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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

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 accompanying consolidated financial statements and related notes. Our MD&A is provided to enhance the understanding of our financial condition, changes in financial condition and results of our operations and 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 years ended December 31, 2020, 2019 and 2018. Our discussion is presented on both a consolidated and segment basis. Our two segments are: (i) National Networks and (ii) International and Other.

Liquidity and Capital Resources. This section provides a discussion of our financial condition as of December 31, 2020 as well as an analysis of our cash flows for the years ended December 31, 2020, 2019 and 2018. The discussion of our financial condition and liquidity includes summaries of (i) our primary sources of liquidity and (ii) our contractual obligations and off balance sheet arrangements that existed at December 31, 2020.

Critical Accounting Policies and Estimates. This section provides a discussion of our accounting policies considered to be important to an understanding of our financial condition and results of operations, and which require significant judgment and estimates on the part of management in their application.

Business Overview

We manage our business through the following 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. Our AMC Studios operation produces original programming for our programming networks and also licenses such programming worldwide. AMC Networks Broadcasting & Technology is our technical services business, which primarily services most of the national programming networks.

•International and Other: Includes AMCNI, our international programming businesses consisting of a portfolio of channels around the world; AMC Networks Streaming Services consisting of our targeted subscription streaming services (Acorn TV, Shudder, Sundance Now, ALLBLK), AMC+ and other streaming initiatives; Levity, our production services and comedy venues business; and IFC Films, our film distribution business.

Financial Results Overview

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

(In thousands) Years Ended December 31,

Revenues, net

Operating income (loss)

AOI

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 depreciation and amortization, cloud computing amortization, share-based compensation expense or benefit, impairment 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. 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 consolidated operating income to AOI for the periods indicated:

(In thousands) Years Ended December 31,

Cloud computing amortization 200 — —

Items Impacting Comparability

Impact of COVID-19 on Our Business

In March 2020, the World Health Organization declared the novel coronavirus ("COVID-19") a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The rapid spread of the pandemic and the continuously evolving responses to combat it have had a negative impact on the global economy.

The impact of COVID-19 and measures to prevent its spread have affected our businesses in a number of ways. Beginning in mid-March, we experienced adverse advertising sales impacts, suspended content production, which led to delays in the creation and availability of substantially all of our programming, and the temporary closure of our comedy venues. In the third quarter of 2020, the Company commenced production activities, however substantially all Company employees continue to work remotely, and the Company continues to restrict business travel. If significant portions of our workforce, including key personnel, are unable to work effectively because of illness, government actions or other restrictions in connection with the COVID-19 pandemic, the impact of the pandemic on our businesses could be exacerbated.

The Company has evaluated and continues to evaluate the potential impact of the COVID-19 pandemic on its consolidated financial statements, including the impairment of goodwill (see Note 9) and indefinite-lived intangible assets and the fair value and collectability of receivables. The COVID-19 pandemic has had a material impact on the Company's operations since mid-March 2020. The Company cannot reasonably predict the ultimate 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, the duration and spread of the pandemic, the impact of governmental regulations that have been, and may continue to be, imposed in response to the pandemic, the effectiveness of actions taken to contain or mitigate the outbreak, the availability, safety and efficacy of a vaccine, 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.

RLJE

In October 2018, we acquired a controlling interest in RLJE, a premium digital channel company that operates the subscription streaming services Acorn TV and UMC or Urban Movie Channel (rebranded to ALLBLK). The operating results of RLJE are included in our International and Other segment in the consolidated statement of income from the date of the acquisition.

Levity

In April 2018, we acquired a controlling interest in Levity, an entertainment company that owns and operates comedy venues as well as produces content for distribution. The operating results of Levity are included in our International and Other segment in the consolidated statement of income from the date of the acquisition.

National Networks

In our National Networks segment, we earn revenue principally from the distribution of our programming and the sale of advertising. Distribution revenue primarily includes subscription fees paid by distributors to carry our programming networks and content licensing revenue from the licensing of original programming for digital, foreign and home video distribution. Subscription fees paid by distributors represent the largest component of distribution revenue. Our subscription fee revenues 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 networks, but are generally based upon the number of each distributor's subscribers who receive our programming, referred to as viewing subscribers. Content licensing revenue from the licensing of original programming for digital and foreign distribution is recognized upon availability or distribution by the licensee.

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. If these guaranteed viewer ratings are not met, we are generally required to provide additional advertising units to the advertiser at no charge. For these types of arrangements, a portion of the related revenue is deferred if the guaranteed ratings are not met and is subsequently recognized either when we provide the required additional advertising time or the guarantee obligation contractually expires. Most of our advertising revenues vary based upon the popularity of our programming as measured by Nielsen. Our national programming networks have advertisers representing companies in a broad range of sectors, including the automotive, restaurants/food, health, and telecommunications industries.

Changes in revenue are primarily derived from changes in the contractual subscription rates charged for our services; the number of subscribers; the prices and number of advertising spots on our networks; and the availability, amount and timing of licensing fees earned from the distribution of our original programming. Our revenues may increase over time through contractual rate increases stipulated in our affiliation agreements. In negotiating for additional subscribers or extended carriage, we have agreed, in some instances, to make upfront payments to a distributor which we record as deferred carriage fees and are amortized as a reduction to revenue over the period of the related affiliation agreement. We also may help fund the distributors' efforts to market our networks. We believe that these transactions generate a positive return on investment over the contract period. We seek to increase our advertising revenues by increasing the rates we charge for such advertising, which is directly related to the overall distribution of our programming, penetration of our services on various digital platforms such as Advertising Video-on-Demand ("AVOD") services and the popularity (including within desirable demographic groups) of our services as measured by Nielsen.

Our principal goal is to increase our revenues by increasing distribution and penetration of our services, and increasing our ratings. To do this, we must continue to contract for and produce high-quality, attractive programming. As competition for programming increases and alternative distribution technologies continue to emerge and develop in the industry, costs for content acquisition and original programming may increase. There is a concentration of subscribers in the hands of a few distributors, which could create disparate bargaining power between the largest distributors and us by giving those distributors greater leverage in negotiating the price and other terms of affiliation agreements. We also seek to increase our content licensing revenues by expanding the opportunities for licensing our programming through digital distribution platforms, foreign distribution and home video services. Content licensing revenues in each quarter may vary based on the timing of availability of our programming to distributors.

Programming expense, included in technical and operating expense, represents the largest expense of the National Networks segment and primarily consists of amortization and write-offs of programming 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 expense primarily include distribution and production related costs and program operating costs including cost of delivery, such as origination, transmission, uplinking and encryption.

To an increasing extent, the success of our business depends on original programming, both scripted and unscripted, across all of our networks. In recent years, we have introduced a number of scripted original series. These series generally result in higher ratings for our networks. 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 will continue to increase our investment in programming across all of our networks. There may be significant changes in the level of our technical and operating expenses due to the amortization of content acquisition and/or original programming costs and/or the impact of management's periodic assessment of programming usefulness. Such costs will also fluctuate with the level of revenues derived from owned original programming in each period as these costs are amortized based on the individual-film-forecast-computation method.

Most original series require us to make up-front investments, which are often significant amounts. Not all of our programming efforts are commercially successful, which could result in a write-off of program rights. If it is determined that programming rights have limited, or no, future programming usefulness based on actual demand or market conditions, a write-off of the unamortized cost is recorded in technical and operating expense. Program rights write-offs of $85.5 million, $37.9 million and $48.8 million were recorded for the years ended December 31, 2020, 2019 and 2018, respectively (see further discussion below).

See "Critical Accounting Policies and Estimates" for a discussion of the amortization and write-off of program rights.

International and Other

Our International and Other segment includes the operations of AMCNI, AMC Networks Streaming Services, IFC Films and Levity.

