 
 
 
 
 
 
Interest expense
(39,716
)
 
(39,265
)
 
(79,361
)
 
(77,470
)
Interest income
4,745

 
5,332

 
8,945

 
10,351

Miscellaneous, net
(2,697
)
 
(14,719
)
 
(15,482
)
 
2,227

Total other income (expense)
(37,668
)
 
(48,652
)
 
(85,898
)
 
(64,892
)
Income from operations before income taxes
132,589

 
142,879

 
329,222

 
360,294

Income tax benefit (expense)
1,396

 
(32,547
)
 
(45,080
)
 
(89,426
)
Net income including noncontrolling interests
133,985

 
110,332

 
284,142

 
270,868

Net income attributable to noncontrolling interests
(5,242
)
 
(4,151
)
 
(12,002
)
 
(7,817
)
Net income attributable to AMC Networks' stockholders
$
128,743

 
$
106,181

 
$
272,140

 
$
263,051

 
 
 
 
 
 
 
 
Net income per share attributable to AMC Networks' stockholders:
Basic
$
2.28

 
$
1.84

 
$
4.81

 
$
4.43

Diluted
$
2.25

 
$
1.82

 
$
4.73

 
$
4.38

 
 
 
 
 
 
 
 
Weighted average common shares:
 
 
 
 
 
 
 
Basic
56,590

 
57,758

 
56,589

 
59,354

Diluted
57,335

 
58,387

 
57,529

 
60,044

See accompanying notes to condensed consolidated financial statements.

2


AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Net income including noncontrolling interests
$
133,985

 
$
110,332

 
$
284,142

 
$
270,868

Other comprehensive income (loss):
 
 
 
 
 
 
 
Foreign currency translation adjustment
553

 
(45,759
)
 
(5,210
)
 
(26,955
)
Unrealized loss on interest rate swaps
(1,625
)
 

 
(2,263
)
 

Other comprehensive loss, before income taxes
(1,072
)
 
(45,759
)
 
(7,473
)
 
(26,955
)
Income tax expense
374

 

 
523

 

Other comprehensive loss, net of income taxes
(698
)
 
(45,759
)
 
(6,950
)
 
(26,955
)
Comprehensive income
133,287

 
64,573

 
277,192

 
243,913

Comprehensive income attributable to noncontrolling interests
(5,033
)
 
(2,173
)
 
(11,831
)
 
(6,736
)
Comprehensive income attributable to AMC Networks' stockholders
$
128,254

 
$
62,400

 
$
265,361

 
$
237,177

See accompanying notes to condensed consolidated financial statements.

3


AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)
(unaudited)
 
Class A
Common
Stock
 
Class B
Common
Stock
 
Paid-in
Capital
 
Accumulated Earnings
 
Treasury
Stock
 
Accumulated
Other
Comprehensive
Loss
 
AMC Networks Stockholders’
Equity
 
Noncontrolling Interests
 
Total Stockholders' Equity
Balance, March 31, 2019
$
634

 
$
115

 
$
242,322

 
$
1,372,339

 
$
(993,574
)
 
$
(166,446
)
 
$
455,390

 
$
29,147

 
$
484,537

Net income attributable to AMC Networks’ stockholders

 

 

 
128,743

 

 

 
128,743

 

 
128,743

Net income attributable to non-redeemable noncontrolling interests

 

 

 

 

 

 

 
128

 
128

Distributions to noncontrolling member

 

 

 

 

 

 

 
(2,374
)
 
(2,374
)
Treasury stock not yet settled

 

 
(832
)
 

 

 

 
(832
)
 

 
(832
)
Other comprehensive income

 

 

 

 

 
(698
)
 
(698
)
 
(208
)
 
(906
)
Share-based compensation expense

 

 
16,725

 

 

 

 
16,725

 

 
16,725

Proceeds from the exercise of stock options

 

 

 

 

 

 

 

 

Treasury stock acquired

 

 

 

 
(57,448
)
 

 
(57,448
)
 

 
(57,448
)
Restricted stock units converted to shares
5

 

 
(65
)
 

 

 

 
(60
)
 

