UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 4, 2022
Commission File Number: 1-35106
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (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 | ||||||||||||
| The | Stock Market LLC | |||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ¨
Item 2.02 Results of Operations and Financial Condition.
On November 4, 2022 , AMC Networks Inc. (the “Registrant”) issued a press release announcing its financial results for the quarter ended September 30, 2022. A copy of the Registrant’s press release is being furnished herewith as Exhibit 99.1 and is incorporated herein by reference in its entirety.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. The following Exhibit is furnished as part of this Report on Form 8-K:
| Exhibit Number | Item | |||||||
| 99.1 | ||||||||
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: | By: | /s/ Michael J. Sherin III | ||||||||||||
| Michael J. Sherin III | ||||||||||||||
| Executive Vice President and Chief Accounting Officer | ||||||||||||||
AMC NETWORKS INC. REPORTS THIRD QUARTER 2022 RESULTS
New York, NY – November 4, 2022: AMC Networks Inc. ("AMC Networks" or the "Company") (NASDAQ: AMCX) today reported financial results for the third quarter ended September 30, 2022.
Chief Executive Officer Christina Spade said: "Our strong content engagement is driving positive momentum throughout 2022. Our focus to transform to a consumer-focused multi-platform premium content company is taking hold with strong digital distribution growth. We have 11.1 million paid subscribers as of the end of the third quarter, representing 44% growth from the prior year and streaming revenue growth of 41%. Our ability to break through the competition with our highly-engaging content, as we further reconstitute our revenue mix, positions us well for long-term success and value creation."
Operational Highlights:
•Expanding distribution partnership with Roku with the addition of 11 FAST channels programmed by AMC Networks
•Anne Rice’s Interview with the Vampire premiered in October and is the biggest new series in AMC+ history and the #1 new drama on ad-supported cable in 2022; renewed for a second season
•Premiering Anne Rice’s Mayfair Witches, the next series in the Anne Rice Immortal Universe, on AMC+ and AMC on January 8, 2023
•Developing three new series in The Walking Dead Universe:
◦The Walking Dead: Dead City, featuring Maggie and Negan in a post-apocalyptic Manhattan led by Jeffery Dean Morgan and Lauren Cohan
◦Norman Reedus-led, Daryl Dixon series set in Paris
◦The continuing journey of Rick and Michonne, led by Andrew Lincoln and Danai Gurira
•Expanded distribution of the AMC+ premium streaming services in Australia, New Zealand and Spain
Financial Highlights – Third Quarter Ended September 30, 2022:
•Streaming subscribers grew 44% from the prior year to 11.1 million subscribers as of September 30, 2022
•Net revenues decreased 16% from the prior year to $682 million, largely driven by the timing of content licensing revenues, lower affiliate and advertising revenues, and unfavorable foreign currency translation, partly offset by streaming revenue growth of 41%
•Operating income decreased 20% from the prior year to $151 million; Adjusted Operating Income(1) decreased 14% to $194 million, due to lower revenues, partly offset by lower content and marketing investments and strategic cost discipline, with a margin of 28%
•Diluted EPS of $1.94; Adjusted EPS(1) of $2.09
•Net cash provided by operating activities of $19 million; Free Cash Flow(1) of $4 million
| Dollars in thousands, except per share amounts | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
| Net Revenues | $ | 681,843 | $ | 810,766 | (15.9) | % | $ | 2,132,025 | $ | 2,273,899 | (6.2) | % | |||||||||||||||||||||||
| Operating Income | $ | 150,677 | $ | 188,326 | (20.0) | % | $ | 478,557 | $ | 426,290 | 12.3 | % | |||||||||||||||||||||||
| Adjusted Operating Income | $ | 194,305 | $ | 224,691 | (13.5) | % | $ | 601,031 | $ | 713,307 | (15.7) | % | |||||||||||||||||||||||
| Diluted Earnings Per Share | $ | 1.94 | $ | 2.55 | (23.9) | % | $ | 6.23 | $ | 5.39 | 15.6 | % | |||||||||||||||||||||||
| Adjusted Earnings Per Share | $ | 2.09 | $ | 2.68 | (22.0) | % | $ | 6.69 | $ | 9.11 | (26.6) | % | |||||||||||||||||||||||
| Net cash provided by (used in) operating activities | $ | 19,417 | $ | (87,183) | 122.3 | % | $ | 36,591 | $ | 43,984 | (16.8) | % | |||||||||||||||||||||||
| Free Cash Flow | $ | 4,368 | $ | (101,297) | 104.3 | % | $ | (25,151) | $ | (891) | n/m | ||||||||||||||||||||||||
(1) See page 4 of this earnings release for a discussion of non-GAAP financial measures used in this release. This discussion includes the definition of Adjusted Operating Income, Adjusted EPS and Free Cash Flow.