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 from; (i) production services from Levity, (ii) our subscription streaming services Acorn TV, Shudder, Sundance Now, ALLBLK (previously known as Urban Movie Channel), and AMC+ from our AMC Networks Streaming Services business, (iii) the distribution of content of IFC Films and RLJE, and (iv) Levity's operation of comedy venues (all of which are temporarily closed as a result of the COVID-19 pandemic). For the year ended December 31, 2020, distribution revenues represented 90% of the revenues of the International and Other segment. Distribution revenue primarily includes subscription fees paid by distributors or consumers to carry our programming networks or subscription-based streaming services and production services revenue generated from Levity. 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, and a monthly fee paid by consumers for our subscription-based streaming services. 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 as well as from our owned subscription streaming services available in the United States, Canada, Latin America, parts of Europe, India, Australia and New Zealand.

Programming expense, program operating costs and production costs incurred to produce content for third parties are included in technical and operating expense, and represent the largest expense of the International and Other segment. Programming expense primarily consists of amortization of acquired content, costs of dubbing and sub-titling of programs, production costs, participation and residual 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 programming efforts are commercially successful, which could result in a write-off of program rights. If it is determined that programming rights have limited, or no, future programming usefulness based on actual demand or market conditions, a write-off of the unamortized cost is recorded in technical and operating expense.

Similar to our National Networks businesses, the most significant business challenges we expect to encounter in our International and Other businesses include programming competition (from both foreign and domestic programmers), limited channel capacity on distributors' platforms, the number of subscribers on those platforms and economic pressures on subscription fees. Other significant business challenges unique to our international operations include increased programming costs for international rights and translation (i.e. dubbing and subtitling), a lack of availability of international rights for a portion of our domestic programming content, increased distribution costs for cable, satellite or fiber feeds, a limited physical presence in certain territories, and our exposure to foreign currency exchange rate risk. See also the risk factors described under Item 1A, "Risk Factors - We face risks from doing business internationally." in this Annual Report.

Corporate Expenses

We allocate corporate overhead within operating expenses to each segment based upon its proportionate estimated usage of services. 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.

Capital and credit market disruptions, as well as other events such as the COVID-19 pandemic, 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 networks from our distributors. Events such as these may adversely impact our results of operations, cash flows and financial position.

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 notwithstanding that a third-party owns a significant interest in such entity. The noncontrolling owner's interest in the operating results of consolidated subsidiaries are reflected in net (income) loss attributable to noncontrolling interests in our consolidated statements of operations.

Year Ended December 31, 2020 Compared to Year Ended December 31, 2019

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

Years Ended December 31,

(In thousands) Amount % ofRevenues,net Amount % ofRevenues,net $ change % change

Operating expenses:

Other income (expense):

Loss on extinguishment of debt (2,908) (0.1) — — (2,908) n/m

National Networks Segment Results

The following table sets forth our National Networks segment results for the periods indicated.

Years Ended December 31,

(In thousands) Amount % ofRevenues,net Amount % ofRevenues,net $ change % change

Operating expenses:

International and Other Segment Results

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

Years Ended December 31,

(In thousands) Amount % ofRevenues,net Amount % ofRevenues,net $ change % change

Operating expenses:

Cloud computing amortization 200 — — — 200 n/m

Revenues, net

Revenues, net decreased $245.4 million to $2.8 billion for 2020 as compared to 2019. The net change by segment was as follows:

Years Ended December 31,

(In thousands) 2020 % oftotal 2019 % oftotal $ change % change

National Networks

The decrease in National Networks revenues, net was attributable to the following:

Years Ended December 31,

(In thousands) 2020 % oftotal 2019 % oftotal $ change % change

•Advertising revenues decreased $101.9 million, primarily attributable to lower ratings and a reduction in the number of episodes of our original programming primarily related to the impact of the COVID-19 pandemic. Most of our advertising revenues vary based on the timing of our original programming series and the popularity of our programming as measured by Nielsen. Due to these factors, we expect advertising revenues to vary from quarter to quarter.

•Distribution revenues decreased $171.0 million due to a decrease in content licensing revenues of $92.9 and a decrease in subscription revenues of $78.1 million, as compared to the prior comparable period. Content licensing revenues decreased due to a reduction in the number of original programs we distributed related to production delays. Subscription revenues decreased primarily due to lower subscribers. Subscription revenues may vary based on the impact of renewals of affiliation agreements and content licensing revenues vary based on the timing of availability of our programming to distributors. Because of these factors, we expect distribution revenues to vary from quarter to quarter.

The following table presents certain subscriber information at December 31, 2020 and December 31, 2019:

Estimated Domestic Subscribers (1)

National Programming Networks:

________________

(1)Estimated U.S. subscribers as measured by Nielsen.

International and Other

The increase in International and Other revenues, net was attributable to the following:

Years Ended December 31,

(In thousands) 2020 % oftotal 2019 % oftotal $ change % change

Advertising revenues decreased $14.9 million at AMCNI, excluding the impact of foreign currency fluctuations, primarily related to pricing and lower demand resulting from the impact of the COVID-19 pandemic. Distribution revenues increased $81.4 million at AMC Networks Streaming Services due to an increase in subscribers. This increase was partially offset by a decrease of $47.7 million at Levity, due to the impact of the COVID-19 pandemic on its operations, which resulted in the temporary closure of its comedy venues, as well as a decrease of $11.7 million at AMCNI, excluding the impact of foreign currency fluctuations.

Distribution revenues, included in the International and Other segment, include revenues related to AMC Networks Streaming Services of approximately $176.7 million and $95.3 million for the years ended December 31, 2020 and 2019, respectively.

Technical and operating expense (excluding depreciation and amortization)

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

Technical and operating expense (excluding depreciation and amortization) decreased $105.4 million to $1.4 billion for 2020 as compared to 2019. The net change by segment was as follows:

Years Ended December 31,

(In thousands) 2020 2019 $ change % change

Percentage of revenues, net 49.8 % 49.2 %

National Networks

The decrease in technical and operating expense of $108.8 million was due to a decrease in program amortization of $83.7 million primarily attributable to a decrease in the amount of original programming as compared to the prior comparable period, which was impacted by the production delays resulting from the COVID-19 pandemic. In addition, other direct programming costs decreased $25.7 million. Program rights amortization expense includes write-offs of $85.5 million for the year ended December 31, 2020 as compared to program rights write-offs of $37.9 million for year ended December 31, 2019. Programming write-offs are based on management's periodic assessment of programming usefulness.

There may be significant changes in the level of our technical and operating expenses due to content acquisition and/or original programming costs and/or the impact of management's periodic assessment of programming usefulness. Such costs will also fluctuate with the level of revenues derived from owned original programming in each period as these costs are amortized based on the film-forecast-computation method. As additional competition for programming increases and alternate distribution technologies continue to develop in the industry, costs for content acquisition and original programming may increase.

International and Other

The increase in technical and operating expense of $7.7 million was due to an increase of $31.1 million at AMC Networks Streaming Services primarily related to program amortization and $7.0 million of program write-offs from our RLJ Films distribution business, which was partially offset by decreases of $21.9 million related to Levity and $9.7 million at AMCNI. The decrease at Levity is due to the impact of the COVID-19 pandemic on its operations, which resulted in production stoppages and temporary closure of comedy venues.

Selling, general and administrative expense

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

Selling, general and administrative expense increased $29.4 million to $708.8 million, for 2020 as compared to 2019. The net change by segment was as follows:

Years Ended December 31,

(In thousands) 2020 2019 $ change % change

Inter-segment eliminations (904) (107) (797) n/m

Percentage of revenues, net 25.2 % 22.2 %

National Networks

The decrease in the National Networks segment selling, general and administrative expense was principally due to a decrease in advertising and marketing expenses of $13.5 million related to the mix of original programming, which was impacted by the COVID-19 pandemic. Additionally, general and administrative costs were lower across substantially all expense categories.

There may be significant changes in the level of our selling, general and administrative expense from quarter to quarter and year to year due to the timing of promotion and marketing of original programming series.

