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What changed in AMC Networks Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of AMC Networks Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+416 added−363 removedSource: 10-K (2024-02-09) vs 10-K (2023-02-17)

Top changes in AMC Networks Inc.'s 2023 10-K

416 paragraphs added · 363 removed · 297 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeAMC+ also featured a slate of original and exclusive series including the second season of Gangs of London , the Gotham Award-winning This Is Going to Hurt , the third and final season of A Discovery of Witches , and That Dirty Black Bag. • In 2022 AMC+ also became the exclusive streaming home of the Company’s full slate of films from IFC Films, IFC Midnight and RLJE Films following theatrical and digital distribution, with new films released every Friday including Christmas With the Campbells , which was the top acquisition driver of any film on AMC+ in 2022. • AMC+ is available to subscribers commercial free through our direct to consumer (“DTC”) app, as well as through MVPDs and virtual MVPDs, and digital streaming platforms such as Amazon Prime Video Channels, Apple TV Channels and The Roku Channel. • AMC+ is currently available in several international markets including Canada, Spain, South Korea, India, Australia and New Zealand. 1 A paid subscription is defined as a subscription to a direct-to-consumer service or a subscription received through distributor arrangements, in which we receive a fee for the distribution of our streaming services, and includes an estimate of subscribers that converted to paying status in the subsequent period based on historical conversion percentages. 10 • Acorn TV is North America’s largest streaming service specializing in British and international television with exclusive new programs and a deep library of mysteries, dramas and comedies. • In 2022, the service premiered hit series Harry Wild , starring and executive produced by Jane Seymour, the most watched new series and most watched single season of any series on Acorn TV.
Biggest changeAMC+ also featured a slate of critically acclaimed dramas including the second season of Dark Winds, the third and final season of Happy Valley , new original Lucky Hank starring Bob Odenkirk, the award-winning feature film BlackBerry (also available as a limited series), and the launch of breakout series Mayfair Witches from the growing AMC franchise Anne Rice’s Immortal Universe . • AMC+ is also the exclusive streaming home of the Company’s full slate of films from IFC Films, RLJE Films and Shudder following theatrical and digital distribution. • AMC+ is available to subscribers through either ad-supported or commercial free plans through our DTC apps, as well as through MVPDs and virtual MVPDs, and digital streaming platforms such as Amazon Prime Video Channels, Apple TV Channels and The Roku Channel. • AMC+ is currently available in several international markets including Canada, Spain, Australia and New Zealand.
Closed Captioning Certain of our networks must provide closed-captioning of programming for the hearing impaired, and comply with other regulations designed to make our content more accessible, and we must provide closed captioning on certain video content that we offer on the Internet or through other Internet Protocol distribution methods.
Closed Captioning Our networks must provide closed-captioning of programming for the hearing impaired, and comply with other regulations designed to make our content more accessible, and we must provide closed captioning on certain video content that we offer on the Internet or through other Internet Protocol distribution methods.
Supplier Diversity – We are committed to supplier diversity and advancing the social and economic inclusion of businesses owned by historically excluded and underrepresented groups — including women, minorities, veterans, people with disabilities, and the LGBTQ+ community.
We are committed to supplier diversity and advancing the social and economic inclusion of businesses owned by historically excluded and underrepresented groups — including women, minorities, veterans, people with disabilities, and the LGBTQ+ community.
Subscription revenue: Our programming networks as well as our streaming services are distributed to our viewing audience throughout the United States (“U.S.”) and around the world via cable and other multichannel video programming distribution platforms, including direct broadcast satellite ("DBS"), platforms operated by telecommunications providers, virtual or digital multi-channel video programming distributors ("MVPDs" and collectively "distributors"), and through our direct to consumer apps.
Subscription revenue: Our programming networks as well as our streaming services are distributed to our viewing audience throughout the United States (“U.S.”) and around the world via cable and other multichannel video programming distribution platforms, including direct broadcast satellite ("DBS"), platforms operated by telecommunications providers, virtual or digital multi-channel video programming distributors ("MVPDs" and collectively "distributors"), and through our direct to consumer ("DTC") apps.
We strive to use best practices in supplier diversity to identify and work with businesses that are at least 51% owned, operated and controlled by one or more of the following: Minority Business Enterprise (MBE), Women Business Enterprise (WBE), 18 Lesbian, Gay, Bisexual, Transgender, Queer Enterprises (LGBTQ+), Veteran Owned Business (VBE), Service Disabled Veterans (SDV), and Disability-Owned Business Enterprise (DOBE).
We strive to use best practices in supplier diversity to identify and work with businesses that are at least 51% owned, operated and controlled by one or more of the following: Minority Business Enterprise (MBE), Women Business Enterprise (WBE), Lesbian, Gay, Bisexual, Transgender, Queer Enterprises (LGBTQ+), Veteran Owned Business (VBE), Service Disabled Veterans (SDV), and Disability-Owned Business Enterprise (DOBE).
In addition to the Nielsen rating, our advertising rates are also influenced by the demographic mix of our viewing audiences, since advertisers tend to pay premium rates for more desirable demographic groups of viewers. Our programming networks have advertisers representing companies in a broad range of sectors, including automotive, restaurants/food, health, and telecommunications industries.
In addition to the Nielsen rating, our advertising rates are also influenced by the demographic mix of our viewing audiences, since advertisers tend to pay premium rates for more desirable demographic groups of viewers. Our programming networks have advertisers representing companies in a broad range of sectors, including automotive, restaurants/food, health, technology and telecommunications industries.
With respect to the acquisition of entertainment programming, such as syndicated programs and movies that are not produced by or specifically for networks, our competitors include national broadcast television networks, local broadcast television stations, other cable programming networks, Internet-based video content distributors, and video-on-demand programs.
With respect to the acquisition of entertainment programming, such as syndicated programs and movies that are not produced by or specifically for networks, our competitors include national broadcast television networks, local broadcast television stations, other cable programming networks, Internet-based video content distributors, and video-on-demand 17 programs.
Decisions as to how to distribute programming are made on the basis of a variety of factors including the relative value of any particular alternative. We also contract with some of the industry's leading production companies to produce original programming that appears on our programming networks and streaming services.
Decisions as to how to distribute programming are made on the basis of a variety of factors including the relative value of any particular alternative. 7 We also contract with some of the industry's leading production companies to produce original programming that appears on our programming networks and streaming services.
AMC Networks Inc. was incorporated on March 9, 2011 as an indirect, wholly-owned subsidiary of Cablevision Systems Corporation (Cablevision Systems Corporation and its subsidiaries are referred to as "Cablevision"). On June 30, 2011, Cablevision spun off the Company (the "Distribution"), and AMC Networks Inc. became an independent public company.
AMC Networks Inc. was incorporated on March 9, 2011 as an indirect, wholly-owned subsidiary of Cablevision Systems Corporation (Cablevision Systems Corporation and its subsidiaries are referred to as "Cablevision"). On June 30, 2011, Cablevision spun off the Company, and AMC Networks Inc. became an independent public company.
Most of our original programming and all of our acquired programming is obtained through 16 agreements with other parties that have produced or own the rights to such programming. Competition for this programming will increase as the number of programming networks and other distributors increases.
Most of our original programming and all of our acquired programming is obtained through agreements with other parties that have produced or own the rights to such programming. Competition for this programming will increase as the number of programming networks and other distributors increases.
REGULATION Our businesses are subject to and affected by regulations of U.S. federal, state and local government authorities, and our international operations are subject to laws and regulations of the countries in which they operate, as well as international bodies, such as the European Union.
REGULATION Our businesses are subject to and affected by regulations of U.S. federal, state and local government authorities, and our international operations are subject to laws and regulations of regulators in the countries in which they operate, as well as international bodies, such as the European Union.
Our programming networks are available on every major U.S. distribution platform. Our programming networks' distribution agreements expire at various dates through 2028. For our streaming services, we earn monthly or annual subscription fees as the streaming service is provided to our customers. We frequently negotiate with distributors in an effort to increase the subscriber base for our networks.
Our programming networks are available on every major U.S. distribution platform. Our programming networks' distribution agreements expire at various dates through 2029. For our streaming services, we earn monthly or annual subscription fees as the streaming service is provided to our customers. We frequently negotiate with distributors in an effort to increase the subscriber base for our networks.
In addition, we have storied titles and brands known to a global audience, such as The Walking Dead and the Anne Rice catalog, and we own a majority interest in the Agatha Christie library. 5 By leveraging our library of titles and original content, we are able to enrich the content mix across all of our linear and streaming platforms.
In addition, we have storied titles and brands known to global audiences, such as The Walking Dead and the Anne Rice catalog, and we own a majority interest in the Agatha Christie library. 5 By leveraging our library of titles and original content, we are able to enrich the content mix across all of our linear and streaming platforms.
We intend to continue developing strong high-quality original content across our linear networks and streaming services to optimize our distribution, advertising and content licensing revenue, further enhance our brands, strengthen our engagement with our viewers, subscribers, distributors and advertisers, and to build viewership and attract and retain subscribers for our streaming services.
We intend to continue to develop strong high-quality original content across our linear networks and streaming services to optimize our distribution, advertising and content licensing revenue, further enhance our brands, strengthen our engagement with our viewers, subscribers, distributors and advertisers, and to build viewership and attract and retain subscribers for our streaming services.
IFC Films is known for attracting high-profile talent and distributing films that regularly garner critical acclaim and industry honors, including numerous Academy Award, Golden Globe, and Cannes Film Festival Award winning titles, and has been behind some of the most culturally impactful and successful independent film and documentary releases of all time.
The IFC Films brand in particular is known for attracting high-profile talent and distributing films that regularly garner critical acclaim and industry honors, including numerous Academy Award, Golden Globe, and Cannes Film Festival Award winning titles, and has been behind some of the most culturally impactful and successful independent film and documentary releases of all time.
OVERVIEW AMC Networks is a global entertainment company known for its popular and award-winning content. We distribute our content to audiences globally on an array of distribution platforms, including linear networks and subscription streaming services, as well as through licensing arrangements.
OVERVIEW AMC Networks is a global entertainment company known for its popular and award-winning content. We distribute our content to audiences globally on an array of distribution platforms, including linear networks, subscription streaming services and other ad-supported streaming platforms, as well as through licensing arrangements.
Develop and Grow Streaming Offerings and Brands. Our targeted streaming strategy is to serve distinct audiences and build loyal and engaged fan communities around each service. With our targeted approach, we are serving audiences with streaming offerings that are companions to (rather than competitive with) the larger general entertainment streaming services.
Our targeted streaming strategy is to serve distinct audiences and build loyal and engaged fan communities around each service. With our targeted approach, we are serving audiences with streaming offerings that are companions to (rather than competitive with) the larger general entertainment streaming services.
To that end, we have partnerships with all major streaming services and digital platforms, including Netflix, Hulu, Apple TV, Amazon Prime and Roku, to make our content available on various platforms permitting subscribers to access programs at their convenience, including electronic-sell-through (EST) and physical (DVD and Blu-ray) formats. Growth and Innovation in Advertising .
To that end, we have partnerships with all major streaming services and digital platforms, including Netflix, Hulu, Apple TV, Amazon Prime and Roku, to make our content available on various platforms permitting subscribers to access programs at their convenience, including electronic-sell-through ("EST") and physical (DVD and Blu-ray) formats.
For example, most states have enacted laws that impose data security and security breach obligations, and new frameworks regulating consumer privacy have recently been established at the state level and overseas, including the European Union's General Data Protection Regulation, or the GDPR, and the California Consumer Privacy Act, or as amended, the CCPA.
For example, most states have enacted laws that impose data security and security breach obligations, and new frameworks regulating consumer privacy have recently been established at the state level and overseas, including the European Union's General Data Protection Regulation, or the GDPR, the California Consumer Privacy Act, or as amended, the CCPA and other similar comprehensive privacy laws that have been enacted in other states.
We have in some instances made upfront payments to distributors in exchange for these additional subscribers. We also may help fund the distributors' efforts to market our programming networks and streaming services or we may permit distributors to offer limited 6 promotional periods without payment of subscriber fees.
We have in some instances made upfront payments to distributors in exchange for these additional subscribers. We also may support the distributors' efforts to market our programming networks and streaming services or we may permit distributors to offer limited promotional periods without payment of subscriber fees.
They are an important part of driving our business objectives, including curating themed content areas that helps drive streaming subscriber engagement and growth, acting as a valuable sounding board for content development and programming, leading heritage month celebrations and supporting employee engagement and retention.
They are an important part of driving our business objectives, including curating themed content collections that help drive streaming subscriber engagement and growth, acting as a valuable sounding board for content development and programming, leading heritage month celebrations and supporting employee engagement and retention.
Streaming Services The Company’s streaming portfolio of branded subscription services serve a targeted, passionate fanbase with content depth, curation and community. The content on these platforms is a mix of licensed and owned original programming. Our various services are distributed in several key markets internationally, including Canada, the U.K., parts of Europe, Korea, India, Australia, New Zealand and Latin America.
Other Streaming Services The Company’s streaming portfolio of branded subscription services serve a targeted, passionate fanbase with content depth, curation and community. The content on these platforms is a mix of licensed and owned original programming. Our various services are distributed in several key markets internationally, including Canada, the U.K., parts of Europe, Australia and New Zealand.
Our streaming portfolio includes the following targeted services: • Launched in 2020, AMC+ is the Company’s premium streaming bundle featuring an extensive lineup of popular and critically acclaimed programming from AMC, BBC America, IFC, and SundanceTV along with full access to targeted streaming services Shudder, Sundance Now and IFC Films Unlimited.
AMC+ streaming service • Launched in 2020, AMC+ is the Company’s premium streaming bundle featuring an extensive lineup of popular and critically acclaimed programming from AMC, BBC AMERICA, IFC and SundanceTV along with full access to targeted streaming services Shudder, Sundance Now and IFC Films Unlimited.
More than 30% of our U.S.-based workforce are people of color. We aim to attract top talent through our corporate brand and our reputation for innovation and high-quality content, as well as through the many benefits we offer.
More than 30% of our U.S.-based workforce are people of color and 19% of U.S.-based leadership positions are held by people of color. We aim to attract top talent through our corporate brand and our reputation for innovation and high-quality content, as well as through the many benefits we offer.
Other initiatives to foster community and social impact include paid time off for full-time employees for Juneteenth, Election Day, Veterans Day and a volunteer day of their choice. AVAILABLE INFORMATION Our corporate website is http://www.amcnetworks.com and the investor relations section of our website is located at http://investor.amcnetworks.com.
Other initiatives to foster community and social impact include paid time off for full-time employees for Juneteenth, Veterans Day, an annual floating holiday and a volunteer day of their choice. AVAILABLE INFORMATION Our corporate website is http://www.amcnetworks.com and the investor relations section of our website is located at http://investors.amcnetworks.com.
We have an extensive library of television and film properties that we own and control, including several storied franchises such as The Walking Dead Universe, Anne Rice catalog, and Agatha Christie library that are well-known to a global audience.
We have an extensive library of television and film properties, including several storied franchises such as The Walking Dead Universe, the Anne Rice catalog, and the Agatha Christie library that are well-known to global audiences.
In 2022, we matched donations from nearly 300 employees in support of more than 275 causes on our online giving and volunteering platform, Give Back at AMCN. Through the platform, employees can research and learn about organizations doing important and difference-making work and make personal charitable donations, which includes an annual company match.
In 2023, we matched donations from more than 250 employees in support of more than 240 causes on our online giving and volunteering platform, Give Back at AMCN. Through the platform, employees can research and learn about organizations doing important and difference-making work and make personal charitable donations, which includes an annual company match.
As some current content licensing deals with third parties expire, hundreds of hours of our popular and acclaimed shows and films will become an exclusive part of our owned and controlled library which we can then utilize across our various services or re-license to third parties, including critically acclaimed hit series, such as Halt and Catch Fire, Turn , and Rectify , as well as all 11 seasons of The Walking Dead , to be discovered and rediscovered by viewers and subscribers, driving growth and value across our portfolio.
As content licensing deals with third parties expire, hundreds of hours of our popular and acclaimed shows and films become exclusive content in our owned and controlled library, which we can then utilize across our various services or re-license to third parties, including critically acclaimed hit series, such as Halt and Catch Fire, Turn: Washington’s Spies , and Rectify , as well as all 11 seasons of The Walking Dead and all eight seasons of Fear the Walking Dead to be discovered and rediscovered by viewers and subscribers, driving growth and value across our portfolio.
Its mission is to reunite family and friends around the table to make memorable life experiences. • Launched over two decades ago, El Gourmet offers 100% of its content in Spanish, with over 90% original productions and more than 250 episodes premiering each year, showcasing some of the greatest celebrity cooks of this region. • El Gourmet’s original productions have been awarded 14 Martin Fierro Awards (granted by the Association of Argentine Television and Radio Journalists) as well as two Taste Awards in the United States. • Our U.K. business operates a joint venture with Paramount International Networks delivering a portfolio of entertainment channels in the U.K. including CBS Reality, Reality Xtra, Legend, and Horror Xtra. • CBS Reality is increasingly airing owned locally produced ‘true crime’ content aimed at women in the 50+ demographic.
Its mission is to reunite family and friends around the table to make memorable life experiences. • Launched over two decades ago, El Gourmet offers 100% of its content in Spanish, with over 75% original productions and more than 250 episodes premiering each year, showcasing some of the greatest celebrity cooks of this region. • El Gourmet’s original productions have been awarded 15 Martin Fierro Awards (granted by the Association of Argentine Television and Radio Journalists) as well as 13 Taste Awards in the United States. • Our U.K. business operates a joint venture with Paramount Global delivering a portfolio of entertainment channels in the U.K. including TRUE CRIME, LEGEND, TRUE CRIME XTRA and LEGEND XTRA. • TRUE CRIME is increasingly airing owned locally produced "true crime" content aimed at women in the 50+ demographic.
