What changed in this filing

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Item 1. Financial Statements

2022-11-08 compared with 2022-08-04 · 347 added, 259 removed, 763 unchanged (44% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In millions, except share and per share amounts)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Food and beverage

17 unchanged sentences

Non-cash NCM exhibitor services agreement

Equity in loss of non-consolidated entities

Equity in (earnings) loss of non-consolidated entities

Investment expense (income)

4 unchanged sentences

Net loss attributable to AMC Entertainment Holdings, Inc.

Net loss per share attributable to AMC Entertainment Holdings, Inc.'s common stockholders:

Net loss per share:

Average shares outstanding:

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Other comprehensive income (loss):

11 unchanged sentences

(In millions, except share data)

June 30, 2022

September 30, 2022

December 31, 2021

29 unchanged sentences

AMC Entertainment Holdings, Inc.'s stockholders' deficit:

Preferred stock, $ .01 par value per share, 50,000,000 shares authorized;

including Series A Convertible Participating Preferred Stock, 10,000,000 authorized, 5,195,206 issued and outstanding as of September 30, 2022;

5,139,791 issued and outstanding as of December 31, 2021, represented by AMC Preferred Equity Units, each representing a 1/100th interest in a share of Series A Convertible Participating Preferred Stock, of which 1,000,000,000 is authorized;

519,520,595 issued and outstanding as of September 30, 2022;

513,979,100 issued and outstanding as of December 31, 2021

Class A common stock ($ .01 par value, 524,173,073 shares authorized;

516,820,595 shares issued and outstanding as of June 30, 2022;

516,820,595 shares issued and outstanding as of September 30, 2022;

513,979,100 shares issued and outstanding as of December 31, 2021)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

Cash flows from operating activities:

3 unchanged sentences

Loss on extinguishment of debt

Unrealized gain on investments in Hycroft

Unrealized loss (gain) on investments in NCM

Unrealized loss on investments in Hycroft

Unrealized loss on investments in NCM

Amortization of net discount (premium) on corporate borrowings to interest expense

2 unchanged sentences

Non-cash portion of stock-based compensation

Gain on disposition of assets

Loss on disposition of assets

Gain on disposition of Baltics

Loss on dispositions

Equity in loss from non-consolidated entities, net of distributions

30 unchanged sentences

Net proceeds from Class A common stock issuance to Mudrick

Net proceeds from AMC Preferred Equity Units issuance

Payments related to sale of noncontrolling interest

15 unchanged sentences

Construction payables at period end

AMC Preferred Equity Units issuance costs payable at period end

See Notes to Condensed Consolidated Financial Statements.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2022

September 30, 2022

NOTE 1—BASIS OF PRESENTATION

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Temporarily suspended or limited operations.

Total consolidated revenues increased $ 1,359.1 million for the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Total consolidated revenues increased $ 1,564.3 million for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

The increase in total consolidated revenues was primarily due to the reduced impact of the COVID-19 pandemic on the current year which resulted in increased operating capacity and increased availability of films with broad consumer appeal.

As of January 1, 2021 the Company operated at 394 domestic theatres, with limited seating capacities, representing approximately 67 % of its domestic theatres.

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

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

As of January 1, 2021, the Company operated at 109 International leased and partnership theatres, with limited seating capacities, representing approximately 30 % of our International theatres.

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

As of June 30, 2021, the Company operated at 335 international theatres, with limited seating capacities, representing approximately 95 % of its international theatres.

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

During the six months ended June 30, 2022, the Company operated essentially 100 % of its U.S.

The following table summarizes theatre operations for the Company in 2021:

September 30,

Theatre Operations:

Percentage of theatres operated - Domestic

Percentage of theatres operated - International

Percentage of theatres operated - Consolidated

During the nine months ended September 30, 2022, the Company operated essentially 100 % of its U.S.

and International theatres.

As of June 30, 2022 there are no restrictions on operations in any of the U.S.

As of September 30, 2022 there are no restrictions on operations in any of the U.S.

or International theatres.

As of June 30, 2022, the Company has cash and cash equivalents of approximately $ 965.2 million.

As of September 30, 2022, the Company has cash and cash equivalents of approximately $ 684.6 million.

In response to the COVID-19 pandemic, the Company adjusted certain elements of its business strategy and took significant steps to preserve cash.

The Company is continuing to take measures to further strengthen its financial position and enhance its operations, by minimizing non-essential costs, including reductions to its variable costs and elements of its fixed cost structure, introducing new initiatives, and optimizing its theatrical footprint.

Additionally, the Company enhanced future liquidity through debt refinancing at lower interest rates and repurchasing debt at 69 % of par value.

See Note 6 — Corporate Borrowings and Finance Lease Obligations for further information.

The Company continues to take measures to further strengthen its financial position and enhance its operations by minimizing non-essential costs, including reductions to its variable costs and elements of its fixed cost structure, introducing new initiatives, and optimizing its theatrical footprint.

Additionally, the Company enhanced future liquidity through debt refinancing that extended maturities and repurchased debt at 69 % of par value.

See Note 6 — Corporate Borrowings and Finance Lease Liabilities and Note 13—Subsequent Events for further information.

The table below summarizes net increase (decrease) in cash and cash equivalents and restricted cash by quarter for the year ended December 31, 2021:

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The Company’s net cash used in operating activities improved by $ 79.1 million during the three months ended June 30, 2021 compared to the three months ended March 31, 2021, $ 119.9 million during the three months ended September 30, 2021 compared to the three months ended June 30, 2021, and $ 160.4 million during the three months ended December 31, 2021 compared to the three months ended September 30, 2021.

The table below summarizes net decrease in cash equivalents and restricted cash by quarter for the six months ended June 30, 2022:

The table below summarizes net decrease in cash equivalents and restricted cash by quarter for the nine months ended September 30, 2022:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

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Cash flows from financing activities:

Net cash used in financing activities

Net cash provided by (used in) financing activities

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

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The Company’s net cash used in operating activities improved by $ 218.4 million during the three months ended June 30, 2022 compared to the three months ended March 31, 2022 from $( 295.0 ) million to $( 76.6 ) million.

The improvement in net cash used in operating activities from the three months ended March 31, 2022 to the three months ended June 30, 2022 was primarily attributable to an increase in attendance and decrease in net loss and decreases in seasonal working capital uses as we will pay for the strong second quarter 2022 results in early third quarter of 2022.

The improvement in net cash used in operating activities from the three months ended March 31, 2022 to the three months ended June 30, 2022 was primarily attributable to an increase in attendance and decrease in net loss and decreases in seasonal working capital uses as the Company paid for the strong second quarter 2022 results in early third quarter of 2022.

The Company’s net cash used in operating activities deteriorated by $( 147.0 ) million during the three months ended September 30, 2022 compared to the three months ended June 30, 2022 from $( 76.6 ) million to $( 223.6 ) million.

The deterioration in net cash provided by operating activities from the three months ended June 30, 2022 to the three months ended September 30, 2022 was primarily attributable to a decrease in attendance and increase in net loss and increases in seasonal working capital uses as the Company paid for the second quarter 2022 expenses in the third quarter of 2022.

The Company has also continued to repay rent amounts that were deferred during the COVID-19 pandemic, which increases its cash outflows from operating activities.