International and Other

The increase in the International and Other segment selling, general and administrative expense primarily related to $90.6 million at AMC Networks Streaming Services primarily related to advertising and subscriber acquisition expenses, which was partially offset by decreases of $17.9 million at Levity primarily related to the impact of the COVID-19 pandemic and $4.7 million at AMCNI, excluding the impact of foreign currency fluctuations. Foreign currency translation had a favorable impact to the change in selling, general and administrative expense of $1.6 million.

Depreciation and amortization

Depreciation and amortization increased $3.5 million to $104.6 million for 2020 as compared to 2019. The net change by segment was as follows:

Years Ended December 31,

(In thousands) 2020 2019 $ change % change

The increase in depreciation and amortization expense in the National Networks segment was primarily due to depreciation of equipment at our AMC Networks Broadcasting and Technology facilities. The decrease in depreciation and amortization expense in the International and Other segment was primarily due to the lower carrying values of long-lived assets resulting from the impairment charge recognized in June 2020.

Impairment charges

During 2020, as a result of the continuing impact of the COVID-19 pandemic, we qualitatively assessed whether it was more likely than not that goodwill and long-lived assets were impaired. Based on our current projections and updated forecasts, we determined that sufficient indicators of potential impairment of long-lived assets existed and, in connection with the preparation of the Company's second quarter financial information, the Company performed a recoverability test of certain long-lived asset groups within the AMCNI reporting unit. This resulted in an impairment charge of $97.1 million primarily related to certain identifiable intangible assets, as well as property and equipment, and operating lease right-of-use assets. The Company then performed a goodwill impairment test and determined that the carrying value of the AMCNI reporting unit exceeded its fair value, resulting in an impairment charge of $25.1 million.

International television broadcasting markets, as well as a decrease in the financial multiples used to estimate the fair value using the market approach. As a result, we recognized an impairment charge of $98.0 million in 2019, reflecting a partial write-down of the goodwill associated with the AMCNI reporting unit. Additionally, during 2019, in connection with the dispositions of certain businesses, AMCNI recognized impairment charges of $8.6 million.

Restructuring and other related charges

In November 2020, management commenced a restructuring plan (the “2020 Plan”) designed to streamline the Company’s operations through a reduction of its domestic workforce. The 2020 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. In connection with the 2020 Plan, the Company incurred severance costs of $21.2 million. Additionally during 2020, the Company incurred restructuring charges of $6.2 million at AMCNI related to costs associated with the termination of distribution in certain territories and restructuring charges of $7.7 million related to prior restructuring activities in domestic operations.

Restructuring and other related charges of $40.9 million for the year ended December 2019 primarily related to the management re-organization commenced in September 2019. In connection with this re-organization, a number of roles were eliminated to improve the effectiveness of management while reducing the cost structure of the Company. As a result, we incurred restructuring charges of $26.0 million. In addition, charges associated with the AMC Networks Streaming Services re-organization consisted of severance and other personnel related costs of $1.9 million and programming write-offs of $13.0 million related to a change in programming strategy.

Operating Income (Loss)

Years Ended December 31,

(In thousands) 2020 2019 $ change % change

The decrease in operating income at the National Networks segment was primarily attributable to a decrease in revenues of $272.9 million, an increase in restructuring charges of $7.1 million and an increase in depreciation and amortization of $7.9 million, partially offset by a decrease in technical and operating expense of $108.8 million and a decrease in selling, general and administrative expense of $31.0 million.

The increase in operating loss at the International and Other segment, excluding the impact of foreign currency fluctuations, was primarily attributable to an increase in technical and operating expense of $8.5 million, an increase in selling, general and administrative expense of $62.6 million and an increase in impairment charges of $10.7 million, partially offset by an increase in revenues of $12.9 million, a decrease in restructuring charges of $13.3 million and a decrease in depreciation and amortization of $4.3 million. Foreign currency translation had an unfavorable impact to the change in operating loss of $2.8 million.

AOI

The following is a reconciliation of our consolidated operating income to consolidated AOI:

Years Ended December 31,

(In thousands) 2020 2019 $ change % change

Cloud computing amortization 200 — 200 n/m

AOI decreased $177.4 million to $766.6 million for 2020 as compared to 2019. The net change by segment was as follows:

Years Ended December 31,

(In thousands) 2020 2019 $ change % change

The decrease in AOI at the National Networks segment is principally due to the decrease in operating income. The decrease in AOI at the International and Other segment is principally due to the increase in operating loss.

Interest expense, net

The decrease in interest expense, net of $24.5 million is primarily due to lower interest rates on our credit facility and lower average outstanding long-term debt balances.

Loss on extinguishment of debt

In March 2020, we redeemed $200 million principal amount of the then-outstanding $600 million principal amount of our 4.75% Notes due 2022. The loss on extinguishment of debt for the year ended December 31, 2020 of $2.9 million represents the redemption premium, the write-off of a portion of the unamortized discount and deferred financing costs.

Miscellaneous, net

The increase in miscellaneous, net of $77.2 million in 2020 as compared to 2019 was primarily related to an increase in net realized and unrealized gains of $92.0 million from certain marketable equity securities, partially offset by an unfavorable variance of $15.0 million 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.

Income tax expense

Income tax expense was $145.4 million for the year ended December 31, 2020, representing an effective tax rate of 36%. The effective tax rate differs from the federal statutory rate of 21% due primarily to tax expense of $41.7 million for an increase in valuation allowances for foreign deferred tax assets; state and local income tax expense of $14.7 million, tax expense of $8.4 million for excess tax deficiencies related to share-based compensation and tax expense from foreign operations of $6.8 million partially offset by tax benefit of $5.3 million relating to uncertain tax positions (including accrued interest).

Income tax expense was $78.5 million for the year ended December 31, 2019, representing an effective tax rate of 16%. The effective tax rate differs from the federal statutory rate of 21% due primarily to tax benefit of $21.0 million resulting from a net decrease in valuation allowances for foreign deferred tax assets, tax benefit of $11.5 million from a deferred tax adjustment to record the impact of an investment tax credit under the deferral method of accounting, partially offset by state and local income tax expense of $12.2 million and $9.0 of tax expense from foreign operations.

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

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

Years Ended December 31,

(In thousands) Amount % ofRevenues,net Amount % ofRevenues,net $ change % change

Operating expenses:

Other income (expense):

National Networks Segment Results

The following table sets forth our National Networks segment results for the periods indicated.

Years Ended December 31,

(In thousands) Amount % ofRevenues,net Amount % ofRevenues,net $ change % change

Operating expenses:

International and Other Segment Results

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

Years Ended December 31,

(In thousands) Amount % ofRevenues,net Amount % ofRevenues,net $ change % change

Operating expenses:

Revenues, net

Revenues, net increased $88.4 million to $3.1 billion for the year ended December 31, 2019 as compared to the year ended December 31, 2018. The net change by segment was as follows:

Years Ended December 31,

(In thousands) 2019 % oftotal 2018 % oftotal $ change % change

National Networks

The decrease in National Networks revenues, net was attributable to the following:

Years Ended December 31,

(In thousands) 2019 % oftotal 2018 % oftotal $ change % change

•Advertising revenues decreased $40.4 million driven by a decrease of $65.0 million at AMC due to lower ratings, partially mitigated by increased pricing. The decrease at AMC was partially offset by increases at our other networks. Most of our advertising revenues vary based on the timing of our original programming series and the popularity of our programming as measured by Nielsen. Due to these factors, we expect advertising revenues to vary from quarter to quarter.

•Distribution revenues decreased $3.9 million due to a decrease in subscription revenues of $17.5 million primarily due to lower subscribers and the impact of an interpretation of a contractual provision in an affiliate agreement, partially offset by increased pricing. Content licensing revenues increased $13.6 million, primarily at AMC, due to an increase in the number of original programs we distributed. Distribution revenues may vary based on the impact of renewals of affiliation agreements and content licensing revenues vary based on the timing of availability of our programming to distributors. Because of these factors, we expect distribution revenues to vary from quarter to quarter.