 
(60
)
Balance, June 30, 2019
$
639

 
$
115

 
$
258,150

 
$
1,501,082

 
$
(1,051,022
)
 
$
(167,144
)
 
$
541,820

 
$
26,693

 
$
568,513

 
Class A
Common
Stock
 
Class B
Common
Stock
 
Paid-in
Capital
 
Accumulated Earnings
 
Treasury
Stock
 
Accumulated
Other
Comprehensive
Loss
 
AMC Networks Stockholders’
Equity
 
Noncontrolling Interests
 
Total Stockholders' Equity
Balance, December 31, 2018
$
633

 
$
115

 
$
239,767

 
$
1,228,942

 
$
(992,583
)
 
$
(160,194
)
 
$
316,680

 
$
28,528

 
$
345,208

Net income attributable to AMC Networks’ stockholders

 

 

 
272,140

 

 

 
272,140

 

 
272,140

Net income attributable to non-redeemable noncontrolling interests

 

 

 

 

 

 

 
1,070

 
1,070

Distributions to noncontrolling member

 

 

 

 

 

 

 
(2,735
)
 
(2,735
)
Treasury stock not yet settled

 

 
(832
)
 

 

 

 
(832
)
 

 
(832
)
Other comprehensive income

 

 

 

 

 
(6,950
)
 
(6,950
)
 
(170
)
 
(7,120
)
Share-based compensation expense

 

 
36,624

 

 

 

 
36,624

 

 
36,624

Proceeds from the exercise of stock options

 

 
4,630

 

 

 

 
4,630

 

 
4,630

Treasury stock acquired

 

 
986

 

 
(58,439
)
 

 
(57,453
)
 

 
(57,453
)
Restricted stock units converted to shares
6

 

 
(23,025
)
 

 

 

 
(23,019
)
 

 
(23,019
)
Balance, June 30, 2019
$
639

 
$
115

 
$
258,150

 
$
1,501,082

 
$
(1,051,022
)
 
$
(167,144
)
 
$
541,820

 
$
26,693

 
$
568,513







See accompanying notes to consolidated financial statements.


4


AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands)
(unaudited)
 
Class A
Common
Stock
 
Class B
Common
Stock
 
Paid-in
Capital
 
Accumulated Earnings
 
Treasury
Stock
 
Accumulated
Other
Comprehensive
Loss
 
AMC Networks Stockholders’
Equity
 
Noncontrolling Interests
 
Total Stockholders' Equity
Balance, March 31, 2018
$
631

 
$
115

 
$
182,278

 
$
936,379

 
$
(793,078
)
 
$
(95,582
)
 
$
230,743

 
$
30,367

 
$
261,110

Net income attributable to AMC Networks’ stockholders

 

 

 
106,181

 

 

 
106,181

 

 
106,181

Net income attributable to non-redeemable noncontrolling interests

 

 

 

 

 

 

 
1,132

 
1,132

Cumulative effects of adoption of accounting standards

 

 

 
3,246

 

 
(3,411
)
 
(165
)
 

 
(165
)
Treasury stock not yet settled

 

 
9,980

 

 

 

 
9,980

 

 
9,980

Settlement of treasury stock

 

 
1

 

 

 

 
1

 

 
1

Other comprehensive income

 

 

 

 

 
(45,759
)
 
(45,759
)
 
(1,978
)
 
(47,737
)
Proceeds from the exercise of stock options

 

 
4,317

 

 

 

 
4,317

 

 
4,317

Share-based compensation expense

 

 
19,753

 

 

 

 
19,753

 

 
19,753

Treasury stock acquired

 

 

 

 
(158,772
)
 

 
(158,772
)
 

 
(158,772
)
Restricted stock units converted to shares
1

 

 
(381
)
 

 

 

 
(380
)
 

 
(380
)
Balance, June 30, 2018
$
632

 
$
115

 
$
215,948

 
$
1,045,806

 
$
(951,850
)
 
$
(144,752
)
 