1
Segment Results:
(dollars in thousands)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | Change | 2022 | 2021 | Change | ||||||||||||||||||||||||||||||
| Net Revenues: | |||||||||||||||||||||||||||||||||||
| Domestic Operations | $ | 587,389 | $ | 682,746 | (14.0) | % | $ | 1,814,034 | $ | 1,895,730 | (4.3) | % | |||||||||||||||||||||||
| International and Other | 99,270 | 129,940 | (23.6) | % | 334,892 | 389,384 | (14.0) | % | |||||||||||||||||||||||||||
| Inter-segment Eliminations | (4,816) | (1,920) | (150.8) | % | (16,901) | (11,215) | (50.7) | % | |||||||||||||||||||||||||||
| Total Net Revenues | $ | 681,843 | $ | 810,766 | (15.9) | % | $ | 2,132,025 | $ | 2,273,899 | (6.2) | % | |||||||||||||||||||||||
| Operating Income (Loss): | |||||||||||||||||||||||||||||||||||
| Domestic Operations | $ | 186,609 | $ | 213,299 | (12.5) | % | $ | 573,943 | $ | 517,874 | 10.8 | % | |||||||||||||||||||||||
| International and Other | 8,291 | 15,564 | (46.7) | % | 39,733 | 32,365 | 22.8 | % | |||||||||||||||||||||||||||
| Corporate / Inter-segment Eliminations | (44,223) | (40,537) | (9.1) | % | (135,119) | (123,949) | (9.0) | % | |||||||||||||||||||||||||||
| Total Operating Income | $ | 150,677 | $ | 188,326 | (20.0) | % | $ | 478,557 | $ | 426,290 | 12.3 | % | |||||||||||||||||||||||
| Adjusted Operating Income (Loss): | |||||||||||||||||||||||||||||||||||
| Domestic Operations | $ | 206,701 | $ | 231,076 | (10.5) | % | $ | 635,409 | $ | 723,749 | (12.2) | % | |||||||||||||||||||||||
| International and Other | 13,310 | 22,109 | (39.8) | % | 55,509 | 70,777 | (21.6) | % | |||||||||||||||||||||||||||
| Corporate / Inter-segment Eliminations | (25,706) | (28,494) | 9.8 | % | (89,887) | (81,219) | (10.7) | % | |||||||||||||||||||||||||||
| Total Adjusted Operating Income | $ | 194,305 | $ | 224,691 | (13.5) | % | $ | 601,031 | $ | 713,307 | (15.7) | % | |||||||||||||||||||||||
2
Domestic Operations
Third Quarter Results:
•Domestic Operations' revenues decreased 14% from the prior year to $587 million
◦Distribution and other revenues decreased 16% to $407 million
▪Content licensing revenues decreased 63% to $58 million due to the timing and availability of deliveries in the quarter
▪Subscription revenues grew 8% due to increased streaming revenues primarily driven by streaming subscriber growth and contractual affiliate rate increases, partially offset by declines in the linear subscriber universe
•Streaming revenues increased 41% with quarter end total subscribers of 11.1 million
•Affiliate revenues declined in the mid-single-digits due to basic subscriber declines
◦Advertising revenues decreased 10% to $180 million due to lower linear ratings, softer scatter and direct response markets and fewer original hours in the third quarter, partially offset by digital and advanced advertising revenue growth
•Operating income decreased 13% to $187 million
•Adjusted Operating Income, with a margin of 35%, decreased 11% to $207 million, reflecting revenue performance, partially offset by lower programming and marketing investments for the quarter
International and Other
Third Quarter Results:
•International and Other revenues decreased 24% from the prior year to $99 million; excluding the impact of foreign currency translation, 16% decrease
◦Distribution and other revenues decreased 22% to $82 million, primarily due to the timing of productions at 25/7 Media and unfavorable foreign currency translation at AMCNI; excluding the impact of foreign currency translation, 15% decrease
◦Advertising revenues decreased 31% to $17 million, primarily due to the impact of the planned wind-down of two channels in the U.K., the unfavorable impact of foreign currency translation, and softer ratings in the U.K.; excluding the impact of foreign currency translation, 20% decrease
•Operating income decreased 47% to $8 million