The following table presents certain subscriber information at December 31, 2019 and December 31, 2018:

Estimated Domestic Subscribers (1)

National Programming Networks:

________________

(1)Estimated U.S. subscribers as measured by Nielsen.

International and Other

The increase in International and Other revenues, net was attributable to the following:

Years Ended December 31,

(In thousands) 2019 % oftotal 2018 % oftotal $ change % change

The decrease of $1.7 million in advertising revenues was principally due to the unfavorable impact of foreign currency translation of $5.1 million. Distribution revenues increased $147.5 million due to the impact of the Levity and RLJE acquisitions. In addition, distribution revenues increased $22.9 million from our Shudder and Sundance Now targeted streaming services. These increases were partially offset by a decrease in revenues at AMCNI of $16.4 million, excluding the impact of foreign currency fluctuations, primarily due to the termination of distribution in certain territories. Foreign currency translation had an unfavorable impact to distribution revenues of $15.2 million.

Technical and operating expense (excluding depreciation and amortization)

Technical and operating expense (excluding depreciation and amortization) increased $61.0 million to $1.5 billion for 2019 as compared to 2018. The net change by segment was as follows:

Years Ended December 31,

(In thousands) 2019 2018 $ change % change

Percentage of revenues, net 49.2 % 48.7 %

National Networks

The decrease in technical and operating expense was due to a decrease of $30.1 million in other direct programming expense attributable to reduced personnel and the timing of production related costs. The decrease in other direct programming expense was partially offset by a net increase in program rights amortization of $26.1 million, consisting of an increase in program amortization of $47.4 million primarily attributable to the mix of original programming as compared to the prior year, partially offset by a reduction of $21.3 million attributable to the utilization of certain investment tax credits. In addition, program rights amortization includes write-offs of $37.9 million for the year ended December 31, 2019 as compared to program rights write-offs of $48.8 million for the year ended December 31, 2018. Programming write-offs are based on management's periodic assessment of programming usefulness.

There may be significant changes in the level of our technical and operating expenses due to content acquisition and/or original programming costs and/or the impact of management's periodic assessment of programming usefulness. Such costs will also fluctuate with the level of amortization recorded from owned original programming in each period based on the individual-film-forecast-computation method. As additional competition for programming increases and alternative distribution technologies continue to develop, costs for content acquisition and original programming may increase.

International and Other

The increase in the International and Other segment was primarily due to an $89.7 million impact from the Levity and RLJE acquisitions. In addition, technical and operating expense increased $13.3 million at our targeted streaming services (Shudder and Sundance Now) due to the continued investment in programming. Technical and operating expense decreased $19.6 million at AMCNI, excluding the impact of foreign currency fluctuations, due primarily to reduced programming amortization resulting from termination of distribution in certain territories. Foreign currency translation had a favorable impact to the change in technical and operating expense of $12.8 million.

Selling, general and administrative expense

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

Selling, general and administrative expense increased $22.0 million to $679.4 million for 2019 as compared to 2018. The net change by segment was as follows:

Years Ended December 31,

(In thousands) 2019 2018 $ change % change

Percentage of revenues, net 22.2 % 22.1 %

National Networks

The decrease in the National Networks segment selling, general and administrative expense was principally due to a $16.7 million decrease in advertising and marketing costs related to the timing of promotion and marketing of original programming.

International and Other

The increase in the International and Other segment was primarily due to a $50.7 million impact from the acquisitions of Levity and RLJE, partially offset by a decrease of $8.7 million at AMCNI, excluding the impact of foreign currency fluctuations. Foreign currency translation had a favorable impact to the change in selling, general and administrative expense of $6.7 million.

Depreciation and amortization

Depreciation and amortization increased $9.8 million to $101.1 million for 2019 as compared to 2018. The net change by segment was as follows:

Years Ended December 31,

(In thousands) 2019 2018 $ change % change

The increase in depreciation and amortization expense in the International and Other segment was primarily due to a $6.4 million impact from the acquisitions of Levity and RLJE as well as an increase in depreciation expense of $6.2 million related to corporate leasehold additions.

Impairment charges

In December 2019, in connection with the preparation of our fourth quarter financial information, we performed our annual goodwill impairment test and concluded that the estimated fair value of our AMCNI reporting unit declined to less than its carrying amount. The decrease in the estimated fair value was in response to current and expected trends across the International television broadcasting markets, as well as a decrease in the financial multiples used to estimate the fair value using the market approach. As a result, we recognized an impairment charge of $98.0 million in 2019, reflecting a partial write-down of the goodwill associated with the AMCNI reporting unit.

During 2019 and 2018, in connection with the dispositions of certain businesses, AMCNI recognized impairment charges of $8.6 million and $4.5 million, respectively.

Restructuring and other related charges

Restructuring and other related charges of $40.9 million and $45.8 million for the years ended December 2019 and 2018, respectively, primarily related to the management re-organizations which resulted in the elimination of a number of roles to improve the effectiveness of management while reducing the cost structure of the Company. As a result, we incurred restructuring charges of $26.0 million and $35.9 million for the years ended December 2019 and 2018, respectively. During 2019, we also incurred restructuring charges associated with the AMC Networks Streaming Services re-organization which consisted of severance and other personnel related costs of $1.9 million and programming write-offs of $13.0 million related to a change in programming strategy. During 2018, we also incurred restructuring charges of $9.9 million associated with the termination of distribution in certain territories at AMCNI.

Operating Income

Years Ended December 31,

(In thousands) 2019 2018 $ change % change

The decrease in operating income at the National Networks segment was primarily attributable to a decrease in revenues of $44.3 million, partially offset by a decrease in technical and operating expense of $4.0 million, a decrease in selling, general and administrative expense of $14.2 million, and a decrease in restructuring expense of $3.7 million

The increase in operating loss at the International and Other segment was primarily attributable to a net increase of $95.0 million in the combined impairment charges and restructuring and other related charges, partially offset by an increase in operating income at AMCNI.

AOI

The following is a reconciliation of our consolidated operating income to consolidated AOI:

Years Ended December 31,

(In thousands) 2019 2018 $ change % change

AOI increased $11.4 million to $944.0 million for 2019 as compared to 2018. The net change by segment was as follows:

Years Ended December 31,

(In thousands) 2019 2018 $ change % change

National Networks AOI decreased due to the aforementioned explanation for the decrease in operating income.

International and Other AOI increased primarily due to an increase of $14.5 million at AMCNI, excluding the impact of foreign currency fluctuations, and an increase of $15.6 million related to the impact of the acquisitions of Levity and RLJE (including the impact of AOI related to majority-owned equity method investees).

Interest expense, net

The decrease in interest expense, net of $2.7 million is driven by an increase in interest income of $5.5 million, partially offset by an increase in interest expense of $2.8 million due to a higher variable interest rate on our term loan.

Miscellaneous, net

The increase in miscellaneous expense, net of $35.2 million in 2019 as compared to 2018 was primarily driven by the absence of $50.4 million of gains associated with the increase in fair value of our investment in RLJE recognized prior to the acquisition during 2018, partially offset by an $17.8 million favorable variance in foreign currency transactions gains and losses. In addition, miscellaneous expense, net decreased $6.3 million associated with increased earnings from equity method investees, partially offset by an increase related to the partial write-down of certain of our non-marketable equity securities and a note receivable.

Income tax expense

Income tax expense was $156.3 million for the year ended December 31, 2018, representing an effective tax rate of 25%. The effective tax rate differs from the federal statutory rate of 21% due primarily to tax expense of $16.4 million for an increase in valuation allowances for foreign deferred tax assets; state and local income tax expense of $11.5 million and a tax benefit of $12.8 million for the one-time rate change on deferred tax assets and liabilities that resulted from the extension of certain television production cost deductions included in the Bipartisan Budget Act of 2018 (enacted February 9, 2018) and return to provision adjustments.

