What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-11-08 compared with 2021-08-09 · 450 added, 383 removed, 587 unchanged (59% of the section changed)

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● The risks and uncertainties relating to the sufficiency of our existing cash and cash equivalents and available borrowing capacity to comply with minimum liquidity and financial requirements under our debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility, fund operations, and satisfy obligations including cash outflows for deferred rent and planned capital expenditures currently and through the next twelve months.

In order to achieve net positive operating cash flows and long-term profitability, the Company believes it will need to increase attendance levels significantly from their current levels to achieve levels in line with pre COVID-19 attendance.

In order to achieve net positive operating cash flows and long-term profitability, the Company believes it will need to increase attendance levels significantly from its current levels to achieve levels in line with pre-COVID-19 attendance.

The Company believes the global re-opening of its theatres, the anticipated volume of titles available for theatrical release, and the anticipated broad appeal of many of those titles will support increased attendance levels.

However, there remain significant risks that may negatively impact attendance levels, including a resurgence of COVID-19 related restrictions, potential movie-goer reluctance to attend theatres due to concerns about the COVID-19 variant strains, movie studios release schedules and direct to streaming or other changing movie studio practices.

If we are unable to achieve more normalized levels of attendance and operating revenues, we may be required to obtain additional liquidity.

If we are unable to achieve significantly increased levels of attendance and operating revenues, we may be required to obtain additional liquidity.

If such additional liquidity were not realized or insufficient, we likely would seek an in-court or out-of-court restructuring of our liabilities, and in the event of such future liquidation or bankruptcy proceeding, holders of our common stock and other securities would likely suffer a total loss of their investment;

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● increased use of alternative film delivery methods including premium video on demand or other forms of entertainment;

● general and international economic, political, regulatory, social and financial market conditions and other risks, including the effects of the exit of the United Kingdom from the European Union;

● general and international economic, political, regulatory, social and financial market conditions, inflation, and other risks, including the effects of the exit of the United Kingdom from the European Union;

● limitations on the availability of capital or poor financial results may prevent us from deploying strategic initiatives;

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● increased costs in order to comply or resulting from a failure to comply with governmental regulation, including the General Data Protection Regulation (“GDPR”), the California Consumer Privacy Act (“CCPA”) and pending future domestic privacy laws and regulations;

● the dilution caused by recent and future sales of our Class A common stock could adversely affect the market price of the Class A common stock;

● supply chain disruptions may negatively impact our operating results;

● the dilution caused by recent and potential future sales of our Class A common stock could adversely affect the market price of the Class A common stock;

● the market price and trading volume of our shares of Class A common stock has been and may continue to be volatile, and purchasers of our securities could incur substantial losses;

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For further information about these and other risks and uncertainties as well as strategic initiatives, see Item 1A.

“Risk Factors,” and Item 1.

“Risk Factors” of this Form 10-Q, Item 1.

“Business” in our Annual Report on Form 10–K for the year ended December 31, 2020, and our other public filings.

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A COVID-19 resurgence during the fourth quarter of 2020 resulted in additional local, state, and federal governmental restrictions and many previously reopened theatres in International markets temporarily suspended operations again.

As a result of these temporarily suspended or limited operations, our revenues and expenses for the six months ended June 30, 2021 were significantly lower than the revenues and expenses for the six months ended June 30, 2020, with significantly lower revenues and expenses during the first quarter of 2021 compared to the first quarter of 2020, partially offset by increased revenues and expenses during the second quarter of 2021 compared to the second quarter of 2020.

As of January 1, 2021, we were operating at 394 domestic theatres with limited seating capacities, representing approximately 67% of our domestic theatres.

During the first quarter ended March 31, 2021, in response to eased restrictions by state and local governments, we resumed operations in key markets such as New York and Los Angeles.

As of March 31, 2021, we were operating at 585 domestic theatres with limited seating capacities, representing approximately 99% of our domestic theatres.

As of June 30, 2021, we were operating at 593 domestic theatres, representing approximately 100% of our domestic theatres with remaining seating capacity restrictions winding down throughout the quarter.

As of January 1, 2021, we were operating at 109 International leased and partnership theatres, with limited seating capacities, representing approximately 30% of our International theatres.

As of March 31, 2021, we were operating at 97 International theatres with limited seating capacities, representing approximately 27% of our International theatres.

As of June 30, 2021, we were operating at 335 International theatres with limited seating capacities, representing approximately 95% of our International theatres.

Our average consolidated screens operated during the three months ended March 31, 2021 declined by 24.2% from the prior year.

Our average consolidated screens operated during the three months ended June 30, 2021 increased by 8,830 screens to 8,890 screens from 60

screens in the prior year.

As of March 31, 2021, we operated at 585 domestic theatres with limited seating capacities, representing approximately 99% of our domestic theatres.

As of June 30, 2021, we operated 593 domestic theatres, representing approximately 100% of our domestic theatres with remaining seating capacity restrictions winding down throughout the quarter.

As of September 30, 2021, we operated 596 domestic theatres representing essentially 100% of our domestic theatres.

Total revenues for the U.S.

markets increased $490.6 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 and increased $325.6 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

As of March 31, 2021, we operated at 97 international theatres, with limited seating capacities, representing approximately 27% of our international theatres.

As of June 30, 2021, we operated 335 international theatres with limited seating capacities, representing approximately 95% of our international theatres.

The majority of international theatre operations were suspended for the first two months of the second quarter of 2021 due to a COVID-19 resurgence and did not reopen until early June 2021.

At September 30, 2021, we operated 351 international theatres representing approximately 99% of our international theatres.

Total revenues for the International markets increased $153.1 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 and decreased $49.3 million for the nine months ended September 30, 2021 compared to the nine months ended

September 30, 2020.

Consolidated revenues increased $643.7 million for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 and increased $276.3 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

AMC is the world’s largest theatrical exhibition company and an industry leader in innovation and operational excellence.

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The balance of our revenues is generated from ancillary sources, including on-screen advertising, fees earned from our AMC Stubs® customer loyalty program, rental of theatre auditoriums, income from gift card and exchange ticket sales, and online ticketing fees.

As of June 30, 2021, we owned, operated or had interests in 947 theatres and 10,552 screens.

As of September 30, 2021, we owned, operated or had interests in 951 theatres and 10,604 screens.

Box Office Admissions and Film Content

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As a result of the reduction in theatrical film releases, we have licensed and exhibited a larger number of previously released films that have lower film rental terms.

The combination of theatre closures, reopening restrictions, reduced new film releases, and shortened windows of theatrical exclusivity has resulted in a significantly lower industry box office for the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

In response to the current low attendance levels, (in addition to any local capacity restrictions) we have made adjustments to theatre operating hours to align screen availability and associated theatre operating costs with attendance levels for each theatre.

During 2020, we entered into an agreement with Universal Pictures, a subsidiary of the NBC Universal Film and Entertainment division of Comcast Corporation (NASDAQ:CMCSA), to theatrically license films with an accelerated home entertainment window for premium video on demand (“PVOD”).

This multi-year agreement preserves exclusivity for theatrical viewing for at least the first three weekends of a film’s release, during which time a considerable majority of a movie’s theatrical box office revenue typically is generated.

It provides Universal the flexibility to release its movies on PVOD as early as 17 days after theatrical release, with compensation for AMC based in part on a portion of Universal’s PVOD revenue.

We have made adjustments to theatre operating hours to align screen availability and associated theatre operating costs with attendance levels for each theatre.

As we continue our recovery from the impacts of the COVID-19 pandemic on our business, our aggregate attendance levels remain significantly behind pre-pandemic levels.

However, for the first time since 2019, substantially all of our worldwide theatres were open for the entirety of the third quarter of 2021.

The following are recent developments regarding box office performance during that timeframe:

● Labor Day weekend 2021 set a new pre-pandemic admissions revenue record surpassing the previous admissions revenue record set during Labor Day weekend 2013.

In addition to the admissions revenue record, the Labor Day weekend marks the first time since the beginning of COVID-19 that attendance during a weekend in 2021 exceeded the same weekend in 2019.

Greatly contributing to this success, Shang-Chi and the Legend of the Ten Rings opened to reported industry admissions revenues of $94.7 million for its domestic opening weekend;

● Following the box office success of Shang-Chi and the Legend of the Ten Rings , Disney Media & Entertainment Distribution announced plans for exclusive theatrical release windows for the remainder of its 2021 theatrical movies;

● The reported $90 million domestic opening weekend industry admissions revenues for Venom:

Let There Be Carnage makes it the second-biggest ever domestic opening of an October movie in cinema history;

● The 25 th James Bond movie, No Time to Die , set ticket sales records in the International markets;

for example, Saturday one-day ticket admissions revenue in the United Kingdom was the highest for any Bond movie ever since the franchise was launched back in 1962;

● October 2021 ticket admission revenues at both our domestic and international theatre locations were the highest of any month since the COVID-19 pandemic caused the temporary closure of theatres in March 2020.

Our revenues attributable to individual distributors may vary significantly from year to year depending upon the commercial success of each distributor’s films in any given year.

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Movie Screens

The following table provides detail with respect to digital delivery, 3D enabled projection, large screen formats, such as IMAX ® and our proprietary Dolby Cinema™, other Premium Large Format (“PLF”) screens, enhanced food and beverage offerings and our premium seating as deployed throughout our circuit on June 30, 2021.

This data represents available services in a pre-COVID-19 environment.

Due to mandated government attendance restrictions, the ability for guests to utilize all these amenities was and in certain locations continues to be significantly curtailed.

markets, during the six months ended June 30, 2021, the mandated government attendance restrictions have significantly declined or were eliminated;

however, mandated government attendance restrictions continued in many of

the countries within the International markets.

International Markets

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Screens As of

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Dolby Cinema TM

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Upon reopening a remodeled theatre, we typically increase the ticket price to reflect the enhanced consumer experience.

As of June 30, 2021, in our U.S.

As of September 30, 2021, in our U.S.

markets, we featured recliner seating in approximately 350 U.S.

theatres, including Dine-in-Theatres, totaling approximately 3,394 screens and representing 43.5% of total U.S.

In our International markets, as of June 30, 2021, we had recliner seating in approximately 86 International theatres, totaling approximately 550 screens and representing 19.5% of total International screens.

Open-source internet ticketing makes our AMC seats (approximately 1.1 million as of June 30, 2021) in all our U.S.

In our International markets, as of September 30, 2021, we had recliner seating in approximately 87 International theatres, totaling approximately 552 screens and representing 19.7% of total International screens.

Open-source internet ticketing makes our AMC seats (approximately 1.1 million as of September 30, 2021) in all our U.S.

theatres and auditoriums, for all our showtimes as available as possible, on as many websites as possible.

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As a result of the COVID-19 pandemic, we have streamlined our concession menus to focus on our best-selling products and expanded cashless transactions technology through the deployment of mobile ordering across all brands, all in an effort to reduce the number of touch-points between guests and employees.

We have also upgraded our Coca Cola Freestyle beverage machines to include a mobile app allowing guests to dispense drinks without the need to utilize the machine’s touch screen.

We have also upgraded our Coca Cola Freestyle beverage software to allow guests to dispense drinks without the need to utilize

the machine’s touch screen using the Coca-Cola Freestyle app.

Our MacGuffins Bar and Lounges (“MacGuffins”) give us an opportunity to engage our legal age customers.

As of June 30, 2021, we offer alcohol in approximately 342 AMC theatres in the U.S.

As of September 30, 2021, we offer alcohol in approximately 343 AMC theatres in the U.S.

markets and 241 theatres in our International markets and continue to explore expansion globally.

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As we reopened theatres, A-List members had the option to reactivate their subscription, which restarted the monthly charge for the program.

As of June 30, 2021, we had more than 23,800,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined.

Starting in July of 2021, all A-List monthly subscriptions were automatically reactivated.

As of September 30, 2021, we had more than 24,300,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined.

Our AMC Stubs® members represented approximately 43.3% of AMC U.S.

markets attendance as of June 30, 2021.

markets attendance as of September 30, 2021.

Our large database of identified movie-goers also provides us with additional insight into our customers’ movie preferences.

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In addition, it is common for us to closely monitor certain locations where operating performance may not meet our expectations.

We review long-lived assets, including definite-lived intangible assets and theatre assets (including operating

lease right-of-use assets) whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be fully recoverable.

We review long-lived assets, including definite-lived intangible assets and theatre assets (including operating lease right-of-use assets) whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be fully recoverable.

We identify impairments related to internal use software when management determines that the remaining carrying value of the software will not be realized through future use.

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The fair value of assets is determined as either the expected selling price less selling costs (where appropriate) or the present value of the estimated future cash flows, adjusted as necessary for market participant factors.

We recorded impairment charges primarily related to long-lived assets and definite lived intangible assets of $0 million and $106.5 million during the three and six months ended June 30, 2020, respectively.

No impairment charges were recorded during the three and six months ended June 30, 2021.

We recorded impairment charges primarily related to long-lived assets and definite lived intangible assets of $34.5 million and $133.8 million during the three and nine months ended September 30, 2020, respectively.

No impairment charges were recorded during the three and nine months ended September 30, 2021.

There are a number of estimates and significant judgments that are made by management in performing these impairment evaluations.

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Given the nature of our business and our recent history, future impairments are possible and they may be material, based upon business conditions that are constantly changing and the competitive business environment in which we operate.