$
165,899

 
$
29,521

 
$
195,420


 
Class A
Common
Stock
 
Class B
Common
Stock
 
Paid-in
Capital
 
Accumulated Earnings
 
Treasury
Stock
 
Accumulated
Other
Comprehensive
Loss
 
AMC Networks Stockholders’
Equity
 
Noncontrolling Interests
 
Total Stockholders' Equity
Balance, December 31, 2017
$
627

 
$
115

 
$
191,303

 
$
766,725

 
$
(709,440
)
 
$
(114,386
)
 
$
134,944

 
$
29,001

 
$
163,945

Net income attributable to AMC Networks’ stockholders

 

 

 
263,051

 

 

 
263,051

 

 
263,051

Net income attributable to non-redeemable noncontrolling interests

 

 

 

 

 

 

 
1,601

 
1,601

Distributions to noncontrolling member

 

 

 

 

 

 

 

 

Cumulative effects of adoption of accounting standards

 

 

 
16,030

 

 
(3,411
)
 
12,619

 

 
12,619

Treasury stock not yet settled

 

 

 

 

 

 

 

 

Settlement of treasury stock

 

 
996

 

 

 

 
996

 

 
996

Other comprehensive income

 

 

 

 

 
(26,955
)
 
(26,955
)
 
(1,081
)
 
(28,036
)
Proceeds from the exercise of stock options

 

 
4,317

 

 

 

 
4,317

 

 
4,317

Share-based compensation expense

 

 
35,072

 

 

 

 
35,072

 

 
35,072

Treasury stock acquired

 

 

 

 
(242,410
)
 

 
(242,410
)
 

 
(242,410
)
Restricted stock units converted to shares
5

 

 
(15,740
)
 

 

 

 
(15,735
)
 

 
(15,735
)
Balance, June 30, 2018
$
632

 
$
115

 
$
215,948

 
$
1,045,806

 
$
(951,850
)
 
$
(144,752
)
 
$
165,899

 
$
29,521

 
$
195,420



See accompanying notes to consolidated financial statements.

5


AMC NETWORKS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 
Six Months Ended June 30,
 
2019
 
2018
Cash flows from operating activities:
 
 
 
Net income including noncontrolling interests
$
284,142

 
$
270,868

Adjustments to reconcile net income to net cash from operating activities:
 
 
 
Depreciation and amortization
49,949

 
42,023

Share-based compensation expense related to equity classified awards
36,624

 
35,072

Non-cash restructuring and other related charges
14,026

 

Amortization and write-off of program rights
468,987

 
468,957

Amortization of deferred carriage fees
7,761

 
8,803

Unrealized foreign currency transaction gain
(647
)
 
(1,866
)
Unrealized gain on derivative contracts, net

 
(17,322
)
Amortization of deferred financing costs and discounts on indebtedness
3,947

 
3,800

Bad debt expense
2,937

 
1,924

Deferred income taxes
(40,065
)
 
29,290

Write-down of non-marketable equity securities and note receivable
17,741

 

Other, net
(2,057
)
 
6,944

Changes in assets and liabilities:
 
 
 
Accounts receivable, trade (including amounts due from related parties, net)
(9,011
)
 
(40,419
)
Prepaid expenses and other assets
(40,017
)
 
(12,377
)
Program rights and obligations, net
(443,519
)
 
(471,385
)
Income taxes payable
8,948

 
(1,829
)
Deferred revenue
1,107

 
4,392

Deferred carriage fees, net
(13,597
)
 
(2,448
)
Accounts payable, accrued liabilities and other liabilities
(58,319
)
 
(45,850
)
Net cash provided by operating activities
288,937

 
278,577

Cash flows from investing activities:
 
 
 
Capital expenditures
(49,463
)
 
(37,402
)
Return of capital from investees
5,908

 
347

Investment in and loans to investees

 
(87,488
)
Payments for acquisition of a business, net of cash acquired

 
(34,879
)
Net cash used in investing activities
(43,555
)
 
(159,422
)
Cash flows from financing activities:
 
 
 
Principal payments on long-term debt
(2,717
)
 

Deemed repurchases of restricted stock units
(23,019
)
 
(15,734
)
Purchase of treasury stock
(58,440
)
 
(242,409
)
Proceeds from stock option exercises
4,630

 
4,317

Principal payments on finance lease obligations
(2,590
)
 
(2,625
)
Distributions to noncontrolling interests
(10,129
)
 
(6,967
)
Net cash used in financing activities
(92,265
)
 
(263,418
)
Net increase (decrease) in cash and cash equivalents from operations
153,117

 
(144,263
)
Effect of exchange rate changes on cash and cash equivalents
(1,661
)
 
1,604

Cash and cash equivalents at beginning of period
554,886

 
558,783

Cash and cash equivalents at end of period
$
706,342

 
$
416,124


See accompanying notes to condensed consolidated financial statements.