Throughout the year we bring together partners, business leaders and our creative talent for engaging and thought-provoking conversations for our employees about our content, industry trends, and advancing DEI.
Throughout the year we bring together partners, business leaders and our creative talent for engaging and thought-provoking conversations for our employees about our content and industry trends, and advancing diversity, equity and inclusion.
We have increased the value of our linear and digital advertising inventory by establishing a leadership position in advanced advertising technologies, including addressable advertising and programmatic buying, to make it easier for a wider variety of advertisers to partner with us and to make the impressions they buy smarter and more effective.
We have increased the value of our linear and digital advertising inventory by establishing a leadership position in advanced advertising technologies, including addressable advertising and programmatic buying - including the industry’s first deployment of programmatic buying on linear television through our Audience+ platform – to make it easier for a wider variety of advertisers to partner with us and to make the impressions they buy smarter and more effective.
In the upfront market, advertisers buy advertising time for the upcoming season, and by purchasing in advance, often receive discounted rates. In the scatter market, advertisers buy advertising time close to the time when the commercials will be run, and often pay a premium.
In the U.S., we sell advertising time in both the upfront and scatter markets. In the upfront market, advertisers buy advertising time for the upcoming season, and by purchasing in advance, often receive discounted rates. In the scatter market, advertisers buy advertising time close to the time when the commercials will be run, and often pay a premium.
AMC Networks Broadcasting & Technology, our technical services business, 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.
The operating segment also includes AMC Networks Broadcasting & Technology, our technical services business, which primarily services the programming networks. • International and Other: Includes AMCNI, our international programming businesses consisting of a portfolio of channels around the world, and 25/7 Media (formerly Levity), our production services business.
AMC Studios • AMC Studios is AMC Networks’ in-house production and distribution operation which launched in 2010 with The Walking Dead , the highest-rated show in cable history. • Since then, AMC Studios has produced several critically acclaimed, award-winning and culturally distinctive originals for AMC Networks’ suite of channels and services including Anne Rice’s Interview with the Vampire , Anne Rice’s Mayfair Witches , Dark Winds , Fear the Walking Dead , Tales of The Walking Dead , Halt and Catch Fire , The Terror anthology and the Peabody Award-winning Rectify , as well as unscripted series Ride with Norman Reedus and James Cameron’s Story of Science Fiction .
AMC Studios • AMC Studios is AMC Networks’ in-house production and distribution operation which launched in 2010 with The Walking Dead , the highest-rated show in cable television history. • Since then, AMC Studios has produced several critically acclaimed, award-winning and culturally distinctive originals for AMC Networks’ suite of channels and services including Anne Rice’s Interview with the Vampire , Anne Rice’s Mayfair Witches , Dark Winds , The Walking Dead: Dead City, The Walking Dead: Daryl Dixon, Fear the Walking Dead , Halt and Catch Fire , The Terror anthology, Preacher , and the Peabody Award-winning Rectify , as well as unscripted series Ride with Norman Reedus and James Cameron’s Story of Science Fiction . • Upcoming AMC Studios series include T he Walking Dead: The Ones Who Live , Parish , Orphan Black: Echoes , and The Terror: Devil in Silver for AMC and AMC+.
AMC Networks Broadcasting & Technology has 30 plus years of experience across its network services groups, including network origination, affiliate engineering, network transmission, and traffic and scheduling that provide day-to-day delivery of any programming network, in high definition or standard definition. 12 International and Other Our International and Other segment includes the operations of AMC Networks International and 25/7 Media.
AMC Networks Broadcasting & Technology has 30 plus years of experience across its network services groups, including network origination, affiliate engineering, network transmission, and traffic and scheduling that provide day-to-day delivery of any programming network, in high definition or standard definition.
The rules, regulations, policies and procedures affecting our businesses are constantly subject to change and increasingly, legislative and regulatory proposals seek to cover all sources of content, including the digital platforms over which we offer content, which may affect our regulatory burdens in the future. 14 The descriptions below are summary in nature and do not purport to describe all present and proposed laws and regulations affecting our businesses.
The rules, regulations, policies and procedures affecting our businesses are constantly subject to change and increasingly, legislative and regulatory proposals seek to cover all sources of content, including the digital platforms over which we offer content, which may affect our regulatory burdens in the future.
We believe the strength of our workforce is one of the significant contributors to our success. Our key human capital management objectives are to invest in and support our employees so that we have the ability to attract, develop and retain a high performing and diverse workforce. Talent The Company employed 1,948 employees as of December 31, 2022.
Our key human capital management objectives are to invest in and support our employees so that we have the ability to attract, develop and retain a high performing and diverse workforce. Talent The Company employed approximately 1,900 employees as of December 31, 2023.
To date, we have launched a total of 15 distinct channels featuring our content, in different configurations, across major FAST platforms, such as Pluto TV, Sling TV and Samsung TV Plus.
We currently have a total of 17 active distinct channels featuring our content, in different configurations, across major FAST platforms, such as Pluto TV, Tubi, Plex, Sling TV and Samsung TV Plus.
The GDPR and the CCPA impose, among other things, 15 more stringent operational requirements for processors and controllers of personal data, including expanded disclosures about how personal information is to be used, and increased liability for violations.
The GDPR, the CCPA and other state laws impose, among other things, stringent operational requirements for processors and controllers of personal data, including expansive disclosures about how personal information is to be used, and significant fines for violations.
Through an initiative called the AMC Networks “Content Room,” we offer brands and advertisers opportunities to reach fans of our shows and franchises in compelling and innovative ways including through custom short-form content, on social media platforms and through on-the-ground live events. Revenue We earn revenue principally from the distribution of our programming and the sale of advertising.
Through an initiative called the AMC Networks “Content Room,” we offer brands and advertisers opportunities to reach fans of our shows and franchises in compelling and innovative ways including through custom short-form content on social media platforms and through on-the-ground live events. Maintain Financial Discipline With Focus on Free Cash Flow .
We continue to leverage our high-quality popular content on our networks to optimize our advertising revenue. In addition, we are embracing an array of new advertising opportunities, including an expanding and robust presence on free ad-supported streaming (FAST) and advertising video on demand (AVOD) platforms.
In addition, we are embracing an array of new advertising opportunities, including an expanding and robust presence on free ad-supported streaming ("FAST") and advertising video on demand ("AVOD") platforms.
Increased Ownership and Control of Content and Valuable IP . AMC Networks’ wholly-owned or majority-controlled library includes more than 6,000 episodes and 1,300 films, as well as more than 20,000 episodes of highly localized unscripted lifestyle content from our AMC Networks International business.
AMC Networks’ wholly-owned or majority-controlled library includes more than 7,500 episodes and nearly 1,500 films, as well as more than 20,000 episodes of highly localized unscripted lifestyle content from our AMCNI business.
Our streaming services ended 2022 with approximately 11.8 million aggregate paid streaming subscribers 1 .
Our streaming services, including AMC+, ended 2023 with approximately 11.4 million aggregate paid streaming subscribers 1 .
Martin. The series sustained a 100% Fresh rating on Rotten Tomatoes and will return for a second season in 2023. • AMC's film library consists of films that are licensed under long-term contracts with major studios such as Twentieth Century Fox, Warner Bros., Sony, MGM, NBC Universal, Paramount and Buena Vista.
The series has achieved 100% Fresh ratings on Rotten Tomatoes for each of its first two seasons and has been renewed for season three, expected in 2025. • AMC's film library consists of films that are licensed under long-term contracts with major studios such as Twentieth Century Fox, Warner Bros., Sony, MGM, NBC Universal, Paramount and Buena Vista.
High Impact Partnerships – We work with leading industry organizations to promote greater inclusion in the stories we tell, the partners we work with, and the audiences who enjoy our content.
Howard Foundation, Future Now, Black Theatre Coalition, and the Institute of American Indian Arts (IAIA). High Impact Partnerships – We work with leading industry organizations to promote greater inclusion in the stories we tell, the partners we work with, and the audiences who enjoy our content.
Distribution Revenue Distribution revenue primarily includes: fees charged to distributors that carry our network brands and content; subscription fees paid for our streaming services; and revenue earned from the licensing of our original programming.
For the year ended December 31, 2023, one distributor accounted for greater than 10% of our consolidated revenues, net. 6 Distribution Revenue Distribution revenue primarily includes: fees charged to distributors that carry our network brands and content; subscription fees paid for our streaming services; and revenue earned from the licensing of our original programming.
We do this primarily by partnering with leading industry diversity advocacy organizations and through our corporate internship program where we source candidates from a broad range of colleges including Historically Black Colleges and Universities (HBCUs) through our partnership with the Entertainment Industry College Outreach Program ("EICOP") HBCU in LA.
We do this primarily by partnering with leading industry diversity advocacy organizations and through our corporate internship program where we support opportunities and access for candidates from diverse and under-represented communities through a broad range of organizations including: The Entertainment Industry College Outreach Program (EICOP) HBCU in LA and New York internship programs, T.
Some of these competitors have exclusive contracts with motion picture studios or independent motion picture distributors or own film libraries. Competition for Advertising Revenue Our programming networks must compete with other sellers of advertising time and space, including other MVPDs, radio, newspapers, outdoor media and increasing shifts in spending toward online and mobile offerings from more traditional media.
Competition for Advertising Revenue Our programming networks, and ad-supported streaming services, must compete with other sellers of advertising time and space, including other MVPDs, radio, newspapers, outdoor media and increasing shifts in spending toward online and mobile offerings from more traditional media.
Distribution of Programming Services The business of distributing programming services to cable television systems and other MVPDs and licensing of original programming for distribution is highly competitive. Our programming services face competition from other programming networks and services for carriage by a particular MVPD, and for the carriage on the service tier that will attract the most subscribers.
Our programming services face competition from other programming networks and services for carriage by a particular MVPD, and for the carriage on the service tier that will attract the most subscribers.
The rights agreements for this content are of varying duration and generally permit our programming networks and streaming services to carry these series, films and other programming during certain window periods. 7 SEGMENTS We manage ou r business through the following two operating segments: • Domestic Operations: Includes our programming services and AMC Broadcasting & Technology.
The rights agreements for this content are of varying duration and generally permit our programming networks and streaming services to carry these series, films and other programming during certain window periods.
COMPETITION Our programming services, consisting of linear networks and streaming services, operate in three highly competitive markets. First, our programming services compete with other programming services to obtain distribution on cable television systems and other multichannel video programming distribution systems, and ultimately for viewing by each distributor's subscribers.
First, our programming services compete with other programming services to obtain distribution on cable television systems and other multichannel video programming distribution systems, and ultimately for viewing by each distributor's subscribers. Second, our programming services compete with other programming services and other sources of video content, to secure desired entertainment programming.
We believe our products enhance our value to advertisers through better targeting, data and measurement and we believe they will contribute to growth of our overall business in the mid and long term.
Although advertising revenue has declined in recent years, and we expect advertising revenue to continue to decline as the advertising market gravitates toward other distribution platforms, we believe that, in the mid and long-term, our products enhance our value to advertisers through better targeting, data and measurement and we believe they will contribute to growth of our overall business.
AMC Networks also operates IFC Films, a film distribution business that distributes independent narrative and documentary films under the IFC Films label as well as the IFC Midnight distribution label.
AMC Networks also operates a film distribution business that distributes independent narrative and documentary films under three distinct film brands: IFC Films, RLJ Entertainment Films ("RLJE Films") and Shudder.
We aim to retain our talent by emphasizing our competitive rewards; offering opportunities that support employees both personally and professionally; and our commitment to fostering a positive, inclusive and collaborative corporate culture. Our performance management practice includes frequent feedback and conversations between managers and team members, and talent reviews designed to identify potential future leaders and inform succession plans.
We aim to retain our talent by emphasizing our competitive rewards; offering opportunities that support employees both personally and professionally; and our commitment to fostering a positive, inclusive and collaborative corporate culture.
In 2022, we introduced a new series called “Courageous Conversations,” a monthly opportunity for all employees to engage on key social and cultural issues impacting our community and society at large, presented and facilitated by experts on topics ranging from neurodiversity in the workplace to exploring authentic engagement with Native American communities.
In 2023, we continued the Company’s “Courageous Conversations” series, a monthly opportunity for all employees to engage on key social and cultural issues impacting our community and society at large, presented and facilitated by experts.
Advertising Revenue We earn advertising revenue by selling advertising time on our programming networks, on digital platforms we own and on an increasing number of AVOD and FAST platforms. In the U.S., we sell advertising time in both the upfront and scatter markets.
We also earn revenue, to a lesser extent, through the distribution of AMC Studios produced series to third parties. Advertising Revenue We earn advertising revenue by selling advertising time on our programming networks, on digital platforms we own and on an increasing number of AVOD and FAST platforms in the U.S and the U.K.
Our global workforce, as of December 31, 2022, was more than 50% women, with 44% of our leadership positions (vice president or equivalent and above) held by women, including three members of the Company’s senior leadership team. The Company also appointed its first woman Chief Commercial Officer in 2022, who now serves as an executive officer of AMC Networks.
Our global workforce, as of December 31, 2023, was 50% women, with 45% of our leadership positions (vice president or equivalent and above) held by women, including our Chief Executive Officer and four additional members of the Company’s senior leadership team.
Some examples of our DEI areas of focus are described below: Fostering Inclusive Communities – We have nine active Business Employee Resource Groups (BERGs) that form communities through shared interests and experiences with more than 20 chapters across the U.S, U.K., Europe and Latin America. Our BERG members strive to create a culture of belonging for our employees.
Fostering Inclusive Communities – We have 12 Business Employee Resource Groups (BERGs) that form communities through shared interests and experiences with more than 20 chapters across the U.S., U.K., Europe and Latin America.
In 2023 the network will debut Frozen Planet II, the highly anticipated sequel to the four-time Emmy ® -winning series Frozen Planet. • As of December 31, 2022, IFC reached approximately 60 million Nielsen subscribers and had distribution agreements with all major U.S. distributors. • IFC is the home of offbeat, unexpected comedies.
In 2023 the network brought viewers F rozen Planet II , the sequel to the four-time Emmy®-winning series Frozen Planet and the epic Planet Earth III , narrated by the legendary Sir David Attenborough. • Orphan Black: Echoes , the spinoff from the Emmy Award-winning original series Orphan Black , is slated to premiere in 2024. • As of December 31, 2023, IFC reached approximately 56 million Nielsen subscribers and had distribution agreements with all major U.S. distributors. • IFC is the home of offbeat, unexpected comedies.
AMC Networks International • AMCNI, the international division of the Company, delivers entertaining and acclaimed programming that reaches subscribers in more than 110 countries and territories around the world, through operational centers in London, Madrid, Budapest, Miami and Buenos Aires. • AMCNI consists of our global brand, AMC, as well as a portfolio of popular, locally recognized brands delivering programming in a wide range of genres, including sports, film, cooking, crime and investigation, science, documentary and kids. • Our local and regional channels are programmed for local audiences and language, and we develop and license local content that is tailored to individual market tastes. • AMCNI also operates a number of joint venture partnerships and managed channel services as well as direct to consumer services.
AMC Networks International • AMCNI, the international division of the Company, delivers entertaining and acclaimed programming that reaches subscribers in approximately 110 countries and territories around the world, through operational centers in 13 London, Madrid, Budapest, Prague, Miami and Buenos Aires. • AMCNI consists of our global brand, AMC, as well as a portfolio of popular, locally recognized brands delivering programming in a wide range of genres, including sports, film, cooking, lifestyle, crime and investigation, science, documentary and kids. • Our local and regional channels are programmed for local audiences and language, and we develop and license local content that is tailored to individual market tastes. • AMCNI operates a number of joint venture partnerships and managed channel services as well as direct to consumer services. ◦ A joint venture with Paramount International Networks delivers a portfolio of seven entertainment channels which is managed from London, including TRUE CRIME, TRUE CRIME XTRA, LEGEND and LEGEND XTRA (U.K. only) CBS Justice, CBS Europa, and CBS Reality (available outside of the U.K.). ◦ Dreamia, a joint venture with NOS in Portugal, delivers channels including Canal Hollywood, Canal Panda, Panda Kids, Biggs, Blast, Casa e Cozinha, and recently launched the over-the-top ("OTT") application Panda+. • The UK portfolio of channels reaches viewers via the Sky, Virgin Media, Freesat and Freeview platforms and on demand via the WATCH FREE UK player available from Freesat, Freeview and YouView and downloadable via IOS, Android, and all major device/manufacturer stores.
Emergency Alert Codes or Attention Signals We may not include emergency alert codes or attention signals, or simulations of them, in our content under any circumstances other than a genuine alert, an authorized test of the emergency alert system, or a permissible public service announcement.
CALM Act FCC rules require MVPDs to ensure that all commercials comply with specified volume standards, and our distribution agreements generally require us to certify compliance with such standards. 15 Emergency Alert Codes or Attention Signals We may not include emergency alert codes or attention signals, or simulations of them, in our content under any circumstances other than a genuine alert, an authorized test of the emergency alert system, or a permissible public service announcement.
Our Content – We have a long track record of championing and supporting independent and diverse voices and using our platforms and brands to bring these storytellers’ vision to life. Encouraging diverse and inclusive voices and points of view – on our screens, on our sets, and in our writer’s rooms – is fundamental to our creative process.
Some examples of our areas of focus include: Our Content – We have a long track record of championing and supporting independent and diverse voices and using our platforms and brands to bring these storytellers’ vision to life.