During the six months ended June 30, 2020, we recorded non-cash impairment charges of long-lived assets of $81.4 million on 57 theatres in the U.S.

During the six months ended June 30, 2020, we recorded impairment losses related to definite-lived intangible assets of $8.0 million.

In addition, we recorded an impairment loss of $7.2 million within investment expense (income), related to equity interest investments without a readily determinable fair value accounted for under the cost method.

No non-cash impairment charges of long-lived assets were recorded during the three months ended June 30, 2020 or during the three and six months ended June 30, 2021.

During the three months ended March 31, 2020, we performed a quantitative impairment evaluation of our indefinite-lived intangible assets related to the AMC, Odeon and Nordic trade names and recorded impairment charges of $5.9 million related to Odeon trade names and $2.4 million related to Nordic trade names during the three months ended March 31, 2020 and six months ended June 30, 2020.

During the three months ended September 30, 2020, we recorded non-cash impairment of long-lived assets of $28.1 million on 49 theatres in the U.S.

markets with 527 screens (in Alabama, California, Colorado, Florida, Illinois, Indiana, Iowa, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Wisconsin, and Wyoming) and $0 million in the International markets.

During the nine months ended September 30, 2020, we recorded non-cash impairment charges of long-lived assets of $109.5 million on 75 theatres in the U.S.

markets with 851 screens (in Alabama, Arkansas, California, Colorado, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming) and $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, UK and Sweden).

During the three and nine months ended September 30, 2020, we recorded impairment losses related to definite-lived intangible assets of $6.4 million and $14.4 million, respectively.

In addition, during the three and nine months ended September 30, 2020, the Company recorded an impairment loss of $0 million and $7.2 million, respectively, within investment expense (income), related to equity interest investments without a readily determinable fair value accounted for under the cost method.

We first assessed the qualitative factors to determine whether the existence of events and circumstances indicated that it was more likely than not the fair value amounts of any indefinite-lived intangible assets were less than their carrying amounts and concluded it was not more likely than not that the fair value amounts were less than their carrying amounts.

At September 30, 2020 and March 31, 2020, we performed a quantitative impairment evaluation of its indefinite-lived intangible assets related to the AMC, Odeon and Nordic trade names.

We recorded impairment charges of $4.5 million and $0.1 million related to the Odeon and Nordic trade names, respectively, during the three months ended September 30, 2020.

During the nine months ended September 30, 2020, we recorded impairment

charges of $10.4 million and $2.5 million related to the Odeon and Nordic trade names, respectively.

No impairment charges were recorded related to the AMC trade name for the three and nine months ended September 30, 2020.

To estimate fair value of our indefinite-lived trade names, we employed a derivation of the Income Approach known as the Royalty Savings Method.

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Related cash flows were discounted at 12.5% for AMC and 14.0% for Odeon and Nordic.

No impairment charges related to our indefinite-lived trade names were recorded during the three months ended June 30, 2020 or during the three and six months ended June 30, 2021.

There was no impairment charge of indefinite-lived intangible assets during the three and nine months ended September 30, 2021.

We evaluate the goodwill recorded at our two reporting units (Domestic Theatres and International Theatres) for impairment annually as of the beginning of the fourth fiscal quarter or more frequently as specific events or circumstances dictate.

In accordance with ASC 350-20-35-30, we performed an assessment to determine whether there were any events or changes in circumstances that would warrant an interim ASC 350 impairment analysis as of March 31, 2021.

Based on increases in our enterprise market capitalization from December 31, 2020 to March 31, 2021 and from December 31, 2020 to June 30, 2021, we performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of our two reporting units is less than their respective carrying amounts as of March 31, 2021 and June 30, 2021, respectively.

We concluded that it is not more likely than not that the fair value of

our two reporting units have been reduced below their respective carrying amounts.

As a result, we concluded that interim quantitative impairment tests as of March 31, 2021 and June 30, 2021 were not required.

At March 31, 2020, we performed the Step 1 quantitative goodwill impairment test and used an enterprise value approach to measure fair value of the reporting units.

The enterprise fair values of the Domestic Theatres and International Theatres reporting units were less than their carrying values and goodwill impairment charges of $1,124.9 million and $619.4 million, respectively, were recorded as of March 31, 2020 for our Domestic Theatres and International Theatres reporting units.

Based on increases in our enterprise market capitalization from December 31, 2020 to March 31, 2021, from December 31, 2020 to June 30, 2021, and from December 31, 2020 to September 30, 2021 we performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of our two reporting units is less than their respective carrying amounts as of March 31, 2021, June 30, 2021, and September 30, 2021, respectively.

We concluded that it is not more likely than not that the fair value of our two reporting units have been reduced below their respective carrying amounts.

As a result, we concluded that interim quantitative impairment tests as of March 31, 2021, June 30, 2021, and September 30, 2021 were not required.

The Step 1 quantitative goodwill impairment test was performed at March 31, 2020 and September 30, 2020 due to a decline in the common stock price and prices of the Company’s corporate borrowings and the resulting impact on market capitalization, which were two of several factors considered when making this evaluation, including the sustained declines during 2020 in our enterprise market capitalization and the temporary suspension of operations at all of our theatres on or before March 17, 2020 due to the COVID-19 pandemic.

At March 31, 2020, the enterprise fair values of the Domestic Theatres and International Theatres reporting units were less than their carrying values and goodwill impairment charges of $1,124.9 million and $619.4 million, respectively, were recorded as of March 31, 2020 for our Domestic Theatres and International Theatres reporting units.

At September 30, 2020, the enterprise fair values of the Domestic Theatres and International Theatres reporting units were less than their carrying values and goodwill impairment charges of $151.2 million and $5.6 million, respectively, were recorded as of September 30, 2020 for our Domestic Theatres and International Theatres reporting units.

Significant Events

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In December of 2020 and the first half of 2021, we entered into equity distribution agreements with sales agents to sell up to 241.6 million shares of our Class A common stock, par value $0.01 per share, through “at-the-market” offering programs.

During the six months ended June 30, 2021, we raised gross proceeds of approximately $1,611.8 million related to the “at-the-market” offering programs and paid fees to the sales agents of approximately $40.3 million and other fees of $0.7 million.

During the nine months ended September 30, 2021, we raised gross proceeds of approximately $1,611.8 million related to the “at-the-market” offering programs and paid fees to the sales agents of approximately $40.3 million and other fees of $0.8 million.

We intend to use the net proceeds from the sale of the Class A common stock pursuant to the equity distribution agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness or working capital, capital expenditures and other investments.

The gross proceeds raised from the “at-the-market” sale of Class A common stock during the six months ended June 30, 2021 are summarized in the table below:

The gross proceeds raised from the “at-the-market” sale of Class A common stock during the nine months ended September 30, 2021 are summarized in the table below:

"At-the-market"

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(1) On December 11, 2020, we entered into an equity distribution agreement with Goldman Sachs & Co.

Riley Securities, Inc., as sales agents to sell up to 178.0 million shares of our Class A common stock, of which approximately 40.93 million shares of our Class A common stock were sold and settled during December 2020 and approximately 137.07 million shares of our Class A common stock were sold and settled during the six months ended June 30, 2021.

Class A common stock issuance to Mudrick.

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In May 2021, we received cash consideration of $31.4 million (€26.2 million), net of cash of $0.1 million and transaction costs of $0.3 million, which completed the sale of our remaining 51% equity interest in Lithuania and eliminated our noncontrolling interest in Forum Cinemas OU.

We recorded the net gain from the sale of our equity interest in Forum Cinemas OU of $5.5 million, net of transaction costs of $2.6 million, in investment income, during the three and six months ended June 30, 2021.

Accrued transaction costs of $1.0 million were paid during the three months ended September 30, 2021.

We recorded the net gain from the sale of our equity interest in Forum Cinemas OU of $0 million and $5.5 million (net of transaction costs of $2.6 million) in investment expense (income), during the three and nine months ended September 30, 2021, respectively.

Operating Results

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Food and beverage

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Non-cash NCM exhibitor service agreement

Equity in loss of non-consolidated entities

Equity in (earnings) loss of non-consolidated entities

Investment expense (income)

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating Data:

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Three Months Ended

September 30,

(In millions)

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Depreciation and amortization

Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill

Operating costs and expenses

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Non-cash NCM exhibitor service agreement

Equity in loss of non-consolidated entities

Investment expense (income)

Equity in (earnings) loss of non-consolidated entities

Investment income

Total other expense (income), net

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Three Months Ended

September 30,

Segment Operating Data:

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International Markets

Six Months Ended

Nine Months Ended

September 30,

(In millions)

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Non-cash NCM exhibitor service agreement

Equity in loss of non-consolidated entities (1)

Equity in (earnings) loss of non-consolidated entities (1)

Investment expense (income)

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International Markets

Six Months Ended

Nine Months Ended

September 30,

Segment Operating Data:

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Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

During the three months ended June 30, 2021, Adjusted EBITDA in the U.S.

markets was $(118.0) million compared to $(241.6) million during the three months ended June 30, 2020.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions and decreases in rent expense, partially offset by increases in operating expenses due to the increase in attendance and increases in general and administrative expense.

During the three months ended June 30, 2021, Adjusted EBITDA in the International markets was $(32.8) million compared to $(98.7) million during the three months ended June 30, 2020.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic, increases in governmental assistance for COVID-19, and decreases in rent, partially offset by increases in operating expenses due to the increase in attendance, increases in general and administrative expense and increases in foreign currency translation rates.

During the three months ended June 30, 2021, Adjusted EBITDA in the U.S.

markets and International markets was $(150.8) million compared to $(340.3) million during the three months ended June 30, 2020, driven by the aforementioned factors impacting Adjusted EBITDA.

During the six months ended June 30, 2021, Adjusted EBITDA in the U.S.

markets was $(318.4) million compared to $(245.4) million during the six months ended June 30, 2020.

The year-over-year decrease was primarily due to the decrease in attendance largely attributable to the limited or temporary suspension of operations as consequence of the COVID-19 pandemic, the increase in general and administrative expense and the decrease in cash distributions from equity method investees, partially offset by decreases in operating expenses due to the decrease in attendance, rent, and increases in governmental assistance for COVID-19.

During the six months ended June 30, 2021, Adjusted EBITDA in the International markets was $(127.1) million compared to $(91.8) million during the six months ended June 30, 2020.

The year-over-year decrease was primarily due to the decrease in attendance largely attributable to the limited or temporary suspension of operations as consequence of the COVID-19 pandemic and the increases in foreign currency translation rates, partially offset by decreases in operating expenses due to the decrease in attendance, decreases in rent, and increases in governmental assistance for COVID-19.

During the six months ended June 30, 2021, Adjusted EBITDA in the U.S.

markets and International markets was $(445.5) million compared to $(337.2) million during the six months ended June 30, 2020, driven by the aforementioned factors impacting Adjusted EBITDA.

During the three months ended September 30, 2021, Adjusted EBITDA in the U.S.

markets was $(30.1) million compared to $(259.1) million during the three months ended September 30, 2020.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic, the release of new films, lifting of seating restrictions, and the increase in cash distributions from equity method investees, partially offset by increases in operating expenses due to the increase in attendance, increases in rent expense, and increases in general and administrative expense.

During the three months ended September 30, 2021, Adjusted EBITDA in the International markets was $24.7 million compared to $(75.4) million during the three months ended September 30, 2020.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic, the release of new films, increases in governmental assistance for COVID-19, increases in cash distributions and attributable EBITDA from equity method investees, and decreases in rent, partially offset by increases in operating expenses due to the increase in attendance and increases in general and administrative expense.

During the three months ended September 30, 2021, Adjusted EBITDA in the U.S.

markets and International markets was $(5.4) million compared to $(334.5) million during the three months ended September 30, 2020, driven by the aforementioned factors impacting Adjusted EBITDA.

During the nine months ended September 30, 2021, Adjusted EBITDA in the U.S.

markets was $(348.5) million compared to $(504.5) million during the nine months ended September 30, 2020.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic, lifting of seating restrictions, increases in governmental assistance for COVID-19, and decreases in rent expense, partially offset by increases in operating expenses due to the increase in attendance, increases in general and administrative expense, and decreases in cash distributions from equity method investees.

During the nine months ended September 30, 2021, Adjusted EBITDA in the International markets was $(102.4) million compared to $(167.2) million during the nine months ended September 30, 2020.

The year-over-year improvement was primarily due to increases in governmental assistance for COVID-19, decreases in operating expenses due to the decrease in attendance largely attributable to the limited or temporary suspension of operations as a consequence of the COVID-19 pandemic and decreases in rent, partially offset by the decrease in revenues due to the decrease in attendance and increases in general and administrative expense.

During the nine months ended September 30, 2021, Adjusted EBITDA in the U.S.

markets and International markets was $(450.9) million compared to $(671.7) million during the nine months ended September 30, 2020, driven by the aforementioned factors impacting Adjusted EBITDA.