6

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


Note 1. Description of Business and Basis of Presentation
Description of Business
AMC Networks Inc. ("AMC Networks") and its subsidiaries (collectively referred to as the "Company") own and operate entertainment businesses and assets. The Company is comprised of two operating segments:
National Networks: Includes activities of our five national programming networks, AMC Studios operations and AMC Broadcasting & Technology. Our national programming networks are AMC, WE tv, BBC AMERICA, IFC and SundanceTV in the United States ("U.S."); and AMC and IFC in Canada. Our AMC Studios operations produces original programming for our programming networks and also licenses such program rights worldwide. AMC Networks Broadcasting & Technology is our technical services business, which primarily services most of the national programming networks.
International and Other: Principally includes AMC Networks International (AMCNI), the Company's international programming businesses consisting of a portfolio of channels around the world; IFC Films, the Company's independent film distribution business; Levity Entertainment Group LLC ("Levity"), acquired April 20, 2018, our production services and comedy venues company; RLJ Entertainment Inc. ("RLJE"), acquired October 1, 2018, a content distribution company that also includes the subscription streaming services Acorn TV and Urban Movie Channel ("UMC") and our subscription streaming services, Sundance Now and Shudder.
Basis of Presentation
Principles of Consolidation
The consolidated financial statements include the accounts of AMC Networks and its subsidiaries in which a controlling voting interest is maintained or variable interest entities ("VIEs") in which the Company has determined it is the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation.
Investments in business entities in which the Company lacks control but does have the ability to exercise significant influence over operating and financial policies are accounted for using the equity method of accounting.
Unaudited Interim Financial Statements
These condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission ("SEC"), and should be read in conjunction with the Company's consolidated financial statements and notes thereto for the year ended December 31, 2018 contained in the Company's Annual Report on Form 10-K ("2018 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, 2019.
Revision to Previously Issued Financial Statements
We have revised the condensed consolidated financial statements included herein to correct an error related to the foreign currency translation amounts reported in the condensed consolidated statement of comprehensive income for the three and six months ended June 30, 2018. The revision resulted in a decrease of $53.2 million to each of the following line items in the condensed consolidated statement of comprehensive income: (i) foreign currency translation adjustment, (ii) other comprehensive income (loss) and (iii) comprehensive income attributable to AMC Networks’ stockholders, for both the three and six months ended June 30, 2018. In accordance with accounting guidance in ASC Topic 250-10, Accounting Changes and Error Corrections (SEC Staff Accounting Bulletin Topic 1M), we assessed the materiality of the errors from quantitative and qualitative perspectives and concluded that the errors were not material to our previously issued financial statements. Consequently, we are correcting these errors in this report.
Program Rights
The Company periodically reviews the programming usefulness of its licensed and owned original program rights based on a series of factors, including expected future revenue generation from airings on the Company's networks and other exploitation opportunities, ratings, type and quality of program material, standards and practices, and fitness for exhibition through various forms of distribution. If it is determined that film or other program rights have limited, or no, future programming usefulness, a write-off of the unamortized cost is included in technical and operating expense. Program rights write-offs, included in technical