The service’s lineup also includes original series Craig Ross Jr.’s Monogamy, A House Divided, Double Cross , Millennials, and Partners In Rhyme . 11 • HIDIVE LLC (“HIDIVE”) operates an anime-focused streaming service offering a robust library of television series, movies, and original video animations.
Bivins. • The service’s lineup also includes: original series À La Carte co-executive produced by Meagan Good ; Partners In Rhyme co-created by trailblazing rap legend MC Lyte; multi-season success A House Divided ; and Double Cross . • HIDIVE LLC (“HIDIVE”) operates an anime-focused streaming service offering a robust library of entertainment that includes television series, movies, and original video animations.
In 2022, HIDIVE became available on Amazon Prime Channels and Roku Channels. • Sentai Holdings, LLC (“Sentai”) is a leading global acquirer, producer and supplier of anime content that it distributes through its affiliates including HIDIVE, Anime Network and Sentai Filmworks, as well as select commercial partners.
HIDIVE’s distribution reach continues to grow through its expanding network of partners and the development of new services including its Anime X HIDIVE FAST channel. • Our subsidiary Sentai Holdings, LLC (“Sentai”) is a leading global acquirer, producer and supplier of anime content that it distributes through its affiliates including HIDIVE, The Anime Network and Sentai Filmworks, as well as select commercial partners.
See Note 4 to the consolidated financial statements for additional information relating to the 2021 spin-off of the Levity comedy venues business. For financial information of the Company by operating segment, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations — Consolidated Results of Operations" and Note 23 to the accompanying consolidated financial statements.
For financial information of the Company by operating segment, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations — Consolidated Results of Operations" and Note 23 to the accompanying consolidated financial statements. Domestic Operations Our flagship AMC brand consists of the AMC programming network, AMC+ streaming service and AMC Studios.
With strong industry relationships and access to key content creators in Japan, Sentai curates one of the anime industry’s most diverse libraries of top trending and classic titles.
With strong industry relationships and access to key content creators in Japan, Sentai curates one of the anime industry’s most diverse libraries of top trending and classic titles. 12 Film Distribution AMC Networks also operates a film business that distributes movies under three very distinct brands: IFC Films, RLJ Entertainment Films and Shudder.
We compete for advertisers on the basis of rates we charge and also on the number and demographic nature of viewers who watch our programming. Advertisers will often seek to target their advertising content to those demographic categories they consider most likely to purchase the product or service they advertise.
Advertisers will often seek to target their advertising content to those demographic categories they consider most likely to purchase the product or service they advertise. Accordingly, the demographic make-up of our viewership can be equally or more important than the number of viewers watching our programming.
In addition to its deep and diverse catalog, HIDIVE offers first-run simulcasts of the freshest anime at or near the time that content airs in Japan. HIDIVE is available in North America as well as key overseas markets including the U.K., Ireland, Australia, New Zealand and most countries comprising Latin America.
In addition to its deep and diverse catalog, HIDIVE offers first-run simulcasts of the best new anime at or near the same time as their Japanese broadcast, which in 2023 included the global hit series Oshi no Ko and The Eminence in Shadow . • HIDIVE is currently available in the U.S. and Canada as well as key overseas markets including the U.K., Ireland, Australia, and New Zealand.
In 2023 the network launched the highly anticipated Anne Rice’s Mayfair Witches, the second endeavor in the Anne Rice Immortal Universe, debuting on the heels of Anne Rice’s Interview with the Vampire and has renewed the series for a second season . • AMC also premiered Dark Winds , “perhaps the most ambitious Native-led TV show ever made,” according to The Hollywood Reporter, starring Zahn McClarnon and executive produced by Robert Redford and George R.R.
Both series were quickly renewed for second seasons, which are expected to appear in 2024. • AMC also presented the second season of Dark Winds , “perhaps the most ambitious Native-led TV show ever made,” according to The Hollywood Reporter, starring Zahn McClarnon and executive produced by Robert Redford and George R.R. Martin.
They facilitate networking and 17 connections with peers; support the acquisition of diverse talent; provide an avenue to facilitate leadership and skill development; and help to increase the organization’s overall cultural competency.
Our BERG members strive to create a culture of belonging for our employees by facilitating networking and connections with peers; supporting the acquisition of diverse talent; providing an avenue to facilitate leadership and skill development; and helping to increase the organization’s overall cultural competency.
We believe that our relations with the labor unions and our employees are generally good. Diversity, Equity and Inclusion (DEI) At AMC Networks being diverse, equitable, and inclusive is more than a business imperative that spurs creativity and drives innovation. It is at the heart of who we are and what we believe.
We believe that our relations with the labor unions and our employees are generally good. Diversity, Equity and Inclusion At AMC Networks, we recognize that diversity is a business imperative. We seek to offer programming that reflects and resonates with our diverse audiences.
They include: adoption assistance; backup child/elder care; child care resources; college planning; domestic partner coverage; domestic partner tax equalization; gender reassignment surgery; employee assistance programs; financial planning seminars; and a health advocate offering.
While offerings vary by location, they generally include: employee and family medical, dental and vision coverage; life and disability insurance coverage; adoption assistance; backup child/elder care; child care resources; college planning; domestic partner coverage; domestic partner tax equalization; gender confirmation surgery; employee assistance programs; financial planning seminars and identity theft protection.
Dreamia, a joint venture with NOS in Portugal, delivers channels including Canal Hollywood, Canal Panda, Panda Kids, Biggs, Blast, Casa e Cozinha, and recently launched the over-the-top ("OTT") application Panda+. • Highlights of the top AMCNI locally recognized channels are detailed below: • El Gourmet is a “go-to” TV culinary destination for Latin American audiences that connects with its viewers by celebrating local traditions and featuring culinary experiences from all over the world.
A significant part of AMCNI UK’s content library is also available via partnerships with major streaming platforms such as FreeVee, Pluto TV, Rakuten TV and Samsung TV. • Highlights of the top AMCNI locally recognized channels are detailed below: • El Gourmet is a “go-to” TV culinary destination for Latin American audiences that connects with its viewers by celebrating local traditions and featuring culinary experiences from all over the world.
The success of our businesses depends on our ability to license and produce content for our programming services that is adequate in quantity and quality and will generate satisfactory viewer ratings. In each of these cases, some of our competitors are large publicly held companies that have greater financial resources than we do.
In each of these cases, some of our competitors are large publicly held companies that have greater financial resources than we do. Distribution of Programming Services The business of distributing programming services to cable television systems and other MVPDs and licensing of original programming for distribution is highly competitive.
Learning Together – We equip our employees and our production staff with the tools and knowledge they need to expand awareness and understand what promoting diversity, equity and inclusion really means, we provide learning opportunities across a variety of topics ranging from exploring unearned advantage and disadvantage and cultivating an inclusive writer’s room and set to building a more equitable workforce through inclusive hiring practices.
Learning Together – We equip our employees and our production staff with the tools and knowledge they need to expand awareness and understand what promoting diversity, equity and inclusion really means.
Programming businesses are subject to regulation by the country in which they operate, as well as international bodies, such as the European Union. These regulations may include restrictions on types of advertising that can be sold on our networks, programming content requirements, requirements to make programming available on non-discriminatory terms, and local content quotas.
In certain countries, these regulations include restrictions on types of advertising that can be sold on our networks, programming content requirements, requirements to make programming available on non-discriminatory terms, and local content quotas. 16 COMPETITION Our programming services, consisting of linear networks and streaming services, operate in three highly competitive markets.
Second, our programming services compete with other programming services and other sources of video content, to secure desired entertainment programming. Third, our programming services compete with other sellers of advertising time and space, including other cable programming networks, radio, newspapers, outdoor media and, increasingly, internet sites.
Third, our programming services compete with other sellers of advertising time and space, including other cable programming networks, radio, newspapers, outdoor media and, increasingly, internet sites. The success of our businesses depends on our ability to license and produce content for our programming services that is adequate in quantity and quality and will generate satisfactory viewer ratings.
Domestic Operations Programming Networks - Our programming networks consist of the following services: • As of December 31, 2022, AMC reached approximately 70 million Nielsen subscribers and had distribution agreements with all major U.S. and Canada distributors. • AMC is home to some of the most popular and acclaimed dramas on television, including The Walking Dead , the highest-rated series in cable history; Fear the Walking Dead , Interview with the Vampire and Gangs of London . • In 2022, AMC aired the epic conclusion of The Walking Dead , while expanding The Walking Dead Universe franchise, with the premiere of episodic anthology series Tales of the Walking Dead, and production on new series built around iconic characters from the franchise including The Walking Dead: Dead City ; The Walking Dead: Daryl Dixon , and a new series centered on the epic love story of central characters Rick and Michonne.
As of December 31, 2023, AMC reached approximately 65 million Nielsen subscribers and had distribution agreements with all major U.S. and Canada distributors. • In 2023, AMC expanded The Walking Dead Universe franchise with the premiere of two new series: The Walking Dead: Dead City and The Walking Dead: Daryl Dixon , featuring some of the most popular characters from The Walking Dead , the highest-rated series in cable television history, which ended in late 2022.
Our AMC Studios operation produces original programming for our programming services and also licenses such programming worldwide, and IFC Films is our film distribution business.
Our global streaming services consist of AMC+ and our targeted subscription streaming services (Acorn TV, Shudder, Sundance Now, ALLBLK, and HIDIVE). Our AMC Studios operation produces original programming for our programming services and third parties and also licenses programming worldwide. Our film distribution business includes IFC Films, RLJ Entertainment Films and Shudder.
These documentary style programs re-visit famous crimes predominantly from the U.K. and the United States and investigate the psychology of a killer. 13 • Jim Jam is a pre-school kids channel aimed at 2-6 year-olds, focusing on education and teaching English. • Popular content includes Bob The Builder , Fireman Sam , Thomas and Friends and Chuggington . • Jim Jam reaches subscribers in over 60 EMEA countries. • Canal Hollywood is one of the leading pay-TV film channels in Spain and Portugal, offering a wide selection of movies produced by major U.S. studios. • Genres include comedy, drama, thriller, western, musical, and science fiction and the industry’s biggest stars. • The channel began broadcasting in 1993 and is distributed on all pay-TV platforms in Spain and Portugal, reaching more than 10 million households. • Sports 1 & Sports 2 are premium sports channels in our core Central European territories. • The channels broadcast European football, Formula 1, NBA and ice hockey among other live sports events. • 25/7 Media (dba Center Drive Media) owns and operates two leading production companies: Triage Entertainment, founded in 1995, and Lando Entertainment, founded in 2016. • Together, they produce premium, prime-time programming, and focus on four major genres: multi-cam events, original formats and lifestyle, premium documentary series and scripted. • Center Drive Media has produced award-winning and culturally distinctive originals across a wide range of networks and platforms, including CBS, NBC, Netflix, Paramount+, Discovery+, Food Network, HGTV, Lifetime, History, MTV, CMT, HBO and Showtime.
These factual programs analyze authentic criminal cases predominantly from the U.K. and the United States through firsthand interviews, archive footage and key evidence. 14 • Jim Jam is a pre-school kids channel focused on education, providing a stimulating, engaging and safe environment for 2-5 year olds and contributing to their social, intellectual, and emotional development by providing learning through fun. • Popular content includes Bob The Builder , Fireman Sam , Thomas and Friends and Pettson and Findus . • Jim Jam is available in over 60 EMEA countries. • Canal Hollywood is one of the leading pay-TV film channels in Spain and Portugal, offering a wide selection of movies produced by major U.S. studios. • Genres include comedy, drama, thriller, western, musical, and science fiction and the industry’s biggest stars. • The channel began broadcasting in 1993 and is distributed on all pay-TV platforms in Spain and Portugal, reaching more than 10 million households. • Sports 1 & Sports 2 are basic cable channels in our core Central European territories. • The channels broadcast European football, European Handball, NBA and ice hockey among other live sports events.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese costs may not be recouped when the content is broadcast or distributed and higher costs may lead to decreased profitability or potential write-downs. Increased competition from additional entrants into the market for development and production of original programming, such as Netflix, Hulu, Apple TV, Google TV and Amazon Prime, increases our programming content costs.
Biggest changeOur investments in original programming have been and are expected to continue to be significant and involve complex negotiations with numerous third parties. These costs may not be recouped when the content is broadcast or distributed, and higher costs may lead to decreased profitability or potential write-downs.
In addition, the pricing and volume of advertising has been affected by shifts in spending toward online and mobile offerings from more traditional media, or toward new ways of purchasing advertising, such as through automated purchasing, dynamic advertising insertion, third parties selling local advertising spots and advertising exchanges, some or all of which is not as advantageous to us as current advertising methods.
In addition, the pricing and volume of advertising has been affected by shifts in spending toward online and mobile offerings from more traditional media, and toward new ways of purchasing advertising, such as through automated purchasing, dynamic advertising insertion, third parties selling local advertising spots and advertising exchanges, some or all of which is not as advantageous to us as current advertising methods.
These risks include: • laws and policies affecting trade and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws; • changes in local regulatory requirements, including restrictions on content, imposition of local content quotas and restrictions on foreign ownership; • exchange controls, tariffs and other trade barriers; • differing degrees of protection for intellectual property and varying attitudes towards the piracy of intellectual property; • foreign privacy and data protection laws and regulations, as well as data localization requirements, and changes in these laws and requirements; • the instability of foreign economies and governments; • war and acts of terrorism; and • anti-corruption laws and regulations such as the Foreign Corrupt Practices Act and the U.K.
These risks include: • laws and policies affecting trade and taxes, including laws and policies relating to the repatriation of funds and withholding taxes, and changes in these laws; 25 • changes in local regulatory requirements, including restrictions on content, imposition of local content quotas and restrictions on foreign ownership; • exchange controls, tariffs and other trade barriers; • differing degrees of protection for intellectual property and varying attitudes towards the piracy of intellectual property; • foreign privacy and data protection laws and regulations, as well as data localization requirements, and changes in these laws and requirements; • the instability of foreign economies and governments; • war and acts of terrorism; and • anti-corruption laws and regulations such as the Foreign Corrupt Practices Act and the U.K.
Any 27 acquisitions and strategic investments that we are able to identify and complete may be accompanied by a number of risks, including: • the difficulty of assimilating the operations and personnel of acquired companies into our operations; • the potential disruption of our ongoing business and distraction of management; • the incurrence of additional operating losses and operating expenses of the businesses we acquired or in which we invested; • the difficulty of integrating acquired technology and rights into our services and unanticipated expenses related to such integration; • the failure to successfully further develop an acquired business or technology and any resulting impairment of amounts currently capitalized as intangible assets; • the failure of strategic investments to perform as expected or to meet financial projections; • the potential for patent and trademark infringement and data privacy and security claims against the acquired companies, or companies in which we have invested; • litigation or other claims in connection with acquisitions, acquired companies, or companies in which we have invested; • the impairment or loss of relationships with customers and partners of the companies we acquired or in which we invested or with our customers and partners as a result of the integration of acquired operations; • the impairment of relationships with, or failure to retain, employees of acquired companies or our existing employees as a result of integration of new personnel; • the difficulty of integrating operations, systems, and controls as a result of cultural, regulatory, systems, and operational differences; • the performance of management of companies in which we invest but do not control; • in the case of foreign acquisitions and investments, the impact of particular economic, tax, currency, political, legal and regulatory risks associated with specific countries; and • the impact of known potential liabilities or liabilities that may be unknown, including as a result of inadequate internal controls, associated with the companies we acquired or in which we invested.
Any acquisitions and strategic investments that we are able to identify and complete may be accompanied by a number of risks, including: • the difficulty of assimilating the operations and personnel of acquired companies into our operations; • the potential disruption of our ongoing business and distraction of management; • the incurrence of additional operating losses and operating expenses of the businesses we acquired or in which we invested; • the difficulty of integrating acquired technology and rights into our services and unanticipated expenses related to such integration; • the failure to successfully further develop an acquired business or technology and any resulting impairment of amounts currently capitalized as intangible assets; • the failure of strategic investments to perform as expected or to meet financial projections; • the potential for patent and trademark infringement and data privacy and security claims against the acquired companies, or companies in which we have invested; • litigation or other claims in connection with acquisitions, acquired companies, or companies in which we have invested; • the impairment or loss of relationships with customers and partners of the companies we acquired or in which we invested or with our customers and partners as a result of the integration of acquired operations; 29 • the impairment of relationships with, or failure to retain, employees of acquired companies or our existing employees as a result of integration of new personnel; • the difficulty of integrating operations, systems, and controls as a result of cultural, regulatory, systems, and operational differences; • the performance of management of companies in which we invest but do not control; • in the case of foreign acquisitions and investments, the impact of particular economic, tax, currency, political, legal and regulatory risks associated with specific countries; and • the impact of known potential liabilities or liabilities that may be unknown, including as a result of inadequate internal controls, associated with the companies we acquired or in which we invested.
While we believe that the carrying values of our intangible assets are recoverable, there is no assurance that we would receive any cash from the voluntary or involuntary sale of these intangible assets, particularly if we were not continuing as an operating business. Risks Relating to Our Debt Our substantial long-term debt and high leverage could adversely affect our business.
While we believe that the carrying values of our intangible assets are recoverable, there is no assurance that we would receive any cash from the voluntary or involuntary sale of these intangible assets, particularly if we were not continuing as an operating business. 30 Risks Relating to Our Debt Our substantial long-term debt and high leverage could adversely affect our business.
As more cable and satellite operators, Internet service providers, subscription streaming services, other content distributors, aggregators and search 21 providers create or acquire their own content, some of them have significant competitive advantages, which could adversely affect our ability to negotiate favorable terms and distribution or otherwise compete effectively in the delivery marketplace.