•Adjusted Operating Income decreased 40% to $13 million, reflecting lower revenue and the unfavorable impact of foreign currency translation; excluding the impact of foreign currency translation, 36% decrease
Other Matters
Stock Repurchase Program & Outstanding Shares
As previously disclosed, the Company's Board of Directors has authorized a program to repurchase up to $1.5 billion of the Company’s outstanding shares of common stock. The Stock Repurchase Program has no pre-established closing date and may be suspended or discontinued at any time. During the quarter ended September 30, 2022, the Company did not repurchase any shares. As of September 30, 2022, the Company had $135 million of authorization remaining for repurchase under the Stock Repurchase Program.
As of October 28, 2022, the Company had 31,495,577 shares of Class A Common Stock and 11,484,408 shares of Class B Common Stock outstanding.
Please see the Company’s Form 10-Q for the period ended September 30, 2022, which will be filed later today, for further details regarding the above matters.
3
Description of Non-GAAP Measures
The Company defines Adjusted Operating Income (Loss), which is a non-GAAP financial measure, as operating income (loss) before share-based compensation expense 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. Because it is based upon operating income (loss), Adjusted Operating Income (Loss) also excludes interest expense (including cash interest expense) and other non-operating income and expense items. The Company believes that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the various operating units of the business without regard to the effect of the settlement of an obligation that is not expected to be made in cash.
The Company believes that Adjusted Operating Income (Loss) is an appropriate measure for evaluating the operating performance of the business segments and the Company on a consolidated basis. Adjusted Operating Income (Loss) and similar measures with similar titles are common performance measures used by investors, analysts, and peers to compare performance in the industry.
Internally, the Company uses net revenues and Adjusted Operating Income (Loss) measures as the most important indicators of its business performance and evaluates management’s effectiveness with specific reference to these indicators. Adjusted Operating Income (Loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), and other measures of performance presented in accordance with U.S. generally accepted accounting principles ("GAAP"). Since Adjusted Operating Income (Loss) 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. For a reconciliation of operating income (loss) to Adjusted Operating Income (Loss), please see pages 7-8 of this release.
The Company defines Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by operating activities less capital expenditures and cash distributions to noncontrolling interests, all of which are reported in our Consolidated Statement of Cash Flows. The Company believes the most comparable GAAP financial measure of its liquidity is net cash provided by operating activities. The Company believes that Free Cash Flow is useful as an indicator of its overall liquidity, as the amount of Free Cash Flow generated in any period is representative of cash that is available for debt repayment, investment, and other discretionary and non-discretionary cash uses. The Company also believes that Free Cash Flow is one of several benchmarks used by analysts and investors who follow the industry for comparison of its liquidity with other companies in the industry, although the Company’s measure of Free Cash Flow may not be directly comparable to similar measures reported by other companies. For a reconciliation of net cash provided by operating activities to Free Cash Flow, please see page 9 of this release.