The following tables set forth our Adjusted EBITDA by reportable operating segment and our reconciliation of Adjusted EBITDA:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Adjusted EBITDA (In millions)

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

International markets

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Income tax provision (benefit)

3 unchanged sentences

Certain operating expense (income) (2)

Equity in loss of non-consolidated entities

Equity in (earnings) loss of non-consolidated entities

Cash distributions from non-consolidated entities (3)

1 unchanged sentence

Investment expense (income)

Other expense (income) (5)

Other expense (5)

Other non-cash rent benefit (6)

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Adjusted EBITDA

(1) During the six months ended June 30, 2020, we recorded non-cash impairment charges of $1,124.9 million and $619.4 million related to the enterprise fair values of our Domestic Theatres and International Theatres reporting units, respectively.

We recorded non-cash impairment charges during the six months ended June 30, 2020 related to our long-lived assets of $81.4 million on 57 theatres in the U.S.

(1) During the three months ended September 30, 2020, we recorded goodwill non-cash impairment charges of $151.2 million and $5.6 million related to the enterprise fair value of the Domestic Theatres and International Theatres reporting units, respectively.

We recorded non-cash impairment charges related to our long-lived assets of $28.1 million on 49 theatres in the U.S.

markets with 527 screens which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $0 million in the International markets during the three months ended September 30, 2020.

We recorded non-cash impairment charges related to definite-lived intangible assets of $6.4 million in the Domestic Theatres reporting unit and indefinite-lived intangible assets of $4.5 million and $0.1 million related to the Odeon and Nordic trade names, respectively, in the International Theatres reporting unit during the three months ended September 30, 2020.

During the nine months ended September 30, 2020, we recorded goodwill non-cash impairment charges of $1,276.1 million and $625.0 million related to the enterprise fair values of the Domestic Theatres and International Theatres reporting units, respectively.

During the nine months ended September 30, 2020, we recorded non-cash impairment charges related to our long-lived assets of $109.5 million on 75 theatres in the U.S.

markets with 851 screens, which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $9.9 million on 23 theatres in the International markets with 213 screens, which were related to property, net and operating lease right-of-use assets, net.

We recorded non-cash impairment charges related to our indefinite-lived intangible assets of $5.9 million and $2.4 million related to the Odeon and Nordic trade names, respectively, during the six months ended June 30, 2020.

We also recorded non-cash impairment charges of $8.0 million related to our definite-lived intangible assets.

We recorded non-cash impairment charges related to indefinite-lived intangible assets of $10.4 million and $2.5 million related to the Odeon and Nordic trade names, respectively, in the International Theatres reporting unit during the nine months ended September 30, 2020.

We also recorded non-cash impairment charges of $14.4 million related to our definite-lived intangible assets in the Domestic Theatres reporting unit during the nine months ended September 30, 2020.

(2) Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens including the related accretion of interest, non-cash deferred digital equipment rent expense, and disposition of assets and other non-operating gains or losses included in operating expenses.

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We believe including cash distributions is an appropriate reflection of the contribution of these investments to our operations.

(4) Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain International markets.

(4) Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain

International markets.

See below for a reconciliation of our equity in (earnings) loss of non-consolidated entities to attributable EBITDA.

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Equity in loss of non-consolidated entities

Equity in loss of non-consolidated entities excluding International theatre joint ventures

Equity in loss of International theatre joint ventures

Equity in (earnings) loss of non-consolidated entities

Equity in (earnings) loss of non-consolidated entities excluding International theatre joint ventures

Equity in earnings (loss) of International theatre joint ventures

Income tax provision (benefit)

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Attributable EBITDA

(5) Other expense (income) during the three months ended June 30, 2021, included income related to contingent lease guarantees of $(3.7) million, partially offset by foreign currency transaction losses of $3.4 million.

Other expense (income) during the three months ended June 30, 2020, included a gain of $(6.4) million for the fair value adjustment of the derivative asset related to the contingent call option related to the Class B common stock purchase and cancellation agreement and the foreign currency transaction gains of $(2.1) million, partially offset by credit losses related to contingent lease guarantees of $3.9 million and financing fees of $2.8 million related to debt modification.

During the six months ended June 30, 2021, other expense (income) primarily consisted of income related to contingent lease guarantees of $(5.7) million and foreign currency transaction gains of $(0.4) million, partially offset by financing fees of $1.0 million primarily related to deferred financing cost write-off for the Odeon revolving credit facility.

During the six months ended June 30, 2020, other expense (income) primarily related to a loss of $13.7 million for the fair value adjustment of the derivative asset related to the contingent call option related to the Class B common stock purchase and cancellation agreement, credit losses related to contingent lease guarantees of $9.2 million, and financing fees of $2.8 million related to debt modification, partially offset by a gain of $(0.5) million for the fair value adjustment of the derivative liability related to the Convertible Notes due 2026 and foreign currency transaction losses of approximately $(0.1) million.

(5) Other expense during the three months ended September 30, 2021, included loss on debt extinguishment of $14.4 million, partially offset by foreign currency transaction gains of $(0.7) million.

Other expense during the three months ended September 30, 2020, primarily related to a loss of $89.9 million for the fair value adjustment of the derivative liability related to the Convertible Notes due 2026, financing fees of $36.3 million related to debt modification, credit losses related to contingent lease guarantees of $6.1 million, a loss of $5.9 million for the fair value adjustment of the derivative asset related to the contingent call option related to the Class B common stock purchase and cancellation agreement, and foreign currency transaction losses of approximately $0.1 million.

During the nine months ended September 30, 2021, other expense primarily consisted of a loss on debt extinguishment of $14.4 million and financing fees of $1.0 million, partially offset by income related to contingent lease guarantees of $(5.7) million and foreign currency transaction gains of $(1.1) million.

During the nine months ended September 30, 2020, other expense primarily related to a loss of $89.4 million for the fair value adjustment of the derivative liability related to the Convertible Notes due 2026, financing fees of $39.1 million related to debt modification, a loss of $19.6 million for the fair value adjustment of the derivative asset related to the contingent call option related to the Class B common stock purchase and cancellation agreement, and credit losses related to contingent lease guarantees of $15.3 million.

(6) Reflects amortization expense for certain intangible assets reclassified from depreciation and amortization to rent expense due to the adoption of ASC 842, Leases and deferred rent benefit related to the impairment of right-of-use operating lease assets.

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Segment Information

Our historical results of operations for the three and six months ended June 30, 2021 and June 30, 2020 reflect the results of operations for our two Theatrical Exhibition reportable segments, U.S.

Our historical results of operations for the three and nine months ended September 30, 2021 and September 30, 2020 reflect the results of operations for our two Theatrical Exhibition reportable segments, U.S.

markets and International markets.

Results of Operations— For the Three Months Ended June 30, 2021 Compared to the Three Months Ended June 30, 2020

Results of Operations— For the Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

Condensed Consolidated Results of Operations

Total revenues increased $425.8 million from $18.9 million to $444.7 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Admissions revenues increased $232.1 million from $0.9 million to $233.0 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to an increase in attendance from 0.1 million patrons to 22.1 million patrons.

The increase in attendance was primarily due to the fact that operations at all of our theatres in U.S.

markets and International markets were temporarily suspended during nearly all of the second quarter of 2020 as a result of the COVID-19 pandemic.

Total revenues increased $643.7 million from $119.5 million to $763.2 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

Admissions revenues increased $362.2 million from $62.9 million to $425.1 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to an increase in attendance from 6.5 million patrons to 40.0 million patrons and a 9.9% increase in average ticket price.

The increase in attendance was primarily due to the fact that operations at our theatres in U.S.

markets and International markets were temporarily suspended during most of the third quarter of 2020 as a result of the COVID-19 pandemic which also resulted in fewer new films released in the prior year.

As discussed above, by the start of the second quarter of 2021, we had resumed operations at nearly all of our domestic theatres and at certain of our International theatres, and during the second quarter of 2021, seating capacity restrictions continued to be lifted at U.S.

theatre locations and we continued to resume operations at International theatre locations.

Food and beverage revenues increased $161.1 million from $0.4 million to $161.5 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance.

Total other theatre revenues increased $32.6 million from $17.6 million to $50.2 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance and by increases in foreign currency translation rates.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year, lower frequency on our A-List subscription program and on our AMC Stubs program, partially offset by loyalty program discounts and a decrease in foreign currency translation rates.

Food and beverage revenues increased $236.1 million from $29.1 million to $265.2 million, during the three months ended September 30, 2021, compared to the three months ended September 30, 2020, primarily due to the increase in attendance and increase in food and beverage per patron.

Food and beverage per patron increased 48.3% from $4.47 to $6.63 due to several contributing factors, including increases in units sold per transaction, an increase in dine-in percentages and mobile orders along with price increases, partially offset by a decrease in foreign currency translation rates.

Total other theatre revenues increased $45.4 million from $27.5 million to $72.9 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance partially offset by decreases in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $250.8 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance and an increase in average screens operated and an increase in foreign currency translation rates.

Film exhibition costs increased $98.7 million from $0.2 million to $98.9 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 42.4% for the three months ended June 30, 2021 and not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs increased $21.8 million from $4.5 million to $26.3 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Operating costs and expenses increased $113.5 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to the increase in attendance and an increase in average screens operated, partially offset by a decrease in impairment charges of $195.9 million and decrease in foreign currency translation rates.

Film exhibition costs increased $149.9 million from $26.6 million to $176.5 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to the increase in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 41.5% for the three months ended September 30, 2021 and 42.3% during the three months ended September 30, 2020.

Food and beverage costs increased $34.1 million from $8.8 million to $42.9 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

The increase in food and beverage costs was primarily due to the increase in food and beverage revenues.

As a percentage of food and beverage revenues, food and beverage costs were 16.3% for the three months ended June 30, 2021 and were not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs included $4.5 million of charges for obsolete inventory during the three months ended June 30, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was not meaningful during the three months ended June 30, 2020 and 2021 due to the low levels of attendance in each period.

Rent expense decreased 8.3%, or $18.6 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $420.6 million that have been deferred to the second half of 2021 and future years as of June 30, 2021.

As a percentage of food and beverage revenues,

food and beverage costs were 16.2% for the three months ended September 30, 2021 and 30.2% during the three months ended September 30, 2020.

Food and beverage costs included $3.2 million of charges for obsolete inventory during the three months ended September 30, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 42.1% during the three months ended September 30, 2021and not meaningful during the three months ended September 30, 2020 due to the low levels of attendance in the prior year.

Rent expense increased 0.3%, or $0.6 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $375.9 million that have been deferred to the fourth quarter of 2021 and future years as of September 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $4.3 million during the three

months ended June 30, 2021 compared to $1.8 million during the three months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 114.2% or $29.0 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense due to improvements in expected annual performance compared to annual targets, increases in professional fees and insurance costs and the increase in foreign currency translation rates.

Merger, acquisition and other costs were $1.4 million during the three months ended September 30, 2021 compared to $1.0 million during the three months ended September 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 45.3% or $14.8 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense due to improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year and increases in salaries and insurance costs.

See Note 7—Stockholders’ Equity in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about stock-based compensation expense.

Depreciation and amortization.

Depreciation and amortization decreased 11.7% or $14.0 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020, partially offset by the increase in foreign currency translation rates.

Depreciation and amortization decreased 16.0% or $19.8 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020 and the decrease in foreign currency translation rates.

Impairment of long-lived assets, indefinite-lived intangible assets and goodwill.

During the three months ended September 30, 2020, we recognized non-cash impairment losses of $28.1 million on 49 theatres in the U.S.

We performed a quantitative impairment evaluation of our indefinite-lived intangible assets as of September 30, 2020 related to the AMC, Odeon and Nordic tradenames and recorded impairment charges of $4.5 million and $0.1 million related to Odeon and Nordic tradenames, respectively, during the three months ended September 30, 2020.

In addition, we performed a quantitative impairment evaluation of our definite-lived intangible assets as of September 30, 2020, and recorded impairment charge of $6.4 million.

We performed a quantitative impairment evaluation of our goodwill as of September 30, 2020 and recorded impairment charges of $151.2 million and $5.6 million during the three months ended September 30, 2020 for our Domestic Theatres and International Theatres reporting units, respectively.

Other expense (income).

Other income of $42.7 million during the three months ended June 30, 2021 was primarily due to $42.2 million in government assistance related to COVID-19 and estimated credit income of $3.7 million related to contingent lease guarantees, partially offset by foreign currency transaction losses of $3.4 million.

Other income of $6.6 million during the three months ended June 30, 2020 was primarily due to the increase in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $6.4 million, international government assistance related to COVID-19 of $4.4 million and $2.1 million of international foreign currency transaction gains, partially offset by estimated credit losses related to contingent lease guarantees of $3.9 million and $2.8 million of third party financing costs related to an ongoing debt restructuring.

Other income of $11.7 million during the three months ended September 30, 2021 was primarily due to $25.1 million in government assistance related to COVID-19 offset by a loss on extinguishment of $14.4 million related to the redemption of $35.0 million principal amount of 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026.

Other expense of $125.0 million during the three months ended September 30, 2020 was primarily due to third party expenses of $36.3 million related to the restructuring of our debt, the increase in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2026 of $89.9 million, the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $5.9 million, and estimated credit losses related to contingent lease guarantees of $6.1 million, partially offset by international government assistance related to COVID-19 of $13.5 million.

See Note 1—Basis of Presentation in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about the components of other expense.

Interest expense.