As more cable and satellite operators, Internet service providers, subscription streaming services, other content distributors, aggregators and search providers create or acquire their own content, some of them have significant competitive advantages, which could adversely affect our ability to negotiate favorable terms and distribution or otherwise compete effectively in the delivery marketplace.
These factors are often unpredictable and volatile, and subject to influences that are beyond our control, such as the quality and appeal of competing programming, general economic conditions and the availability of other entertainment activities. We may not be able to anticipate and react effectively to shifts in viewer preferences and/or interests in our markets.
These factors are often unpredictable and volatile, and subject to influences that are beyond our control, such as the quality and appeal of competing programming, general economic conditions and the availability of other entertainment activities. We may not be able to anticipate and react effectively to shifts in viewer preferences and/or interests in 20 our markets.
The agreements governing the Credit Facility and the indentures governing our notes contain covenants that, among other things, limit our ability to: • borrow money or guarantee debt; • create liens; • pay dividends on or redeem or repurchase stock; • make investments; • enter into transactions with affiliates; • enter into strategic transactions; and • sell assets or merge with other companies.
The agreements governing the Credit Facility and the indentures governing our notes contain covenants that, among other things, limit our ability to: • borrow money or guarantee debt; • create liens; • pay dividends on or redeem or repurchase stock; • make investments; 31 • enter into transactions with affiliates; • enter into strategic transactions; and • sell assets or merge with other companies.
In addition, we and our numerous production and distribution partners operate various technology systems in connection with the production and 23 distribution of our programming, and intentional, or unintentional, acts could result in unauthorized access to our content, a disruption of our services, or improper disclosure of confidential information. The prevalence of digital formats and technologies heightens this risk.
In addition, we and our numerous production and distribution partners operate various technology systems in connection with the production and distribution of our programming, and intentional, or unintentional, acts could result in unauthorized access to our content, a disruption of our services, or improper disclosure of confidential information. The prevalence of digital formats and technologies heightens this risk.
A higher effective tax rate may also result to the extent that losses are incurred in non-U.S. subsidiaries that do not reduce our U.S. taxable income. 28 We are subject to changing tax laws, treaties and regulations in and between countries in which we operate, including treaties between the United States and other nations.
A higher effective tax rate may also result to the extent that losses are incurred in non-U.S. subsidiaries that do not reduce our U.S. taxable income. We are subject to changing tax laws, treaties and regulations in and between countries in which we operate, including treaties between the United States and other nations.
In addition, from time to time we have disputes with writers, producers and other creative talent over the amount of royalty and other payments (See Item 3. – Legal Proceedings for additional information). We believe that disputes of this type are endemic to our business and similar disputes may arise from time to time in the future.
In addition, from time to time we have disputes with writers, 21 producers and other creative talent over the amount of royalty and other payments (See Item 3. – Legal Proceedings for additional information). We believe that disputes of this type are endemic to our business and similar disputes may arise from time to time in the future.
The loss of any significant personnel or artistic talent, or our artistic talent losing their audience base, could also have a material adverse effect on our business. Our operations and business have in the past been, and could in the future be, materially adversely impacted by a pandemic or other health emergency.
The loss of any significant personnel or artistic talent, or our artistic talent losing their audience base, could also have a material adverse effect on our business. 28 Our operations and business have in the past been, and could in the future be, materially adversely impacted by a pandemic or other health emergency.
Similarly, a decrease in viewing subscribers could have a negative impact on the number of viewers actually watching the programs on our programming networks, thereby impacting the rates we are able to charge advertisers. 24 Economic conditions affect a number of aspects of our businesses worldwide and impact the businesses of advertisers on our networks.
Similarly, a decrease in viewing subscribers could have a negative impact on the number of viewers actually watching the programs on our programming networks, thereby impacting the rates we are able to charge advertisers. Economic conditions affect a number of aspects of our businesses worldwide and impact the businesses of advertisers on our networks.
In addition, multi-platform campaign verification is in its infancy, and viewership on tablets and smartphones, which is growing rapidly, is presently not measured by any one consistently applied method. These variations and changes could have a significant effect on advertising revenues.
In addition, multi-platform campaign verification is in its infancy, and viewership on tablets and smartphones, 24 which is growing rapidly, is presently not measured by any one consistently applied method. These variations and changes could have a significant effect on advertising revenues.
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.
Any increase 26 (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.
Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures.
Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or to 27 implement adequate preventative measures.
We are engaged in efforts to respond to and mitigate the risks from these changes, but the success of some of these initiatives depends in part on the cooperation of measurement companies, advertisers and affiliates and, therefore, is not within our control.
We are engaged in efforts to respond to and mitigate the risks from these changes, but the success of these initiatives depends in part on the cooperation of measurement companies, advertisers and affiliates and, therefore, is not within our control.
Although we maintain in-orbit protection providing us with back-up satellite transmission facilities should our primary satellites fail, there can be no assurance that such back-up transmission facilities will be effective or will not 26 themselves fail.
Although we maintain in-orbit protection providing us with back-up satellite transmission facilities should our primary satellites fail, there can be no assurance that such back-up transmission facilities will be effective or will not themselves fail.
These changes pose risks to the traditional U.S. television industry, including (i) the disruption of the traditional television content distribution model by subscription streaming services and virtual multichannel video programming services, which are increasing in number and some of which have a significant and growing subscriber base, and (ii) the disruption of the advertising supported television model resulting from increased video consumption through subscription streaming services and virtual multichannel video programming services with no advertising or less advertising than on television networks, and time shifted viewing of television programming.
These changes pose risks to the traditional U.S. television industry, including (i) the disruption of the traditional television content distribution model by subscription streaming services and virtual MVPDs, which are increasing in number and some of which have a significant and growing subscriber base, and (ii) the disruption of the advertising supported television model resulting from increased video consumption through subscription streaming services and virtual MVPDs with no advertising or less advertising than on television networks, and time shifted viewing of television programming.
This could lead to a decrease in the number of subscribers receiving our programming from MVPDs, which could, in turn, have a negative impact on our viewing subscribers and subscription fee revenues.
This could lead to a decrease in the number of subscribers receiving our programming from MVPDs, which could, in turn, have a negative impact on our viewing subscribers and subscription revenues.
Equipment failure, employee misconduct or outside interference could also disrupt the facilities' services. We maintain a full time disaster recovery site in Chandler, Arizona, which is capable of providing simultaneous playout of AMC, BBCA, SundanceTV, IFC and WEtv in the event of a disruption of operations at our main facility in Bethpage, NY.
Equipment failure, employee misconduct or outside interference could also disrupt the facilities' services. We maintain a full time disaster recovery site in Chandler, Arizona, which is capable of providing simultaneous playout of AMC, BBC AMERICA ("BBCA"), SundanceTV, IFC and WEtv in the event of a disruption of operations at our main facility in Bethpage, NY.
Furthermore, the 20 relative service levels, content offerings, pricing and related features of competitors to our service may adversely impact our ability to attract and retain subscribers.
Furthermore, the relative service levels, content offerings, pricing and related features of competitors to our service may adversely impact our ability to attract and retain subscribers.
Programming businesses are subject to the regulations of the countries in which they operate as well as international bodies, such as the European Union ("E.U.").
Programming businesses are subject to the regulations of regulators in the countries in which they operate as well as international bodies, such as the European Union ("E.U.").
Our programming networks depend upon agreements with a limited number of cable television system operators and other MVPDs. The loss of any significant distributor could have a material adverse effect on our consolidated results of operations. Currently our programming networks have distribution agreements with staggered expiration dates through 2028 .
Our programming networks depend upon agreements with a limited number of cable television system operators and other MVPDs. The loss of any significant distributor could have a material adverse effect on our consolidated results of operations. Currently our programming networks have distribution agreements with staggered expiration dates through 2029 .
The members of the Dolan Family Group have executed a voting agreement (the "Stockholders Agreement") that has the effect of causing the voting power of the holders of our Class B Common Stock to be cast as provided therein with respect to all matters to be voted on by 30 holders of Class B Common Stock.
The members of the Dolan Family Group have executed a voting agreement (the "Stockholders Agreement") that has the effect of causing the voting 32 power of the holders of our Class B Common Stock to be cast as provided therein with respect to all matters to be voted on by holders of Class B Common Stock.
Dolan, members of his family, certain Dolan family interests and the Dolan Family Foundation that provide them with "demand" and "piggyback" registration rights with respect to approximately 12.3 million shares of Class A Common Stock, including shares issuable upon conversion of shares of Class B Common Stock.
Dolan, members of his family, certain Dolan family interests and the Dolan Family Foundation that provide them with "demand" and "piggyback" registration rights with respect to approximately 12.4 million shares of Class A Common Stock, including shares issuable upon conversion of shares of Class B Common Stock.
In certain cases, we also help fund our distributors' efforts to market our programming networks or permit distributors to offer promotional periods without payment of subscriber fees. As we continue our efforts to add viewing subscribers, our net revenues may be negatively affected by these deferred carriage fee arrangements, discounted subscriber fees or other payments.
In certain cases, we also support our distributors' efforts to market our programming networks or permit distributors to offer promotional periods without payment of subscriber fees. As we continue our efforts to add viewing subscribers, our net revenues may be negatively affected by these deferred carriage fee arrangements, discounted subscriber fees or other payments.
If we fail to adapt our distribution methods and content to new technologies, our appeal to our targeted audiences might decline and there could be a negative effect on our business. Consolidation among cable, satellite and telecommunications service providers has had, and could continue to have, an adverse effect on our revenue and profitability.
If we fail to adapt our distribution methods and content to new technologies, our appeal to our targeted audiences would likely decline and there would be a negative effect on our business. Consolidation among cable, satellite and telecommunications service providers has had, and could continue to have, an adverse effect on our revenue and profitability.
We compete with other providers of programming networks for the right to be carried by a particular cable or other multichannel video programming distribution system and for the right to be carried by such system on a particular "tier" of service. The increasing offerings by virtual MVPDs through alternative distribution methods creates competition for carriage on those platforms.
We compete with other providers of programming networks for the right to be carried by a particular cable or other MVPD system and for the right to be carried by such system on a particular "tier" of service. The increasing offerings by virtual MVPDs through alternative distribution methods creates competition for carriage on those platforms.
Because a limited number of distributors account for a large portion of our business, failure to renew our programming networks' distribution agreements, renewal on less favorable terms, or the termination of those agreements, both in the United States and internationally, could have a material adverse effect on our business.
Because a limited number of distributors account for a large portion of our business, failure to renew our programming networks' distribution agreements, renewal on less favorable terms, or the termination of those agreements, either in the United States or internationally, could have a material adverse effect on our business.
Advertising revenues can be significantly impacted by new technologies, since advertising sales are dependent on audience measurement provided by third parties, and the results of audience measurement techniques can vary independent of the size of the audience for a variety of reasons, including variations in the employed statistical sampling methods, difficulties related to the employed statistical sampling methods, new distribution platforms and viewing technologies, and the shifting of the marketplace to the use of measurement of different viewer behaviors, such as delayed viewing.
Since advertising sales are dependent on audience measurement provided by third parties, and the results of audience measurement techniques can vary independent of the size of the audience for a variety of reasons, including variations in the employed statistical sampling methods, there could be difficulties related to the employed statistical sampling methods, new distribution platforms and viewing technologies, and the shifting of the marketplace to the use of measurement of different viewer behaviors, such as delayed viewing.
Decreases in consumer discretionary spending in the U.S and other countries where our networks are distributed may affect cable television and other video service subscriptions, in particular with respect to digital service tiers on which certain of our programming networks are carried.
Decreases in consumer discretionary spending in the U.S and other countries where our networks are distributed have in the past affected and may in the future affect cable television and other video service subscriptions, in particular with respect to digital service tiers on which certain of our programming networks are carried.
Our efforts to attract and retain streaming subscribers may not be successful, which may adversely affect our business Our ability to continue to attract subscribers will depend in part on our ability to consistently provide compelling content choices, effectively market our streaming services, as well as provide a quality experience for subscribers.
Our efforts to attract and retain streaming subscribers may not be successful, which may adversely affect our business Our ability to attract subscribers depends in part on our ability to consistently provide compelling content choices, effectively market our streaming services, as well as provide a quality experience for subscribers.
Accordingly, we must adapt to changing consumer behavior driven by advances such as virtual MVPDs, video on demand, subscription streaming services, including services such as Netflix, Hulu, Apple TV, Google TV and Amazon Prime, and mobile devices. Gaming and other consoles such as Microsoft's Xbox and Roku are establishing themselves as alternative providers of video services.
Accordingly, we must adapt to changing consumer behavior driven by advances such as virtual MVPDs, video on demand, subscription streaming services, including services such as Netflix, Hulu, Apple TV and Amazon Prime, and mobile devices. Gaming and other consoles such as Microsoft's Xbox and Roku have established themselves as alternative providers of video services.
Advertising market conditions in specific markets have in the past caused and could in the future cause our revenues and operating results to decline significantly in any given period.
Advertising market conditions in specific markets have in the past caused and are expected in the future to cause our revenues and operating results to decline significantly in any given period.
Our amended and restated certificate of incorporation acknowledges that directors and officers of the Company may also be serving as directors, officers, employees, consultants or agents of MSGS, MSGE, and its subsidiaries and that we may engage in material business transactions with such entities (the applicable provisions of the amended and restated certificate of incorporation, the "Overlap Provisions").
Our amended and restated certificate of incorporation acknowledges that directors and officers of the Company may also be serving as directors, officers, employees, consultants or agents of MSGS, MSGE, Sphere Entertainment or their respective subsidiaries and that we may engage in material business transactions with such entities (the applicable provisions of the amended and restated certificate of incorporation, the "Overlap Provisions").
As of December 31, 2022, the Dolan family, including trusts for the benefit of members of the Dolan family (collectively "the Dolan Family Group"), own all of our Class B Common Stock, approximately 3% of our outstanding Class A Common Stock and approximately 79% of the total voting power of all our outstanding common stock.
As of December 31, 2023, the Dolan family, including trusts for the benefit of members of the Dolan family (collectively "the Dolan Family Group"), own all of our Class B Common Stock, approximately 4% of our outstanding Class A Common Stock and approximately 79% of the total voting power of all our outstanding common stock.
See "Certain Relationships and Related Party Transactions—Certain Relationships and Potential Conflicts of Interest" in our proxy statement filed with the SEC on April 29, 2022 for a description of our related party transaction approval policy that we have adopted to help address such potential conflicts that may arise.
See "Certain Relationships and Related Party Transactions—Certain Relationships and Potential Conflicts of Interest" in our latest proxy statement filed with the SEC for a description of our related party transaction approval policy that we have adopted to help address such potential conflicts that may arise.
Competition for content, audiences and advertising is intense and comes from broadcast television, other cable networks, distributors, including subscription streaming services and virtual multichannel video programming services, social media content distributors, and other entertainment outlets and platforms, as well as from search, social networks, program guides and "second screen" applications.
Competition for content, audiences and advertising is intense and comes from broadcast television, other cable networks, distributors, including subscription streaming services and virtual MVPDs, social media content distributors, and other entertainment outlets and platforms, as well as from search providers, social networks, program guides and "second screen" applications.
At December 31, 2022, our consolidated financial statements included approximately $5.6 billion of consolidated total assets, of which approximately $1.0 billion were classified as intangible assets. Intangible assets primarily include affiliation agreements and affiliate relationships, advertiser relationships, trademarks and goodwill.
At December 31, 2023, our consolidated financial statements included approximately $5.0 billion of consolidated total assets, of which approximately $0.9 billion were classified as intangible assets. Intangible assets primarily include affiliation agreements and affiliate relationships, advertiser relationships, trademarks and goodwill.
We have incurred write-offs of program rights in the past, including $403.8 million in the fourth quarter of 2022, and may incur future program rights write-offs if it is determined that program rights have limited, or no, future usefulness. 19 In addition, feature films constitute a significant portion of the programming on our AMC, IFC and SundanceTV programming networks.
We have incurred write-offs of program rights in the past, including $403.8 million in the fourth quarter of 2022, and may incur future program rights write-offs if it is determined that program rights have limited, or no, future usefulness. In addition, our AMC, IFC and SundanceTV programming networks broadcast feature films.
In addition to other cable programming networks, we also compete for programming with national broadcast television networks, local broadcast television stations, video on demand services and subscription streaming services, such as Netflix, Hulu, Apple TV, Google TV and Amazon Prime. Some of these competitors have exclusive contracts with motion picture studios or independent motion picture distributors or own film libraries.
Discovery, Inc., we also compete for programming with national broadcast television networks, local broadcast television stations, video on demand services and subscription streaming services, such as Netflix, Hulu, Apple TV and Amazon Prime. Some of these competitors have exclusive contracts with motion picture studios or independent motion picture distributors or own film libraries.
The increased number of entertainment choices available to consumers has intensified audience fragmentation and reduced the viewing of content through traditional and virtual multichannel video programming providers, which has caused, and may continue to cause, audience ratings declines for our programming networks and has adversely affected the pricing and volume of advertising.
The increased number of entertainment choices available to consumers has intensified audience fragmentation and reduced the viewing of content through traditional and virtual MVPDs, which has caused, and are expected to continue to cause, audience ratings declines for our programming networks and has adversely affected the pricing and volume of advertising.
We may not be successful in achieving the full cost reduction benefits we expect over the timeframe we expect, or at all, and the ongoing costs of implementing cost reduction and restructuring measures might be greater than anticipated.