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● $ 40.4 million of capital expenditures, $ 17.8 million for the acquisition of theatres, partially offset by proceeds of $ 11.4 million from the sale of securities in conjunction with the liquidation of a non-qualified deferred compensation plan during the three months ended June 30, 2022.

● $ 54.5 million of capital expenditures, partially offset by proceeds from the disposition of long-term assets of $ 3.6 million during the three months ended September 30, 2022.

The Company’s net cash used in financing activities included:

● $ 955.7 million of principal and premium payments of, $ 52.2 million of taxes paid for restricted unit withholdings, and $ 17.7 million of cash used to pay for deferred financing costs, partially offset by proceeds from the Company’s debt issuance of $ 950.0 million, during the three months ended March 31, 2022.

● $ 57.9 million of principal and premium payments, $ 1.8 million of cash used to pay for deferred financing costs during the three months ended June 30, 2022.

The Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations, satisfy its obligations, including cash outflows to repay rent amounts that were deferred during the COVID-19 pandemic and planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under its 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, the Company believes that box office revenues will need to increase significantly compared to 2021 and the combined first and second quarter of 2022 to levels in line with pre COVID-19 box office revenues.

● $ 955.7 million of principal and premium payments, $ 52.2 million of taxes paid for restricted unit withholdings, and $ 17.7 million of cash used to pay for deferred financing costs, partially offset by proceeds from the Company’s debt issuance of $ 950.0 million, during the three months ended March 31, 2022.

● $ 57.9 million of principal and premium payments, $ 1.1 million of cash used to pay for deferred financing costs, and $ 0.7 million of AMC Preferred Equity Unit issuance costs during the three months ended June 30, 2022.

● $ 7.4 million of principal payments and $ 0.5 million of cash used to pay deferred financing costs, partially offset by $ 8.5 million of net proceeds from AMC Preferred Equity Units issuance during the three months ended September 30, 2022.

In order to achieve net positive operating cash flows and long-term profitability, the Company believes that box office revenues will need to increase significantly compared to 2021 and the combined first, second, and third quarter of 2022 to levels in line with pre COVID-19 box office revenues.

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.

The Company believes that recent attendance levels are positive signs of continued demand for the moviegoing experience.

For the six months ended June 30, 2022 attendance was 98.2 million patrons, a 69.3 million patron increase from the approximately 28.9 million patrons for the six months ended June 30, 2021.

For the nine months ended September 30, 2022 attendance was 151.4 million patrons, an 82.5 million patron increase from the approximately 68.9 million patrons for the nine months ended September 30, 2021.

However, these attendance levels are still significantly below pre COVID-19 levels.

The Company’s business is seasonal, with higher attendance and revenues generally occurring during the summer months and holiday seasons.

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

The Company’s cash resources and needs will

continue to be impacted during the fourth quarter by interest payments, deferred rent payments and the cash used in part to repay in full the Odeon Term Loan Facility.

If anticipated levels of attendance during the fourth quarter holiday season and beyond do not materialize, the rate of cash burn will be higher than expected.

Moreover, it is difficult to predict future attendance levels and there remain significant risks that may negatively impact attendance, including a potential resurgence of COVID-19 related restrictions, potential movie-goer reluctance to attend theatres due to concerns about COVID-19 variant strains, movie studios release schedules, the production and theatrical release of fewer films compared to levels before the onset of the COVID-19 pandemic, and direct to streaming or other changing movie studio practices.

The Company currently estimates that its existing cash and cash equivalents will be sufficient to comply with minimum liquidity and financial covenant requirements under its debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility, currently and through the next twelve months.

The Company entered the Ninth Amendment to the Credit Agreement, dated as of March 8, 2021, pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant (the secured leverage ratio) applicable to the Senior Secured Revolving Credit Facility from March 31, 2021 to March 31, 2022, which was further extended from March 31, 2022 to March 31, 2023 by the Eleventh Amendment, dated as of December 20, 2021, as described, and on the terms and conditions specified, therein.

The Company is currently subject to minimum liquidity requirements of approximately $ 139.5 million, of which $ 100 million is required under the conditions for the Extended Covenant Suspension Period, as amended, under the Senior Secured Revolving Credit Facility, and £ 32.5 million (approximately $ 39.5 million) of which is required under the Odeon Term Loan Facility.

which the aggregate principal amount of revolving loans and letters of credit (excluding letters of credit that are cash collateralized) in excess of $ 25 million outstanding under the Senior Secured Revolving Credit Facility exceeds 35 % of the principal amount of commitments under the Senior Secured Revolving Credit facility then in effect, beginning with the quarter ending June 30, 2023.

As of September 30, 2022, the Company was subject to minimum liquidity requirements of approximately $ 136.2 million, of which $ 100 million is required under the conditions for the Extended Covenant Suspension Period, as amended, under the Senior Secured Revolving Credit Facility, and £ 32.5 million (approximately $ 36.2 million) of which is required under the Odeon Term Loan Facility.

The Company was released from the Odeon Term Loan Facility minimum liquidity requirement on October 20, 2022, following the complete repayment of the loan.

There is no minimum liquidity requirement with the new Odeon Notes due 2027.

See Note 13—Subsequent Events for more information.

The Company currently expects it will be able to comply with this financial covenant;

however, the Company does not anticipate the need to borrow under the Senior Secured Revolving Credit Facility during the next twelve months.

The 11.25 % Odeon Term Loan due 2023 matures on August 19, 2023 during the third fiscal quarter of the Company’s next calendar year.

The Company is currently negotiating terms of new debt intended to refinance the existing £ 147.6 million and € 312.2 million aggregate principal amounts of Odeon Term Loan due 2023.

While the Company intends to fully refinance the 11.25 % Odeon Term Loan due 2023 and extend current maturity dates, there are no assurances that the Company will be able to do so.

If the Company is unable to refinance these amounts, the principal amounts will be reported as current maturities which may increase uncertainty regarding its ability to meet future commitments.

however, the Company’s ability to comply will depend on projected increased levels of theatre attendance.

The 11.25 % Odeon Term Loan Facility due 2023 (“Odeon Term Loan Facility”) was to mature on August 19, 2023, during the third fiscal quarter of the Company’s next calendar year.

On October 20, 2022, the Company completely repaid the Odeon Term Loan Facility using existing cash and $ 363.0 million net proceeds from the issuance of new senior secured notes.

Accordingly, the Company has classified $ 363.0 million of the Odeon Term Loan Facility as a long-term liability in the condensed consolidated balance sheets.

The remaining $ 108.1 million of principal has been classified as a current liability.

See Note 13—Subsequent Events for more information.

The Company may, at any time and from time to time, seek to retire or purchase its outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.

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

As a result, deferred lease amounts were approximately $ 218.9 million as of June 30, 2022.

The Company’s cash expenditures for rent increased significantly during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

See Note 2—Leases for a summary of the estimated future repayment terms for the deferred lease amounts due to COVID-19.

As a result, deferred lease amounts were approximately $ 195.8 million as of September 30, 2022.

Including repayments of deferred lease amounts, the Company’s cash expenditures for rent increased significantly during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

See Note 2—Leases for a summary of the estimated future repayment terms for the deferred lease amounts due to COVID-19 and also a summary of the estimated future repayment terms for the minimum operating lease and finance lease amounts.

AMC Preferred Equity Units.