Interest expense increased $7.7 million to $98.9 million for the three months ended June 30, 2021 compared to $91.2 million during the three months ended June 30, 2020 primarily due to:

● the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;

Interest expense increased $5.0 million to $99.3 million for the three months ended

September 30, 2021 compared to $94.3 million during the three months ended September 30, 2020 primarily due to:

● the issuance of $300 million of 10.5% First Lien Notes due 2026 on July 31, 2020;

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● the conversion of $600.0 million 2.95% Convertible Notes due 2026 to 44,422,860 Class A common shares on January 27, 2021;

● the borrowings under revolving credit facilities of approximately $325.1 million during the three months ended June 30, 2020 that remained outstanding until February and March 2021;

● the borrowings under revolving credit facilities of approximately $325.1 million during the three months ended March 31, 2020 that remained outstanding until February and March 2021;

● the repayment of £89.7 million and €12.8 million outstanding amounts under the Odeon revolver on February 19, 2021;

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See Note 6—Corporate Borrowings and Finance Lease Obligations in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about our indebtedness.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $2.7 million for the three months ended June 30, 2021 compared to $12.4 million for the three months ended June 30, 2020.

decrease in equity in loss of $9.7 million was primarily due to decreases in equity in losses from DCIP of $9.7 million.

Equity in (earnings) loss of non-consolidated entities.

Equity in (earnings) loss of non-consolidated entities was ($6.7) million for the three months ended September 30, 2021 compared to $10.6 million for the three months ended September 30, 2020.

The decrease in equity in loss of $17.3 million was primarily due to decreases in equity in losses from DCIP of $13.5 million.

Investment income.

Investment income was $6.3 million for the three months ended June 30, 2021 compared to investment income of $1.3 million for the three months ended June 30, 2020.

Investment income includes a gain on sale of the Baltics of $5.5 million during the three months ended June 30, 2021.

Income tax benefit.

The income tax benefit was $5.2 million and $6.1 million for the three months ended June 30, 2021 and June 30, 2020, respectively.

Investment income was $0 million for the three months ended September 30, 2021 compared to investment income of $4.1 million for the three months ended September 30, 2020.

Income tax provision (benefit).

The income tax provision (benefit) was $(1.9) million and $4.6 million for the three months ended September 30, 2021 and September 30, 2020, respectively.

See Note 8 — Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net loss was $344.0 million and $561.2 million during the three months ended June 30, 2021 and June 30, 2020, respectively.

Net loss during the three months ended June 30, 2021 compared to net loss for the three months ended June 30, 2020 was positively impacted by the increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, lower amounts of rent expense, decreases in depreciation and amortization expense, increases in other income, increases in investment income, and decreases in equity losses in non-consolidated entities, partially offset by higher interest expense and general and administrative costs, and increases in foreign currency translation rates.

Net loss was $224.2 million and $905.8 million during the three months ended September 30, 2021 and September 30, 2020, respectively.

Net loss during the three months ended September 30, 2021 compared to net loss for the three months ended September 30, 2020 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in impairment of long-lived assets, decreases in depreciation and amortization expense, decreases in other expense and decreases in equity losses in non-consolidated entities, decreases in income tax provision and decreases in foreign currency exchange rates, partially offset by higher interest expense and general and administrative costs and lower investment income.

Theatrical Exhibition–U.S.

Total revenues increased $359.1 million from $15.7 million to $374.8 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Admissions revenues increased $194.1 million from $0.0 million to $194.1 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to an increase in attendance from 0.0 million patrons to 17.8 million patrons.

The increase in attendance was due to the fact that operations at all of our theatres in U.S.

markets were temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic.

Total revenues increased $490.6 million from $47.3 million to $537.9 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

Admissions revenues increased $274.8 million from $18.4 million to $293.2 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to an increase in attendance from 2.0 million patrons to 26.7 million patrons and a 17.2% increase in average ticket price.

The increase in attendance was primarily due to the fact that operations at our theatres in U.S.

markets were temporarily suspended during most of the third quarter of 2020 as a result of the COVID-19 pandemic, which also resulted in fewer new films released in the prior

As discussed above, by the start of the second quarter of 2021, we had resumed operations at nearly all of our domestic theatres and during the second quarter of 2021, seating capacity restrictions continued to be lifted at U.S.

theatre locations.

Food and beverage revenues increased $140.8 million from $0.0 million to $140.8 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance.

Total other theatre revenues increased $24.2 million from $15.7 million to $39.9 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance.

Food and beverage revenues increased $187.3 million from $10.5 million to $197.8 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to the increases in attendance and an increase in food and beverage revenues per patron.

Food and beverage per patron increased 38.5% from $5.35 to $7.41 due to several contributing factors, including increases in units sold per transaction and an increase in dine-in percentages and mobile orders along with price increases.

Total other theatre revenues increased $28.5 million from $18.4 million to $46.9 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance.

Operating costs and expenses.

Operating costs and expenses increased $215.1 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance and an increase in average screens operated.

Film exhibition costs increased $84.4 million from ($0.2) million to $84.2 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 43.4% for the three months ended June 30, 2021 and not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs increased $17.0 million from $3.3 million to $20.3 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Operating costs and expenses increased $65.6 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to the increase in attendance and an increase in average screens operated partially offset by a decrease in impairment charges of $185.6 million.

Film exhibition costs increased $117.2 million from $9.5 million to $126.7 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to the increase in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 43.2% for the three months ended September 30, 2021 and 51.6% during the three months ended September 30, 2020.

The decrease in film exhibition cost percentage is primarily due to the concentration of box office revenues in lower grossing films and library content in the current year, which typically results in lower film exhibition costs.

Food and beverage costs increased $24.0 million from $4.4 million to $28.4 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

The increase in food and beverage costs was primarily due to the increase in food and beverage revenues.

As a percentage of food and beverage revenues, food and beverage costs were 14.4% for the three months ended June 30, 2021 and were not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs included $3.3 million of charges for obsolete inventory during the three months ended June 30, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was not meaningful during the three months ended June 30, 2020 and 2021 due to the low levels of attendance in each period.

Rent expense decreased 5.9%, or $9.8 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $327.8 million that have been deferred to the second half of 2021 and

future years as of June 30, 2021.

As a percentage of food and beverage revenues, food and beverage costs were 14.4% for the three months ended September 30, 2021 and 41.9% during the three months ended September 30, 2020.

Food and beverage costs included $3.2 million of charges for obsolete inventory during the three months ended September 30, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 43.0% during the three months ended September 30, 2021 and not meaningful during the three months ended September 30, 2020 due to the low levels of attendance in the prior year.

Rent expense increased 2.3%, or $3.6 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $292.8 million that have been deferred to the fourth quarter of 2021 and future years as of September 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $3.5 million during the three months ended June 30, 2021 compared to $1.7 million during the three months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 189.9% or $26.2 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense due to improvements in expected annual performance compared to annual targets, and increases in professional fees and insurance costs.

Merger, acquisition and other costs were $1.3 million during the three months ended September 30, 2021 compared to $0.7 million during the three months ended September 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 54.7% or $10.5 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense due to improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year and increases in insurance costs.

Depreciation and amortization.

Depreciation and amortization decreased 13.4% or $12.2 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020.

Other expense (income).

Other expense was $0.1 million during the three months ended June 30, 2021 and June 30, 2020.

Depreciation and amortization decreased 14.4% or $13.2 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020.

Impairment of long-lived assets and goodwill.

During the three months ended September 30, 2020, we recognized non-cash impairment losses of $28.1 million on 49 theatres in the U.S.

markets with 527 screens (in

Alabama, California, Colorado, Florida, Illinois, Indiana, Iowa, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Tennessee, Texas, Wisconsin, and Wyoming) which were related to property, net, operating lease right-of-use assets, net and other long-term assets.

We performed quantitative impairment evaluations of our definite-lived intangible assets as of September 30, 2020 and recorded an impairment charge of $6.4 million during the three months ended September 30, 2020.

We performed quantitative impairment evaluations of our goodwill as of September 30, 2020 and recorded an impairment charge of $151.2 million for our Domestic Theatres reporting unit.

Other expense.

Other expense was $13.6 million during the three months ended September 30, 2021 due primarily to a loss on extinguishment of $14.4 million related to the redemption of $35.0 million principal amount of 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026.

Other expense of $132.2 million during the three months ended September 30, 2020 was primarily due to third party expenses of $36.3 million related to the restructuring of our debt, the increase in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2026 of $89.9 million and the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $5.9 million.

Interest expense.

Interest expense decreased $9.3 million to $79.3 million for the three months ended June 30, 2021 compared to $88.6 million during the three months ended June 30, 2020, primarily due to:

Interest expense decreased $13.4 million to $78.5 million for the three months ended September 30, 2021 compared to $91.9 million during the three months ended September 30, 2020, primarily due to:

● a reduction in the effective interest rate from 6.37% to 4.46% on $2,017.5 million aggregate principal amount of our senior subordinated notes exchanged for $1,462.3 million aggregate principal amount of second lien notes on July 31, 2020;

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● the conversion of $600.0 million 2.95% Convertible Notes due 2026 to 44,422,860 Class A common shares on January 27, 2021;

● the borrowings under revolving credit facilities of approximately $212.1 million during the three months ended June 30, 2020 that remained outstanding until March 2021;

● the borrowings under revolving credit facilities of approximately $212.1 million during the three months ended March 31, 2020 that remained outstanding until March 2021;

● a decline in interest rates related to borrowings under the Senior Secured Term Loan due 2026;

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partially offset by:

● the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;

● the issuance of $300 million of 10.5% First Lien Notes due 2026 on July 31, 2020;

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Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $0.3 million for the three months ended June 30, 2021 compared to $11.4 million for the three months ended June 30, 2020.

Equity in (earnings) loss of non-consolidated entities.

Equity in (earnings) loss of non-consolidated entities was ($6.1) million for the three months ended September 30, 2021 compared to $8.4 million for the three months ended September 30, 2020.

The decrease in equity in loss of $14.5 million was primarily due to decreases in equity in losses from DCIP of $13.5 million.

Investment income.

Investment income was $0.8 million for the three months ended June 30, 2021 compared to investment income of $1.2 million for the three months ended June 30, 2020.

Investment income was $0.0 million for the three months ended September 30, 2021 compared to investment income of $4.1 million for the three months ended September 30, 2020.

Income tax provision (benefit).

The income tax provision (benefit) was ($3.4) million and $4.4 million for the three months ended June 30, 2021 and June 30, 2020, respectively.

The income tax provision (benefit) was ($2.3) million and $6.2 million for the three months ended September 30, 2021 and September 30, 2020, respectively.

See Note 8 — Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net loss was $269.6 million and $441.4 million during the three months ended June 30, 2021 and June 30, 2020, respectively.

Net loss during the three months ended June 30, 2021 compared to net loss for the three

months ended June 30, 2020 was positively impacted by the increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, lower amounts of rent expense, decreases in depreciation and amortization expense, decreases in equity losses in non-consolidated entities, decreases in interest expense and increases in income tax benefit, partially offset by higher general and administrative costs and lower amounts of investment income.

Net loss was $202.2 million and $778.1 million during the three months ended September 30, 2021

and September 30, 2020, respectively.

Net loss during the three months ended September 30, 2021 compared to net loss for the three months ended September 30, 2020 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in impairment of long-lived assets, decreases in depreciation and amortization expense, decreases in other expense, decreases in equity losses in non-consolidated entities and decreases in income tax provision, partially offset by higher interest expense and general and administrative costs, higher rent expense and lower investment income.

Theatrical Exhibition - International Markets

Total revenues increased $66.7 million from $3.2 million to $69.9 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Admissions revenues increased $38.0 million from $0.9 million to $38.9 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to an increase in attendance from 0.1 million patrons to 4.3 million patrons.

The increase in attendance was primarily due to the fact that operations at all of our theatres in International markets were temporarily suspended during nearly all of the second quarter of 2020 as a result of the COVID-19 pandemic.

Total revenues increased $153.1 million from $72.2 million to $225.3 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

Admissions revenues increased $87.4 million from $44.5 million to $131.9 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to an increase in attendance from 4.5 million patrons to 13.3 million patrons.

The increase in attendance was primarily due to the fact that operations at our theatres in International markets were temporarily suspended during most of the third quarter of 2020 as a result of the COVID-19 pandemic which also resulted in fewer new films released in the prior year.

As discussed above, by the start of the second quarter of 2021, we had resumed operations at certain of our International theatres and during the second quarter of 2021 we continued to resume operations at International theatre locations.

Food and beverage revenues increased $20.3 million from $0.4 million to $20.7 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance.

Total other theatre revenues increased $8.4 million from $1.9 million to $10.3 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance and by increases in foreign currency translation rates.

Food and beverage revenues increased $48.8 million from $18.6 million to $67.4 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to the increase in attendance.

Food and beverage per patron increased 23.7% from $4.10 to $5.07 due to the minimal volumes of attendance year-over-year reflecting an increase in average purchase per patron, partially offset by the decrease in foreign currency translation rates.

Total other theatre revenues increased $16.9 million from $9.1 million to $26.0 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance partially offset by decreases in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $35.7 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance and an increase in average screens operated and an increase in foreign currency translation rates.

Film exhibition costs increased $14.3 million from $0.4 million to $14.7 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 37.8% for the three months ended June 30, 2021 and not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs increased $4.8 million from $1.2 million to $6.0 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Operating costs and expenses increased $47.9 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to the increase in attendance and an increase in average screens operated partially offset by a decrease in foreign currency translation rates.