Our business has been, and may in the future be, the subject of restructuring and cost reduction initiatives. We may not be successful in achieving the full cost reduction benefits we expect over the timeframe we expect, or at all, and the ongoing costs of implementing cost reduction and restructuring measures might be greater than anticipated.
In addition, as competition with these entrants for the creation and acquisition of quality programming continues to escalate, the complexity of negotiations over acquired rights to the content and the value of the rights we acquire or retain may increase, leading to increased acquisition costs, and our ability to successfully acquire content of the highest quality may face greater uncertainty.
As competition for the creation and acquisition of quality programming continues to escalate, the complexity of negotiations over acquired rights to the content and the value of the rights we acquire or retain has increased and is expected to further increase, leading to increased acquisition costs, and our ability to successfully acquire content of the highest quality may face greater uncertainty.
We have a significant amount of long-term debt. As of December 31, 2022, we had $2.8 billion principal amount of total long-term debt (excluding finance leases), $641.3 million of which is senior secured debt under our Credit Facility and $2.2 billion of which is senior unsecured debt.
We have a significant amount of long-term debt. As of December 31, 2023, we had $2.4 billion principal amount of total long-term debt (excluding finance leases), $607.5 million of which is senior secured debt under our Credit Facility and $1.8 billion of which is senior unsecured debt.
Sales of a substantial number of shares of Class A Common Stock, including sales pursuant to these registration rights agreements, could adversely affect the market price of the Class A Common Stock and could impair our future ability to raise capital through an offering of our equity securities. 31 We share certain executives and directors with Madison Square Garden Sports Corp.
Sales of a substantial number of shares of Class A Common Stock, including sales pursuant to these registration rights agreements, could adversely affect the market price of the Class A Common Stock and could impair our future ability to raise capital through an offering of our equity securities. 33 We share certain executives and directors with Sphere Entertainment Co.
Such changes may impact the revenues we are able to generate from our traditional distribution methods, either by decreasing the viewership of our programming networks on cable and other 22 multichannel video programming distribution systems which are almost entirely directed at television video delivery or by making advertising on our programming networks less valuable to advertisers.
Such changes have impacted and are expected to continue to impact the revenues we are able to generate from our traditional distribution methods, by decreasing the viewership of our programming networks on cable and other MVPD systems which are almost entirely directed at television video delivery and by making advertising on our programming networks less valuable to advertisers.
Our ability to exploit new distribution platforms and viewing technologies will affect our ability to maintain or grow our business. New forms of content distribution provide different economic models and compete with current distribution methods in ways that are not entirely predictable.
We must successfully adapt to technological advances in our industry, including alternative distribution platforms and viewing technologies. Our ability to exploit new distribution platforms and viewing technologies will affect our ability to maintain or grow our business. New forms of content distribution provide different economic models and compete with current distribution methods in ways that are not entirely predictable.
We may be able to incur additional debt in the future. The terms of the Credit Facility and indentures governing our notes allow us to incur substantial amounts of additional debt, subject to certain limitations.
The terms of the Credit Facility and indentures governing our notes allow us to incur substantial amounts of additional debt, subject to certain limitations.
Our programming networks and streaming services compete with other programming networks and other types of video programming services for marketing and distribution by cable and other multichannel video programming distribution systems and ultimately for viewing by their subscribers.
The programming industry is highly competitive. Our programming networks and streaming services compete with other programming networks and other types of video programming services for marketing and distribution by cable and other MVPD systems and ultimately for viewing by their subscribers.
For example, our interest expense increased from approximately $129.1 million in 2021 to approximately $133.8 million in 2022 despite a relative constant amount of outstanding principal amount of total debt. As a result, increases in market interest rates have increased our interest expense and our debt service obligations.
For example, our interest expense increased from approximately $133.8 million in 2022 to approximately $152.7 million in 2023 despite a reduction in the outstanding principal amount of total debt. As a result, increases in market interest rates have increased our interest expense and our debt service obligations.
Data maintained in digital form is subject to the risk of cybersecurity attacks, tampering and theft. We develop and maintain systems to monitor and prevent this from occurring, but the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated.
We develop and maintain systems to monitor and prevent this from occurring, but the development and maintenance of these systems is costly and requires ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated.
Other programming networks and streaming services that are affiliated with programming sources such as movie or television studios or film libraries may have a competitive advantage over us.
Certain programming networks and streaming services that are affiliated with programming sources such as movie or television studios or film libraries have a competitive advantage over us. In addition to other cable programming networks, such as Paramount Global and Warner Bros.
An increase in the costs of programming may lead to decreased profitability or otherwise adversely affect our business. Although in some cases the financial commitment for original programming is partially offset by foreign, state or local tax incentives, there is a risk that the tax incentives will not remain available for the duration of a series.
Although in some cases the financial commitment for original programming is partially offset by foreign, state or local tax incentives, there is a risk that the tax incentives will not remain available for the duration of a series.
We cannot assure you that we will ultimately be successful in producing or obtaining the quality programming our networks and streaming services need to be successful. Increased programming costs may adversely affect our profits. We produce original programming and other content and may continue to invest in this area, the costs of which are significant.
We cannot assure you that we will ultimately be successful in producing or obtaining the quality programming our networks and streaming services need to be successful. Increased programming costs have adversely affected and may continue to adversely affect our profits.
Any labor disputes or a strike by one or more unions representing any of these parties who are essential to our original programming could have a material adverse effect on our original programming, disrupt our operations and reduce our revenues.
While the Company was not significantly impacted by the 2023 Writers Guild of America and SAG-AFTRA strikes, any future labor disputes or a strike by one or more unions representing any of these parties who are essential to our original programming could have a material adverse effect on our original programming, disrupt our operations and reduce our revenues.
We incur costs for the creative talent, including actors, writers and producers, who create our original programming. Some of our original programming has achieved significant popularity and critical acclaim, which has increased and could continue to increase the costs of such programming in the future.
Some of our original programming has achieved significant popularity and critical acclaim, which has increased and could continue to increase the costs of such programming in the future.
Certain programming networks affiliated with broadcast networks like ABC, CBS, Fox or NBC or other key free-to-air programming networks in countries where our networks are distributed may have a competitive advantage over our programming networks in obtaining distribution through the "bundling" of carriage agreements for such programming networks with a distributor's right to carry the affiliated broadcasting network.
More content consumption options increase competition for viewers as well as for programming and creative talent, which can decrease our audience ratings, and therefore potentially our advertising revenues. 22 Certain programming networks affiliated with broadcast networks like ABC, CBS, Fox or NBC or other key free-to-air programming networks in countries where our networks are distributed may have a competitive advantage over our programming networks in obtaining distribution through the "bundling" of carriage agreements for such programming networks with a distributor's right to carry the affiliated broadcasting network.
In addition, as we have in the past, we may in the future refinance all or a portion of our debt, including borrowings under the Credit Facility, and obtain the ability to incur more debt as a result. If new debt is added to our current debt levels, the related risks we could face would be magnified.
In addition, as we have in the past, we may in the future refinance all or a portion of our debt, including our senior notes or borrowings under the Credit Facility, and obtain the ability to incur more debt as a result.
We also acquire programming and television series, as well as a variety of digital content and other ancillary rights from other companies, and we pay license fees, royalties or contingent compensation in connection with these acquired rights. Our investments in original programming have been and may continue to be significant and involve complex negotiations with numerous third parties.
We produce original programming and other content and may continue to invest in this area, the costs of which are significant. We also acquire programming and television series, as well as a variety of digital content and other ancillary rights from other companies, and we pay license fees, royalties or contingent compensation in connection with these acquired rights.
Item 1A. Risk Factors. A wide range of risks may affect our business, financial condition and results of operations, now and in the future. We consider the risks described below to be the most significant. There may be other currently unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects on our future results.
Item 1A. Risk Factors. A wide range of risks may affect our business, financial condition and results of operations, now and in the future. We consider the risks described below to be the most significant.
For example, the potential for a conflict of interest exists when we, on one hand, and an Other Entity, on the other hand, consider acquisitions and other corporate opportunities that may be suitable for us and for the Other Entity.
These directors may have actual or apparent conflicts of interest with respect to matters involving or affecting each company. For example, the potential for a conflict of interest exists when we, on one hand, and an Other Entity, on the other hand, consider acquisitions and other corporate opportunities that may be suitable for us and for the Other Entity.
A lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may increase our future debt issuance costs and reduce our access to capital.
If new debt is added to our current debt levels, the related risks we could face would be magnified. A lowering or withdrawal of the ratings assigned to our debt securities by rating agencies may increase our future debt issuance costs and reduce our access to capital.
We are unable to predict whether any of these or other proposals in the United States or foreign jurisdictions will ultimately be enacted. Any such changes could negatively impact our business. A significant amount of our book value consists of intangible assets that may not generate cash in the event of a voluntary or involuntary sale.
We are unable to predict whether any of these or other proposals in the United States or foreign jurisdictions will ultimately be enacted. Any such changes could negatively impact our business.
Increased competition from additional entrants into the market for development and production of original programming, such as Netflix, Hulu, Apple TV, Google TV and Amazon Prime, increases our content costs as creating competing high quality, original content requires significant investment.
Increased competition from additional entrants into the market for development and production of original programming, such as Netflix, Hulu, Apple TV, and Amazon Prime, increases our programming content costs. We incur costs for the creative talent, including actors, writers and producers, who create our original programming.
("MSGS") and Madison Square Garden Entertainment Corp. ("MSGE") , which may give rise to conflicts. One of our executives, Gregg G. Seibert, serves as a Vice Chairman of the Company and as a Vice Chairman of MSGS and MSGE (each, an "Other Entity" and, collectively the "Other Entities").
("Sphere Entertainment"), Madison Square Garden Sports Corp. ("MSGS") and Madison Square Garden Entertainment Corp. ("MSGE") , which may give rise to conflicts. We share two executives with MSGS, MSGE and Sphere Entertainment (each, an "Other Entity" and, collectively the "Other Entities"): Gregg G.
The Credit Facility and indentures governing our notes restrict, and market or business conditions may limit, our ability to do some of these things. Although a significant amount of our outstanding debt has fixed interest rates, borrowings under our Credit Facility bear interest at variable rates.
The Credit Facility and indentures governing our notes restrict, and market or business conditions may limit, our ability to do some of these things.
We have incurred significant costs to implement our strategy and initiatives, and if they are not successful, our competitive position, businesses and results of operations could be adversely affected.
We have incurred significant costs to implement our strategy and initiatives, and will continue to do so, and if they are not successful, our competitive position, businesses and results of operations could be adversely affected. We are subject to intense competition, which may have a negative effect on our profitability or on our ability to expand our business.
Complying with these laws and regulations could be costly, require us to change our business 25 practices, or limit or restrict aspects of our business in a manner adverse to our business operations. In particular, certain data privacy laws have required monitoring of, and changes to, our practices related to the collection, use, disclosure and storage of personal information.
Complying with these laws and regulations has been and could continue to be costly, could require us to change our business practices, or could limit or restrict aspects of our business in a manner adverse to our business operations.
Various risks, uncertainties and events beyond our control could affect our ability to comply with these covenants and maintain these financial ratios. Failure to comply with any of the covenants in our existing or future financing agreements could result in a default under those agreements and under other agreements containing cross-default provisions.
Failure to comply with any of the covenants in our existing or future financing agreements could result in a default under those agreements and under other agreements containing cross-default provisions. A default would permit lenders to accelerate the maturity for the debt under these agreements and to foreclose upon any collateral securing the debt.
Adverse changes in foreign rules and regulations could have a significant adverse impact on our profitability. We face continually evolving cybersecurity risks, which could result in the disclosure, theft or destruction of confidential information, disruption of our programming, damage to our brands and reputation, legal exposure and financial losses.
We face continually evolving cybersecurity risks, which could result in the disclosure, theft or destruction of confidential information, disruption of our programming, damage to our brands and reputation, legal exposure and financial losses. We maintain information, including confidential and proprietary information regarding our content, distributors, advertisers, viewers and employees, in digital form as necessary to conduct our business.
Economic and Operational Risks We face risks from doing business internationally. We have operations through which we distribute programming outside the United States. As a result, our business is subject to certain risks inherent in international business, many of which are beyond our control.
As a result, our business is subject to certain risks inherent in international business, many of which are beyond our control.
We may not be able to adapt to new content distribution platforms and to changes in consumer behavior resulting from these new technologies, which may adversely affect our business. We must successfully adapt to technological advances in our industry, including alternative distribution platforms and viewing technologies.
If we are unable to successfully compete with current and new competitors in both retaining our existing subscriptions and attracting new subscriptions, our streaming services will be adversely affected. 23 We may not be able to adapt to new content distribution platforms and to changes in consumer behavior resulting from these new technologies, which may adversely affect our business.
We may enter into hedging agreements in the future, however any such agreements do not offer complete protection from this risk. 29 The agreements governing our debt contain various covenants that impose restrictions on us that may affect our ability to operate our business.
The agreements governing our debt contain various covenants that impose restrictions on us that may affect our ability to operate our business.
We will need to refinance our existing indebtedness as it matures, and we do not expect to generate sufficient cash from operations to repay at maturity our outstanding debt obligations. As a result, we will be dependent upon our ability to access the capital and credit markets.
We will need to refinance our existing indebtedness as it matures, and we do not expect to generate sufficient cash from operations to repay at maturity our outstanding debt obligations. For example, we have $774.7 million of senior unsecured debt due in August 2025 that we will need to repay and/or refinance.
In addition, the limitations imposed by financing agreements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing. Despite our current levels of debt, we may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial debt.
Any of these events could have a material adverse effect on our business, financial condition and results of operations. Despite our current levels of debt, we may still be able to incur substantially more debt. This could further exacerbate the risks associated with our substantial debt. We may be able to incur additional debt in the future.
We maintain information, including confidential and proprietary information regarding our content, distributors, advertisers, viewers and employees, in digital form as necessary to conduct our business. We also rely on third-party vendors to provide certain services in connection with the storage, processing and transmission of digital information.
We also rely on third-party vendors to provide certain services in connection with the storage, processing and transmission of digital information. Data maintained in digital form is subject to the risk of cybersecurity attacks, tampering and theft.
If interest rates were to continue rising, this would further increase the amount of interest expense that we would have to pay for borrowings under the Credit Facility. While we have in the past entered into hedging agreements limiting our exposure to higher interest rates, we did not have any interest rate swap contracts outstanding at December 31, 2022.
While we have in the past entered into hedging agreements limiting our exposure to higher interest rates, we did not have any interest rate swap contracts outstanding at December 31, 2023. We may enter into hedging agreements in the future; however, any such agreements do not offer complete protection from this risk.
Many of these laws and regulations continue to evolve, and sometimes conflict among the countries in which we operate, and substantial uncertainty surrounds their scope and application. Our failure to comply with these law and regulations could result in exposure to enforcement actions by foreign governments, as well as significant negative publicity and reputational damage.
Our failure to comply with these law and regulations could result in exposure to enforcement actions by foreign governments, as well as significant negative publicity and reputational damage. Adverse changes in foreign rules and regulations could have a significant adverse impact on our profitability.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. We lease approximately 904,000 square feet of space in the United States, including approximately 326,000 square feet of office space that we lease at 11 Penn Plaza, New York, NY 10001, under lease arrangements with remaining terms through 2027 . We use this space as our corporate headquarters and as the principal business location of our Company.
Biggest changeItem 2. Properties. We lease approximately 813,000 square feet of space in the United States, including approximately 326,000 square feet of office space that we lease at 11 Penn Plaza, New York, NY 10001, under lease arrangements with remaining terms through 2027 . We use this space as our corporate headquarters and as the principal business location of our Company.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs a result, on January 9, 2023, the Plaintiffs filed with the court a notice of dismissal of the remaining claims, and on January 19, 2023, the court formally dismissed the case. On January, 26, 2023, the Plaintiffs filed a notice of appeal of the court’s post-trial, demurrer, and summary adjudication decisions.
Biggest changeOn January 26, 2023, the Plaintiffs filed a notice of appeal of the court’s post-trial, demurrer, and summary adjudication decisions. The parties entered into an agreement to resolve through confidential binding arbitration the remaining claims in the litigation (consisting mainly of ordinary course profit participation audit claims), and as a result, the court formally dismissed the case.
The Plaintiffs asserted that the Company had been improperly underpaying the Plaintiffs under their contracts with the Company and they asserted claims for breach of contract, breach of the implied covenant of good faith and 32 fair dealing, inducing breach of contract, and liability for violation of Cal. Bus. & Prof. Code § 17200.
The Plaintiffs asserted that the Company had been improperly underpaying the Plaintiffs under their contracts with the Company and they asserted claims for breach of contract, breach of the implied covenant of good faith and fair dealing, inducing breach of contract, and liability for violation of Cal. Bus. & Prof. Code § 17200.
On May 5, 2021, the Plaintiffs filed a third amended complaint, repleading in part their claims for alleged breach of the implied covenant of good faith and fair dealing, inducing breach of contract, and certain breach of contract claims.
On May 5, 2021, the Plaintiffs filed a third amended complaint, repleading in part their claims for alleged breach of the implied covenant of good faith and fair 35 dealing, inducing breach of contract, and certain breach of contract claims.
Plaintiffs claim in the MFN Litigation that they are entitled to actual and compensatory damages in excess of $200 million. The Plaintiffs also bring a cause of action to enjoin an arbitration the Company commenced in May 2022 concerning the same dispute.
Plaintiffs claim in the MFN Litigation that they are entitled to actual and compensatory damages in excess of $200 million. The Plaintiffs also brought a cause of action to enjoin an arbitration the Company commenced in May 2022 concerning the same dispute.