Liquidity and Capital Resources

Overview

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

Sources of cash primarily include cash flow from operations, amounts available under our revolving credit facility and access to capital 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.

On February 8, 2021, the Company issued $1.0 billion in aggregate principal amount of 4.25% senior notes due 2029 (the “4.25% Notes due 2029”) and received net proceeds of $982.3 million, after deducting underwriting discounts and commissions and expenses. The Company used such proceeds to redeem (i) the remaining $400 million principal amount of the Company’s 4.75% senior notes due 2022 and (ii) $600 million principal amount of the Company’s 5.00% senior notes due 2024 on February 26, 2021 (the "Redemption Date"). The 4.75% senior notes due 2022 were redeemed at a redemption price of 100.000% of the principal amount of such notes and the 5.00% senior notes due 2024 were redeemed at a redemption price of 102.500% of the principal amount of such notes, in each case, plus accrued and unpaid interest to, but excluding, the Redemption Date.

On February 8, 2021, the Company entered into Amendment No. 1 (“Amendment No. 1”) to its existing credit agreement (the "Credit Agreement"). Amendment No. 1 extends the maturity dates of the $675 million term loan A facility and $500 million revolving credit facility under the Credit Agreement to February 8, 2026, and makes certain other amendments to the covenants and other provisions of the Credit Agreement.

Our 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 year ended December 31, 2020, the Company repurchased 14.8 million shares of its Class A common stock at an average purchase price of $23.91 per share (inclusive of the results of the modified "Dutch auction" tender offer discussed below). As of December 31, 2020, the Company had $135.3 million available for repurchase under the Stock Repurchase Program.

On September 16, 2020, we commenced a modified "Dutch auction" tender offer (the "Tender Offer") to purchase up to $250 million in value of shares of our Class A Common Stock, plus up to an additional 2% of the outstanding shares of Class A Common Stock, at a price not greater than $26.50 nor less than $22.50 per share. The Tender Offer expired on October 14, 2020. On October 21, 2020, we accepted for purchase 10.8 million shares of its Class A Common Stock, at a price of $23.20 per share, for an aggregate cost of $250.6 million. The cost of these shares, and the fees relating to the Tender Offer, are classified in Treasury stock in the consolidated balance sheet.

Our principal uses of cash include the acquisition and production of programming, investments and acquisitions, repurchases of outstanding debt and common stock, debt service, and payments for income taxes. Although impacted by the COVID-19 pandemic, we continue to increase our investment in original programming, the funding of which generally occurs six to nine months in advance of a program's airing. In March 2020, we redeemed $200 million principal amount of the then-outstanding $600 million principal amount of our 4.75% Notes due 2022.

As of December 31, 2020, our consolidated cash and cash equivalents balance includes approximately $221.5 million held by foreign subsidiaries. Most or all of the earnings of our foreign subsidiaries will continue to be permanently reinvested in foreign operations and we do not expect to incur any significant, additional taxes related to such amounts, nor have any been provided for in the current period.

We believe that a combination of cash-on-hand, cash generated from operating activities and availability under our revolving credit facility 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. As a result, we will then be dependent upon our ability to access the capital and credit markets in order to repay or refinance the outstanding balances of our indebtedness. Failure to raise significant amounts of funding to repay these obligations at maturity 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. See Item 1A, "Risk Factors – Risks Related to Our Debt" in this Annual Report.

Cash Flow Discussion

The following table is a summary of cash flows provided by (used in) operations for the periods indicated:

Years Ended December 31,

Operating Activities

Net cash provided by operating activities amounted to $748.7 million for the year ended December 31, 2020 as compared to $483.7 million for the year ended December 31, 2019. In 2020, net cash provided by operating activities resulted primarily from $1.5 billion of net income before amortization of program rights, depreciation and amortization, share-based compensation and other non-cash items, a decrease in accounts receivable, trade of $63.3 million due to the timing of cash receipts, an decrease in prepaid expenses and other assets of $64.1 million, and an increase in accounts payable, accrued liabilities and other liabilities of $16.0 million. Partially offsetting these increases were payments for program rights of $850.0 million. Changes in all other assets and liabilities during the year resulted in an increase in cash of $5.1 million.

In 2019, net cash provided by operating activities amounted to $483.7 million for the year ended December 31, 2019 as compared to $606.5 million for the year ended December 31, 2018. In 2019, net cash provided by operating activities resulted from $1.7 billion of net income before amortization of program rights, depreciation and amortization, share-based compensation and other non-cash items, which was partially offset by payments for program rights of $969.9 million, an increase in prepaid expenses and other assets of $142.3 million primarily related to an increase in production tax credits and taxes receivable, an increase in accounts receivable, trade of $43.3 million due to the timing of cash receipts, and a decrease in accounts payable, accrued liabilities and other liabilities of $28.4 million primarily as a result of lower employee related liabilities. Changes in all other assets and liabilities during the year resulted in a decrease in cash of $5.1 million.

In 2018, net cash provided by operating activities resulted from $1.6 billion of net income before amortization of program rights, depreciation and amortization, share-based compensation and other non-cash items, which was partially offset by payments for program rights of $978.8 million. Additionally, income taxes payable decreased $17.0 million and accounts payable, accrued expenses and other liabilities increased $48.9 million primarily due to higher accruals for participation and

residuals, partially offset by lower employee related liabilities at December 31, 2018 as compared to the prior year. Accounts receivable, trade, increased $52.1 million at December 31, 2018 as compared to the prior year primarily driven by higher distribution revenues as well as timing of cash receipts. Changes in all other assets and liabilities during the year resulted in a decrease in cash of $13.4 million.

Investing Activities

Net cash used in investing activities for the years ended December 31, 2020, 2019 and 2018 was $35.2 million, $89.7 million and $260.2 million, respectively. In 2020, net cash used in investing activities was primarily related to capital expenditures of $46.6 million, partially offset by proceeds from the sales of investments of $10.0 million.

In 2019, net cash used in investing activities was primarily related to capital expenditures of $91.6 million, primarily related to leasehold improvements, and the purchase of investments of $3.5 million, partially offset by a return of capital from investees of $5.4 million.

In 2018, net cash used in investing activities was primarily related to capital expenditures of $89.8 million, primarily related to modernization and improvements of facilities and equipment, payments for acquisitions, net of cash acquired of $84.4 million related to Levity and RLJE, and the purchase of several minority investments, including loans to investees, of $90.1 million, partially offset by a return of capital from investees.

Financing Activities

Net cash used in financing activities amounted to $648.0 million for the year ended December 31, 2020 as compared to $131.1 million for the year ended December 31, 2019 and $314.6 million for the year ended December 31, 2018. In 2020, financing activities primarily consisted of purchases of Class A Common Stock of $356.7 million under our Stock Repurchase Program, principal payments on long-term debt of $262.3 million, taxes paid in lieu of shares issued for equity-based compensation of $16.0 million, and distributions to noncontrolling members of $15.8 million.

In 2019, financing activities primarily consisted of purchases of Class A Common Stock of $70.6 million under our Stock Repurchase Program, principal payments on long-term debt of $23.0 million, taxes paid in lieu of shares issued for equity-based compensation of $23.0 million, and distributions to noncontrolling members of $15.6 million.

In 2018, financing activities primarily consisted of purchases of Class A Common Stock of $283.1 million under our Stock Repurchase Program, distributions to noncontrolling members of $14.3 million, and taxes paid in lieu of shares issued for equity-based compensation of $16.8 million.

Debt Financing Agreements

The Company's principal amount of long-term debt consists of:

Senior Secured Credit Facility:(a)

Senior Notes:

(a) The Company's $500 million revolving credit facility remains undrawn at December 31, 2020. Total undrawn revolver commitments are available to be drawn for general corporate purposes of the Company.

In March 2020 we redeemed $200 million principal amount of the outstanding $600 million principal amount of our 4.75% Notes due 2022. In connection with the redemption, we incurred a loss on extinguishment of debt for the year ended December 31, 2020 of $2.9 million representing the redemption premium and the write-off of a portion of the unamortized discount and deferred financing costs.

Subsequent to December 31, 2020, on February 26, 2021, we redeemed (i) the remaining $400 million principal amount of our 4.75% Notes due 2022 and (ii) $600 million principal amount of our 5.00% Notes due 2024.

Additional information regarding our outstanding indebtedness and the significant terms and provisions of our Senior Secured Credit Facility and our Senior Notes is discussed in Note 11 to the accompanying consolidated financial statements included in this Annual Report on Form 10-K and is incorporated herein by reference.

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 December 31, 2020 included $400.0 million of 4.75% Notes due December 2022, $1.0 billion of 5.00% Notes due April 2024 and $800.0 million of 4.75% Notes due August 2025 (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

(In thousands) Year Ended December 31, 2020 Year Ended December 31, 2019

Parent Company Guarantor Subsidiaries Parent Company Guarantor Subsidiaries

Assets

Liabilities and equity:

Amounts due to subsidiaries $ — $ 27,091 $ — $ —

Contractual Obligations and Off Balance Sheet Arrangements

Contractual Obligations

Our contractual obligations as of December 31, 2020 are summarized in the following table:

(In thousands) Payments due by period

Total Year 1 Years 2 - 3 Years4 - 5 More than5 years

Debt obligations:(1)

(1)Subsequent to December 31, 2020, our Senior Secured Credit Facility was refinanced and we issued new Senior Notes and redeemed certain of our existing Senior Notes, all of which impact the obligations reflected in this table. See Note 11, Long-Term Debt, to our consolidated financial statements for additional information.

(2)Interest on variable rate debt and the variable portion of interest rate swap contracts is estimated based on a LIBOR yield curve as of December 31, 2020.

(3)Purchase obligations consist primarily of program rights obligations, participations, residuals, and transmission and marketing commitments.

(4)Operating and finance lease obligation amounts include imputed interest.

The contractual obligations table above does not include any liabilities for uncertain income tax positions due to the fact that we are unable to reasonably predict the ultimate amount or timing of any related payments in settlement of our liabilities for uncertain income tax positions. At December 31, 2020, the liability for uncertain tax positions was $9.7 million, excluding the related accrued interest liability of $2.7 million and deferred tax assets of $2.1 million. See Note 15 to the accompanying consolidated financial statements for further discussion of the Company's income taxes.

In connection with the 2018 acquisition of RLJE, the terms of the operating agreement provide the noncontrolling member with a right to put all of its noncontrolling interest to a subsidiary of the Company at the greater of the then fair market value or enterprise value of RLJE, in each case pursuant to the operating agreement and applied to the equity interest. The put option is exercisable following the seven year anniversary of the agreement (October 31, 2025), or earlier upon a change of control. The above table does not include any future payments that would be required upon the exercise of these put rights.

In connection with the 2018 acquisition of Levity, the terms of the operating agreement provide the noncontrolling interest holders with a right to put 50% of their interests to a subsidiary of the Company on the four year anniversary of the agreement (April 20, 2022), and a right to put all of their interests to the Company on the six year anniversary of the agreement (April 20, 2024). The put rights are at fair market value. The above table does not include any future payments that would be required upon the exercise of these put rights.

In connection with the 2014 acquisition of BBC AMERICA, the terms of the agreement provide the BBC with a right to put all of its 50.1% noncontrolling interest to a subsidiary of the Company at the greater of the then fair value or the fair value of the initial equity interest at the closing date of the acquisition. The put option is exercisable on the fifteen (October 23, 2029) and twenty-five (October 23, 2039) year anniversaries of the agreement. The above table does not include any future payments that would be required upon the exercise of these put rights.

Off-Balance Sheet Arrangements

We have no material off-balance sheet arrangements (as defined in Item 303(a)(4) of Regulation S-K).

Critical Accounting Policies and Estimates

In preparing our consolidated financial statements, we are required to make certain estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. These estimates and assumptions can be subjective and complex and, consequently, actual results could differ materially from our estimates and assumptions. We base our estimates on historical experience, known or expected trends and other assumptions that we believe are reasonable under the circumstances.

We believe the following critical accounting policies comprise the more significant judgments and estimates used in the preparation of our consolidated financial statements:

Program Rights

Licensed rights to programming, including feature films and episodic series, are stated at the lower of amortized cost or fair value. Such licensed rights along with the related obligations are recorded at the contract value when a license agreement is executed, unless there is uncertainty with respect to either cost, acceptability or availability. If such uncertainty exists, those rights and obligations are recorded at the earlier of when the uncertainty is resolved or when the license period begins. Costs are amortized to technical and operating expense on a straight-line or accelerated basis, based on the expected exploitation strategy of the rights, over a period not to exceed the respective license periods. We periodically review the remaining useful lives of our licensed program rights based on several factors, including expected future revenue generation from airings on our 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, the remaining useful life of such rights is adjusted accordingly, which may result in the accelerated amortization or write-off of such costs to technical and operating expense.

Owned original programming costs, including estimated participation and residual costs qualifying for capitalization as program rights are amortized to technical and operating expense over their estimated useful lives, commencing upon the first airing, based on attributable revenue for airings to date as a percentage of total projected attributable revenue ("ultimate revenue") under the individual-film-forecast-computation method. We base our estimates of projected attributable revenue on distribution and advertising revenues historically generated from similar content in comparable markets, and projected program usage. Projected program usage is based on our current expectation of future exhibitions. We periodically review attributable revenue estimates and projected program usage and revise our assumptions if necessary, which could either accelerate or delay the timing of amortization expense or result in a write-down of the unamortized costs to fair value. For example, a program's strong performance could result in increased usage and increased attributable revenues in a particular period, resulting in accelerated amortization of costs in that period. Poor ratings may result in the reduction of attributable revenue from planned usage or the abandonment of a program, which would require a write-off of any unamortized costs. Actual attributable revenue and exhibitions may vary from our projections due to factors such as market acceptance, levels of distribution and advertising revenue, resulting in changes to our decisions regarding planned program usage. A failure to adjust for a downward change in estimates of ultimate revenues could result in the understatement of program rights amortization expense for the period. Any capitalized development costs for programs that we determine will not be produced are also written off. Historically, other than instances of write-offs associated with our decisions to abandon programming, actual ultimate revenue amounts have not significantly differed from our estimates of ultimate revenue.

Program rights write-offs of $108.3 million, $40.9 million and $50.5 million were recorded for the years ended December 31, 2020, 2019 and 2018, respectively.

Useful Lives of Affiliate Intangible Assets

The carrying amount of our intangible assets as of December 31, 2020 is $410.7 million, of which $294.3 million is comprised of affiliate relationships acquired in business combinations. Useful lives of affiliate relationships (ranging from 6 to 25 years) are initially determined based upon weighted average remaining terms of agreements in place with major distributors when purchase accounting is applied, plus an assumption for expected renewals. We periodically update our assumption for expected renewals based on recent experience and known or expected trends. We have historically been successful in renewing our major affiliation agreements and expect to renew such agreements in the future. However, if renewal trends deteriorate in the future (e.g., failure to renew, or renewals with significantly shorter terms), we may revise the remaining useful lives of affiliate intangible assets, resulting in higher amortization expense in future periods. In June 2020, we recognized impairment charges associated with certain intangible assets. See Note 9 to the accompanying consolidated financial statements included in this Annual Report on Form 10-K for additional details.

Goodwill

Goodwill is not amortized, but instead is tested for impairment at the reporting unit level annually as of December 1, or more frequently upon the occurrence of certain events or substantive changes in circumstances. The annual goodwill impairment test allows for the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If it is determined, on the basis of qualitative factors, that the fair value of a reporting unit is, more likely than not, less than its carrying value, the quantitative impairment test is required. In accordance with Accounting Standards Update 2017-04 Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, the Company recognizes goodwill impairment as the difference between the carrying amount of a reporting unit and its fair value, but not to exceed the carrying amount of goodwill.

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

International and Other 450,647

Based on our annual and interim impairment tests for goodwill during 2020 and 2019, we recognized impairment charges of $25.1 million and $98.0 million for the years ended December 31, 2020 and 2019, respectively. See Note 9 to the accompanying consolidated financial statements included in this Annual Report on Form 10-K for additional details.

Recently Issued Accounting Pronouncements

The information regarding recently issued accounting pronouncements is discussed in Note 2 to the accompanying consolidated financial statements included in this Annual Report on Form 10-K and is incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

Fair Value of Debt

Based on the level of interest rates prevailing at December 31, 2020, the fair value of our fixed rate debt of $2.24 billion was higher than its carrying value of $2.18 billion by $62.2 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 December 31, 2020 would increase the estimated fair value of our fixed rate debt by approximately $24.9 million to approximately $2.27 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 creditworthy 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.

As of December 31, 2020, we have $2.8 billion principal amount of debt outstanding (excluding finance leases), of which $675.0 million principal amount outstanding under the Credit Facility is subject to variable interest rates. A hypothetical 100 basis point increase in interest rates prevailing at December 31, 2020 would increase our annual interest expense by approximately $6.7 million.

As of December 31, 2020, we have interest rate swap contracts outstanding with notional amounts aggregating $100.0 million that are designated as cash flow hedges. The aggregate fair values of interest rate swap contracts at December 31, 2020 was a net liability of $2.4 million. The interest rate paid on approximately 80% of our debt (excluding finance leases) as of December 31, 2020 is effectively fixed (76% being fixed rate obligations and 4% effectively fixed through utilization of these interest rate swap contracts). Cumulative unrealized losses, net of tax on the portion of floating-to-fixed interest rate swaps designated as cash flow hedges was $1.8 million and is included in accumulated other comprehensive loss.

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.

As a result of our international expansion in recent years, we expect the exposure to foreign currency fluctuations will have a more significant impact on our financial position and results of operations.

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.

The Company recognized $(4.0) million, $11.1 million and $(6.8) million of foreign currency transaction gains (losses) for the years ended December 31, 2020, 2019 and 2018, respectively, resulting from the translation of monetary assets and liabilities that are denominated in currencies other than the underlying functional currency of the applicable entity. Unrealized foreign currency transaction gains or losses are computed based on period-end exchange rates and are non-cash in nature until such time as the amounts are settled. Such amount is included in miscellaneous, net in the consolidated statements of income.

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 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 8. Financial Statements and Supplementary Data.

The Financial Statements required by this Item 8 appear beginning on page 68 of this Annual Report, and are incorporated by reference herein.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

(a) Evaluation of 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 December 31, 2020, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective.

(b) Management's Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining effective internal control over financial reporting, as such term is defined under the Securities Exchange Act of 1934 Rule 13a-15(f). The Company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including the Company's Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the framework in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2020.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2020 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their attestation report appearing on page F-1.

(d) Changes in Internal Control over Financial Reporting

During the three months ended December 31, 2020, 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.

Item 9B. Other Information.

None.

Part III

Item 10. Directors, Executive Officers and Corporate Governance.

Information relating to our directors, executive officers and corporate governance will be included in our definitive Proxy Statement for our 2021 Annual Meeting of Stockholders, which will be filed within 120 days of the year ended December 31, 2020 (the "2021 Proxy Statement"), which is incorporated herein by reference.

Item 11. Executive Compensation.

Information relating to executive compensation will be included in the 2021 Proxy Statement, which is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Information relating to the beneficial ownership of our common stock and related stockholder matters will be included in the 2021 Proxy Statement, which is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Information relating to certain relationships and related transactions and director independence will be included in the 2021 Proxy Statement, which is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services.

Information relating to principal accountant fees and services will be included in the 2021 Proxy Statement, which is incorporated herein by reference.

Part IV

Item 15. Exhibits and Financial Statement Schedules.

(a) Documents filed as part of the Form 10-K:

The following items are filed as part of this Annual Report:

(1)The financial statements as indicated in the index set forth on page 68.

(2)Financial statement schedule:

Schedule II—Valuation and Qualifying Accounts

Schedules other than that listed above have been omitted, since they are either not applicable, not required or the information is included elsewhere herein.

(1)Exhibits:

The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Annual Report.

Item 16. Form 10-K Summary.

None.

INDEX TO EXHIBITS

ExhibitNumber Description of Exhibit

21 Subsidiaries of the Registrant.

22 List of Guarantor Subsidiaries.

23 Consent of Independent Registered Public Accounting Firm.

101.INS XBRL Instance Document.

101.SCH XBRL Taxonomy Extension Schema Document.

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF XBRL Taxonomy Extension Definition Linkbase.

101.LAB XBRL Taxonomy Extension Label Linkbase Document.

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.

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: February 26, 2021 By: /s/ Christina Spade

Christina Spade

Executive Vice President and Chief Financial Officer

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Joshua W. Sapan and Christina Spade, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him in his name, place and stead, in any and all capacities, to sign this report, and file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Name Title Date

/s/ Joshua W. Sapan President and Chief Executive Officer February 26, 2021

Joshua W. Sapan (Principal Executive Officer)

Christina Spade (Principal Financial Officer)

Christian B. Wymbs (Principal Accounting Officer)

/s/ James L. Dolan Chairman of the Board of Directors February 26, 2021

James L. Dolan

/s/ Charles F. Dolan Chairman Emeritus and Director February 26, 2021

Charles F. Dolan

/s/ William J. Bell Director February 26, 2021

William J. Bell

/s/ Kristin A. Dolan Director February 26, 2021

Kristin A. Dolan

/s/ Marianne Dolan Weber Director February 26, 2021

Marianne Dolan Weber

/s/ Patrick F. Dolan Director February 26, 2021

Patrick F. Dolan

/s/ Thomas C. Dolan Director February 26, 2021

Thomas C. Dolan

/s/ Brian G. Sweeney Director February 26, 2021

Brian G. Sweeney

/s/ Vincent Tese Director February 26, 2021

Vincent Tese

/s/ Leonard Tow Director February 26, 2021

Leonard Tow

/s/ David E. Van Zandt Director February 26, 2021

David E. Van Zandt

/s/ Carl E. Vogel Director February 26, 2021

Carl E. Vogel

AMC NETWORKS INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm F-1

Consolidated Balance Sheets F-4

Consolidated Statements of Income F-5

Consolidated Statements of Comprehensive Income F-6

Consolidated Statements of Stockholders’ Equity F-7

Consolidated Statements of Cash Flows F-8

Notes to Consolidated Financial Statements F-9

Schedule II—Valuation and Qualifying Accounts S-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

AMC Networks Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited AMC Networks Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2020, and the related notes, and financial statement schedule II (collectively, the “consolidated financial statements”), and our report dated February 26, 2021, expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

New York, New York

February 26, 2021

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors

AMC Networks Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of AMC Networks Inc. and subsidiaries (the Company) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the years in the three‐year period ended December 31, 2020, and the related notes, and the financial statement schedule II (collectively, the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the years in the three‐year period ended December 31, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 26, 2021,expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Changes in Accounting Principles

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for program rights due to the adoption of Accounting Standards Update (ASU) No. 2019-02, Improvements to Accounting for Costs of Films and License Agreements for Program Materials, as of January 1, 2020, and changed its method of accounting for leases due to the adoption of ASU No. 2016-02, Leases (ASC 842), as of January 1, 2019.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Assessment of the carrying value of goodwill in the AMC Networks International (AMCNI) reporting unit

As discussed in Note 9 to the consolidated financial statements, the Company’s goodwill balance for the International and Other segment was $450.6 million at December 31, 2020, which includes the AMCNI reporting unit. The Company performs goodwill impairment testing on an annual basis during the fourth quarter of each fiscal year as of December 1, and whenever events and changes in circumstances indicate that the carrying value of a reporting unit might exceed its fair value. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and its impact on each of its reporting units and determined that a triggering event had occurred with respect to its AMCNI reporting unit. The Company recognized an impairment charge of $25 million for the year ended December 31, 2020 to reduce the carrying value of the AMCNI reporting unit to its fair value.

F-2

We identified the assessment of the carrying value of goodwill in the AMCNI reporting unit as a critical audit matter. Revenue growth rates, long-term growth rate and the discount rate used by the Company to estimate the fair value of the reporting unit involved challenging auditor judgment, and have a significant effect on the Company’s assessment of the carrying value of the reporting unit’s goodwill.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s impairment process, including controls over the selection of the revenue growth rates, long-term growth rate and the discount rate used to estimate the fair value of the reporting unit. We performed sensitivity analyses over the revenue growth rates, long-term growth rate and discount rate assumptions. We evaluated the Company’s forecasted reporting unit revenue growth rate assumptions by comparing the assumptions to the reporting unit’s historical revenue growth rates, to projected revenue growth rates for guideline companies, and to projected television broadcasting revenue growth rates published by a third-party. We compared the Company’s historical revenue forecasts to actual results to assess the Company’s ability to accurately forecast. We involved a valuation professional with specialized skills and knowledge who assisted in:

• independently developing a discount rate range using publicly available market data for comparable entities and comparing it to the Company’s discount rate;

• independently developing a long-term growth rate range using publicly available market data and comparing it to the Company’s long-term growth rate; and

• developing an estimated range of the reporting unit fair value using the reporting unit’s cash flow projections and the independently developed discount rate range and long-term growth rate range, and compared the result to the Company’s fair value estimate.

Assessment of amortization of owned original program rights

As discussed in Note 6 to the consolidated financial statements, the balance of the Company’s owned original program rights, net as of December 31, 2020 was $464.2 million, of which $216.2 million relates to completed productions. Owned original program rights costs are amortized over their estimated useful lives, commencing upon the first airing, based on attributable revenue to-date as a percentage of total projected attributable revenue (ultimate revenues) under the individual-film-forecast-computation method. The Company bases its estimates of ultimate revenues primarily on distribution and advertising revenues historically generated from similar content in comparable markets, and projected program usage. Projected program usage is based on the Company’s expectation of future exhibitions. The Company reviews ultimate revenue estimates and projected program usage and revises assumptions, if necessary, which could either accelerate or delay the timing of amortization expense or result in a write-down of unamortized costs to fair value.

We identified the assessment of ultimate revenues used in the amortization of owned original program rights as a critical audit matter. The assumptions used by the Company to determine ultimate revenues involved especially challenging auditor judgment as they involve subjective assessments about future distribution (subscription fee revenues and content licensing revenues) and advertising revenues. Changes in those assumptions could have a significant effect on the carrying amount of the Company’s owned original program rights and associated current period program rights amortization expense.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the critical audit matter. This included controls related to the development of assumptions used in determining projected attributable distribution revenue and projected attributable advertising revenue. We compared the Company’s historical projections of attributable distribution and advertising revenues to actual results to assess the Company’s ability to accurately project ultimate revenues. For a selection of owned original programming series, we evaluated (1) projected attributable subscription fee revenue, by comparing the Company’s assumptions for projected subscribers and rates to recent actual subscriber and rate trends and terms of existing distribution agreements, (2) projected attributable content licensing revenue, by comparing expected licensing fees to contractual terms of existing agreements and recent historical trends of sales and usage based royalties, (3) projected attributable advertising revenue, by comparing the underlying pricing and ratings assumptions to recent historical trends, and (4) projected program usage by comparing historical projections to actual usage, to assess the company’s ability to accurately project program usage, and compared projected program usage to historical trends.

/s/ KPMG LLP

We have served as the Company’s auditor since 2011.

New York, New York

February 26, 2021

F-3

AMC NETWORKS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

ASSETS

Current Assets:

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Current portion of program rights obligations 259,449 304,692

Commitments and contingencies

Stockholders' equity:

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

Non-redeemable noncontrolling interests 26,296 25,724

See accompanying notes to consolidated financial statements.

F-4

AMC NETWORKS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts)

Operating expenses:

Other income (expense):

Loss on extinguishment of debt (2,908) — —

Net income attributable to noncontrolling interests (17,009) (27,230) (17,780)

Net income per share attributable to AMC Networks' stockholders:

Weighted average common shares:

See accompanying notes to consolidated financial statements.

F-5

AMC NETWORKS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

Other comprehensive income (loss):

Unrealized loss on interest rate swaps (437) (1,609) (356)

Amounts reclassified from accumulated other comprehensive loss — — (370)

Other comprehensive income (loss), before income taxes 33,125 (7,881) (42,442)

Other comprehensive income (loss), net of income taxes 33,239 (7,517) (42,397)

See accompanying notes to consolidated financial statements.

F-6

AMC NETWORKS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

Distributions to noncontrolling member — — — — — — — (2,847) (2,847)

Noncontrolling interests acquired — — — — — — — 1,354 1,354

Treasury stock not yet settled — — (985) — — — (985) — (985)

Settlement of treasury stock — — 995 — — — 995 — 995

Proceeds from the exercise of stock options — — 4,317 — — — 4,317 — 4,317

Distributions to noncontrolling member — — — — — — — (3,438) (3,438)

Non-redeemable noncontrolling interests changes — — — — — — — (4,429) (4,429)

Settlement of treasury stock — — 985 — — — 985 — 985

Proceeds from the exercise of stock options — — 4,630 — — — 4,630 — 4,630

Distributions to noncontrolling member — — — — — — — (1,037) (1,037)

See accompanying notes to consolidated financial statements.

F-7

AMC NETWORKS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Cash flows from operating activities:

Adjustments to reconcile net income to net cash from operating activities:

Non-cash restructuring and other related charges 5,359 14,098 7,440

Unrealized foreign currency transaction (gain) loss 3,099 (16,325) 2,057

Unrealized (gain) on derivative contracts, net — — (43,476)

Loss on extinguishment of debt 2,908 — —

Gains on investments (97,617) — —

Changes in assets and liabilities:

Cash flows from investing activities:

Principal payments received on loans to investees 5,000 — —

Payments for acquisition of a business, net of cash acquired — — (84,389)

Proceeds from sale of investments 10,000 — —

Cash flows from financing activities:

Proceeds from the issuance of long-term debt 6,000 1,521 289

Principal payments on long-term debt (262,250) (22,988) —

Proceeds from stock option exercises — 4,630 4,317

Principal payments on finance lease obligations (3,261) (5,115) (4,938)

See accompanying notes to consolidated financial statements.

F-8

AMC NETWORKS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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. Our AMC Studios operations produce original programming for our programming networks and also license those program rights worldwide. AMC Networks Broadcasting & Technology is 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; AMC Networks Streaming Services, consisting of our targeted subscription streaming services (Acorn TV, Shudder, Sundance Now, ALLBLK), AMC+ and other streaming initiatives; Levity, our production services and comedy venues business; and IFC Films, our film distribution business.

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.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("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. Summary of Significant Accounting Policies

AMCX US Equity

AMCX · 10-K · period ended 2020-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

AMCX US Equity☆

AMCX · 10-K · period ended 2020-12-31

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosure About Market Risk.

Item 8. Financial Statements and Supplementary Data.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Item 9A. Controls and Procedures.

Item 9B. Other Information.

Item 10. Directors, Executive Officers and Corporate Governance.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Item 14. Principal Accountant Fees and Services.

Item 15. Exhibits and Financial Statement Schedules.

Item 16. Form 10-K Summary.

AMCX US Equity