Film exhibition costs increased $32.7 million from $17.1 million to $49.8 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to the increase in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 37.8% for the three months ended September 30, 2021 and 38.4% during the three months ended September 30, 2020.

Food and beverage costs increased $10.1 million from $4.4 million to $14.5 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

The increase in food and beverage costs was primarily due to the increase in food and beverage revenues.

As a percentage of food and beverage revenues, food and beverage costs were 29.0% for the three months ended June 30, 2021 and were not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs included $1.2 million of charges for obsolete inventory during the three months ended June 30, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was not meaningful during the three months ended June 30, 2020 and 2021 due to the low levels of attendance in each period.

Rent expense decreased 14.8%, or $8.8 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $92.8 million that have been deferred to the second half of 2021 and future years as of June 30, 2021.

As a percentage of food and beverage revenues, food and beverage costs were 21.5% for the three months ended September 30, 2021 and 23.7% during the three months ended September 30, 2020.

As a percentage of revenues, operating expense was 40.1% during the three months ended September 30, 2021and not meaningful during the three months ended September 30, 2020 due to the low levels of attendance in the prior year.

Rent expense decreased 5.3%, or $3.0 million, during the three months ended September 30, 2021 compared to the three months ended September 30, 2020.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $83.1 million that have been deferred to the fourth quarter of 2021 and future years as of September 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $0.8 million during the three months ended June 30, 2021 compared to $0.1 million during the three months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 24.1% or $2.8 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense due to improvements in expected annual performance compared to annual targets and the increase in foreign currency translation rates.

See Note 7—Stockholders’ Equity in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about

stock-based compensation expense.

Merger, acquisition and other costs were $0.1 million during the three months ended September 30, 2021 compared to $0.3 million during the three months ended September 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 31.9% or $4.3 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to increases in

bonus expense due to improvements in expected annual performance compared to annual targets.

Depreciation and amortization.

Depreciation and amortization decreased 6.3% or $1.8 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020, partially offset by the increase in foreign currency translation rates.

Other expense (income).

Other income of $42.8 million during the three months ended June 30, 2021 was primarily due to $42.2 million in government assistance related to COVID-19 and estimated credit income of $4.0 million related to contingent lease guarantees, partially offset by foreign currency transaction losses of $3.4 million.

Other income of $6.7 million during the three months ended June 30, 2020 was primarily due to international government assistance related to COVID-19 of $4.4 million and $2.1 million of international foreign currency transaction gains.

Depreciation and amortization decreased 20.7% or $6.6 million during the three months ended September 30, 2021 compared to the three months ended September 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020 and the decrease in foreign currency translation rates.

Impairment of long-lived assets, indefinite-lived intangible assets and goodwill.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets related to the Odeon and Nordic tradenames as of September 30, 2020 and recorded impairment charges of $4.5 million and $0.1 million related to the Odeon and Nordic tradenames, respectively, during the three months ended September 30, 2020.

We performed a quantitative impairment evaluation of our goodwill as of September 30, 2020 and recorded an impairment charge of $5.6 million for our International Theatres reporting unit during the three months ended September 30, 2020.

Other income.

Other income of $25.3 million during the three months ended September 30, 2021 was primarily due to $24.7 million in government assistance related to COVID-19.

Other income of $7.2 million during the three months ended September 30, 2020 was primarily due to government assistance related to COVID-19 of $13.5 million, partially offset by estimated credit losses related to contingent lease guarantees of $6.1 million.

Interest expense.

Interest expense increased $17.0 million to $19.6 million for the three months ended June 30, 2021 compared to $2.6 million during the three months ended June 30, 2020, primarily due to:

Interest expense increased $18.4 million to $20.8 million for the three months ended September 30, 2021 compared to $2.4 million during the three months ended September 30, 2020, primarily due to:

● the issuance of £140.0 million and €296.0 million 10.75%/11.25% Cash/PIK Term Loans due 2023 on February 19, 2021,

partially offset by:

● the borrowings under revolving credit facilities of approximately $113.6 million during the three months ended March 31, 2020 that remained outstanding until February and March 2021;

● the repayment of £89.7 million and €12.8 million outstanding amounts under the Odeon revolver on February 19, 2021.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $2.4 million for the three months ended June 30, 2021 compared to $1.0 million for the three months ended June 30, 2020.

Equity in (earnings) loss of non-consolidated entities.

Equity in (earnings) loss of non-consolidated entities was ($0.6) million for the three months ended September 30, 2021 compared to $2.2 million for the three months ended September 30, 2020.

Investment income.

Investment income was $5.5 million for the three months ended June 30, 2021 compared to investment income of $0.1 million for the three months ended June 30, 2020.

Investment income includes a gain on sale of the Baltics of $5.5 million during the three months ended June 30, 2021.

Income tax benefit.

The income tax benefit was $1.8 million and $10.5 million for the three months ended June 30, 2021 and June 30, 2020, respectively.

Investment income was $0 million for the three months ended September 30, 2021 and September 30, 2020.

Income tax provision (benefit).

The income tax provision (benefit) was $0.4 million and ($1.6) million for the three months ended September 30, 2021 and September 30, 2020, respectively.

See Note 8 — Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net loss was $74.4 million and $119.8 million during the three months ended June 30, 2021 and June 30, 2020, respectively.

Net loss during the three months ended June 30, 2021 compared to net loss for the three months ended June 30, 2020 was positively impacted by the increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic, lower amounts of rent expense, decreases in depreciation and amortization expense increases in other income, increases in investment income, and decreases in equity losses in non-consolidated entities, partially offset by higher interest expense and general and administrative costs, lower amounts of income tax benefit and increases in foreign currency translation rates.

Results of Operations— For the Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020

Net loss was $22.0 million and $127.7 million during the three months ended September 30, 2021 and September 30, 2020, respectively.

Net loss during the three months ended September 30, 2021 compared to net loss for the three months ended September 30, 2020 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in impairment of long-lived assets, decreases in depreciation and amortization expense, decreases in rent expense, increases in other income and decreases in equity losses in non-consolidated entities and decreases in foreign currency exchange rates, partially offset by higher

interest expense, higher general and administrative costs and lower income tax benefit.

Results of Operations— For the Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

Condensed Consolidated Results of Operations

Total revenues decreased 38.3%, or $367.4 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

Admissions revenues decreased 46.8%, or $266.4 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to a 52.4% decrease in attendance, partially offset by an 11.6% increase in average ticket price.

The decrease in attendance was primarily due to the COVID-19 pandemic which resulted in the temporary suspension of operations at our theatres in U.S.

and International markets, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year, increases in IMAX and Premium content and an increase in foreign currency translation rates, partially offset by higher frequency on our A-List subscription program.

Food and beverage revenues decreased 26.7%, or $76.9 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in attendance.

Food and beverage per patron increased 54.0% from $4.76 to $7.33 due to several contributing factors including increases in units sold per transaction and increases in the percentage of patrons making purchases due to higher child percentages, private theatre rentals, an increase in dine-in percentages, mobile orders along with price increases, reduced loyalty program penetration and the increase in foreign currency translation rates.

Total other theatre revenues decreased 23.4%, or $24.1 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to decreases in ticket fees, income from gift cards and package tickets and screen advertising due to the decrease in attendance, partially offset by increases in foreign currency translation rates.

Total revenues increased 25.6%, or $276.3 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Admissions revenues increased 15.2%, or $95.8 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to a 2.6% increase in attendance and a 12.2% increase in average ticket price.

The increase in attendance was primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension of operations at our theatres in U.S.

markets and International markets, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year, increases in IMAX and Premium content and lower frequency on our A-List subscription program, partially offset by loyalty program discounts and a decrease in foreign currency translation rates.

Food and beverage revenues increased 50.1%, or $159.2 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to the increase in food and beverage per patron and the increase in attendance.

Food and beverage per patron increased 46.3% from $4.73 to $6.92 due to several contributing factors including increases in units sold per transaction and increases in the percentage of patrons making purchases due to higher child percentages, private theatre rentals, an increase in dine-in percentages, mobile orders along with price increases and reduced loyalty program penetration, partially offset by a decrease in foreign currency translation rates.

Total other theatre revenues increased 16.3%, or $21.3 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance, partially offset by decreases in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses decreased $2,100.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020 primarily due to the $1,851.9 million impairment of long-lived assets charge recorded during the six months ended June 30, 2020 and year-over-year declines in operating expenses due to the decrease in attendance, partially offset by an increase in foreign currency translation rates.

Film exhibition costs decreased 55.5%, or $151.0 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 40.0% for the six months ended June 30, 2021 and 47.8% for the six months ended June 30, 2020.

The decrease in film exhibition cost percentage is primarily due to the concentration of box office revenues in lower grossing films in the current year which typically results in lower film exhibition costs and library content.

Food and beverage costs decreased 37.8%, or $21.9 million, during the six months ended June 30, 2021

compared to the six months ended June 30, 2020.

The decrease in food and beverage costs was primarily due to the decrease in food and beverage revenues.

As a percentage of food and beverage revenues, food and beverage costs were 17.0% for the six months ended June 30, 2021 and 20.1% for the six months ended June 30, 2020.

Food and beverage costs included $7.2 million of charges for obsolete inventory during the six months ended June 30, 2020 due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 71.8% for the six months ended June 30, 2021 and 49.1% for the six months ended June 30, 2020.

Rent expense decreased 13.9%, or $64.3 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates.

Operating costs and expenses decreased $1,987.2 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 primarily due to the $2,047.8 million impairment of long-lived assets charge recorded during the nine months ended September 30, 2020 and the decrease in foreign currency translation rates.

Film exhibition costs decreased 0.4%, or $1.1 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

As a percentage of admissions revenues, film exhibition costs were 40.9% for the nine months ended September 30, 2021 and 47.2% for the nine months ended September 30, 2020.

Food and beverage costs increased 18.3%, or $12.2 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

The increase in food and beverage costs was primarily due to the increase in food and beverage revenues.

As a percentage of food and beverage revenues, food and beverage costs were 16.5% for the nine months ended September 30, 2021 and 21.0% for the nine months ended September 30, 2020.

Food and beverage costs included $10.4 million of charges for obsolete inventory during the nine months ended September 30, 2020 due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 55.1% for the nine months ended September 30, 2021 and 61.5% for the nine months ended September 30, 2020.

Rent expense decreased 9.4%, or $63.7 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures and the decrease in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $375.9 million that have been deferred to the fourth quarter of 2021 and future years as of September 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $11.0 million during the six months ended June 30, 2021 compared to $2.0 million during the six months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 81.2% or $47.6 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense as a result of improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year and increases in insurance costs and professional expenses.

Merger, acquisition and other costs were $12.4 million during the nine months ended September 30, 2021 compared to $3.0 million during the nine months ended September 30, 2020,

primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 68.3% or $62.4 million during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense as a result of improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year and increases in insurance costs and professional expenses.

Depreciation and amortization.

Depreciation and amortization decreased 9.2% or $22.4 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020, partially offset by the increase in foreign currency translation

Depreciation and amortization decreased 11.5% or $42.2 million during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020 and the decrease in foreign currency translation rates.

Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill.

During the six months ended June 30, 2020, we recognized non-cash impairment losses of $81.4 million on 57 theatres in the U.S.

markets with 658 screens (in Alabama, Arkansas, California, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming) which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, Sweden, and UK), which were related to property, net and operating lease right-of-use assets, net.

No non-cash impairment charges of long-lived assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets as of June 30, 2020 related to the AMC, Odeon and Nordic trade names and recorded impairment charges of $8.3 million related to the Odeon and Nordic trade names during the six months ended June 30, 2020.

In addition, we performed quantitative impairment evaluations of our definite-lived intangible assets as of June 30, 2020 and recorded impairment charges of $8.0 million in U.S.

No impairment charges related to our indefinite-lived intangible assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our goodwill as of June 30, 2020 and recorded impairment charges of $1,124.9 million and $619.4 million during the six months ended June 30, 2020 for our Domestic Theatres and International Theatres reporting units, respectively.

No goodwill impairment charges were recorded during the six months ended June 30, 2021.

During the nine months ended September 30, 2020, we recognized non-cash impairment losses of $109.5 million on 75 theatres in the U.S.

markets with 851 screens (in Alabama, Arkansas, California, Colorado, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming) which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, UK and Sweden) which were related to property, net and operating lease right-of-use assets, net.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets as of March 31, 2020 and September 30, 2020 related to the AMC, Odeon and Nordic tradenames and recorded impairment charges of $12.9 million related to the Odeon and Nordic tradenames during the nine months ended September 30, 2020.

In addition, we performed quantitative impairment evaluations of our definite-lived intangible assets as of March 31, 2020 and September 30, 2020 and recorded impairment charges of $14.4 million.

We performed quantitative impairment evaluations of our goodwill as of March 31, 2020 and September 20, 2020 and recorded impairment charges of $1,276.1 million and $625.0 million during the nine months ended September 30, 2020 for our Domestic Theatres and International Theatres reporting units, respectively.

Other expense (income).