On December 15, 2022, the Company removed the MFN Litigation to the United States District Court for the Central District of California. On January 13, 2023, the Company filed a motion to dismiss the MFN Litigation and informed the court that the Company had withdrawn the arbitration Plaintiffs sought to enjoin.
On December 15, 2022, the Company removed the MFN Litigation to the United States District Court for the Central District of California. On January 13, 2023, the Company filed a motion to dismiss the MFN Litigation and informed the court that the Company had withdrawn the arbitration Plaintiffs sought to enjoin. The motion has been fully briefed and awaiting decision.
Item 4. Mine Safety Disclosures. Not applicable. 33 Part II
Item 4. Mine Safety Disclosures. Not applicable. 36 Part II
The Company believes that the asserted claims are without merit and will vigorously defend against them if they are not dismissed. At this time, no determination can be made as to the ultimate outcome of this litigation or the potential liability, if any, on the part of the Company.
The court has scheduled a trial date of September 17, 2024. The Company believes that the asserted claims are without merit and will vigorously defend against them if they are not dismissed. At this time, no determination can be made as to the ultimate outcome of this litigation or the potential liability, if any, on the part of the Company.
The Company is party to various lawsuits and claims in the ordinary course of business, including the matters described above.
The Company is party to various lawsuits and claims in the ordinary course of business, including the matters described above, as well as other lawsuits and claims relating to employment, intellectual property, and privacy and data protection matters.
Removed
In December 2022, the parties entered into an agreement to resolve through confidential binding arbitration the remaining claims in the litigation (consisting mainly of ordinary course profit participation audit claims), which had been scheduled for a February 2023 jury trial.
Added
The arbitration to resolve the two remaining claims for breach of contract was held between October 16 through October 20, 2023 and a final decision is not expected until later in 2024.
Removed
The Company believes the two remaining claims in the case for breach of contract, which will now be resolved through confidential binding arbitration, are without merit and is continuing to defend against them.
Added
While the ultimate outcome of this litigation is uncertain, we expect that the ultimate outcome is unlikely to have a material impact on the Company’s financial condition or results of operations.
Removed
At this time, no determination can be made as to the ultimate outcome of this litigation or the potential liability, if any, on the part of the Company.
Added
The Company is party to actions and claims arising from alleged violations of the federal Video Privacy Protection Act (the “VPPA”) and analogous state laws. In addition to certain putative class actions currently pending, the Company is facing a series of arbitration claims managed by multiple plaintiffs law firms.
Added
The class action complaints and the arbitration claims all allege that the Company’s use of a Meta Platforms, Inc. pixel on the websites for certain of its subscription video services, including AMC+ and Shudder, violated the privacy protection provisions of the VPPA and its state law analogues.
Added
On October 27, 2023, the Company reached a settlement with multiple plaintiffs relating to their pending class actions alleging violations of the VPPA and analogous state laws. On January 10, 2024, the class action settlement was preliminarily approved by the United States District Court for the Southern District of New York.
Added
The Company has also reached settlements, or settlements in principle, to resolve the arbitration claims. All of the settlements reached by the Company in connection with these matters are expected to be reimbursed by the Company’s insurance carriers.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeINDEXED RETURNS Period Ended Company Name / Index Base Period 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 AMC Networks Inc. 100 101.48 73.04 66.14 63.68 28.98 S&P MidCap 400 Index 100 88.92 112.21 127.54 159.12 138.34 Peer Group 100 98.14 127.85 156.98 135.08 73.94 This performance graph shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 34 As of February 10, 2023, there were 548 holders of record of our Class A Common Stock and 34 holders of record of our Class B Common Stock.
Biggest changeINDEXED RETURNS Period Ended Company Name / Index Base Period 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 AMC Networks Inc. 100 71.98 65.18 62.76 28.55 34.24 S&P MidCap 400 Index 100 126.20 143.44 178.95 155.58 181.15 Peer Group 100 130.28 159.96 137.64 75.34 81.39 This performance graph shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 37 As of February 2, 2024, there were 513 holders of record of our Class A Common Stock and 33 holders of record of our Class B Common Stock.
The chart assumes $100 was invested on December 31, 2017 in each of: i) Company's Class A Common Stock, ii) the S&P Mid-Cap 400 Index, and iii) in this Peer Group weighted by market capitalization.
The chart assumes $100 was invested on December 31, 2018 in each of: i) Company's Class A Common Stock, ii) the S&P Mid-Cap 400 Index, and iii) in this Peer Group weighted by market capitalization.
Performance Graph The following graph compares the performance of the Company's Class A Common Stock with the performance of the S&P Mid-Cap 400 Index and a peer group (the "Peer Group Index") by measuring the changes in our Class A Common Stock prices from December 31, 2017 through December 31, 2022.
Performance Graph The following graph compares the performance of the Company's Class A Common Stock with the performance of the S&P Mid-Cap 400 Index and a peer group (the "Peer Group Index") by measuring the changes in our Class A Common Stock prices from December 31, 2018 through December 31, 2023.
The Company did not repurchase any shares of its Class A common stock during the year ended December 31, 2022. As of December 31, 2022, the Company had $135.3 million available for repurchase under the Stock Repurchase Program. Item 6. [Reserved] 35
The Company did not repurchase any shares of its Class A common stock during the year ended December 31, 2023. As of December 31, 2023, the Company had $135.3 million available for repurchase under the Stock Repurchase Program. Item 6. [Reserved] 38

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

100 edited+46 added−34 removed59 unchanged
Biggest changeIn 2021, net cash used in financing activities consisted of principal payments, net of proceeds, on long-term debt (including the redemption of $400 million of 4.75% Notes due December 2022 and $600 million of 5.00% Notes due April 2024) of $30.5 million, taxes paid in lieu of shares issued for equity-based compensation of $32.9 million, and distributions to noncontrolling interests of $29.4 million and payments on finance leases of $3.8 million, partially offset by proceeds from the exercise of stock options of $9.8 million and contributions from noncontrolling interests of $2.7 million. 48 Debt Financing Agreements The Company's principal amount of long-term debt consists of: (In thousands) December 31, 2022 December 31, 2021 Senior Secured Credit Facility: (a) Term Loan A Facility $ 641,250 $ 675,000 Senior Notes: 5.00% Notes due April 2024 400,000 400,000 4.75% Notes due August 2025 800,000 800,000 4.25% Notes due February 2029 1,000,000 1,000,000 Principal amount of debt $ 2,841,250 $ 2,875,000 (a) The Company's $500 million revolving credit facility remains undrawn at December 31, 2022.
Biggest changeIn 2023, net cash used in financing activities primarily consisted of principal payments on long-term debt of $458.4 million (including $400.0 million of 5.00% Notes due April 2024, $24.7 million of 4.75% Notes due August 2025, and $33.7 million on the Term Loan A Facility), distributions to noncontrolling interests of $72.9 million, taxes paid in lieu of shares issued for equity-based compensation of $7.3 million, principal payments on finance leases of $4.2 million, and the purchase of noncontrolling interests of $1.3 million.
If events or changes in circumstances indicate that the fair value of program rights predominantly monetized individually or a film group is less than its unamortized cost, the Company will write off the excess to technical and operating expenses in the consolidated statements of income.
If events or changes in circumstances indicate that the fair value of program rights predominantly monetized individually or a film group is less than its unamortized cost, the Company will write off the excess to technical and operating expenses in the consolidated statements of income.
The effective tax rate differs from the federal statutory rate of 21% due primarily to state and local income tax benefit of $6.0 million and tax benefit of $70.4 million related to the deemed liquidation of a wholly-owned controlled foreign corporation, partially offset by tax expense of $32.6 million resulting from a net increase in valuation allowances for foreign deferred tax assets, state net operating losses and excess capital losses and tax expense of $10.4 million related to non-deductible compensation expense.
The effective tax rate differs from the federal statutory rate of 21% due primarily to state and local income tax benefit of $6.0 million and tax benefit of $70.4 million related to the deemed liquidation of a wholly-owned controlled foreign corporation, partially offset by tax 45 expense of $32.6 million resulting from a net increase in valuation allowances for foreign deferred tax assets, state net operating losses and excess capital losses and tax expense of $10.4 million related to non-deductible compensation expense.
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.
Although we currently believe that amounts available under our revolving credit facility will be available when and if needed, we can provide no 48 assurance that access to such funds will not be impacted by adverse conditions in the financial markets.
Program rights that are predominantly monetized individually 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.
To a lesser extent, program rights that are predominantly monetized individually 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.
Technical and operating expenses (excluding depreciation and amortization) The components of technical and operating expenses primarily include the amortization 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 expenses (excluding depreciation and amortization) The components of technical and operating expenses primarily include the amortization of program rights, such as those for original programming, feature films and licensed series, and other direct programming costs, such as participation and residual costs, distribution and production related costs and program delivery costs, such as transmission, encryption, hosting, and formatting.
This section provides an analysis of our results of operations for the years ended December 31, 2022 and 2021. Our discussion is presented on both a consolidated and segment basis. Our two segments are: (i) Domestic Operations and (ii) International and Other.
This section provides an analysis of our results of operations for the years ended December 31, 2023 and 2022. Our discussion is presented on both a consolidated and segment basis. Our two segments are: (i) Domestic Operations and (ii) International and Other.
Programming expenses, program operating costs and production costs incurred to produce content for third parties are included in technical and operating expenses, and represent the largest expense of the International and Other segment. Programming expenses primarily consist of amortization of acquired content, costs of dubbing and sub-titling of programs, production costs, and participation and residual costs.
Programming expenses, program operating costs and production costs incurred to produce content for third parties are included in technical and operating expenses, and represent the largest expense of the International and Other segment. Programming expenses primarily consist of amortization of acquired content, costs of dubbing and sub-titling of programs, and production costs.
Analysis of our results of operations, on both a consolidated and segment basis, for the year ended December 31, 2020, including a comparison of 2021 to 2020, is included in our Annual Report on Form 10-K for the year ended December 31, 2021. Liquidity and Capital Resources .
Analysis of our results of operations, on both a consolidated and segment basis, for the year ended December 31, 2021, including a comparison of 2022 to 2021, is included in our Annual Report on Form 10-K for the year ended December 31, 2022. Liquidity and Capital Resources .
Programming expenses, included in technical and operating expenses, represent the largest expenses of the Domestic Operations segment and primarily consists of amortization of program rights, such as those for original programming, feature films and licensed series, as well as participation and residual costs.
Programming expenses, included in technical and operating expenses, represent the largest expenses of the Domestic Operations segment and primarily consist of amortization of program rights, such as those for original programming, feature films and licensed series, as well as participation and residual costs.
Events such as these may adversely impact our results of operations, cash flows and financial position. 39 Consolidated Results of Operations The amounts presented and discussed below represent 100% of each operating segment's revenues, net and expenses.
Events such as these may adversely impact our results of operations, cash flows and financial position. 42 Consolidated Results of Operations The amounts presented and discussed below represent 100% of each operating segment's revenues, net and expenses.
Income tax benefit (expense) Income tax benefit was $41.0 million for 2022, representing an effective tax rate of 137%.
Income tax benefit was $41.0 million for 2022, representing an effective tax rate of 137%.
The Market Comparables Method incorporates revenue and earnings multiples from publicly traded companies with operations and other characteristics similar to each reporting unit. The 51 selected multiples consider each reporting unit’s relative growth, profitability, size, and risk relative to the selected publicly traded companies.
The Market Comparables Method incorporates revenue and 53 earnings multiples from publicly traded companies with operations and other characteristics similar to each reporting unit. The selected multiples consider each reporting unit’s relative growth, profitability, size, and risk relative to the selected publicly traded companies.
This section provides a discussion of our financial condition as of December 31, 2022 as well as an analysis of our cash flows for the years ended December 31, 2022 and 2021. The discussion of our financial condition and liquidity also includes a summary of our primary sources of liquidity.
This section provides a discussion of our financial condition as of December 31, 2023 as well as an analysis of our cash flows for the years ended December 31, 2023 and 2022. The discussion of our financial condition and liquidity also includes a summary of our primary sources of liquidity.
We believe that a combination of cash-on-hand, cash generated from operating activities, availability under our revolving credit facility, borrowings under additional financing facilities and, when we have access to capital and credit markets, proceeds from the sale of new debt, 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.
We believe that a combination of cash-on-hand, cash generated from operating activities, availability under our revolving credit facility and our accounts receivable monetization program, borrowings under additional financing facilities and, when we have access to capital and credit markets, proceeds from the sale of new debt, 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.
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.
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 have increased.
Analysis of our cash flows for the year ended December 31, 2020 is included in our Annual Report on Form 10-K for the year ended December 31, 2021. Critical Accounting Policies and Estimates .
Analysis of our cash flows for the year ended December 31, 2021 is included in our Annual Report on Form 10-K for the year ended December 31, 2022. Critical Accounting Policies and Estimates .
Our principal uses of cash include the production, acquisition and promotion of programming, technology investments, debt service and payments for income taxes. We continue to invest in original programming, the funding of which generally occurs six to nine months in advance of a program's airing.
Our principal uses of cash include the production, acquisition and promotion of programming, technology investments, debt service and payments for income taxes. We continue to invest in original programming, the funding of which generally occurs at least nine months in advance of a program's airing.
As a result, we will be dependent upon our ability to access the capital and credit markets in order to repay, refinance, repurchase through privately negotiated transactions, tender offers or otherwise or redeem the outstanding balances of our indebtedness.
As a result, we will be dependent upon our ability to access the capital and credit markets in order to repay, refinance, repurchase through privately negotiated transactions, open market repurchases, tender offers or otherwise or redeem the outstanding balances of our indebtedness.
For our two other reporting units, we concluded that the estimated fair value of the reporting units exceeded their respective carrying values by 27% and 15%, and therefore no impairment charge was required. See Note 9 to the accompanying consolidated financial statements included in this Annual Report on Form 10-K for additional details.
For our two other reporting units, we concluded that the estimated fair value of the reporting units exceeded their respective carrying values by 16% and 7%, and therefore no impairment charge was required. See Note 9 to the accompanying consolidated financial statements included in this Annual Report on Form 10-K for additional details.
As a result, the Company recognized an impairment charge of $40.7 million, reflecting a partial write-down of the goodwill associated with the AMCNI reporting unit.
As a result, we recognized an impairment charge of $40.7 million, reflecting a partial write-down of the goodwill associated with the AMCNI reporting unit.
Program rights that are monetized as a group are amortized based on projected usage, typically resulting in an accelerated amortization pattern and, to a lesser extent, program rights that are monetized individually 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.
Program rights that are predominantly monetized as a group are amortized based on projected usage, typically resulting in an accelerated amortization pattern and, to a lesser extent, program rights that are predominantly monetized individually are amortized based on the individual-film-forecast-computation method. Most original series require us to make significant up-front investments.
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 through production services from 25/7 Media.
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. Until its sale, we also earned revenue through production services from 25/7 Media.
In 2022, net cash provided by operating activities primarily resulted from $1,524.6 million of net income before amortization of program rights, depreciation and amortization, and other non-cash items, partially offset by payments for 47 program rights of $1,347.4 million. Changes in all other assets and liabilities during the year resulted in a net cash inflow of $4.6 million.
Changes in all other assets and liabilities during the year resulted in a net cash outflow of $25.1 million. In 2022, net cash provided by operating activities primarily resulted from $1,524.6 million of net income before amortization of program rights, depreciation and amortization, and other non-cash items, partially offset by payments for program rights of $1,347.4 million.
For the year ended December 31, 2022 , distribution revenues represented 81% of the revenues of the International and Other segm ent. Distribution revenue primarily includes subscription fees paid by distributors to carry our programming networks and production services revenue generated from 25/7 Media.
For the year ended December 31, 2023 , distribution revenues represented 80% of the revenues of the International and Other segm ent. Distribution revenue primarily includes subscription fees paid by distributors to carry our programming networks and production services revenue generated from 25/7 Media.
Impairment and other charges In December 2022, in connection with the preparation of our fourth quarter financial information, the Company performed its annual goodwill impairment test and concluded that the estimated fair value of the AMCNI reporting unit declined to less than its carrying amount.
In December 2022, 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 the AMCNI reporting unit declined to less than its carrying amount.
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. 50 Owned original programming costs, including estimated participation and residual costs qualifying for capitalization, are recorded as program rights on the consolidated balance sheet.
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. 52 Owned original programming costs qualifying for capitalization are recorded as program rights on the consolidated balance sheet.
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. Our programming efforts are not all commercially successful, which could result in a write-off 38 of program rights.
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. Our programming efforts are not all commercially successful, which has in the past resulted and could in the future result in a write-off of program rights.
Advertising revenues decreased primarily due to lower linear ratings, softness in the advertising market, and fewer original programming episodes, partially offset by continued digital and advanced advertising revenue growth. 43 The following table presents certain subscriber information for our national programming networks at December 31, 2022 and 2021: Estimated U.S.
Advertising revenues decreased due to linear ratings declines, softness in the advertising market and fewer original programming episodes within the period, partially offset by digital and advanced advertising revenue growth. 46 The following table presents certain subscriber information for our national programming networks at December 31, 2023 and 2022: Estimated U.S.
Foreign subsidiaries of AMC Networks do not and will not guarantee the notes. 49 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.
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.
As a result of the Plan, the Company recorded r estructuring and other related charges of $449.0 million for the year ended December 31, 2022, consisting of content impairments of $403.8 million and severance and other personnel costs of $45.2 million. The Company expects to incur additional restructuring and other related charges in 2023.
For the year ended December 31, 2022, a s a result of the Plan, the Company recorded r estructuring and other related charges of $449.0 million, consisting of content impairments of $403.8 million and severance and other personnel costs of $45.2 million.