7

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

and operating expense, were $10.3 million and $3.9 million for the three months ended June 30, 2019 and June 30, 2018, respectively. Program rights write-offs, included in technical and operating expense, were $13.6 million and $9.2 million for the six months ended June 30, 2019 and June 30, 2018, respectively. Program write-offs, included in Restructuring and other related charges, were $13.0 million for the three and six months ended June 30, 2019 (see Note 4).
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements; and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates. Significant estimates and judgments inherent in the preparation of the consolidated financial statements include the useful lives and methodologies used to amortize and assess recoverability of program rights, the estimated useful lives of intangible assets and the valuation and recoverability of goodwill and intangible assets.
Adoption of New Lease Standard
The Company adopted ASU No. 2016-02, Leases (Topic 842) on January 1, 2019, using the modified retrospective approach and effective date method. In addition, the Company elected the package of practical expedients, permitted under the transition guidance within the new standard, which among other things, allowed for the carry forward of the historical classification of leases. The adoption of the new standard resulted in additional net lease assets of $180.0 million (which is net of the historical deferred rent liability balance of $57.0 million) and lease liabilities of $237.0 million, respectively, as of January 1, 2019. The new standard did not materially impact our consolidated net income or cash flows. See Note 10 for further discussion regarding leases.
Recently Issued Accounting Pronouncements
In August 2018, the Financial Accounting Standards Board ("FASB") issued ASU No. 2018-13, Fair Value Measurement (Topic 820). ASU 2018-13 changes the disclosure requirements for fair value measurements and is effective for the first quarter of 2020, with early adoption permitted. ASU 2018-13 changes disclosure requirements related to transfers between Level I and II assets, as well as several aspects surrounding the valuation process and unrealized gains and losses related to Level III assets. The Company is currently evaluating the impact the adoption of the modified disclosure requirements will have on its consolidated financial statements.
In March 2019, the FASB issued ASU No. 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials. ASU 2019-02 aligns the accounting for production costs of episodic television series with the accounting for production costs of films. It also requires an entity to test a film or license agreement within the scope of Subtopic 920-350 for impairment at the film group level, when the film or license agreement is predominantly monetized with other films and/or license agreements. The changes in this standard are effective for the first quarter of 2020, with early adoption permitted. The Company is currently evaluating the impact the adoption of the prospective disclosure requirements will have on its consolidated financial statements.
Note 2. Revenue Recognition
Transaction Price Allocated to Future Performance Obligations
As of June 30, 2019, other than contracts for which the Company has applied the practical expedients, the aggregate amount of transaction price allocated to remaining performance obligations was not material to our consolidated revenues.
Contract Balances from Contracts with Customers
The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers.
(In thousands)
 
June 30, 2019
 
December 31, 2018
Balances from contracts with customers:
 
 
 
 
     Accounts receivable (including long-term, included in Other assets)
 
$
1,042,312

 
$
1,018,105

     Contract assets, short-term (included in Other current assets)
 
15,767

 
9,131

     Contract assets, long-term (included in Other assets)
 
8,696

 
8,136

     Contract liabilities (Deferred revenue)
 
56,577

 
55,424


Revenue recognized for the six months ended June 30, 2019 relating to the contract liability at December 31, 2018 was $9.2 million.

8

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

Note 3. Net Income per Share
The following is a reconciliation between basic and diluted weighted average shares outstanding:
(In thousands)
Three Months Ended June 30,
 
Six Months Ended June 30,
2019
 
2018
 
2019
 
2018
Basic weighted average common shares outstanding
56,590

 
57,758

 
56,589

 
59,354

Effect of dilution:
 
 
 
 
 
 
 
Stock options
15

 
5

 
24

 
3

Restricted stock units
730

 
624

 
916

 
687

Diluted weighted average common shares outstanding
57,335

 
58,387

 
57,529

 
60,044


Approximately 1.5 million restricted stock units outstanding as of June 30, 2019 and June 30, 2018, have been excluded from diluted weighted average common shares outstanding since a performance condition for these awards was not met in each of the respective periods. As of June 30, 2019, there were 0.3 million restricted stock units that would have been anti-dilutive to the diluted weighted average common shares outstanding.
Stock Repurchase Program
The Company's Board of Directors has authorized a program to repurchase up to $1.5 billion of its outstanding shares of common stock (the "Stock Repurchase Program"). The Stock Repurchase Program has no pre-established closing date and may be suspended or discontinued at any time. For the six months ended June 30, 2019, the Company repurchased 1.1 million shares of its Class A Common Stock at an average purchase price of approximately $54.61 per share. As of June 30, 2019, the Company has $501.0 million of authorization remaining for repurchase under the Stock Repurchase Program.