Other income of $60.1 million during the six months ended June 30, 2021 was primarily due to $54.6 million in government assistance related to COVID-19, foreign currency transaction gains of $0.4 million, and estimated credit income of $5.7 million related to contingent lease guarantees, partially offset by $1.0 million of financing fees related to the write-off of unamortized deferred charges on the Odeon revolver.

Other expense of $20.3 million during the six months ended June 30, 2020 was primarily due to the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $13.7 million and estimated credit losses related to contingent lease guarantees of $9.2 million, partially offset by income due to a decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $0.5 million and $4.4 million of government assistance related to COVID-19.

Other income of $71.8 million during the nine months ended September 30, 2021 was primarily due to $79.7 million in government assistance related to COVID-19 and estimated credit income of $5.7 million related to contingent lease guarantees, partially offset by a loss on extinguishment of $14.4 million related to the redemption of $35.0 million principal amount of 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026 and $1.0 million of financing fees related to the write-off of unamortized deferred charges on the Odeon revolver.

Other expense of $145.3 million during the nine months ended September 30, 2020 was primarily due to third party expenses of $39.1 million related to the restructuring of our debt, the increase in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2026 of $89.4 million, the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $19.6 million, estimated credit losses related to contingent lease guarantees of $15.3 million, partially offset by international government assistance related to COVID-19 of $17.9 million.

Interest expense.

Interest expense increased $87.7 million to $261.7 million for the six months ended June 30, 2021 compared to $174.0 million during the six months ended June 30, 2020, primarily due to:

Interest expense increased $92.7 million to $361.0 million for the nine months ended September 30, 2021 compared to $268.3 million during the nine months ended September 30, 2020, primarily due to:

● the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;

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● the issuance of $100 million of 15%/17% Cash/PIK/Toggle First Lien Notes due 2026 on January 15, 2021;

● the conversion of $600.0 million 2.95% Convertible Notes due 2026 to 44,422,860 Class A common shares on January 27, 2021 that resulted in the write-off to interest expense of $70.0 million of unamortized discount and deferred charges at the date of conversion following the guidance in ASC 815-15-40-1;

● the conversion of $600.0 million 2.95% Convertible Notes due 2026 to 44,422,860 Class A common shares on January 27, 2021 that resulted in the write-off to interest expense of $70.0 million of

unamortized discount and deferred charges at the date of conversion following the guidance in ASC 815-15-40-1;

● the issuance of £140.0 million and €296.0 million 10.75%/11.25% Cash/PIK Term Loans due 2023 on February 19, 2021,

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● the extinguishment of $104.5 million of Second Lien Notes due 2026 on December 14, 2020 in exchange for common shares;

● borrowings under revolving credit facilities of approximately $325.1 million during the six months ended June 30, 2020 that remained outstanding until February and March 2021;

● borrowings under revolving credit facilities of approximately $325.1 million during the nine months ended September 30, 2020 that remained outstanding until February and March 2021;

● the repayment of £89.7 million and €12.8 million outstanding amounts under the Odeon revolver on February 19, 2021;

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Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $5.5 million for the six months ended June 30, 2021 compared to $15.3 million for the six months ended June 30, 2020.

The decrease in equity in loss of $9.8 million was primarily due to decreases in equity in losses from DCIP of $11.6 million, partially offset by increases in equity losses on other investments of $1.8 million.

Equity in (earnings) loss of non-consolidated entities.

Equity in (earnings) loss of non-consolidated entities was ($1.2) million for the nine months ended September 30, 2021 compared to $25.9 million for the nine months ended September 30, 2020.

The decrease in equity in loss of $27.1 million was primarily due to decreases in equity in losses from DCIP of $25.2 million, partially offset by decreases in equity earnings on other investments of $2.0 million.

Investment (income) expense.

Investment income was ($8.3) million for the six months ended June 30, 2021 compared to investment expense of $8.1 million for the six months ended June 30, 2020.

Investment income includes a gain on sale of the Baltics of $5.5 million during the six months ended June 30, 2021.

Investment expense includes impairment charges of $7.2 million related to investments and declines in our non-qualified deferred compensation plan investments during the six months ended June 30, 2020.

Investment income was ($8.3) million for the nine months ended September 30, 2021 compared to investment expense of $4.0 million for the nine months ended September 30, 2020.

Investment income includes a gain on sale of the Baltics of $5.5 million during the nine months ended September 30, 2021.

Investment expense includes an impairment charge of $7.2 million related to an investment , partially offset by a payment of $3.7 million under the NCM tax receivable agreement during the nine months ended September 30, 2020.

Income tax provision (benefit).

The income tax provision (benefit) was ($12.0) million and $62.1 million for the six months ended June 30, 2021 and June 30, 2020, respectively.

The decrease in income tax expense is primarily due to the recording of International valuation allowances against deferred tax assets held in Spain of $40.1 million and Germany of $33.1 million during the six months ended June 30, 2020.

The income tax provision (benefit) was ($13.9) million and $66.7 million for the nine months ended September 30, 2021 and September 30, 2020, respectively.

See Note 8 — Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net loss was $911.2 million and $2,737.5 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

Net loss during the six months ended June 30, 2021 compared to net loss for the six months ended June 30, 2020 was positively impacted by the decline in impairment charges related to long-lived assets, definite and indefinite-lived intangible assets and goodwill, decreased depreciation expense, lower amounts of rent expense, increases in other income, increases in investment income and decreases in income tax provision, partially offset by the decrease in attendance as a result of the COVID-19 pandemic, higher interest expense and general and administrative costs, and increases in foreign currency translation rates.

Net loss was $1,135.4 million and $3,643.3 million during the nine months ended September 30, 2021 and September 30, 2020, respectively.

Net loss during the nine months ended September 30, 2021 compared to net loss for the nine months ended September 30, 2020 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in impairment of long-lived assets, decreases in depreciation and amortization expense, decreases in rent expense, increases in other income, decreases in equity losses in non-consolidated entities, increases in investment income, decreases in income tax provision and decreases in foreign currency exchange rates, partially offset by higher interest expense and higher general and administrative costs.

Theatrical Exhibition–U.S.

Total revenues decreased 24.4%, or $165.0 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

Admissions revenues decreased 33.4%, or $130.1 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to a 39.4% decrease in attendance, partially offset by a 9.8% increase in average ticket price.

The decrease in attendance was primarily due to the COVID-19 pandemic which resulted in the temporary suspension of operations at our theatres in U.S.

markets, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year and increases in IMAX and Premium content, partially offset by higher frequency on our A-List subscription program.

Food and beverage revenues decreased 13.0%, or $28.2 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in attendance.

Total revenues increased 45.0%, or $325.6 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Admissions revenues increased 35.5%, or $144.7 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to a 21.9% increase in attendance and a 11.2% increase in average ticket price.

The increase in attendance was primarily due to the COVID-19 pandemic impact on the prior year, which resulted in the temporary suspension of operations at our theatres in U.S.

markets, deterred customers from attending our theatres when we

resumed operations, and prompted film distributors to delay or alternatively distribute films.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year and increases in IMAX and Premium content and lower frequency on our A-List subscription program.

Food and beverage revenues increased 70.1%, or $159.1 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to the increase in food and beverage per patron and the increase in attendance.

Food and beverage per patron increased 39.6% from $5.45 to $7.61 due to several contributing factors including increases in units sold per transaction and increases in the percentage of patrons making purchases due to higher child percentages, private theatre rentals, an increase in dine-in percentages, mobile orders along with price increases and reduced loyalty program penetration.

Total other theatre revenues decreased 9.4%, or $6.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to decreases in ticket fees, income from gift cards and package tickets and screen advertising due to the decrease in attendance.

Total other theatre revenues increased 24.3%, or $21.8 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance.

Operating costs and expenses.

Operating costs and expenses decreased $1,336.0 million, during the six

months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the $1,214.3 million impairment of long-lived assets charge recorded during the six months ended June 30, 2020 and year-over-year declines in operating expenses due to the decrease in attendance.

Film exhibition costs decreased 47.5%, or $94.3 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 40.3% for the six months ended June 30, 2021 and 51.1% for the six months ended June 30, 2020.

Food and beverage costs decreased 24.6%, or $9.4 million, during the six months ended June 30, 2021

compared to the six months ended June 30, 2020.

The decrease in food and beverage costs was primarily due to the decrease in food and beverage revenues.

As a percentage of food and beverage revenues, food and beverage costs were 15.3% for the six months ended June 30, 2021 and 17.6% for the six months ended June 30, 2020.

Food and beverage costs included $4.0 million of charges for obsolete inventory during the six months ended June 30, 2020 due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 64.3% for the six months ended June 30, 2021 and 48.9% for the six months ended June 30, 2020.

Rent expense decreased 14.1%, or $47.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $327.8 million that have been deferred to the second half of 2021 and future years as of June 30, 2021.

Operating costs and expenses decreased $1,270.4 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to the $1,399.9 million impairment of long-lived assets charge recorded during the nine months ended September 30, 2020.

Film exhibition costs increased 11.0%, or $22.9 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, due to the increase in admissions revenues, partially offset by a decrease in film exhibition costs as a percentage of admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 41.9% for the nine months ended September 30, 2021 and 51.1% for the nine months ended September 30, 2020.

Food and beverage costs increased 34.3%, or $14.6 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

The increase in food and beverage costs was primarily due to the increase in food and beverage revenues.

As a percentage of food and beverage revenues, food and beverage costs were 14.8% for the nine months ended September 30, 2021 and 18.8% for the nine months ended September 30, 2020.

Food and beverage costs included $7.2 million of charges for obsolete inventory during the nine months ended September 30, 2020 due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 53.4% for the nine months ended September 30, 2021 and 62.7% for the nine months ended September 30, 2020.

Rent expense decreased 8.9%, or $44.1 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $292.8 million that have been deferred to the fourth quarter of 2021 and future years as of September 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $7.2 million during the six months ended June 30, 2021 compared to $2.0 million during the six months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 144.4% or $44.9 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense as a result of improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year and increases in insurance costs and professional expenses.

Merger, acquisition and other costs were $8.5 million during the nine months ended September 30, 2021 compared to $2.7 million during the nine months ended September 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 110.1% or $55.4 million during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense as a result of improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year and increases in insurance costs and professional expenses.

Depreciation and amortization.

Depreciation and amortization decreased 9.9% or $18.2 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020.

Depreciation and amortization decreased 11.4% or $31.4 million during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020.

Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill.

During the six months ended June 30, 2020, we recognized non-cash impairment losses of $81.4 million on 57 theatres in the U.S.

No non-cash impairment charges of long-lived assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets as of June 30, 2020 related to the AMC trade name and recorded no impairment charges to the AMC trade names during the six months ended June 30, 2020.

In addition, we performed quantitative impairment evaluations of our definite-lived intangible assets as of June 30, 2020 and recorded impairment charges of $8.0 million in U.S.

No impairment charges related to our indefinite-lived intangible assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our goodwill as of June 30, 2020 and recorded impairment charges of $1,124.9 million during the six months ended June 30, 2020 for our Domestic Theatres reporting unit.

No goodwill impairment charges were recorded during the six months ended June 30, 2021.

Other expense (income).

Other income of $3.4 million during the six months ended June 30, 2021 was

primarily due to $4.2 million in government assistance related to COVID-19.

Other expense of $25.6 million during the six months ended June 30, 2020 was primarily due to the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $13.7 million and estimated credit losses related to contingent lease guarantees of $9.2 million, partially offset by income due to a decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $0.5 million.

During the nine months ended September 30, 2020, we recognized non-cash impairment losses of $109.5 million on 75 theatres in

markets with 851 screens (in Alabama, Arkansas, California, Colorado, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming) which were related to property, net, operating lease right-of-use assets, net and other long-term assets.

We performed quantitative impairment evaluations of our definite-lived intangible assets as of March 31, 2020 and September 30, 2020 and recorded impairment charges of $14.4 million during the nine months ended September 30, 2020.

We performed quantitative impairment evaluations of our goodwill as of March 31, 2020 and September 30, 2020 and recorded impairment charges of $1,276.1 million for our Domestic Theatres reporting unit.

Other expense.

Other expense of $10.2 million during the nine months ended September 30, 2021 was primarily due to a loss on extinguishment of $14.4 million related to the redemption of $35.0 million principal amount of 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026, partially offset by $4.6 million in government assistance related to COVID-19.

Other expense of $157.8 million during the nine months ended September 30, 2020 was primarily due to third party expenses of $39.1 million related to the restructuring of our debt, the increase in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2026 of $89.4 million, the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $19.6 million and estimated credit losses related to contingent lease guarantees of $9.2 million.

Interest expense.

Interest expense increased $63.0 million to $232.4 million for the six months ended June 30, 2021 compared to $169.4 million during the six months ended June 30, 2020, primarily due to:

Interest expense increased $49.6 million to $310.9 million for the nine months ended September 30, 2021 compared to $261.3 million during the nine months ended September 30, 2020, primarily due to:

● the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;

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● the extinguishment of $104.5 million of Second Lien Notes due 2026 on December 14, 2020 in exchange for common shares;

● borrowings under revolving credit facilities of approximately $212.2 million during the six months ended June 30, 2020 that remained outstanding until March 2021;

● borrowings under revolving credit facilities of approximately $212.2 million during the three months ended March 31, 2020 that remained outstanding until March 2021;

● a decline in interest rates related to borrowings under the Senior Secured Term Loan due 2026;

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Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $1.2 million for the six months ended June 30, 2021 compared to $13.3 million for the six months ended June 30, 2020.