On August 4, 2022, the Company announced that its Board of Directors declared a special dividend of one AMC Preferred Equity Unit (an “AMC Preferred Equity Unit”) for each share of Class A common stock outstanding at the close of business on August 15, 2022, the record date.

The dividend was paid at the close of business on August 19, 2022 to investors who held Class A common stock as of August 22, 2022, the ex-dividend date.

Each AMC Preferred Equity Unit is a depositary share and represents an interest in one one-hundredth (1/100th) of a share of Series A Convertible Participating Preferred Stock evidenced by a depositary receipt pursuant to a deposit agreement.

The Company has 50,000,000 Preferred Stock shares authorized, 10,000,000 of which have currently

been allocated and 5,195,206 have been issued under the depositary agreement as Series A Convertible Participating Preferred Stock, leaving 40,000,000 unallocated Preferred Stock shares.

Each AMC Preferred Equity Unit is designed to have the same economic and voting rights as a share of Class A common stock.

Trading of the AMC Preferred Equity Units on the New York Stock Exchange (the “NYSE”) began on August 22, 2022 under the ticker symbol “APE”.

Due to the characteristics of the AMC Preferred Equity Units, the special dividend had the effect of a stock split pursuant to ASC 505-20-25-4.

Accordingly, all references made to share, per share, or common share amounts in the accompanying consolidated financial statements and applicable disclosures include Class A common stock and AMC Preferred Equity Units and have been retroactively adjusted to reflect the effects of the special dividend as a stock split.

See Note 7—Stockholders’ Equity and Note 12—Loss Per Share.

Use of estimates.

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All significant intercompany balances and transactions have been eliminated in consolidation.

Due to the seasonal nature of the Company’s business and the recovery of the industry from the global COVID-19 pandemic, results for the six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022.

Due to the seasonal nature of the Company’s business and the recovery of the industry from the global COVID-19 pandemic, results for the nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022.

The Company manages its business under two reportable segments for its theatrical exhibition operations, U.S.

1 unchanged sentence

Cash and equivalents.

At June 30, 2022, cash and cash equivalents for the U.S.

At September 30, 2022, cash and cash equivalents for the U.S.

markets and International markets were $ 583.5 million and $ 101.1 million respectively, and at December 31, 2021, cash and cash equivalents were $ 1,311.4 million and $ 281.1 million, respectively.

7 unchanged sentences

Other comprehensive income (loss)

Balance June 30, 2022

Balance September 30, 2022

Accumulated depreciation and amortization.

Accumulated depreciation was $ 2,680.0 million and $ 2,583.4 million at June 30, 2022 and December 31, 2021, respectively, related to property.

Accumulated amortization of intangible assets was $ 42.0 million and $ 41.2 million at June 30, 2022 and December 31, 2021, respectively.

Accumulated depreciation was $ 2,716.4 million and $ 2,583.4 million at September 30, 2022 and December 31, 2021, respectively, related to property.

Accumulated amortization of intangible assets was $ 42.1 million and $ 41.2 million at September 30, 2022 and December 31, 2021, respectively.

Other expense (income).

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Decreases related to contingent lease guarantees

3 unchanged sentences

Non-operating components of net periodic benefit income

(Gain) Loss on extinguishment of debt

Loss on extinguishment of debt

Financing fees related to modification of debt agreements

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Lease terms vary but generally the leases provide for fixed and escalating rentals, contingent escalating rentals based on the Consumer Price Index and other indexes not to exceed certain specified amounts and variable rentals based on a percentage of revenues.

The Company often receives

contributions from landlords for renovations at existing locations.

The Company often receives contributions from landlords for renovations at existing locations.

The Company records the amounts received from landlords as an adjustment to the right-of-use asset and amortizes the balance as a reduction to rent expense over the base term of the lease agreement.

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A summary of deferred payment amounts related to rent obligations for which payments were deferred to future periods are provided below:

September 30,

(In millions)

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Total deferred lease amounts

(1) During the six months ended June 30, 2022, the decrease in fixed operating lease deferred amounts includes $ 79.4 million of decreases in the deferred balances as of December 31, 2021 related to payments and abatements.

(1) During the nine months ended September 30, 2022, the decrease in fixed operating lease deferred amounts includes $ 114.7 million of decreases in the deferred balances as of December 31, 2021 related to payments and abatements.

The following table reflects the lease costs for the periods presented:

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

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Cash flow and supplemental information is presented below:

Six Months Ended

Nine Months Ended

September 30,

(In millions)

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(1) Includes lease extensions and option exercises.

The following table represents the weighted-average remaining lease term and discount rate as of June 30, 2022:

As of June 30, 2022

The following table represents the weighted-average remaining lease term and discount rate as of September 30, 2022:

As of September 30, 2022

Weighted Average

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Finance leases

Minimum annual payments, including deferred lease payments less contractual rent amounts due and not paid that were recorded in accounts payable, that are recorded as operating and finance lease liabilities and the net present value thereof as of June 30, 2022 are as follows:

Operating Lease

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(In millions)

Six months ending December 31, 2022 (1)

Three months ending December 31, 2022 (1)

Total lease payments

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Lease Payments

Three months ended September 30, 2022

Three months ended December 31, 2022

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(In millions)

Three months ended September 30, 2022

Three months ended December 31, 2022

Total deferred lease amounts

As of June 30, 2022, the Company had signed additional operating lease agreements for three theatres that have not yet commenced with minimum annual payments of approximately $ 68.9 million, which are expected to commence between years 2022 and 2024 and carry lease terms ranging from 11 to 20 years .

As of September 30, 2022, the Company had signed additional operating lease agreements for three theatres that have not yet commenced with minimum annual payments of approximately $ 64.6 million, which are expected to commence between years 2022 and 2024 and carry lease terms ranging from 11 to 20 years .

The timing of lease commencement is dependent on the landlord providing the Company with control and access to the related facility.

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Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Major revenue types

5 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Timing of revenue recognition

5 unchanged sentences

(In millions)

June 30, 2022

September 30, 2022

December 31, 2021

4 unchanged sentences

(In millions)

June 30, 2022

September 30, 2022

December 31, 2021

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Foreign currency translation adjustment

Balance June 30, 2022

Balance September 30, 2022

(1) Includes movie tickets, food and beverage, gift cards, exchange tickets, and AMC Stubs® loyalty membership fees.

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Reclassification of portion of the beginning balance to other theatre revenue, as the result of performance obligations satisfied

Balance June 30, 2022

Balance September 30, 2022

(1) Represents the carrying amount of the National CineMedia, LLC (“NCM”) common units that were previously received under the annual Common Unit Adjustment (“CUA”).

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Gift cards and exchange tickets.

The total amount of non-redeemed gift cards and exchange tickets included in deferred revenues and income in the condensed consolidated balance sheet as of June 30, 2022 was $ 274.0 million.

The total amount of non-redeemed gift cards and exchange tickets included in deferred revenues and income in the condensed consolidated balance sheet as of September 30, 2022 was $ 261.3 million.

This will be recognized as revenues as the gift cards and exchange tickets are redeemed or as the non-redeemed gift card and exchange ticket revenues are recognized in proportion to the pattern of actual redemptions, which is estimated to occur over the next 24 months .

Loyalty programs.

As of June 30, 2022, the amount of deferred revenues allocated to the loyalty programs included in deferred revenues and income in the condensed consolidated balance sheet was $ 66.7 million.

As of September 30, 2022, the amount of deferred revenues allocated to the loyalty programs included in deferred revenues and income in the condensed consolidated balance sheet was $ 66.5 million.

The earned points will be recognized as revenue as the points are redeemed, which is estimated to occur over the next 24 months .

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NOTE 4—GOODWILL

The following table summarizes the changes in goodwill by reporting unit for the six months ended June 30, 2022:

The following table summarizes the changes in goodwill by reporting unit for the nine months ended September 30, 2022:

(In millions)

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Currency translation adjustment

Balance June 30, 2022

Balance September 30, 2022

NOTE 5—INVESTMENTS

Investments in non-consolidated affiliates and certain other investments accounted for under the equity method generally include all entities in which the Company or its subsidiaries have significant influence, but not more than 50% voting control, and are recorded in the condensed consolidated balance sheets in other long-term assets.

Investments in non-consolidated affiliates as of June 30, 2022 include interests in Digital Cinema Implementation Partners, LLC (“DCIP”) of 29.0 %, Digital Cinema Distribution Coalition, LLC (“DCDC”) of 14.6 %, AC JV, LLC (“AC JV”), owner of Fathom Events, of 32.0 %, SV Holdco LLC (“SV Holdco”), owner of Screenvision, of 18.4 %, Digital Cinema Media Ltd.

Investments in non-consolidated affiliates as of September 30, 2022 include interests in Digital Cinema Distribution Coalition, LLC (“DCDC”) of 14.6 %, AC JV, LLC (“AC JV”), owner of Fathom Events, of 32.0 %, SV Holdco LLC (“SV Holdco”), owner of Screenvision, of 18.4 %, Digital Cinema Media Ltd.

(“DCM”) of 50.0 %, and Saudi Cinema Company LLC (“SCC”) of 10.0 %.

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Indebtedness held by equity method investees is non-recourse to the Company.

During the three months ended June 30, 2022 and June 30, 2021, the Company recorded equity in loss of non-consolidated entities of $ 1.0 million and $ 2.7 million, respectively.

During the six months ended June 30, 2022 and June 30, 2021, the Company recorded equity in loss of non-consolidated entities of $ 6.1 million and $ 5.5 million, respectively.

During the three months ended September 30, 2022 and September 30, 2021, the Company recorded equity in (earnings) loss of non-consolidated entities of $( 2.8 ) million and $( 6.7 ) million, respectively.

During the nine months ended September 30, 2022 and September 30, 2021, the Company recorded equity in (earnings) loss of non-consolidated entities of $ 3.3 million and $( 1.2 ) million, respectively.

Related party transactions with equity method investees.

At June 30, 2022 and December 31, 2021, the Company recorded net receivable amounts due from equity method investees of $ 5.5 million and $ 2.6 million, respectively, primarily related to on-screen advertising revenue, projector warranty expenditures and other transactions.

The Company recorded related party transactions with equity method investees in other revenues, film exhibition costs, and operating expenses (income) of $ 6.5 million, $ 2.3 million and $ 0 million, respectively, during the three months ended June 30, 2022, and $ 1.2 million, $ 0.4 million, and $( 0.3 ) million, respectively, during the three months ended June 30, 2021.

The Company recorded related party transactions with equity method investees in other revenues, film exhibition costs, and operating expenses of $ 12.0 million, $ 3.4 million, and $ 0 million, respectively, during the six months ended June 30, 2022, and $ 1.8 million, $ 0.7 million, and $ 0.1 million, respectively, during the six months ended June 30, 2021.

At September 30, 2022 and December 31, 2021, the Company recorded net receivable amounts due from equity method investees of $ 1.0 million and $ 2.6 million, respectively, primarily related to on-screen advertising revenue, projector warranty expenditures and other transactions.

The Company recorded related party transactions with equity method investees in other revenues, film exhibition costs, and operating expenses (income) of $ 4.3 million, $ 3.1 million and $ 0 million, respectively, during the three months ended September 30, 2022, and $ 2.8 million, $ 1.4 million, and $ 0 million, respectively, during the three months ended September 30, 2021.

The Company recorded related party transactions with equity method investees in other revenues, film exhibition costs, and operating expenses of $ 16.3 million, $ 6.5 million, and $ 0 million, respectively, during the nine months ended September 30, 2022, and $ 4.6 million, $ 2.1 million, and $ 0.1 million, respectively, during the nine months ended September 30, 2021.

Investment in Hycroft

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The Company believes the fair value option to be the most appropriate election for this equity method investment as the Company is not entering the mining business.

During the three and six months ended June 30, 2022, the Company recorded unrealized (losses) and gains in investment income of $( 47.8 ) million and $ 16.1 million, respectively.

See Note 9 — Fair Value Measurements for fair value information and Note 13 — Supplemental Balance Sheet Information for the asset value for investments in Hycroft measured under the fair value option as well as the total asset value for other equity method investments.

During the three and nine months ended September 30, 2022, the Company recorded unrealized losses in investment income of $ 19.5 million and $ 3.4 million, respectively.

See Note 9 — Fair Value Measurements for fair value information and the asset value for investments in Hycroft measured under the fair value option as well as the total asset value for other equity method investments.

NCM Transaction

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(“NCM, Inc.”) of $ 2.52 on March 30, 2022.

During the three and six months ended June 30, 2022, the Company recorded unrealized losses in investment expense of $ 9.6 million and $ 9.5 million, respectively.

See Note 9 — Fair Value Measurements for information regarding the fair value measurement on June 30, 2022.

NOTE 6—CORPORATE BORROWINGS AND FINANCE LEASE OBLIGATIONS

A summary of the carrying value of corporate borrowings and finance lease obligations is as follows:

During the three and nine months ended September 30, 2022, the Company recorded unrealized losses in investment expense of $ 1.6 million and $ 11.1 million, respectively.

See Note 9 — Fair Value Measurements for information regarding the fair value measurement on September 30, 2022.

NOTE 6—CORPORATE BORROWINGS AND FINANCE LEASE LIABILITIES

A summary of the carrying value of corporate borrowings and finance lease liabilities is as follows:

(In millions)

June 30, 2022

September 30, 2022

December 31, 2021

First Lien Secured Debt:

Senior Secured Credit Facility-Term Loan due 2026 ( 4.199 % as of June 30, 2022)

10.75 % in Year 1, 11.25 % thereafter Cash/PIK Odeon Term Loan Facility due 2023 (£ 147.6 million and € 312.2 million par value as of June 30, 2022)

Senior Secured Credit Facility-Term Loan due 2026 ( 5.756 % as of September 30, 2022 and 3.103 % as of December 31, 2021)

10.75 % in Year 1, 11.25 % thereafter Cash/PIK Odeon Term Loan Facility due 2023 (£ 147.6 million and € 312.2 million par value as of September 30, 2022)

7.5 % First Lien Notes due 2029

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Subordinated Debt:

6.375 % Senior Subordinated Notes due 2024 (£ 4.0 million par value as of June 30, 2022)

6.375 % Senior Subordinated Notes due 2024 (£ 4.0 million par value as of September 30, 2022)

5.75 % Senior Subordinated Notes due 2025

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6.125 % Senior Subordinated Notes due 2027

Finance lease obligations

Total principal amount of corporate borrowings

Finance lease liabilities

Deferred financing costs

Net premium (1)

Total carrying value of corporate borrowings and finance lease liabilities

Current maturities corporate borrowings

Current maturities finance lease obligations

Current maturities finance lease liabilities

Total noncurrent carrying value of corporate borrowings and finance lease liabilities

(1) The following table provides the net premium (discount) amounts of corporate borrowings:

September 30,

(In millions)

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6.375 % Senior Subordinated Notes due 2024

The following table provides the principal payments required and maturities of corporate borrowing as of June 30, 2022:

The following table provides the principal payments required and maturities of corporate borrowing as of September 30, 2022:

(In millions)

Six months ended December 31, 2022

Three months ended December 31, 2022

(1) $ 108.1 million principal of the Odeon Term Loan Facility is included in 2023 maturities and the remaining $ 363.0 million is included in 2027.

The Odeon Term Loan Facility was refinanced on October 20 th 2022.

See Note 13 – Subsequent Events for more information

First Lien Notes due 2029

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The Company used the net proceeds from the sale of the notes, and cash on hand, to fund the full redemption of the then outstanding $ 500 million aggregate principal amount of the Company’s 10.5 % First Lien Notes due 2025 (“First Lien Notes due 2025”), the then outstanding $ 300 million aggregate principal amount of the Company’s 10.5 % First Lien Notes due 2026 (“First Lien Notes due 2026”), and the then outstanding $ 73.5 million aggregate principal amount of the Company’s 15 %/ 17 % Cash/PIK Toggle First Lien Secured Notes due 2026 (“First Lien Toggle Notes due 2026”) and to pay related accrued interest, fees, costs, premiums and expenses.

The Company recorded a loss on debt extinguishment related to this transaction of $ 0 million and $ 135.0 million, respectively, in other expense, during the three and six months ended June 30, 2022.

The Company recorded a loss on debt extinguishment related to this transaction of $ 135.0 million in other expense, during nine months ended September 30, 2022.

The deferred charges will be amortized to interest expense over the term of the First Lien Notes due 2029 using the effective interest method.

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(ii) 101.875 % for the twelve-month period beginning on February 15, 2026, and (iii) 100.0 % at any time thereafter, plus accrued and unpaid interest.

In addition, the Company may redeem up to 35 % of the aggregate principal amount of the First Lien Notes due 2029 using net proceeds from certain equity offerings completed prior to February 15, 2025 at a redemption price equal to 107.5 % of their aggregate principal amount and accrued and unpaid interest to, but not including the date of redemption.

their aggregate principal amount and accrued and unpaid interest to, but not including the date of redemption.

The Company may redeem some or all of the First Lien Notes due 2029 at any time prior to February 15, 2025 at a redemption price equal to 100 % of their aggregate principal amount and accrued and unpaid interest to, but not including, the date of redemption, plus an applicable make-whole premium.

Upon a Change of Control (as defined in the

indenture governing the First Lien Notes due 2029), the Company must offer to purchase the First Lien Notes due 2029 at a purchase price equal to 101 % of the principal amounts, plus accrued and unpaid interest.

Upon a Change of Control (as defined in the indenture governing the First Lien Notes due 2029), the Company must offer to purchase the First Lien Notes due 2029 at a purchase price equal to 101 % of the principal amounts, plus accrued and unpaid interest.

The First Lien Notes due 2029 are general senior secured obligations of the Company and are fully and unconditionally guaranteed on a joint and several senior secured basis by all of the Company’s existing and future subsidiaries that guarantee the Company’s other indebtedness, including the Company’s Senior Secured Credit Facilities under the credit agreement dated as of April 30, 2013 (as amended through the Eleventh Amendment thereto dated December 20, 2021).

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Second Lien Notes due 2026

During the three months ended June 30, 2022, the Company repurchased $ 72.5 million aggregate principal amounts of the Second Lien Notes due 2026 for $ 50.0 million and recorded a gain on extinguishment of $ 38.6 million in other expense (income).

During the nine months ended September 30, 2022, the Company repurchased $ 72.5 million aggregate principal amounts of the Second Lien Notes due 2026 for $ 50.0 million and recorded a gain on extinguishment of $ 38.6 million in other expense (income).

Accrued interest of $ 3.1 million was paid in connection with the repurchases.

Odeon Term Loan due 2023

The 11.25 % Odeon Term Loan due 2023 matures on August 19, 2023 during the third fiscal quarter of the Company’s next calendar year.

The Company is currently negotiating terms of new debt intended to refinance the existing £ 147.6 million and € 312.2 million aggregate principal amounts of Odeon Term Loan due 2023.

While the Company intends to fully refinance the 11.25 % Odeon Term Loan due 2023 and extend current maturity dates, there are no assurances that the Company will be able to do so.

If the Company is unable to refinance these amounts, the principal amounts will be reported as current maturities which may increase uncertainty regarding its ability to meet future commitments.

Odeon Term Loan Facility due 2023

The 11.25 % Odeon Term Loan Facility due 2023 (“Odeon Term Loan Facility”) was to mature on August 19, 2023 during the third fiscal quarter of the Company’s next calendar year.

On October 20, 2022 the Company completely repaid the Odeon Term Loan Facility using existing cash and $ 363.0 million net proceeds from the issuance of new senior secured notes.

Accordingly, the Company has classified $ 363.0 million of the Odeon Term Loan Facility as a long-term liability in the condensed consolidated balance sheets.

The remaining $ 108.1 million of principal has been classified as a current liability.

See Note 13—Subsequent Events for more information.

Financial Covenants

Following the expiration of the Extended Covenant Suspension Period ending March 31, 2023, the Company will be subject to the financial covenant under the Senior Secured Revolving Credit Facility as of the last day of each quarter on which the aggregate principal amount of revolving loans and letters of credit (excluding letters of credit that are cash collateralized) in excess of $ 25 million outstanding under the Senior Secured Revolving Credit Facility exceeds 35 % of the principal amount of commitments under the Senior Secured Revolving Credit Facility then in effect, beginning with the quarter

ending June 30, 2023.

As of September 30, 2022 the Company was subject to minimum liquidity requirements of approximately $ 136.2 million, of which $ 100 million is required under the conditions for the Extended Covenant Suspension Period, as amended, under the Senior Secured Revolving Credit Facility, and £ 32.5 million (approximately $ 36.2 million) of which is required under the Odeon Term Loan Facility.

The Company was released from the Odeon Term Loan Facility minimum liquidity requirement on October 20, 2022 following the complete repayment of the loan.

There is no minimum liquidity requirement with the new Odeon Notes due 2027.

See Note 13—Subsequent Events for more information.

The Company currently expects it will be able to comply with this financial covenant;

however, the Company does not anticipate the need to borrow under the Senior Secured Revolving Credit Facility during the next twelve months.

however, the Company’s ability to comply will depend on projected increased levels of theatre attendance.

NOTE 7—STOCKHOLDERS’ EQUITY

AMC Preferred Equity Units

On August 4, 2022, the Company announced that its Board of Directors declared a special dividend of one AMC Preferred Equity Unit for each share of Class A common stock outstanding at the close of business on August 15, 2022, the record date.

The dividend was paid at the close of business on August 19, 2022 to investors who held Class A common stock as of August 22, 2022, the ex-dividend date.

The Company has 50,000,000 Preferred Stock shares authorized, 10,000,000 of which have currently been allocated and 5,195,206 have been issued under the depositary agreement as Series A Convertible Participating Preferred Stock, leaving 40,000,000 unallocated Preferred Stock shares.

Each AMC Preferred Equity Unit is designed to have the same economic and voting rights as a share of Class A common stock.

Trading of the AMC Preferred Equity Units on the NYSE began on August 22, 2022 under the ticker symbol “APE”.

Due to the characteristics of the AMC Preferred Equity Units, the special dividend had the effect of a stock split pursuant to ASC 505-20-25-4.

Equity Distribution Agreement

On September 26, 2022, the Company entered into an equity distribution agreement (the “Equity Distribution Agreement) with Citigroup Global Markets Inc., as a sales agent (“Sales Agent”), to sell up to 425.0 million shares of the Company’s AMC Preferred Equity Units, from time to time, through an “at-the-market” offering program (the “Offering”).

Subject to the terms and conditions of the Equity Distribution Agreement, the Sales Agent will use reasonable efforts consistent with their normal trading and sales practices, applicable law and regulations, and the rules of the NYSE to sell the AMC Preferred Equity Units from time to time based upon the Company’s instructions for the sales, including any price, time or size limits specified by the Company.

The Company intends to use the net proceeds, from the sale of AMC Preferred Equity Units pursuant to the Equity Distribution Agreement to repay, refinance, redeem or repurchase the Company’s existing indebtedness (including expenses, accrued interest and premium, if any) and otherwise for general corporate purposes.

During the three months ended September 30, 2022 the Company raised gross proceeds of approximately $ 9.3 million and paid fees to the Sales Agent and incurred other third-party issuance costs of approximately $ 0.2 million and $ 4.8 million, respectively through its at-the-market offering of approximately 2.7 million shares of its AMC Preferred Equity Units.

See Note 13—Subsequent Events for further information regarding at-the-market offerings.

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

Board of director stock award expense

Board of directors stock award expense

Restricted stock unit expense

2 unchanged sentences

Total stock-based compensation expense

As of June 30, 2022, the estimated remaining unrecognized compensation cost related to stock-based compensation arrangements was approximately $ 50.6 million, which reflects assumptions related to attainment of performance targets based on the scales as described below.

As of September 30, 2022, the estimated remaining unrecognized compensation cost related to stock-based compensation arrangements was approximately $ 23.7 million, which reflects assumptions related to attainment of performance targets based on the scales as described below.

The weighted average period over which this remaining compensation expense is expected to be recognized is approximately 1.1 years.

Plan Amendment due to stock split

The 2013 Plan contemplates equitable adjustments for certain transactions such as a stock split.

On August 19, 2022 the Compensation Committee approved an adjustment to the 2013 Equity Incentive Plan to entitle each participant one AMC Preferred Equity Unit and one share of Common Stock for each RSU or PSU that vests.

If the performance targets of the PSUs are met at 100 %, the amendment to the plan would result in 5,124,782 potential AMC Preferred Equity Units being delivered to participants upon vesting.

The Company determined that this modification was a Type 1 (probable-to-probable) modification that did not increase the fair value of the award and therefore did not require additional stock-based compensation expense to be recognized.

References made to share, per share, or common share amounts have been retroactively adjusted to reflect the effects of the stock split.

Awards Granted in 2022

During the six months ended June 30, 2022, AMC’s Board of Directors approved awards of stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan.

The grant date fair value of these awards during the six months ended June 30, 2022 was based on the closing price of AMC’s Class A common stock (“Common Stock” or “Common Shares”) on February 16, 2022 of $ 19.67 per share, March 7, 2022 of $ 15.21 per share, and May 3, 2022 of $ 15.51 per share.

Each RSU and PSU held by a participant as of a dividend record date is entitled to a dividend equivalent equal to the amount paid with respect to one share of Common Stock underlying the unit.

During the nine months ended September 30, 2022, AMC’s Board of Directors approved awards of stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan.

The grant date fair value of these awards during the nine months ended September 30, 2022 was based on the closing price of AMC’s Class A common stock (“Common Stock”) on February 16, 2022 of $ 9.84 per share, March 7, 2022 of $ 7.61 per share, and May 3, 2022 of $ 7.76 per share.

Each RSU and PSU held by a participant as of a dividend record date is entitled to a dividend equivalent equal to the amount paid with respect to one share of Common Stock and one AMC Preferred Equity Unit underlying the unit.

Any such accrued dividend equivalents are paid to the holder upon vesting of the units.

2 unchanged sentences

● Stock Award Agreement:

During the six months ended June 30, 2022, the Company granted awards of 41,650 fully vested shares of Common Stock to its independent members of AMC’s Board of Directors with a grant date fair value of $ 0.8 million.

During the nine months ended September 30, 2022, the Company granted awards of 41,650 fully vested shares of Common Stock and 41,650 AMC Preferred Equity Units to its independent members of AMC’s Board of Directors with a grant date fair value of $ 0.8 million.

● Restricted Stock Unit Award Agreement:

During the six months ended June 30, 2022, the Company granted RSU awards of 697,135 to certain members of management with a grant date fair value of $ 13.6 million.

During the nine months ended September 30, 2022, the Company granted RSU awards of 1,394,270 to certain members of management with a grant date fair value of $ 13.6 million.

The Company records stock-based compensation expense on a straight-line recognition method over the requisite vesting period.

Each RSU represents the right to receive one share of Common Stock at a future date.

The RSUs vest over three years , with one-third vesting in each year.

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● Performance Stock Unit Award Agreement:

During the six months ended June 30, 2022, total PSUs of 697,135 were awarded (“2022 PSU award”) to certain members of management and executive officers, with the total PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year within the performance period (“Tranche Year”).

During the nine months ended September 30, 2022, total PSUs of 1,394,270 were awarded (“2022 PSU award”) to certain members of management and executive officers, with the total PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year within the performance period (“Tranche Year”).

The PSUs within each Tranche Year are further divided between two performance targets;

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As a result, the 2020 PSU award grant date fair value for the 2022 Tranche Year award of 859,366 units was approximately $ 8.5 million, measured using performance targets at 100 %.

At June 30, 2022, the Company estimated that 2022 Tranche Year target performance conditions for the annual Adjusted EBITDA and free cash flow are expected to be achieved at 200 % and 120 %, respectively.

The following table represents the nonvested RSU and PSU activity for the six months ended June 30, 2022:

At September 30, 2022, the Company estimated that 2022 Tranche Year target performance conditions for the annual Adjusted EBITDA and free cash flow are expected to be achieved at 50 % and 75 %, respectively.

The following table represents the nonvested RSU and PSU activity for the nine months ended September 30, 2022:

Shares of RSU

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( 4,716,556 )

Nonvested at June 30, 2022

Nonvested at September 30, 2022

Tranche Years 2023 and 2024 awarded under the 2022 PSU award and Tranche Year 2023 awarded under the 2021 PSU award with grant date fair values to be determined in years 2023 and 2024, respectively

Total Nonvested at June 30, 2022

Total Nonvested at September 30, 2022

(1) Includes awards modified during 2020 where grant date fair value was not determined until 2022.

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(3) Represents vested RSUs and PSUs surrendered in lieu of taxes and cancelled awards returned to the 2013 Equity Incentive plan.

As a result, the Company paid taxes for restricted unit withholdings of approximately $ 52.2 million during the six months ended June 30, 2022.

As a result, the Company paid taxes for restricted unit withholdings of approximately $ 52.2 million during the nine months ended September 30, 2022.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Six Months Ended June 30, 2022

Class A Voting

For the Nine Months Ended September 30, 2022

Preferred Stock

Series A Convertible

Participating

Depositary Shares of

Class A Common Stock

Preferred Stock

AMC Preferred

Comprehensive

1 unchanged sentence

(In millions, except share and per share data)

Equity Units (2)

Equity (Deficit)

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Balances June 30, 2022

(1) Includes 41,650 shares awarded to Board of Directors and 2,799,845 vested RSUs and PSUs.

Other comprehensive income

AMC Preferred Equity Units issuance

Stock-based compensation

Balances September 30, 2022

(1) Includes 41,650 Class A common stock shares awarded to the Board of Directors, 2,799,845 vested RSUs and PSUs, and 2,841,495 AMC Preferred Equity Units.

(2) Share counts have been retroactively adjusted to reflect the effect of the stock split.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Six Months Ended June 30, 2021

Class A Voting

Class B Voting

For the Nine Months Ended September 30, 2021

Preferred Stock

Series A Convertible

Depositary Shares

Participating

Class A and Class B Common Stock

Preferred Stock

Preferred Equity

Treasury Stock

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Income (Loss)

Equity (Deficit)

Balances December 31, 2020

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Class A common stock issuance

Wanda conversion of Class B shares to Class A shares

( 46,103,784 )

Convertible Notes due 2026 stock conversion

1 unchanged sentence

( 5,666,000 )

Stock-based compensation

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Balances June 30, 2021

Other comprehensive loss

Class A common stock, accrued dividend equivalent adjustment

Class A common stock issuance fees

Stock-based compensation

Balances September 30, 2021

(1) Share counts have been retroactively adjusted to reflect the effect of the stock split.

NOTE 8—INCOME TAXES

The Company’s worldwide effective income tax rate is based on actual income (loss), statutory rates, valuation allowances against deferred tax assets and tax planning opportunities available in the various jurisdictions in which it operates.

The Company is using a discrete income tax calculation for the three and six months ended June 30, 2022 due to the lingering effects of the COVID-19 pandemic on the industry.

The Company is using a discrete income tax calculation for the three and nine months ended September 30, 2022 due to the lingering effects of the COVID-19 pandemic on the industry.

Historically, for interim financial reporting, the Company estimated the worldwide annual income tax rate based on projected taxable income (loss) for the full year and recorded a quarterly income tax provision or benefit in accordance with the anticipated annual rate, adjusted for discrete items, if any.

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deferred tax assets and most of the Company’s international deferred tax assets as the Company has determined the realization of these assets does not meet the more likely than not criteria.

The effective tax rate for the six months ended June 30, 2022 reflects the impact of these valuation allowances against U.S.

and international deferred tax assets generated during the six-month period.

The actual effective rate for the six months ended June 30, 2022 was 0 %.

The Company’s consolidated tax rate for the six months ended June 30, 2022 differs from the U.S.

The effective tax rate for the nine months ended September 30, 2022 reflects the impact of these valuation allowances against U.S.

and international deferred tax assets generated during the nine-month period.

The actual effective rate for the nine months ended September 30, 2022 was ( 0.4 )%.

The Company’s consolidated tax rate for the nine months ended September 30, 2022 differs from the U.S.

statutory tax rate primarily due to the valuation allowances in U.S.

and foreign jurisdictions, foreign tax rate differences, federal and state tax credits, permanent differences and other discrete items.

At June 30, 2022 and December 31, 2021, the Company has recorded net deferred tax liabilities of $ 30.8 million and $ 30.7 million, respectively.

At September 30, 2022 and December 31, 2021, the Company has recorded net deferred tax liabilities of $ 31.1 million and $ 30.7 million, respectively.

Utilization of the Company’s net operating loss carryforwards, disallowed business interest carryforwards and other tax attributes became subject to the Section 382 ownership change limitation due to changes in the Company’s stock ownership on January 27, 2021.

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Recurring Fair Value Measurements.

The following table summarizes the fair value hierarchy of the Company’s financial assets and liabilities carried at fair value on a recurring basis as of June 30, 2022:

Fair Value Measurements at June 30, 2022 Using

The following table summarizes the fair value hierarchy of the Company’s financial assets and liabilities carried at fair value on a recurring basis as of September 30, 2022:

Fair Value Measurements at September 30, 2022 Using

Total Carrying

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(In millions)

June 30, 2022

September 30, 2022

Other long-term assets:

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The Company is required to disclose the fair value of financial instruments that are not recognized at fair value in the statement of financial position for which it is practicable to estimate that value:

Fair Value Measurements at June 30, 2022 Using

Fair Value Measurements at September 30, 2022 Using

Significant other

3 unchanged sentences

(In millions)

June 30, 2022

September 30, 2022

Current maturities of corporate borrowings

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The Company valued these notes at principal value less an estimated discount reflecting a market yield to maturity.

See Note 6 — Corporate Borrowings and Finance Lease Obligations for further information.

See Note 6 — Corporate Borrowings and Finance Lease Liabilities for further information.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value because of the short maturity of these instruments.

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Three Months Ended

Six Months Ended

Nine Months Ended

Revenues (In millions)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

International markets

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

Adjusted EBITDA (In millions)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

International markets

2 unchanged sentences

The Company defines Adjusted EBITDA as net earnings (loss) plus (i) income tax provision (benefit), (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of the Company’s ongoing operating performance and to include attributable EBITDA from equity investments in theatre operations in International markets and any cash distributions of earnings from its other equity method investees.

The measure of segment profit and loss the Company uses to evaluate performance and allocate its resources is Adjusted EBITDA, which is consistent with how Adjusted EBITDA is defined in the Company’s debt indentures.

The measure of segment profit and loss the Company uses to evaluate performance and allocate its resources is Adjusted EBITDA, which is broadly consistent with how Adjusted EBITDA is defined in the Company’s debt indentures.

Three Months Ended

Six Months Ended

Nine Months Ended

Capital Expenditures (In millions)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

International markets

1 unchanged sentence

Long-term assets, net (In millions)

June 30, 2022

September 30, 2022

December 31, 2021

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Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Income tax provision (benefit)

2 unchanged sentences

Certain operating expense (1)

Equity in loss of non-consolidated entities

Equity in (earnings) loss of non-consolidated entities

Cash distributions from non-consolidated entities (2)

1 unchanged sentence

Investment expense (income) (4)

Other expense (income) (5)

Other expense (5)

Other non-cash rent benefit (6)

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Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

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

Income tax benefit

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Equity in (earnings) loss of non-consolidated entities

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

Equity in earnings (loss) of International theatre joint ventures

Income tax provision

Investment income

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Attributable EBITDA

(4) Investment expense (income) during the three months ended June 30, 2022 includes deterioration in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $ 27.8 million and deterioration in estimated fair value of the Company’s investment in warrants to purchase

common shares of Hycroft Mining Holding Corporation of $ 20.0 million.