Our programming efforts are not always commercially successful, which could result in a write-off of program rights.
Our programming efforts are not always commercially successful, which has in the past resulted and could in the future result in a write-off of program rights.
Segment adjusted operating income The decrease in segment adjusted operating income was primarily attributable to a decrease in revenues of $68.8 million, partially offset by decreases in technical and operating expenses of $45.9 million and selling, general and administrative expenses of $8.5 million.
Segment adjusted operating income The decrease in segment adjusted operating income was primarily attributable to a decrease in revenues of $358.6 million, partially offset by decreases in technical and operating expenses of $160.8 million and selling, general and administrative expenses of $124.7 million.
Note Guarantees Debt of AMC Networks as of December 31, 2022 included $400.0 million of 5.00% Notes due April 2024, $800.0 million of 4.75% Notes due August 2025, and $1.0 billion of 4.25% Notes due February 2029 (collectively, the “notes”).
Note Guarantees Debt of AMC Networks as of December 31, 2023 included $774.7 million of 4.75% Notes due August 2025 and $1.0 billion of 4.25% Notes due February 2029 (collectively, the “notes”).
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.
For these types of arrangements, a portion of the related revenue is deferred if the guaranteed 40 ratings are not met and is subsequently recognized either when we provide the required additional advertising time or the guarantee obligation contractually expires.
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.
AOI and similar measures with similar titles are common performance measures used by investors, analysts and peers to compare performance in the industry. 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.
Years Ended December 31, Change (In thousands) 2022 2021 2022 vs. 2021 Revenues, net $ (21,122) $ (14,325) 47.4 % Operating expenses: Technical and operating expenses (excluding depreciation and amortization) (a) (18,375) (21,526) (14.6) % Selling, general and administrative expenses (b) 117,236 119,866 (2.2) % Segment adjusted operating income $ (119,983) $ (112,665) 6.5 % (a) Technical and operating expenses excludes cloud computing amortization (b) Selling, general and administrative expenses excludes share-based compensation expenses and cloud computing amortization Revenues, net Revenue eliminations are primarily related to inter-segment licensing revenues recognized between the Domestic Operations and International and Other segments.
Years Ended December 31, Change (In thousands) 2023 2022 2023 vs. 2022 Revenues, net $ (9,186) $ (21,122) (56.5) % Operating expenses: Technical and operating expenses (excluding depreciation and amortization) (a) (11,934) (18,375) (35.1) % Selling, general and administrative expenses (b) 105,936 117,236 (9.6) % Segment adjusted operating income (loss) $ (103,188) $ (119,983) (14.0) % (a) Technical and operating expenses excludes cloud computing amortization (b) Selling, general and administrative expenses excludes share-based compensation expenses and cloud computing amortization Revenues, net Revenue eliminations are primarily related to inter-segment licensing revenues recognized between the Domestic Operations and International and Other segments.
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.
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 support the distributors' efforts to market our networks.
The effective tax rate differs from the federal statutory rate of 21% due primarily to state and local income tax expense of $11.7 million, tax expense of $9.6 million resulting from a net increase in valuation allowances for foreign deferred tax assets, tax expense of $8.3 million related 42 to non-deductible compensation expense, partially offset by $5.5 million of tax benefit related to nontaxable income attributable to noncontrolling interests and tax benefit of $4.7 million for excess tax benefits related to share-based compensation.
The effective tax rate differs from the federal statutory rate of 21% due primarily to state and local income tax expense of $10.5 million, tax expense related to foreign operations of $3.4 million, tax expense of $10.6 million resulting from a net increase in valuation allowances primarily related to foreign deferred tax assets, $3.8 million of tax expense related to nontaxable loss attributable to noncontrolling interests and tax expense of $5.2 million related to non-deductible compensation expense.
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.
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.
Given the maturity dates of our 5.00% senior notes due 2024 and our 4.75% senior notes due 2025, we may access the capital or credit markets in the near term to refinance those senior notes through privately negotiated transactions, tender offers or redemptions.
Given the maturity date of the remaining $774.7 million of 4.75% senior notes due 2025, we may access the capital or credit markets in the near term to refinance those senior notes through privately negotiated transactions, open market repurchases, tender offers or redemptions.
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 an interest, which may be significant, in such entity. The noncontrolling owner's interest in the operating results of consolidated subsidiaries are reflected in net income attributable to noncontrolling interests in our consolidated statements of operations.
Where we have management control of an entity, we consolidate 100% of such entity in our consolidated statements of income notwithstanding that a third-party owns an interest, which may be significant, in such entity.
If these guaranteed viewer ratings are not met, we are generally required to provide additional advertising units to the advertiser at no charge.
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.
Segment adjusted operating income The decrease in segment adjusted operating income was primarily attributable to increases in technical and operating expenses of $126.2 million and selling, general and administrative expenses of $29.6 million, partially offset by an increase in revenues of $94.5 million.
Segment adjusted operating income The decrease in segment adjusted operating income was primarily attributable to a decrease in revenues of $38.0 million and an increase in selling, general and administrative expenses of $4.7 million, partially offset by a decrease in technical and operating expenses of $34.3 million.
AMC Networks Broadcasting & Technology, our technical services business, 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.
The operating segment also includes AMC Networks Broadcasting & Technology, our technical services business, which primarily services the 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, our production services business, until it was sold on December 29, 2023.
There were no material write-offs included in program rights amortization expense in 2022. Program rights amortization expense includes write-offs $1.7 million for 2021 . Programming write-offs are based on management's periodic assessment of programming useful ness.
Program rights amortization expense includes write-offs of $14.5 million for the year ended December 31, 2023, for programming that was substantively abandoned. There were no material write-offs included in program rights amortization expense in 2022. Programming write-offs are based on management's periodic assessment of programming useful ness.
Our global streaming services consist of our targeted subscription streaming services (Acorn TV, Shudder, Sundance Now, ALLBLK, and HIDIVE), AMC+ and other streaming initiatives. Our AMC Studios operation produces original programming for our programming services and also licenses such programming worldwide, and IFC Films is our film distribution business.
Our programming networks are AMC, WE tv, BBC AMERICA, IFC, and SundanceTV. Our global streaming services consist of AMC+ and our targeted subscription streaming services (Acorn TV, Shudder, Sundance Now, ALLBLK, and HIDIVE). Our AMC Studios operation produces original programming for our programming services and third parties and also licenses programming worldwide.
Subscribers as measured by Nielsen (In thousands) December 31, 2022 December 31, 2021 National Programming Networks: AMC 69,900 78,300 WE tv 68,200 75,500 BBC AMERICA 64,600 73,000 IFC 60,000 68,000 SundanceTV 58,400 65,900 Technical and operating expenses (excluding depreciation and amortization) Technical and operating expenses (excluding depreciation and amortization) increased primarily due to costs associated with the delivery of an AMC Studios produced series to a third party in the fourth quarter of 2022 and an increase in program rights amortization, partially offset by a decrease in other direct programming costs.
Subscribers as measured by Nielsen (In thousands) December 31, 2023 December 31, 2022 National Programming Networks: AMC 65,100 69,900 WE tv 63,700 68,200 BBC AMERICA 60,000 64,600 IFC 56,200 60,000 SundanceTV 53,900 58,400 Technical and operating expenses (excluding depreciation and amortization) Technical and operating expenses (excluding depreciation and amortization) decreased primarily due to a decrease in program rights amortization, consistent with the decrease in content licensing revenue for The Walking Dead and Fear the Walking Dead , and lower costs associated with the delivery of Silo , an AMC Studios produced series.
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.
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 specific subscription fee revenues we earn vary from period to period, distributor to distributor and also vary among our programming services, but are generally based upon the number of each distributor's subscribers who receive our programming, referred to as viewing subscribers.
Our subscription revenues for our programming networks are based on a per subscriber fee, and, to a lesser extent, fixed fees under multi-year contracts, commonly referred to as "affiliation agreements." The subscription revenues we earn vary from period to period, distributor to distributor and also vary among our programming services, but are generally based on the impact of renewals of affiliation agreements and upon the number of each distributor's subscribers who receive our programming, referred to as viewing subscribers.
Years Ended December 31, Change (In thousands) 2022 2021 2022 vs. 2021 Revenues, net: Subscription $ 1,395,026 $ 1,318,732 5.8 % Content licensing and other 491,870 416,898 18.0 % Distribution and other 1,886,896 1,735,630 8.7 % Advertising 788,246 844,986 (6.7) % Total revenues, net 2,675,142 2,580,616 3.7 % Technical and operating expenses (excluding depreciation and amortization) (a) 1,276,791 1,150,564 11.0 % Selling, general and administrative expenses (b) 626,203 596,559 5.0 % Majority-owned equity investees AOI 17,248 11,948 44.4 % Segment adjusted operating income $ 789,396 $ 845,441 (6.6) % (a) Technical and operating expenses excludes cloud computing amortization (b) Selling, general and administrative expenses excludes share-based compensation expenses Revenues Subscription revenues increased primarily due to a 35.4% increase in streaming revenues driven by streaming subscriber growth, partially offset by a 5.8% decline in affiliate revenue.
Years Ended December 31, Change (In thousands) 2023 2022 2023 vs. 2022 Revenues, net: Subscription $ 1,340,207 $ 1,395,026 (3.9) % Content licensing and other 342,557 491,870 (30.4) % Distribution and other 1,682,764 1,886,896 (10.8) % Advertising 633,823 788,246 (19.6) % Total revenues, net 2,316,587 2,675,142 (13.4) % Technical and operating expenses (excluding depreciation and amortization) (a) 1,115,948 1,276,791 (12.6) % Selling, general and administrative expenses (b) 501,501 626,203 (19.9) % Majority-owned equity investees AOI 13,606 17,248 (21.1) % Segment adjusted operating income $ 712,744 $ 789,396 (9.7) % (a) Technical and operating expenses excludes cloud computing amortization (b) Selling, general and administrative expenses excludes share-based compensation expenses Revenues Subscription revenues decreased primarily due to a 13.3% decline in affiliate revenues, partially offset by a 12.7% increase in streaming revenues.
Our national programming networks have advertisers representing companies in a broad range of sectors, including the automotive, restaurants/food, health, and telecommunications industries.
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. Our national programming networks have advertisers representing companies in a broad range of sectors, including the automotive, restaurants/food, health, technology and telecommunications industries.
Technical and operating expenses (excluding depreciation and amortization) increased 11.0% in our Domestic Operations segment primarily due to costs associated with the delivery of an AMC Studios produced series to a third party in the fourth quarter of 2022 and an increase in program rights amortization, partially offset by a decrease in other direct programming costs.
Technical and operating expenses (excluding depreciation and amortization) decreased 12.6% in our Domestic Operations segment primarily due to a decrease in program rights amortization and lower costs associated with the delivery of Silo , an AMC Studios produced series.
The carrying amount of goodwill, by operating segment is as follows: (In thousands) December 31, 2022 Domestic Operations $ 349,292 International and Other 294,127 $ 643,419 Based on our annual impairment tests for goodwill during 2022, we recorded an impairment charge of $40.7 million related to our AMCNI reporting unit.
The carrying amount of goodwill, by operating segment is as follows: (In thousands) December 31, 2023 Domestic Operations $ 348,732 International and Other 277,764 $ 626,496 Based on our annual and interim impairment tests for goodwill during 2023, we recorded total impairment charges of $21.7 million related to our 25/7 Media reporting unit.
Advertising revenues decreased 6.7% in our Domestic Operations segment primarily due to lower linear ratings, pricing softness, and fewer original programming episodes, partially offset by continued digital and advanced advertising revenue growth.
We expect content licensing revenues in our Domestic Operations segment to face pressure in 2024 due to reduced availability of original programming. Advertising revenues decreased 19.6% in our Domestic Operations segment primarily due to linear ratings declines, softness in the advertising market and fewer original programming episodes within the period, partially offset by digital and 43 advanced advertising revenue growth.
Years Ended December 31, Change (In thousands) 2022 2021 2022 vs. 2021 Revenues, net: Subscription $ 1,618,541 $ 1,568,576 3.2 % Content licensing and other 606,154 558,378 8.6 % Distribution and other 2,224,695 2,126,954 4.6 % Advertising 871,850 950,654 (8.3) % Total revenues, net 3,096,545 3,077,608 0.6 % Operating expenses: Technical and operating (excluding depreciation and amortization) 1,515,902 1,432,083 5.9 % Selling, general and administrative 896,817 891,734 0.6 % Depreciation and amortization 107,227 93,881 14.2 % Impairment and other charges 40,717 159,610 (74.5) % Restructuring and other related charges 448,966 10,378 4226.1 % Total operating expenses 3,009,629 2,587,686 16.3 % Operating income 86,916 489,922 (82.3) % Other income (expense): Interest expense, net (120,436) (118,830) 1.4 % Loss on extinguishment of debt — (22,074) (100.0) % Miscellaneous, net 3,568 25,214 (85.8) % Total other income (expense) (116,868) (115,690) 1.0 % Net income (loss) from operations before income taxes (29,952) 374,232 (108.0) % Income tax benefit (expense) 40,980 (94,393) (143.4) % Net income including noncontrolling interests 11,028 279,839 (96.1) % Net income attributable to noncontrolling interests (3,434) (29,243) (88.3) % Net income attributable to AMC Networks' stockholders $ 7,594 $ 250,596 (97.0) % Revenues Subscription revenues increased 5.8% in our Domestic Operations segment primarily due to an increase in streaming revenues, partially offset by a decline in affiliate revenue.
Years Ended December 31, Change (In thousands) 2023 2022 2023 vs. 2022 Revenues, net: Subscription $ 1,561,061 $ 1,618,541 (3.6) % Content licensing and other 435,170 606,154 (28.2) % Distribution and other 1,996,231 2,224,695 (10.3) % Advertising 715,646 871,850 (17.9) % Total revenues, net 2,711,877 3,096,545 (12.4) % Operating expenses: Technical and operating (excluding depreciation and amortization) 1,327,500 1,515,902 (12.4) % Selling, general and administrative 764,087 896,817 (14.8) % Depreciation and amortization 107,402 107,227 0.2 % Impairment and other charges 96,689 40,717 137.5 % Restructuring and other related charges 27,787 448,966 (93.8) % Total operating expenses 2,323,465 3,009,629 (22.8) % Operating income 388,412 86,916 n/m Other income (expense): Interest expense, net (115,685) (120,436) (3.9) % Miscellaneous, net 23,279 3,568 n/m Total other income (expense) (92,406) (116,868) (20.9) % Net income (loss) from operations before income taxes 296,006 (29,952) n/m Income tax benefit (expense) (94,606) 40,980 n/m Net income including noncontrolling interests 201,400 11,028 n/m Net (income) loss attributable to noncontrolling interests 14,064 (3,434) n/m Net income attributable to AMC Networks' stockholders $ 215,464 $ 7,594 n/m Revenues Subscription revenues de creased 3.9% in our Domestic Operations segment primarily due to a decline in affiliate revenues, partially offset by an increase in streaming revenues.
Program rights that are monetized as a group are amortized based on projected usage, typically resulting in an accelerated amortization pattern. We base our estimates of ultimate revenue primarily 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.
Program rights that are monetized as a group are amortized based on projected program usage, typically resulting in an accelerated amortization pattern. Projected program usage is based on the Company's current expectation of future exhibitions taking into account historical usage of similar content.
Selling, general and administrative expenses (including share-based compensation expenses) increased 3.3% in our Domestic Operations segment primarily due to higher employee related costs, partially offset by lower share-based compensation expenses.
Selling, general and administrative expenses (including share-based compensation expenses) decreased 19.4% in our Domestic Operations segment primarily due to lower marketing and subscriber acquisition expenses related to our streaming services, and decreased 9.6% in Corporate primarily due to lower employee related costs.
Affiliate revenue decreased due to basic subscriber declines, partially offset by contractual affiliate rate increases. Subscription revenues include revenues related to the Company's streaming services of $501.9 million and $370.8 million for 2022 and 2021, respectively. Aggregate paid subscribers to our streaming services were approximately 11.8 million and 9.0 million at December 31, 2022 and 2021, respectively.
Subscription revenues include revenues related to the Company's streaming services of $565.6 million and $501.9 million for 2023 and 2022, respectively. Aggregate paid subscribers to our streaming services were approximately 11.4 million at both December 31, 2023 and 2022.
Summarized Financial Information Income Statement (In thousands) Year Ended December 31, 2022 Year Ended December 31, 2021 Parent Company Guarantor Subsidiaries Parent Company Guarantor Subsidiaries Revenues $ — $ 2,244,245 $ — $ 2,137,263 Operating expenses — 2,165,131 — 1,713,682 Operating income $ — $ 79,114 $ — $ 423,581 Income (loss) before income taxes $ (49,040) $ 91,088 $ 314,283 $ 472,985 Net income 7,594 82,396 250,596 463,637 Balance Sheet December 31, 2022 December 31, 2021 (In thousands) Parent Company Guarantor Subsidiaries Parent Company Guarantor Subsidiaries Assets Amounts due from subsidiaries $ — $ 79,020 $ — $ — Current assets 44,045 1,258,759 9,991 1,242,724 Non-current assets 3,893,205 3,706,858 4,010,028 3,633,383 Liabilities and equity: Amounts due to subsidiaries $ 68,682 $ 6,783 $ 12,797 $ 5,324 Current liabilities 157,658 872,109 100,969 671,041 Non-current liabilities 2,972,602 330,467 3,067,962 331,860 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.