Equity in (earnings) loss of non-consolidated entities.

Equity in (earnings) loss of non-consolidated entities was ($4.9) million for the nine months ended September 30, 2021 compared to $21.7 million for the nine months ended September 30, 2020.

The decrease in equity in loss of $26.6 million was primarily due to decreases in equity in losses from DCIP of $25.2 million and decreases in equity losses on other investments of $1.4 million.

Investment (income) expense.

Investment income was ($2.8) million for the six months ended June 30, 2021 compared to investment expense of $8.2 million for the six months ended June 30, 2020.

Investment income was ($2.8) million for the nine months ended September 30, 2021 compared to investment expense of $4.1 million for the nine months ended September 30, 2020.

expense includes impairment charges of $7.2 million related to investments, partially offset by a payment of $3.7 million under the NCM tax receivable agreement during the nine months ended September 30, 2020.

Income tax provision (benefit).

The income tax provision (benefit) was ($7.9) million and $1.5 million for the six months ended June 30, 2021 and June 30, 2020, respectively.

The income tax provision (benefit) was ($10.2) million and $7.7 million for the nine months ended September 30, 2021 and September 30, 2020, respectively.

See Note 8 — Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net loss was $709.7 million and $1,879.2 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

Net loss was $911.9 million and $2,657.3 million during the nine months ended September 30, 2021 and September 30, 2020, respectively.

Net loss during the nine months ended September 30, 2021 compared to net loss for the nine months ended September 30, 2020 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in impairment of long-lived assets, decreases in depreciation and amortization expense, decreases in rent expense decreases in other expense, decreases in equity losses in non-consolidated entities, increases in investment income, decreases in income tax provision, partially offset by higher interest expense and higher general and administrative costs.

Theatrical Exhibition - International Markets

Total revenues decreased 71.4%, or $202.4 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

Admissions revenues decreased 75.8%, or $136.3 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to a 76.9% decrease in attendance, partially offset by an 4.9% increase in average ticket price.

Total revenues decreased 13.9%, or $49.3 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Admissions revenues decreased 21.8%, or $48.9 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to a 28.8% decrease in attendance, partially offset by a 9.9% increase in average ticket price.

The decrease in attendance was primarily due to the COVID-19 pandemic which resulted in the temporary suspension of operations at our theatres in International markets, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films.

The increase in average ticket price includes the impact of an increase in foreign currency translation rates and reflects minimal volumes of attendance.

Food and beverage revenues decreased 67.7%, or $48.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in attendance.

Food and beverage per patron increased 39.8% from $3.44 to $4.81 due to the minimal volumes of attendance year-over-year reflecting an increase in average purchase per patron and the increase in foreign currency translation rates.

Total other theatre revenues decreased 54.9%, or $17.4 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to decreases in ticket fees, income from gift cards and package tickets and screen advertising due to the decrease in attendance, partially offset by increases in foreign currency translation rates.

The increase in average ticket price includes the impact of the decrease in foreign currency translation rates and reflects minimal volumes of attendance.

Food and beverage revenues increased $0.1 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to the increase in food and beverage per patron.

Food and beverage per patron increased 40.8% from $3.55 to $5.00 due to the minimal volumes of attendance year-over-year reflecting an increase in average purchase per patron, partially offset by the decrease in foreign currency translation rates.

Total other theatre revenues decreased 1.2%, or $0.5 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Operating costs and expenses.

Operating costs and expenses decreased $764.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to $637.6 million impairment of long-lived assets charge recorded during the six months ended June 30, 2021 and year-over-year declines in operating expenses due to the decrease in attendance, partially offset by an increase in foreign currency translation rates.

Film exhibition costs decreased 77.5%, or $56.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 37.9% for the six months ended June 30, 2021 and 40.7% for the six months ended June 30, 2020.

Operating costs and expenses decreased $716.8 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to a $647.9 million impairment of long-lived assets charge recorded during the nine months ended September 30, 2020 and a decrease in foreign currency translation rates.

Film exhibition costs decreased 26.6%, or $24.0 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to the decrease in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 37.8% for the nine months ended September 30, 2021 and 40.3% for the nine months ended September 30, 2020.

The decrease in film exhibition cost percentage is primarily due to the concentration of box office revenues in lower grossing films in the current year, which typically results in lower film exhibition costs and library content.

Food and beverage costs decreased 63.5%, or $12.5 million, during the six months ended June 30, 2021

compared to the six months ended June 30, 2020.

Food and beverage costs decreased 10.0%, or $2.4 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

The decrease in food and beverage costs was primarily due to the decrease in food and beverage revenues.

As a percentage of food and beverage revenues, food and beverage costs were 31.0% for the six months ended June 30, 2021 and 27.4% for the six months ended June 30, 2020.

Food and beverage costs included $3.2 million of charges for obsolete inventory during the six months ended June 30, 2020 due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 119.5% for the six months ended June 30, 2021 and 49.5% for the six months ended June 30, 2020.

Rent expense decreased 13.5%, or $16.6 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $92.8 million that have been deferred to the second half of 2021 and future years as of June 30, 2021.

As a percentage of food and beverage revenues, food and beverage costs were 24.0% for the nine months ended September 30, 2021 and 26.6% for the nine months ended September 30, 2020.

Food and beverage costs included $3.2 million of charges for obsolete inventory during the nine months ended September 30, 2020 due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 61.1% for the nine months ended September 30, 2021 and 59.0% for the nine months ended September 30, 2020.

Rent expense decreased 10.9%, or $19.6 million, during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar

2019 and 2020, and theatre closures, and the decrease in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $83.1 million that have been deferred to the fourth quarter of 2021 and future years as of September 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $3.8 million during the six months ended June 30, 2021 compared to $0.0 million during the six months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 9.8% or $2.7 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense as a result of improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year and increases in foreign currency translation rates.

Merger, acquisition and other costs were $3.9 million during the nine months ended September 30, 2021 compared to $0.3 million during the nine months ended September 30, 2020, primarily due to increases in legal and professional costs related to strategic planning.

Other general and administrative expense increased 17.1% or $7.0 million during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense as a result of improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year, partially offset by decreases in foreign currency translation rates.

Depreciation and amortization.

Depreciation and amortization decreased 7.1% or $4.2 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020, partially offset by the increase in foreign currency translation rates.

Depreciation and amortization decreased 11.9% or $10.8 million during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020 and the decrease in foreign currency translation rates.

Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill.

During the six months ended June 30, 2020, we recognized non-cash impairment losses of $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, Sweden, and UK), which were related to property, net and operating lease right-of-use assets, net.

No non-cash impairment charges of long-lived assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets as of June 30, 2020 related to the Odeon and Nordic trade names and recorded impairment charges of $8.3 million related to the Odeon and Nordic trade names during the six months ended June 30, 2020.

In addition, we performed quantitative impairment evaluations of our definite-lived intangible assets as of June 30, 2020 and recorded impairment charges of $0.0 million in International markets.

No impairment charges related to our indefinite-lived intangible assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our goodwill as of June 30, 2020 and recorded impairment charges of $619.4 million during the six months ended June 30, 2020 for our International Theatres reporting unit.

No goodwill impairment charges were recorded during the six months ended June 30, 2021.

Other expense (income).

Other income of $56.7 million during the six months ended June 30, 2021 was primarily due to $50.4 million in government assistance related to COVID-19, foreign currency transaction gains of $0.4 million, and estimated credit income of $6.0 million related to contingent lease guarantees, partially offset by $1.0 million of financing fees related to the write-off of unamortized deferred charges on the Odeon revolver.

Other income of $5.3 million during the six months ended June 30, 2020 was primarily due to the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $13.7 million and estimated credit losses related to contingent lease guarantees of $9.2 million, partially offset by income due to a decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $0.5 million and $4.4 million of government assistance related to COVID-19.

During the nine months ended September 30, 2020, we recognized non-cash impairment losses of $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, UK and Sweden) which were related to property, net, and operating lease right-of-use assets, net.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets related to the Odeon and Nordic tradenames as of March 31, 2012 and September 30, 2020 and recorded impairment charges of $12.9 million related to these assets during the nine months ended September 30, 2020.

We performed a quantitative impairment evaluation of our goodwill as of March 31, 2020 and September 30, 2020 and recorded impairment charges of $625.0 million for our International Theatres reporting unit during the nine months ended September 30, 2020.

Other income.

Other income of $82.0 million during the nine months ended September 30, 2021 was primarily due to $75.1 million in government assistance related to COVID-19 and estimated credit income of $6.0 million related to contingent lease guarantees.

Other income of $12.5 million during the nine months ended September 30, 2020 was primarily due to the international government assistance related to COVID-19 of $17.9 million, partially offset by estimated credit losses related to contingent lease guarantees of $6.1 million See Note 1—Basis of Presentation in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about the components of other expense (income).

Interest expense.

Interest expense increased $24.7 million to $29.3 million for the six months ended June 30, 2021 compared to $4.6 million during the six months ended June 30, 2020, primarily due to:

Interest expense increased $43.1 million to $50.1 million for the nine months ended September 30, 2021 compared to $7.0 million during the nine months ended September 30, 2020, primarily due to:

● the issuance of £140.0 million and €296.0 million 10.75%/11.25% Cash/PIK Term Loans due 2023 on February 19, 2021,

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Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $4.3 million for the six months ended June 30, 2021 compared to $2.0 million for the six months ended June 30, 2020.

Equity in loss of non-consolidated entities was $3.7 million for the nine months ended September 30, 2021 compared to $4.2 million for the nine months ended September 30, 2020.

Investment (income) expense.

Investment income was ($5.5) million for the six months ended June 30, 2021 compared to investment income of ($0.1) million for the six months ended June 30, 2020.

Investment income includes a gain on sale of the Baltics of $5.5 million during the six months ended June 30, 2021.

Investment income was ($5.5) million for the nine months ended September

30, 2021 compared to investment income of ($0.1) million for the nine months ended September 30, 2020.

Investment income includes a gain on sale of the Baltics of $5.5 million during the nine months ended September 30, 2021.

Income tax provision (benefit).

The income tax provision (benefit) was ($4.1) million and $60.6 million for the six months ended June 30, 2021 and June 30, 2020, respectively.

The income tax provision (benefit) was ($3.7) million and $59.0 million for the nine months ended September 30, 2021 and September 30, 2020, respectively.

See Note 8 — Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net loss was $201.5 million and $858.3 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

Net loss was $223.5 million and $986.0 million during the nine months ended September 30, 2021 and September 30, 2020, respectively.

Net loss during the nine months ended September 30, 2021 declined compared to net loss for the three months ended September 30, 2020 due to decreases in impairment of long-lived assets, decreases in depreciation and amortization expense, increases in other income, increases in investment income, decreases in equity losses in non-consolidated entities, decreases in income tax provision, decreases in rent expense and decreases in foreign currency translation rates, partially offset by the decrease in attendance as a result of the impact of theatre closures related to COVID-19 in the current year, higher interest expense and general and administrative costs.

LIQUIDITY AND CAPITAL RESOURCES

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Consequently, we typically generate higher revenues during such periods.

We had working capital surplus (deficit) (excluding restricted cash) as of June 30, 2021 and December 31, 2020 of $425.5 million and $(1,104.6) million, respectively.

As of June 30, 2021 and December 31, 2020, working capital included operating lease liabilities of $604.8 million and $583.6 million, respectively, and deferred revenues of $402.1 million and $405.4 million, respectively.

At June 30, 2021, we had $211.9 million unused borrowing capacity, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility.

We had working capital surplus (deficit) (excluding restricted cash) as of September 30, 2021 and December 31, 2020 of $146.1 million and $(1,104.6) million, respectively.

As of September 30, 2021 and December 31, 2020, working capital included operating lease liabilities of $605.9 million and $583.6 million, respectively, and deferred revenues of $392.1 million and $405.4 million, respectively.

At September 30, 2021, we had $212.0 million unused borrowing capacity, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility.

As of December 31, 2020, we had borrowed $212.2 million (the full availability net of standby letters of credit) under our $225.0 million Senior Secured Revolving Credit Facility.

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As of December 31, 2020, we had borrowed $120.8 million (the full availability net of standby letters of credit) under our £100.0 million Odeon Revolver ($136.3 million based on the foreign currency translation rate of 1.3628 on December 31, 2020).

As of June 30, 2021, we had cash and cash equivalents of approximately $1.8 billion.

As of September 30, 2021, we had cash and cash equivalents of approximately $1.6 billion.

In response to the COVID-19 pandemic, we adjusted certain elements of our business strategy and took significant steps to preserve cash and we are continuing to take significant steps to preserve cash, by eliminating non-essential costs, including reductions to our variable costs and elements of our fixed cost structure.

In addition to preserving cash, we enhanced liquidity through debt issuances, debt exchanges and equity sales as previously reported in our Annual Report on Form 10-K for the year ended December 31, 2020 and in our Quarterly Report on Form 10-Q for the three months ended March 31, 2021.

In addition to preserving cash, we enhanced liquidity through debt issuances, debt exchanges and equity sales as previously reported in our Annual Report on Form 10-K for the year ended December 31, 2020 and in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2021 and June 30, 2021.

