AMC Networks Inc. - FORM 8-K - EX-99.1 - May 19, 2021

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Exhibit 99.1

SEGMENT REPORTING CHANGES
This document provides recast segment financial information for 2020 and 2019 to reflect the following:
In the first quarter of 2021, AMC Networks (the "Company" or "our") changed its presentation of operating segments, reflecting a reorganized operating structure focused on a multi-platform distribution approach to content monetization. The Company's streaming services and IFC Films, previously included in the International and Other segment, are now included within the Domestic Operations segment (formerly referred to as the National Networks segment). In addition, certain corporate overhead costs are no longer allocated to the operating segments. These changes have no effect on the Company's consolidated financial statements or results of operations.
The new reporting structure consists of the following two operating segments:
•Domestic Operations: Includes activities of our five national programming networks, our streaming services, our AMC Studios operation, IFC Films and AMC Broadcasting & Technology. Our national programming networks are AMC, WE tv, BBC AMERICA, IFC, and SundanceTV. Our streaming services consist of our targeted subscription streaming services (Acorn TV, Shudder, Sundance Now, and ALLBLK), AMC+ and other streaming initiatives. Our AMC Studios operation produces original programming for our programming networks and also licenses such programming worldwide. IFC Films is our film distribution business and 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 and 25/7 Media (formerly Levity), our production services business.


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SUMMARY OF RECAST SEGMENT RESULTS
The following is a summary of segment revenues, operating income (loss), and adjusted operating income (loss) presented under the new segment reporting structure for the periods presented:

Year EndedQuarter EndedYear Ended
December 31, 2019March 31, 2020June 30, 2020September 30, 2020December 31, 2020December 31, 2020
Revenue
Domestic Operations$2,563,250$611,893$562,932$546,865$659,711$2,381,401
International and Other527,916124,82890,682111,398126,322453,230
Inter-segment Eliminations(30,845)(2,346)(7,323)(4,248)(5,758)(19,675)
$3,060,321$734,375$646,291$654,015$780,275$2,814,956
Operating Income (Loss)
Domestic Operations$884,054$224,601$217,586$179,259$113,425$734,871
International and Other(83,948)4,361(125,562)3,0618,775(109,365)
Corporate / Inter-segment Eliminations(174,829)(55,992)(43,222)(42,843)(40,805)(182,862)
$625,277$172,970$48,802$139,477$81,395$442,644
Adjusted Operating Income(1)
Domestic Operations$986,331$241,033$236,353$205,614$144,954$827,954
International and Other67,33617,84315,5838,9176,38248,725
Corporate / Inter-segment Eliminations (2)
(109,677)(36,422)(26,658)(29,040)(17,948)(110,068)
$943,990$222,454$225,278$185,491$133,388$766,611

(1)     Adjusted Operating Income (AOI) is the primary financial measure the Company uses to evaluate segment performance. 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. See below for a reconciliation of operating income (loss) to AOI.

(2)    Corporate overhead costs include such costs as executive salaries and benefits, costs of maintaining corporate headquarters, facilities and common support functions (such as human resources, legal, finance, strategic planning and information technology).
Inter-segment eliminations are primarily licensing revenues recognized between the Domestic Operations and International and Other segments.


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The following tables present the Company's operating results and a reconciliation to segment AOI under the new segment reporting structure for the periods presented:

Domestic Operations

Year EndedQuarter EndedYear Ended
(unaudited, in thousands)December 31, 2019March 31, 2020June 30, 2020September 30, 2020December 31, 2020December 31, 2020
Revenue:
       Advertising$904,253 $213,226 $187,434 $164,178 $236,639 $801,477 
       Distribution and other1,658,997 398,667 375,498 382,687 423,072 1,579,924 
2,563,250 611,893 562,932 546,865 659,711 2,381,401 
Operating expenses:
Technical and operating (excluding depreciation and amortization)
1,199,159 263,348 235,335 260,330 371,153 1,130,166 
Selling, general and administrative409,878 111,512 97,506 87,025 146,801 442,844 
Depreciation and amortization41,299 10,950 11,301 15,799 12,524 50,574 
Restructuring and other related charges28,860 1,482 1,204 4,452 15,808 22,946 
Total operating expenses1,679,196 387,292 345,346 367,606 546,286 1,646,530 
Operating income884,054 224,601 217,586 179,259 113,425 734,871 
Share-based compensation expense (benefit)26,153 2,724 4,844 4,437 (1,400)10,605 
Depreciation and amortization41,299 10,950 11,301 15,799 12,524 50,574 
Restructuring and other related charges28,860 1,482 1,204 4,452 15,808 22,946 
Majority-owned equity investees AOI5,965 1,276 1,418 1,667 4,597 8,958 
Adjusted operating income$986,331 $241,033 $236,353 $205,614 $144,954 $827,954 



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International and Other

Year EndedQuarter EndedYear Ended
(unaudited, in thousands)December 31, 2019March 31, 2020June 30, 2020September 30, 2020December 31, 2020December 31, 2020
Revenue:
       Advertising$89,659 $19,364 $14,810 $18,924 $21,241 $74,339 
       Distribution and other438,257 105,464 75,872 92,474 105,081 378,891 
527,916 124,828 90,682 111,398 126,322 453,230 
Operating expenses:
Technical and operating (excluding depreciation and amortization)
332,241 80,136 54,190 77,356 88,999 300,681 
Selling, general and administrative132,884 27,458 21,818 26,044 31,492 106,812 
Depreciation and amortization34,983 8,896 7,563 4,937 5,069 26,465 
Impairment and other charges (credits)106,603 — 130,411 — (8,184)122,227 
Restructuring and other related charges5,153 3,977 2,262 — 171 6,410 
Total operating expenses611,864 120,467 216,244 108,337 117,547 562,595 
Operating income (loss)(83,948)4,361 (125,562)3,061 8,775 (109,365)
Share-based compensation expense4,545 609 909 919 551 2,988 
Depreciation and amortization34,983 8,896 7,563 4,937 5,069 26,465 
Impairment and other charges106,603 — 130,411 — (8,184)122,227 
Restructuring and other related charges5,153 3,977 2,262 — 171 6,410 
Adjusted operating income$67,336 $17,843 $15,583 $8,917 $6,382 $48,725 
















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Corporate / Inter-segment Eliminations

Year EndedQuarter EndedYear Ended
(unaudited, in thousands)December 31, 2019March 31, 2020June 30, 2020September 30, 2020December 31, 2020December 31, 2020
Revenue:
       Advertising$(79)$— $— $— $— $— 
       Distribution and other(30,766)(2,346)(7,323)(4,248)(5,758)(19,675)
(30,845)(2,346)(7,323)(4,248)(5,758)(19,675)
Operating expenses:
Technical and operating (excluding depreciation and amortization)
(24,415)575 (7,023)(3,869)(18,939)(29,256)
Selling, general and administrative136,682 45,680 35,840 35,698 41,946 159,164 
Depreciation and amortization24,816 6,884 7,041 6,812 6,830 27,567 
Restructuring and other related charges6,901 507 41 (46)5,210 5,712 
Total operating expenses143,984 53,646 35,899 38,595 35,047 163,187 
Operating loss(174,829)(55,992)(43,222)(42,843)(40,805)(182,862)
Share-based compensation expense33,435 12,179 9,482 7,037 10,617 39,315 
Depreciation and amortization24,816 6,884 7,041 6,812 6,830 27,567 
Restructuring and other related charges6,901 507 41 (46)5,210 5,712 
Cloud computing amortization— — — — 200 200 
Adjusted operating loss$(109,677)$(36,422)$(26,658)$(29,040)$(17,948)$(110,068)
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