The summarized financial information has been prepared in accordance with Rule 13-01 of Regulation S-X. 51 Summarized Financial Information Income Statement (In thousands) Year Ended December 31, 2023 Year Ended December 31, 2022 Parent Company Guarantor Subsidiaries Parent Company Guarantor Subsidiaries Revenues $ — $ 1,935,082 $ — $ 2,244,245 Operating expenses — 1,559,083 — 2,165,131 Operating income $ — $ 375,999 $ — $ 79,114 Income (loss) before income taxes $ 284,660 $ 444,647 $ (49,040) $ 91,088 Net income 215,464 435,328 7,594 82,396 Balance Sheet December 31, 2023 December 31, 2022 (In thousands) Parent Company Guarantor Subsidiaries Parent Company Guarantor Subsidiaries Assets Amounts due from subsidiaries $ — $ — $ — $ 79,020 Current assets 61,931 1,156,533 44,045 1,258,759 Non-current assets 3,676,129 3,301,046 3,893,205 3,706,858 Liabilities and equity: Amounts due to subsidiaries $ 54,627 $ 2,456 $ 68,682 $ 6,783 Current liabilities 173,031 666,783 157,658 872,109 Non-current liabilities 2,516,977 224,051 2,972,602 330,467 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.
The Plan encompasses initiatives that include, among other things, strategic programming assessments and organizational restructuring costs . The programming assessments pertain to a broad mix of owned and licensed content, including legacy television series and films that will no longer be in active rotation on the Company’s linear or streaming platforms.
The Plan was intended to improve the organizational design of the Company through the elimination of certain roles and centralization of certain functional areas of the Company. The programming assessments pertained to a broad mix of owned and licensed content, including legacy television series and films that are no longer in active rotation on the Company’s linear or streaming platforms.
Program rights with no future programming usefulness are substantively abandoned resulting in the write-off of remaining unamortized cost. There was $403.8 million of program write-offs recorded to restructuring and other related charges in connection with the Company’s strategic programming assessments. Refer to Note 5 to the consolidated financial statements for additional information.
For the year ended December 31, 2022. t here were $403.8 million of program write-offs recorded to restructuring and other related charges in connection with the Company’s strategic programming assessments. Refer to Note 5 to the consolidated financial statements for additional information. See "Critical Accounting Policies and Estimates" for a discussion of the amortization and write-off of program rights.
Years Ended December 31, Change (In thousands) 2022 2021 2022 vs. 2021 Revenues, net: Subscription $ 223,515 $ 249,844 (10.5) % Content licensing and other 135,406 155,805 (13.1) % Distribution and other 358,921 405,649 (11.5) % Advertising 83,604 105,668 (20.9) % Total revenues, net 442,525 511,317 (13.5) % Technical and operating expenses (excluding depreciation and amortization) 257,097 303,045 (15.2) % Selling, general and administrative expenses (a) 116,439 124,978 (6.8) % Segment adjusted operating income $ 68,989 $ 83,294 (17.2) % (a) Selling, general and administrative expenses excludes share-based compensation expenses Revenues Subscription revenues de creased primarily due to the unfavorable impact of foreign currency translation at AMCNI.
Years Ended December 31, Change (In thousands) 2023 2022 2023 vs. 2022 Revenues, net: Subscription $ 220,854 $ 223,515 (1.2) % Content licensing and other 101,799 135,406 (24.8) % Distribution and other 322,653 358,921 (10.1) % Advertising 81,823 83,604 (2.1) % Total revenues, net 404,476 442,525 (8.6) % Technical and operating expenses (excluding depreciation and amortization) 222,757 257,097 (13.4) % Selling, general and administrative expenses (a) 121,171 116,439 4.1 % Segment adjusted operating income $ 60,548 $ 68,989 (12.2) % (a) Selling, general and administrative expenses excludes share-based compensation expenses Revenues Subscription revenues de creased primarily due to the non-renewal of an AMCNI distribution agreement in the U.K. in the fourth quarter of 2023.
However, each of our programming businesses has substantial programming acquisition and production expenditure requirements. Our primary source of cash typically includes cash flow from operations. Sources of cash also include amounts available under our revolving credit facility and, subject to market conditions, access to capital and credit markets.
Sources of cash also include amounts available under our revolving credit facility and, subject to market conditions, access to capital and credit markets.
Segment Reporting We manage our business through the following two operating segments: • Domestic Operations: Includes our programming services and AMC Broadcasting & Technology. Our programming services consist of our five national programming networks, our global streaming services, our AMC Studios operation and IFC Films. Our national programming networks are AMC, WE tv, BBC AMERICA, IFC, and SundanceTV.
The results of operations of 25/7 Media are included in the consolidated financial statements through the date of sale. Segment Reporting We manage our business through the following two operating segments: • Domestic Operations: Includes our five programming networks, our global streaming services, our AMC Studios operation and our film distribution business.
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 December 12, 2023 (the “Redemption Date”), we redeemed the remaining $400 million outstanding principal amount of our 5.00% senior notes due 2024 (the “2024 Notes”). The 2024 Notes were redeemed at a redemption price of 100.000% of the principal amount of the 2024 Notes plus accrued and unpaid interest to, but excluding, the Redemption Date.
Dollars in thousands Year Ended December 31, Change 2022 2021 2022 vs. 2021 Revenues, net Domestic Operations $ 2,675,142 $ 2,580,616 3.7 % International and Other 442,525 511,317 (13.5) % Inter-segment Eliminations (21,122) (14,325) 47.4 % $ 3,096,545 $ 3,077,608 0.6 % Operating Income (Loss) Domestic Operations $ 286,517 $ 617,875 (53.6) % International and Other 3,031 37,167 (91.8) % Corporate / Inter-segment Eliminations (202,632) (165,120) 22.7 % $ 86,916 $ 489,922 (82.3) % Adjusted Operating Income (Loss) Domestic Operations $ 789,396 $ 845,441 (6.6) % International and Other 68,989 83,294 (17.2) % Corporate / Inter-segment Eliminations (119,983) (112,665) 6.5 % $ 738,402 $ 816,070 (9.5) % (1) Adjusted Operating Income (Loss), is a non-GAAP financial measure.
Dollars in thousands Year Ended December 31, Change 2023 2022 2023 vs. 2022 Revenues, net Domestic Operations $ 2,316,587 $ 2,675,142 (13.4) % International and Other 404,476 442,525 (8.6) % Inter-segment Eliminations (9,186) (21,122) (56.5) % $ 2,711,877 $ 3,096,545 (12.4) % Operating Income (Loss) Domestic Operations $ 583,542 $ 286,517 103.7 % International and Other (9,624) 3,031 n/m Corporate / Inter-segment Eliminations (185,506) (202,632) (8.5) % $ 388,412 $ 86,916 n/m Adjusted Operating Income (Loss) Domestic Operations $ 712,744 $ 789,396 (9.7) % International and Other 60,548 68,989 (12.2) % Corporate / Inter-segment Eliminations (103,188) (119,983) (14.0) % $ 670,104 $ 738,402 (9.2) % (1) Adjusted Operating Income (Loss), is a non-GAAP financial measure.
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, (In thousands) 2022 2021 Cash provided by operating activities $ 181,834 $ 143,474 Cash used in investing activities (39,385) (26,582) Cash used in financing activities (97,115) (84,103) Net increase in cash and cash equivalents $ 45,334 $ 32,789 Operating Activities Net cash provided by operating activities f or 2022 and 2021 amounted to $181.8 million and $143.5 million, respectively.
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, (In thousands) 2023 2022 Cash provided by operating activities $ 203,919 $ 181,834 Cash used in investing activities (24,322) (39,385) Cash used in financing activities (544,435) (97,115) Net (decrease) increase in cash and cash equivalents $ (364,838) $ 45,334 Operating Activities Net cash provided by operating activities f or 2023 and 2022 amounted to $203.9 million and $181.8 million, respectively. 49 In 2023, net cash provided by operating activities primarily resulted from $1,421.5 million of net income before amortization of program rights, depreciation and amortization, and other non-cash items, partially offset by payments for program rights of $1,079.9 million and restructuring initiatives of $112.6 million.
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.
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. 54 Non-GAAP Financial Measures Internally, we use revenues, net, AOI, and Free Cash Flow measures as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators.
Subscription fees for our streaming services are typically based on a per subscriber fee and are generally paid by distributors and consumers on a monthly basis. Content licensing revenue is earned from the licensing of original programming for digital, foreign and home video distribution and is recognized upon availability or distribution by the licensee.
Subscription fees for our streaming services are typically based on a per subscriber fee and are generally paid by distributors and consumers on a monthly basis.
There were no significant program write-offs included in technical and operating expense for the year ended December 31, 2022. Refer to Note 5 for amounts recorded to restructuring expense in connection with the Company’s strategic programming assessments. Program rights write-offs of $12.8 million were recorded for the year ended December 31, 2021.
Program rights write-offs of $17.3 million were included in technical and operating expense for the year ended December 31, 2023, for programming that was substantively abandoned. There were no significant program write-offs included in technical and operating expense for the year ended December 31, 2022.
Years Ended December 31, 2022 and 2021 The following table sets forth our consolidated results of operations for the periods indicated.
The noncontrolling owner's interest in the operating results of consolidated subsidiaries are reflected in net income or loss attributable to noncontrolling interests in our consolidated statements of income. Years Ended December 31, 2023 and 2022 The following table sets forth our consolidated results of operations for the periods indicated.
There may be significant changes in the level of our selling, general and administrative expense due to the timing of promotions and marketing of original programming series. Depreciation and amortization expenses Depreciation and amortization expenses include depreciation of fixed assets and amortization of finite-lived intangible assets.
There have been and may continue to be significant changes in the level of our selling, general and administrative expenses due to the timing of promotions and marketing of original programming series. Selling, general and administrative expenses in our International & Other segment will decrease in 2024 due to the sale of 25/7 Media.
Our subscription fee revenues for our programming networks 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.
Our subscription revenues are generally based on either a per-subscriber fee or a fixed contractual annual fee, under multi-year affiliation agreements. Subscription revenues are derived from the distribution of our programming networks primarily in Europe, and to a 41 lesser extent, Latin America.
Operating income The decrease in operating income was primarily attributable to increases in restructuring and other related charges of $438.6 million and technical and operating expenses of $83.8 million, partially offset by a decrease in impairment and other charges of $118.9 million.
Operating income The increase in operating income was primarily attributable to decreases in restructuring and other related charges of $421.2 million, technical and operating expenses of $188.4 million and selling, general and administrative expenses of $132.7 million, partially offset by a decrease in revenues of $384.7 million and an increase in impairment and other charges of $56.0 million.
Selling, general and administrative expenses Corporate overhead costs not allocated to the segments 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).
Technical and Operating (excluding depreciation and amortization) Technical and operating expense eliminations are primarily related to inter-segment programming amortization recognized between the Domestic Operations and International and Other segments. Selling, general and administrative expenses Corporate overhead costs not allocated to the segments include such costs as executive salaries and benefits, costs of maintaining corporate headquarters, facilities and common support functions.
Technical and operating expense includes write-offs of $12.8 million for the year ended December 31, 2021 . Programming write-offs are based on management's periodic assessment of programming useful ness. There may be significant changes in the level of our technical and operating expenses due to original programming costs and/or content acquisition costs.
There may be significant changes in the level of our technical and operating expenses due to original programming costs and/or content acquisition costs. As competition for programming increases, costs for content acquisition and original programming are expected to continue to increase.
Interest expense, net The increase in interest expense, net was primarily due to higher interest rates on our Term Loan A Facility, partially offset by higher interest income and lower average daily balances and the refinancing of a portion of our outstanding senior notes at a lower interest rate in 2021.
Interest expense, net The decrease in interest expense, net was primarily due to higher interest income from our money market mutual fund accounts and bank deposits, partially offset by higher interest rates on our Term Loan A Facility.
The following is a reconciliation of operating income (loss) to AOI for the periods indicated: Year Ended December 31, 2022 (In thousands) Domestic Operations International and Other Corporate / Inter-segment Eliminations Consolidated Operating income (loss) $ 286,517 $ 3,031 $ (202,632) $ 86,916 Share-based compensation expenses 12,815 3,900 13,271 29,986 Depreciation and amortization 49,588 18,487 39,152 107,227 Impairment and other charges — 40,717 — 40,717 Restructuring and other related charges 423,205 2,854 22,907 448,966 Cloud computing amortization 23 — 7,319 7,342 Majority owned equity investees AOI 17,248 — — 17,248 Adjusted operating income (loss) $ 789,396 $ 68,989 $ (119,983) $ 738,402 Year Ended December 31, 2021 (In thousands) Domestic Operations International and Other Corporate / Inter-segment Eliminations Consolidated Operating income (loss) $ 617,875 $ 37,167 $ (165,120) $ 489,922 Share-based compensation expenses 22,077 3,627 22,221 47,925 Depreciation and amortization 48,025 19,807 26,049 93,881 Impairment and other charges 143,000 16,610 — 159,610 Restructuring and other related charges 2,516 6,083 1,779 10,378 Cloud computing amortization — — 2,406 2,406 Majority owned equity investees AOI 11,948 — — 11,948 Adjusted operating income (loss) $ 845,441 $ 83,294 $ (112,665) $ 816,070 46 Liquidity and Capital Resources Overview Our operations have historically generated positive net cash flow from operating activities.
The following is a reconciliation of operating income (loss) to AOI for the periods indicated: Year Ended December 31, 2023 (In thousands) Domestic Operations International and Other Corporate / Inter-segment Eliminations Consolidated Operating income (loss) $ 583,542 $ (9,624) $ (185,506) $ 388,412 Share-based compensation expenses 13,765 3,388 8,512 25,665 Depreciation and amortization 46,494 18,127 42,781 107,402 Impairment and other charges 51,966 44,723 — 96,689 Restructuring and other related charges 3,350 3,934 20,503 27,787 Cloud computing amortization 21 — 10,522 10,543 Majority owned equity investees AOI 13,606 — — 13,606 Adjusted operating income (loss) $ 712,744 $ 60,548 $ (103,188) $ 670,104 Year Ended December 31, 2022 (In thousands) Domestic Operations International and Other Corporate / Inter-segment Eliminations Consolidated Operating income (loss) $ 286,517 $ 3,031 $ (202,632) $ 86,916 Share-based compensation expenses 12,815 3,900 13,271 29,986 Depreciation and amortization 49,588 18,487 39,152 107,227 Impairment and other charges — 40,717 — 40,717 Restructuring and other related charges 423,205 2,854 22,907 448,966 Cloud computing amortization 23 — 7,319 7,342 Majority owned equity investees AOI 17,248 — — 17,248 Adjusted operating income (loss) $ 789,396 $ 68,989 $ (119,983) $ 738,402 We define Free Cash Flow, which is a non-GAAP financial measure, as net cash provided by operating activities less capital expenditures, all of which are reported in our Consolidated Statement of Cash Flows.
As of December 31, 2022, our consolidated cash and cash equivalents balance of $930.0 million includes approximately $338.3 million held by foreign subsidiaries.
As of December 31, 2023, approximately $244.9 million of cash and cash equivalents, previously held by foreign subsidiaries, was repatriated to the United States. Our consolidated cash and cash equivalents balance of $570.6 million, as of December 31, 2023, includes approximately $141.9 million held by foreign subsidiaries.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeUnrealized 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.
Biggest changeThe Company recognized foreign currency transaction gains (losses) of $8.4 million and $(1.2) million for the years ended December 31, 2023 and 2022, respectively, related to foreign currency transactions. 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.
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.
Any increase (decrease) in the value of the U.S. dollar against any foreign currency that is the functional 56 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.
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. For the year ended December 31, 2022, we did not have any interest rate swap contracts outstanding.
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. For the year ended December 31, 2023, we did not have any interest rate swap contracts outstanding.
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, 2022 would increase the estimated fair value of our fixed rate debt by approximately $48.6 million to approximately $1.65 billion.
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, 2023 would increase the estimated fair value of our fixed rate debt by approximately $45.7 million to approximately $1.57 billion.
As of December 31, 2022, we have $2.8 billion of debt outstanding (excluding finance leases), of which $641.3 million is outstanding under our loan facility and is subject to variable interest rates. A hypothetical 100 basis point increase in interest rates prevailing at December 31, 2022 would increase our annual interest expense by approximately $6.4 million.
As of December 31, 2023, we have $2.4 billion of debt outstanding (excluding finance leases), of which $607.5 million is outstanding under our loan facility and is subject to variable interest rates. A hypothetical 100 basis point increase in interest rates prevailing at December 31, 2023 would increase our annual interest expense by approximately $6.1 million.
The interest rate paid on approximately 77% of our debt (excluding finance leases) as of December 31, 2022 is fixed.
The interest rate paid on approximately 74% of our debt (excluding finance leases) as of December 31, 2023 is fixed.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Fair Value of Debt Based on the level of interest rates prevailing at December 31, 2022, the fair value of our fixed rate debt of $1.60 billion was lower than its carrying value of $2.18 billion by $575.8 million.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Fair Value of Debt Based on the level of interest rates prevailing at December 31, 2023, the fair value of our fixed rate debt of $1.53 billion was lower than its carrying value of $1.76 billion by $232.9 million.
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.
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.
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.
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.
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 62 of this Annual Report, and are incorporated by reference herein.
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.
Removed
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.
Added
Cumulative translation adjustments are recorded in accumulated other comprehensive income (loss) as a separate component of equity.
Removed
We do not enter into foreign currency contracts for speculative or trading purposes. 52 The Company recognized foreign currency transaction gains (losses) of $(1.2) million and $12.2 million for the years ended December 31, 2022 and 2021, respectively, related to foreign currency transactions.
Removed
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.

Other AMCX 10-K year-over-year comparisons