See Note 6 — Corporate Borrowings and Finance Lease Obligations and Note 7 — Stockholders’ Equity in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I in this Form 10-Q for further information.

Recent updates to our liquidity enhancement initiatives are as follows:

● The launch of two additional “at-the-market” equity offerings to raise capital through the sale of our Class A common stock.

During April and May of 2021, we sold 43.0 million shares, generating $427.5 million in gross proceeds and paid fees to sales agents of $10.7 million.

In June of 2021, we sold 11.55 million shares, generating $587.4 million in gross proceeds and paid fees to sales agents of $14.7 million and other fees of $0.3 million.

● The June 2021 issuance of 8.5 million shares of Class A common stock to Mudrick Capital Management, LP (“Mudrick”) in a private placement for $230.5 million in gross proceeds and paid fees of approximately $0.1 million related to this transaction.

We believe our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund our operations, satisfy our obligations, including cash outflows for increased rent and planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under our debt covenants

related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility for at least the next 12 months.

In order to achieve net positive operating cash flows and long-term profitability, we believe we will need to increase attendance levels significantly from our current levels to achieve levels in line with pre COVID-19 attendance.

The table below summarizes net increase (decrease) in cash equivalents and restricted cash by quarter for the nine months ended September 30, 2021:

Three Months Ended

Nine Months Ended

September 30,

(In millions)

Cash flows from operating activities:

Net cash used in operating activities

Cash flows from investing activities:

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents and restricted cash

Net increase (decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents and restricted cash at end of period

Our net cash used in operating activities improved by $79.1 million during the three months ended June 30, 2021, and has further improved by $119.9 million from ($233.8) million to $(113.9) million during the three months ended September 30, 2021.

This is primarily attributable to continued increases in attendance and industry box office revenues during the nine months ended September 30, 2021.

We will continue to repay rent amounts that were deferred during the pandemic, which will increase its cash outflows from operating activities.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I in this Form 10-Q for a summary of the estimated future repayment terms for the remaining $375.9 million of rentals that were deferred during the COVID-19 pandemic.

Our net cash provided by (used in) investing activities included:

● $(11.9) million of capital expenditures and $(9.3) million of investments in non-consolidated entities, partially offset by proceeds from the disposition of the Baltics’ theatres of $3.8 million and proceeds from the disposition of long-term assets of $1.4 million during the three months ended March 31, 2021;

● $31.4 million of proceeds from the disposition of the Baltics’ theatres, partially offset by $(17.9) million of capital expenditures during the three months ended June 30, 2021;

● $(24.1) million of capital expenditures, $(5.8) million related to the acquisition of assets at two theatres and $(1.0) million of transaction costs related to the Baltics’ theatre sale, partially offset by $2.0 million of proceeds from disposition of long-term assets during the three months ended September 30, 2021.

Our net cash provided by (used in) financing activities included:

● Net proceeds from our debt and equity issuances of $861.9 million during the three months ended March 31, 2021;

● Net proceeds from our equity issuances of $1,219.6 million during the three months ended June 30, 2021;

● Principal and premium payments of $(40.3) million related to an optional redemption of our First Lien Toggle Notes due 2026 during the three months ended September 30, 2021.

COVID-19 attendance.

We believe the global re-opening of our theatres, the anticipated volume of titles available for theatrical release, and the anticipated broad appeal of many of those titles will support increased attendance levels.

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Following the expiration of the Extended Covenant Suspension Period, we will be subject to the financial covenant under the Senior Secured Revolving Credit Facility, beginning with the quarter ending June 30, 2022.

If the attendance levels increase consistent with our assumptions described above, we currently expect we will be able to comply with the financial covenant.

If the attendance levels increase consistent with our assumptions described above, we currently expect we will be able to comply with the financial covenant, however we do not anticipate the need to borrow under the Senior Secured Revolving Credit Facility during the next twelve months.

See Note 6—Corporate Borrowings and Finance Lease Obligations in the Notes to the Condensed Consolidated Financial Statements thereof under Item 1 of Part I of this Form 10-Q for further information.

Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases and our ability to generate cash from operations.

Our liquidity needs thereafter will depend, among other things, on the timing of movie releases and our ability to generate cash from operations.

We received rent concessions provided by the lessors that aided in mitigating the economic effects of COVID-19 during the pandemic.

These concessions primarily consisted of rent abatements and the deferral of rent payments.

As a result of the deferral of rent payments of approximately $420.6 million as of June 30, 2021, our cash expenditures for rent are scheduled to increase significantly in the second half of 2021 and future years.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements thereof under Item 1 of Part I of this Form 10-Q for further information.

As a result, deferred lease amounts were approximately $375.9 million as of September 30, 2021.

Our cash expenditures for rent increased significantly in both the second and third quarters of 2021.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements thereof under Item 1 of Part I of this Form 10-Q for a summary of the estimated future repayment terms for the deferred lease amounts due to COVID-19.

It is very difficult to estimate our liquidity requirements, future cash burn rates and future attendance levels.

Depending on our assumptions regarding the timing and ability to achieve more normalized levels of operating revenue, the estimates of amounts of required liquidity vary significantly.

Depending on our assumptions regarding the timing and ability to achieve significantly increased levels of operating revenue, the estimates of amounts of required liquidity vary significantly.

Similarly, it is very difficult to predict when theatre attendance levels will normalize, which we expect will depend on the widespread availability and use of effective vaccines for the coronavirus.

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Cash Flows from Operating Activities

Cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $546.7 million and $415.9 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

The increase in cash flows used in operating activities was primarily due to decreased attendance levels and temporary

suspension of operations at all of our theatres on or before March 17, 2020, which resulted in lower operating results during the six months ended June 30, 2021.

Cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $660.6 million and $771.6 million during the nine months ended September 30, 2021 and September 30, 2020, respectively.

The decrease in cash flows used in operating activities was primarily due to increased attendance levels, which resulted in higher operating results during the nine months ended September 30, 2021.

Cash Flows from Investing Activities

Cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $2.5 million and $131.5 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

Cash outflows from investing activities include capital expenditures of $29.8 million and $126.7 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

Cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $31.3 million and $154.8 million during the nine months ended September 30, 2021 and September 30, 2020, respectively.

Cash outflows from investing activities include capital expenditures of $53.9 million and $156.0 million during the nine months ended September 30, 2021 and September 30, 2020, respectively.

In 2020, as a result of the COVID-19 pandemic, we significantly reduced capital expenditures to maintenance levels.

During the six months ended June 30, 2021, cash flows used in investing activities included proceeds from the disposition of assets primarily related to proceeds of $35.2 million from the sale of our remaining equity interest in Lithuania and eliminated our noncontrolling interest in Forum Cinemas OU and proceeds received from the disposition of one property of $1.4 million.

During the six months ended June 30, 2021, we made an additional investment of $9.3 million in Saudi Cinema Company LLC.

During the six months ended June 30, 2020, cash flows used in investing activities included an additional investment in Saudi Cinema Company LLC of $9.3 million and proceeds from the disposition of long-term assets of $3.7 million primarily related to three properties.

During the nine months ended September 30, 2021, cash flows used in investing activities included proceeds from the disposition of assets of $34.2 million, primarily from the sale of our remaining equity interest in Estonia of $3.7 million and Lithuania of $30.5 million and proceeds received from the disposition of two properties of $3.4 million.

During the nine months ended September 30, 2021, we made an additional investment of $9.3 million in Saudi Cinema Company LLC and acquired theatre assets of $5.8 million related to two theatres.

During the nine months ended September 30, 2020, cash flows used in investing activities included an additional investment in Saudi Cinema Company LLC of $9.3 million and proceeds from the disposition of long-term assets of $8.6 million primarily related to seven properties and other asset sales.

We fund the costs of constructing, maintaining and remodeling our theatres through existing cash balances, cash generated from operations, landlord contributions, or borrowed funds, as necessary.

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Cash Flows from Financing Activities

Cash flows provided by financing activities, as reflected in the condensed consolidated statements of cash flows, were $2,066.9 million and $785.9 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

The increase in cash flows from financing activities during the six months ended June 30, 2021 was primarily due to the borrowings under the Odeon Term Loan Facility of $534.3 million, the issuance of First Lien Toggle Notes due 2026 of $100.0 million, net proceeds from the sale of Class A common stock of $1,570.8 million, and net proceeds from Class A common stock issuance to Mudrick of $230.4 million, partially offset by the repayments under the revolving credit facilities of $335.0 million, payment for deferred financing costs of $19.3 million, and principal payments under the Term Loan due 2026 of $10.0 million.

During the six months ended June 30, 2020, cash inflows from financing activities included borrowings under our First Lien Notes due 2025 and revolving credit facilities were $490.0 and $322.8 million, respectively, partially offset by principal payments under the Term Loan due 2026 of $10.0 million and deferred financing costs of $9.3 million.

During the six months ended June 30, 2020, we paid dividends and dividend equivalents of $4.3 million.

Cash flows provided by financing activities, as reflected in the condensed consolidated statements of cash flows, were $2,018.6 million and $1,082.5 million during the nine months ended September 30, 2021 and September 30, 2020, respectively.

Cash flows from financing activities during the nine months ended September 30, 2021 was primarily due to the borrowings under the Odeon Term Loan Facility of $534.3 million, borrowings under the issuance of First Lien Toggle Notes due 2026 of $100.0 million, net proceeds from the sale of Class A common stock of $1,570.7 million, and net proceeds from Class A common stock issuance to Mudrick of $230.4 million, partially offset by the repayments under the revolving credit facilities of $335.0 million, principal and redemption premium under the First Lien Toggle Notes due 2026 of $40.3 million, payment for deferred financing costs of $19.9 million, and principal payments under the Term Loan due 2026 of $15.0 million.

During the nine months ended September 30, 2020, cash inflows from financing activities included borrowings under our First Lien Notes due 2025 of $490.0 million, First Lien Notes due 2026 of $270.0 million, revolving credit facilities of $322.2 million, and proceeds from sale of the noncontrolling interest in Forum Cinemas OU of $37.5 million, partially offset by the payment for deferred financing costs of $15.2 million and principal payments under the Term Loan due 2026 of $15.0 million.

During the nine months ended September 30, 2020, we paid dividends and dividend equivalents of $4.3 million.

The following is a summary of dividends declared to stockholders:

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Approximately £89.7 million and €12.8 million of the net proceeds from the Odeon Term Loan Facility were used to repay in full Odeon’s obligations (including principal, interest, fees and cash collateralized letters of credit) under its existing revolving credit facility and the remaining net proceeds will be used for general corporate purposes.

The Odeon Term Loan Facility has a maturity of 2.5 years from the date on which it is first drawn.

Borrowings under the Odeon Term Loan Facility bear interest at a rate equal to 10.75% per annum during the first year and 11.25% thereafter.

The Odeon Term Loan Facility has a maturity of August 19, 2023 (2.5 years from the date on which it is first drawn).

Borrowings under the Odeon Term Loan Facility bear interest at a rate equal to 10.75% per annum during the first year and 11.25% thereafter and each interest period is 3 months, or such other period agreed between us and the Agent.

The interest is capitalized on the last day of each interest period and added to the outstanding principal amount, however Odeon has the option to elect to pay interest in cash.

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Bank National Association, as trustee and collateral agent.

On September 30, 2021, we exercised an option to repurchase $35.0 million of our First Lien Toggle Notes due 2026.

The total cost to exercise this repurchase option was $41.3 million, including principal, redemption premium and accrued and unpaid interest.

As a result of this debt reduction, our annual interest cost has been reduced by $5.25 million.

The First Lien Toggle Notes due 2026 bear cash interest at a rate of 15% per annum payable semi-annually in arrears on January 15 and July 15, beginning on July 15, 2021.

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We borrowed under our Odeon Term Loan Facility, issued First Lien Toggle Notes due 2026, and Silver Lake and certain co-investors elected to convert all of our Convertible Notes due 2026 into shares of our Class A common stock.

See Note 6—Corporate Borrowings and Finance Lease Obligations in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q for further information, including a table that provides the principal payments required and maturities of corporate borrowings as of June 30, 2021.

We received rent concessions provided by the lessors that aided or will aid, in mitigating the economic effects of COVID-19.

These concessions primarily consist of deferral of rent payments and rent abatements.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q for further information, including a table of the minimum annual payments required under existing operating and finance lease liabilities (net present value thereof) as of June 30, 2021.

Depending on the trading prices of our Class A common stock, we may have a significant cash tax liability to cover withholding obligations upon vesting of awards under our Equity Incentive Plan with approximately 3,300,000 shares expected to vest over the next twelve months and an estimated blended tax withholding rate of 45%.

We expect to withhold shares based on historical elections by participants under the terms of the plan, equivalent to the cash tax

requirements for federal, state and local withholdings, pay the required tax obligation and return the withheld shares to the Equity Incentive Plan.

Depending on the trading prices of our Class A common stock, we may have a significant cash tax liability to cover withholding obligations upon vesting of awards under our Equity Incentive Plan with approximately 4,881,000 shares expected to vest over the next six months and an estimated blended tax withholding rate of 45%.

We expect to withhold shares based on historical elections by participants under the terms of the plan, equivalent to the cash tax requirements for federal, state and local withholdings, pay the required tax obligation and return the withheld shares to the Equity Incentive Plan.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis