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): June 17, 2014
AMC Networks Inc.
(Exact name of registrant as specified in its charter)
Delaware | 1-35106 | 27-5403694 | ||
(State or other jurisdiction of incorporation) | (Commission file number) | (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)
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)) |
Item 8.01 Other Events.
AMC Networks Inc. and collectively with its subsidiaries (the "Company") is furnishing this Current Report on Form 8-K (“Form 8-K”) to provide unaudited supplemental financial information for each of the quarters of 2013, and the years ended December 31, 2013 and 2012, to reflect the results of our operating segment reorganization that became effective in the first quarter of 2014.
The company classifies its operations into two operating segments: National Networks and International and Other. As previously announced, during the three months ended March 31, 2014, following the acquisition of Chellomedia on January 31, 2014, the manner in which the President and Chief Executive Officer, who is the chief operating decision maker, evaluates performance and makes decisions about how to allocate resources changed, resulting in the reorganization of the Company's operating segments. The National Networks operating segment now includes the results of AMC and Sundance Channel in Canada and AMC Networks Broadcasting & Technology, the Company's network technical services business, which primarily services the nationally distributed programming networks of the Company. Previously, the results of these operations were included in the International and Other operating segment.
The reorganization became effective, on a prospective basis, beginning in the first quarter of 2014. The information contained in this Form 8-K is being furnished to assist investors in understanding how the Company's operating segment results would have been presented in previously-filed reports had such results been reported on the basis of the Company's operating segments commencing in the first quarter of 2014. Only financial information affected by the operating segment reorganization is included in this Current Report on Form 8-K. The revised supplemental financial information does not represent a revision or restatement of previously-issued financial statements. A copy of the revised supplemental information is attached hereto as Exhibit 99.1.
The information furnished pursuant to this Item 8.01, 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 | Unaudited Supplemental Financial Information of AMC Networks Inc. and subsidiaries for each of the four quarters of 2013 and the years ended December 31, 2013 and 2012. | |
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: | June 17, 2014 | By: | /s/ Sean S. Sullivan | |
Sean S. Sullivan | ||||
Executive Vice President and Chief Financial Officer | ||||
Exhibit 99.1
Unaudited Supplemental Financial Information
The following tables summarize the unaudited supplemental financial information of AMC Networks Inc. and subsidiaries (the "Company") for each of the quarters of 2013, and the years ended December 31, 2013 and 2012, to reflect the results of its operating segment reorganization that became effective in the first quarter of 2014. All dollar amounts are in thousands.
Revenues, net:
For the three months ended, | |||||||||||||||||||||||
2012 | March 31, 2013 | June 30, 2013 | September 30, 2013 | December 31, 2013 | 2013 | ||||||||||||||||||
National Networks | $ | 1,297,151 | $ | 371,670 | $ | 365,995 | $ | 381,147 | $ | 417,475 | $ | 1,536,287 | |||||||||||
International and Other | 57,612 | 10,422 | 13,389 | 14,183 | 17,893 | 55,887 | |||||||||||||||||
Inter-segment eliminations | (2,186 | ) | (131 | ) | (62 | ) | (2 | ) | (121 | ) | (316 | ) | |||||||||||
Total | $ | 1,352,577 | $ | 381,961 | $ | 379,322 | $ | 395,328 | $ | 435,247 | $ | 1,591,858 | |||||||||||
Technical and operating expense (excluding depreciation and amortization):
For the three months ended, | |||||||||||||||||||||||
2012 | March 31, 2013 | June 30, 2013 | September 30, 2013 | December 31, 2013 | 2013 | ||||||||||||||||||
National Networks | $ | 466,735 | $ | 123,947 | $ | 123,071 | $ | 143,117 | $ | 218,521 | $ | 608,656 | |||||||||||
International and Other | 46,748 | 13,824 | 15,720 | 14,989 | 13,249 | 57,782 | |||||||||||||||||