The Company defines Adjusted Earnings per Diluted Share (“Adjusted EPS”), which is a non-GAAP financial measure, as earnings per diluted share excluding the following items: amortization of acquisition-related intangible assets; impairment and other charges (including gains or losses on sales or dispositions of businesses); non-cash impairments of goodwill, intangible and fixed assets; restructuring and other related charges; and gains and losses related to the extinguishment of debt; as well as the impact of taxes on the aforementioned items. The Company believes the most comparable GAAP financial measure is earnings per diluted share. The Company believes that Adjusted EPS is one of several benchmarks used by analysts and investors who follow the industry for comparison of its performance with other companies in the industry, although the Company’s measure of Adjusted EPS may not be directly comparable to similar measures reported by other companies. For a reconciliation of earnings per diluted share to Adjusted EPS, please see pages 10-11 of this release.
4
Forward-Looking Statements
This earnings release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Investors 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 those in the forward-looking statements as a result of various factors, including financial community and rating agency perceptions of the Company and its business, operations, financial condition and the industries in which it operates and the factors described in the Company’s filings with the Securities and Exchange Commission, including the sections entitled "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" contained therein. The Company disclaims any obligation to update any forward-looking statements contained herein.
Conference Call Information
AMC Networks will host a conference call today at 8:30 a.m. ET to discuss its third quarter 2022 results. To listen to the call, please visit investors.amcnetworks.com.
About AMC Networks Inc.
AMC Networks (Nasdaq: AMCX) is a global entertainment company known for its popular and critically acclaimed content. Its brands include targeted streaming services AMC+, Acorn TV, Shudder, Sundance Now, ALLBLK and the anime-focused HIDIVE streaming service, in addition to AMC, BBC AMERICA (operated through a joint venture with BBC Studios), IFC, SundanceTV, WE tv, IFC Films and RLJE Films. AMC Studios, the Company’s in-house studio, production and distribution operation, is behind some of the biggest titles and brands known to a global audience, including The Walking Dead, the Anne Rice catalog and the Agatha Christie library. The Company also operates AMC Networks International, its international programming business, and 25/7 Media, its production services business.
Contacts
| Investor Relations | Corporate Communications | |||||||
| Nicholas Seibert (646) 740-5749 | Georgia Juvelis (917) 542-6390 | |||||||
| nicholas.seibert@amcnetworks.com | georgia.juvelis@amcnetworks.com | |||||||
5
AMC NETWORKS INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenues, net | $ | 681,843 | $ | 810,766 | $ | 2,132,025 | $ | 2,273,899 | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
Technical and operating (excluding depreciation and amortization) | 293,459 | 378,264 | 903,468 | 997,677 | |||||||||||||||||||
Selling, general and administrative | 207,972 | 220,011 | 670,444 | 610,164 | |||||||||||||||||||
| Depreciation and amortization | 29,735 | 23,411 | 79,556 | 71,261 | |||||||||||||||||||
| Impairment and other charges | — | — | — | 158,973 | |||||||||||||||||||
| Restructuring and other related charges | — | 754 | — | 9,534 | |||||||||||||||||||
| Total operating expenses | 531,166 | 622,440 | 1,653,468 | 1,847,609 | |||||||||||||||||||
| Operating income | 150,677 | 188,326 | 478,557 | 426,290 | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense | (34,308) | (31,413) | (97,085) | (97,674) | |||||||||||||||||||
| Interest income | 3,625 | 2,264 | 8,552 | 7,614 | |||||||||||||||||||
| Loss on extinguishment of debt | — | — | — | (22,074) | |||||||||||||||||||
| Miscellaneous, net | (1,546) | 54 | 3,540 | 19,634 | |||||||||||||||||||
| Total other expense | (32,229) | (29,095) | (84,993) | (92,500) | |||||||||||||||||||
| Income from operations before income taxes | 118,448 | 159,231 | 393,564 | 333,790 | |||||||||||||||||||
| Income tax expense | (28,456) | (40,744) | (103,118) | (77,980) | |||||||||||||||||||
| Net income including noncontrolling interests | 89,992 | 118,487 | 290,446 | 255,810 | |||||||||||||||||||
| Net income attributable to noncontrolling interests | (5,326) | (7,836) | (18,163) | (22,253) | |||||||||||||||||||
| Net income attributable to AMC Networks’ stockholders | $ | 84,666 | $ | 110,651 | $ | 272,283 | $ | 233,557 | |||||||||||||||
Net income per share attributable to AMC Networks’ stockholders: | |||||||||||||||||||||||
| Basic | $ | 1.96 | $ | 2.60 | $ | 6.32 | $ | 5.52 | |||||||||||||||
| Diluted | $ | 1.94 | $ | 2.55 | $ | 6.23 | $ | 5.39 | |||||||||||||||
| Weighted average common shares: | |||||||||||||||||||||||
| Basic | 43,238 | 42,506 | 43,070 | 42,308 | |||||||||||||||||||
| Diluted | 43,732 | 43,440 | 43,707 | 43,332 | |||||||||||||||||||
6
AMC NETWORKS INC.
SUPPLEMENTAL FINANCIAL DATA
(Dollars in thousands)
(Unaudited)
| Three Months Ended September 30, 2022 | |||||||||||||||||||||||
| Domestic Operations | International and Other | Corporate / Inter-segment Eliminations | Consolidated | ||||||||||||||||||||
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 | |||||||||||||||||||
| Restructuring and other related charges | — | — | — | — | |||||||||||||||||||
| Impairment and other charges | — | — | — | — | |||||||||||||||||||
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 | |||||||||||||||
| Three Months Ended September 30, 2021 | |||||||||||||||||||||||
| 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 | |||||||||||||||||||
| Impairment and other charges | — | — | — | — | |||||||||||||||||||
| 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 | |||||||||||||||
7
AMC NETWORKS INC.
SUPPLEMENTAL FINANCIAL DATA
(Dollars in thousands)
(Unaudited)
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||
| 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 | |||||||||||||||||||
| Restructuring and other related charges | — | — | — | — | |||||||||||||||||||
| Impairment and other charges | — | — | — | — | |||||||||||||||||||
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 | |||||||||||||||||||||||
| 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 | |||||||||||||||
8
AMC NETWORKS INC.
SUPPLEMENTAL FINANCIAL DATA
(Dollars in thousands, except per share amounts)
(Unaudited)
| Capitalization | September 30, 2022 | |||||||
Cash and cash equivalents | $ | 790,930 | ||||||
Credit facility debt (a) | $ | 649,688 | ||||||
Senior notes (a) | 2,200,000 | |||||||
| Total debt | $ | 2,849,688 | ||||||
Net debt | $ | 2,058,758 | ||||||
| Finance leases | 23,807 | |||||||
| Net debt and finance leases | $ | 2,082,565 | ||||||
| Twelve Months Ended September 30, 2022 | ||||||||
| Operating Income (GAAP) | $ | 542,189 | ||||||
| Share-based compensation expense | 32,624 | |||||||
| Depreciation and amortization | 102,176 | |||||||
| Impairment and other charges | 637 | |||||||
| Restructuring and other related charges | 844 | |||||||
| Cloud computing amortization | 6,227 | |||||||
| Majority owned equity investees | 19,097 | |||||||
| Adjusted Operating Income (Non-GAAP) | $ | 703,794 | ||||||
Leverage ratio (b) | 3.0 | x | ||||||
(a)Represents the aggregate principal amount of the debt.
(b)Represents net debt and finance leases divided by Adjusted Operating Income for the twelve months ended September 30, 2022. This ratio differs from the calculation contained in the Company's credit facility. No adjustments have been made for consolidated entities that are not 100% owned.
| Free Cash Flow | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net cash provided by operating activities | $ | 19,417 | $ | (87,183) | $ | 36,591 | $ | 43,984 | |||||||||||||||
Less: capital expenditures | (11,956) | (11,120) | (33,510) | (29,969) | |||||||||||||||||||
Less: distributions to noncontrolling interests | (3,093) | (2,994) | (28,232) | (14,906) | |||||||||||||||||||
Free cash flow | $ | 4,368 | $ | (101,297) | $ | (25,151) | $ | (891) | |||||||||||||||
9
AMC NETWORKS INC.