Inter-segment eliminations | (6,047 | ) | (1,092 | ) | (1,135 | ) | (1,052 | ) | (926 | ) | (4,205 | ) | |||||||||||
Total | $ | 507,436 | $ | 136,679 | $ | 137,656 | $ | 157,054 | $ | 230,844 | $ | 662,233 | |||||||||||
Selling, general and administrative expense:
For the three months ended, | |||||||||||||||||||||||
2012 | March 31, 2013 | June 30, 2013 | September 30, 2013 | December 31, 2013 | 2013 | ||||||||||||||||||
National Networks | $ | 341,404 | $ | 86,913 | $ | 96,680 | $ | 92,106 | $ | 92,943 | $ | 368,642 | |||||||||||
International and Other | 55,522 | 12,545 | 12,298 | 13,845 | 18,409 | 57,097 | |||||||||||||||||
Inter-segment eliminations | — | (5 | ) | — | 1 | — | (4 | ) | |||||||||||||||
Total | $ | 396,926 | $ | 99,453 | $ | 108,978 | $ | 105,952 | $ | 111,352 | $ | 425,735 | |||||||||||
Share-based compensation expense:
For the three months ended, | |||||||||||||||||||||||
2012 | March 31, 2013 | June 30, 2013 | September 30, 2013 | December 31, 2013 | 2013 | ||||||||||||||||||
National Networks | $ | 14,939 | $ | 3,784 | $ | 4,951 | $ | 4,463 | $ | 4,585 | $ | 17,783 | |||||||||||
International and Other | 2,263 | 553 | 653 | 645 | 665 | 2,516 | |||||||||||||||||
Total | $ | 17,202 | $ | 4,337 | $ | 5,604 | $ | 5,108 | $ | 5,250 | $ | 20,299 | |||||||||||
Depreciation and amortization:
For the three months ended, | |||||||||||||||||||||||
2012 | March 31, 2013 | June 30, 2013 | September 30, 2013 | December 31, 2013 | 2013 | ||||||||||||||||||
National Networks | $ | 75,099 | $ | 15,299 | $ | 15,177 | $ | 6,635 | $ | 4,925 | $ | 42,036 | |||||||||||
International and Other | 10,281 | 3,046 | 3,131 | 3,300 | 3,154 | 12,631 | |||||||||||||||||
Total | $ | 85,380 | $ | 18,345 | $ | 18,308 | $ | 9,935 | $ | 8,079 | $ | 54,667 | |||||||||||
Operating income (loss):
For the three months ended, | |||||||||||||||||||||||
2012 | March 31, 2013 | June 30, 2013 | September 30, 2013 | December 31, 2013 | 2013 | ||||||||||||||||||
National Networks | $ | 413,913 | $ | 145,511 | $ | 131,067 | $ | 139,289 | $ | 101,086 | $ | 516,953 | |||||||||||
International and Other (a) | (54,936 | ) | (18,993 | ) | 115,184 | (17,951 | ) | (16,919 | ) | 61,321 | |||||||||||||
Inter-segment eliminations | 3,861 | 966 | 1,073 | 1,049 | 805 | 3,893 | |||||||||||||||||
Total | $ | 362,838 | $ | 127,484 | $ | 247,324 | $ | 122,387 | $ | 84,972 | $ | 582,167 | |||||||||||
(a) | Amounts for the three months ended June 30, 2013 and for the year ended December 31, 2013 include the litigation settlement gain of $132,944 recorded in connection with the settlement with DISH Network. |
Adjusted Operating Cash Flow(1):
For the three months ended, | |||||||||||||||||||||||
2012 | March 31, 2013 | June 30, 2013 | September 30, 2013 | December 31, 2013 | 2013 | ||||||||||||||||||
National Networks | $ | 503,951 | $ | 164,594 | $ | 151,195 | $ | 150,387 | $ | 110,596 | $ | 576,772 | |||||||||||
International and Other | (42,395 | ) | (15,394 | ) | (13,976 | ) | (14,006 | ) | (13,100 | ) | (56,476 | ) | |||||||||||
Inter-segment eliminations | 3,861 | 966 | 1,073 | 1,049 | 805 | 3,893 | |||||||||||||||||
Total | $ | 465,417 | $ | 150,166 | $ | 138,292 | $ | 137,430 | $ | 98,301 | $ | 524,189 | |||||||||||
(1) The Company evaluates segment performance based on several factors, of which the primary financial measure is operating segment Adjusted Operating Cash Flow ("AOCF"). The Company defines AOCF, which is a financial measure that is not calculated in accordance with generally accepted accounting principles (“GAAP”), as operating income (loss) before depreciation and amortization, share-based compensation expense or benefit, restructuring expense or credit and the litigation settlement gain recorded in the second quarter of 2013 in connection with DISH Network.
The Company believes that AOCF is an appropriate measure for evaluating the operating performance on both an operating segment and consolidated basis. AOCF 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 revenues, net and AOCF measures as the most important indicators of its business performance, and evaluates management’s effectiveness with specific reference to these indicators. AOCF 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 AOCF 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.