SUPPLEMENTAL FINANCIAL DATA
(Dollars in thousands, except per share amounts)
(Unaudited)
| Adjusted Diluted Earnings Per Share | |||||||||||||||||||||||||||||
| Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
| Income from operations before income taxes | Income tax expense | Net income attributable to noncontrolling interests | Net income attributable to AMC Networks' stockholders | Diluted EPS attributable to AMC Networks' stockholders | |||||||||||||||||||||||||
Reported Results (GAAP) | $ | 118,448 | $ | (28,456) | $ | (5,326) | $ | 84,666 | $ | 1.94 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 10,235 | (2,016) | (1,680) | 6,539 | 0.15 | ||||||||||||||||||||||||
| Impairment and other charges | — | — | — | — | — | ||||||||||||||||||||||||
| Restructuring and other related charges | — | — | — | — | — | ||||||||||||||||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | ||||||||||||||||||||||||
| Adjusted Results (Non-GAAP) | $ | 128,683 | $ | (30,472) | $ | (7,006) | $ | 91,205 | $ | 2.09 | |||||||||||||||||||
| Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||
| Income from operations before income taxes | Income tax expense | Net income attributable to noncontrolling interests | Net income attributable to AMC Networks' stockholders | Diluted EPS attributable to AMC Networks' stockholders | |||||||||||||||||||||||||
Reported Results (GAAP) | $ | 159,231 | $ | (40,744) | $ | (7,836) | $ | 110,651 | $ | 2.55 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 10,214 | (1,691) | (2,951) | 5,572 | 0.12 | ||||||||||||||||||||||||
| Impairment and other charges | — | — | — | — | — | ||||||||||||||||||||||||
| Restructuring and other related charges | 754 | (387) | 25 | 392 | 0.01 | ||||||||||||||||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | ||||||||||||||||||||||||
| Adjusted Results (Non-GAAP) | $ | 170,199 | $ | (42,822) | $ | (10,762) | $ | 116,615 | $ | 2.68 | |||||||||||||||||||
10
AMC NETWORKS INC.
SUPPLEMENTAL FINANCIAL DATA
(Dollars in thousands, except per share amounts)
(Unaudited)
| Adjusted Diluted Earnings Per Share | |||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
| Income from operations before income taxes | Income tax expense | Net income attributable to noncontrolling interests | Net income attributable to AMC Networks' stockholders | Diluted EPS attributable to AMC Networks' stockholders | |||||||||||||||||||||||||
Reported Results (GAAP) | $ | 393,564 | $ | (103,118) | $ | (18,163) | $ | 272,283 | $ | 6.23 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 31,195 | (6,162) | (5,040) | 19,993 | 0.46 | ||||||||||||||||||||||||
| Impairment and other charges | — | — | — | — | — | ||||||||||||||||||||||||
| Restructuring and other related charges | — | — | — | — | — | ||||||||||||||||||||||||
| Loss on extinguishment of debt | — | — | — | — | — | ||||||||||||||||||||||||
| Adjusted Results (Non-GAAP) | $ | 424,759 | $ | (109,280) | $ | (23,203) | $ | 292,276 | $ | 6.69 | |||||||||||||||||||
| Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||
| Income from operations before income taxes | Income tax expense | Net income attributable to noncontrolling interests | Net income attributable to AMC Networks' stockholders | Diluted EPS attributable to AMC Networks' stockholders | |||||||||||||||||||||||||
Reported Results (GAAP) | $ | 333,790 | $ | (77,980) | $ | (22,253) | $ | 233,557 | $ | 5.39 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets | 29,077 | (4,661) | (8,928) | 15,488 | 0.35 | ||||||||||||||||||||||||
| Impairment and other charges | 158,973 | (38,078) | — | 120,895 | 2.79 | ||||||||||||||||||||||||
| Restructuring and other related charges | 9,534 | (1,419) | 12 | 8,127 | 0.19 | ||||||||||||||||||||||||
| Loss on extinguishment of debt | 22,074 | (5,257) | — | 16,817 | 0.39 | ||||||||||||||||||||||||
| Adjusted Results (Non-GAAP) | $ | 553,448 | $ | (127,395) | $ | (31,169) | $ | 394,884 | $ | 9.11 | |||||||||||||||||||
11