During the three months ended June 30, 2022 investment expense (income) includes deterioration in estimated fair value of the Company’s investment in NCM of $ 9.6 million.

Investment expense (income) during the six months ended June 30, 2022 includes appreciation in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $( 1.0 ) million and appreciation in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft Mining Holding corporation of $( 15.1 ) million.

During the six months ended June 30, 2022, investment expense (income) includes deterioration in estimated fair value of the Company’s investment in NCM of $ 9.5 million.

(5) Other expense (income) during the three months ended June 30, 2022, included gain on debt extinguishment of $( 38.6 ) million and foreign currency transaction losses of $ 3.6 million.

During the three months ended June 30, 2021, other expense (income) included estimated credit income of $( 3.7 ) million related to decreases in contingent lease guarantees, partially offset by foreign currency transaction losses of $ 3.4 million.

Other expense (income) during the six months ended June 30, 2022, included loss on debt extinguishment of $ 96.4 million and foreign currency transaction losses of $ 8.4 million.

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

(4) Investment expense (income) during the three months ended September 30, 2022 includes deterioration in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $ 11.8 million and deterioration in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft Mining Holding Corporation of $ 7.7 million.

During the three months ended September 30, 2022 investment expense (income) includes deterioration in estimated fair value of the Company’s investment in NCM of $ 1.6 million.

Investment expense (income) during the nine months ended September 30, 2022 includes deterioration in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $ 10.8 million and appreciation in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft Mining Holding corporation of $( 7.4 ) million.

During the nine months ended September 30, 2022, investment expense (income) includes deterioration in estimated fair value of the Company’s investment in NCM of $ 11.1 million.

(5) Other expense during the three months ended September 30, 2022, includes foreign currency transaction losses of $ 6.3 million.

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

Other expense during the nine months ended September 30, 2022, includes loss on debt extinguishment of $ 96.4 million and foreign currency transaction losses of $ 14.7 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.

(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.

5 unchanged sentences

As additional information becomes available, any potential liability related to these actions is assessed and the estimates are revised, if necessary.

Management believes that the ultimate outcome of such matters discussed below, individually and in the aggregate, will not have a material adverse effect on the Company’s financial position or overall trends in results of operations.

Management believes that the ultimate outcome of such matters discussed below, individually and in the aggregate, will not have a material adverse effect on the Company’s

financial position or overall trends in results of operations.

However, litigation and claims are subject to inherent uncertainties and unfavorable outcomes can occur.

2 unchanged sentences

On January 12, 2018 and January 19, 2018, two putative federal securities class actions, captioned Hawaii Structural Ironworkers Pension Trust Fund v.

AMC Entertainment Holdings, Inc., et al.

AMC Entertainment Holdings, Inc., et al., Case No.

1:18-cv-00299-AJN (the “Hawaii Action”), and Nichols v.

AMC Entertainment Holdings, Inc., et al.

AMC Entertainment Holdings, Inc., et al., Case No.

1:18-cv-00510-AJN (the “Nichols Action,” and together with the Hawaii Action, the “Actions”), respectively, were filed against the Company in the U.S.

7 unchanged sentences

On September 2, 2021, the parties reached an agreement in principle to resolve the Actions for $ 18.0 million.

The Company agreed to the settlement and the payment of the settlement amount

to eliminate the distraction, burden, expense, and uncertainty of further litigation.

The Company agreed to the settlement and the payment of the settlement amount to eliminate the distraction, burden, expense, and uncertainty of further litigation.

The Company and the other defendants continue to expressly deny any liability or wrongdoing with respect to the matters alleged in the Actions.

35 unchanged sentences

On September 23, 2021, a stockholder derivative complaint, captioned Lyon v.

1:21-cv-07940-AJN (the “Lyon Action”), was filed in the U.S.

07940-AJN (the “Lyon Action”), was filed in the U.S.

District Court for the Southern District of New York against certain of the Company’s current and former officers and directors.

9 unchanged sentences

2019-0303-JRS (the “Lao Action”), was filed against certain of the Company’s directors, Wanda, two of Wanda’s affiliates, Silver Lake, and one of Silver Lake’s affiliates in the Delaware Court of Chancery.

The Lao Action asserts claims directly, on behalf of a putative class of Company stockholders, and

derivatively, on behalf of the Company, for breaches of fiduciary duty and aiding and abetting breaches of fiduciary duty with respect to transactions that the Company entered into with affiliates of Wanda and Silver Lake on September 14, 2018, and the special cash dividend of $ 1.55 per share of common stock that was payable on September 28, 2018 to the Company’s stockholders of record as of September 25, 2018.

The Lao Action asserts claims directly, on behalf of a putative class of Company stockholders, and derivatively, on behalf of the Company, for breaches of fiduciary duty and aiding and abetting breaches of fiduciary duty with respect to transactions that the Company entered into with affiliates of Wanda and Silver Lake on September 14, 2018, and the special cash dividend of $ 1.55 per share of common stock that was payable on September 28, 2018 to the Company’s stockholders of record as of September 25, 2018.

On July 18, 2019, the Company’s Board of Directors formed a Special Litigation Committee to investigate and evaluate the claims and allegations asserted in the Lao Action and make a determination as to how the Company should proceed with respect to the Lao Action.

5 unchanged sentences

Defendants agreed to the settlement and the payment of the Settlement Amount solely to eliminate the burden, expense, and uncertainty of further litigation, and continue to expressly deny any liability or wrongdoing with respect to the matters alleged in the Lao Action.

On June 24, 2022, the court scheduled a hearing for September 15, 2022, to, amount other things, consider whether to approve the proposed settlement.

On September 28, 2022, the court held a hearing to consider whether to approve the proposed settlement.

At the hearing, the court requested a supplemental notice to stockholders prior to approval.

A second hearing regarding approval of the settlement is scheduled for November 30, 2022.

NOTE 12—LOSS PER SHARE

On August 4, 2022, the Company announced that its Board of Directors declared a special dividend of one AMC Preferred Equity Unit for each share of Common Stock outstanding at the close of business on August 15, 2022, the record date.

The dividend was paid at the close of business on August 19, 2022 to investors who held shares of Common Stock as of August 22, 2022, the ex-dividend date.

Each AMC Preferred Equity Unit is a depositary share and represents an interest in one one-hundredth (1/100 th ) of a share of Series A Convertible Participating Preferred Stock evidenced by a depositary receipt pursuant to a deposit agreement.

The Company has 50,000,000 Preferred Stock shares authorized, 10,000,000 of which have currently been allocated and 5,195,206 have been issued under depositary agreement as Series A Convertible Participating Preferred Stock, leaving 40,000,000 unallocated Preferred Stock shares.

Each AMC Preferred Equity Unit is designed to have the same economic and voting rights as a share of Class A common stock.

Trading of the AMC Preferred Equity Units on the NYSE began on August 22, 2022 under the ticker symbol “APE”.

Due to the characteristics of the AMC Preferred Equity Units, the special dividend similar to a stock split pursuant to ASC 505-20-25-4.

Accordingly, all references made to share, per share, or common share amounts in the accompanying consolidated financial statements and applicable disclosures have been retroactively adjusted to reflect the effects of the special dividend as a stock split.

Basic loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding.

Diluted loss per share includes the effects of unvested RSUs with a service condition only and unvested contingently issuable RSUs and PSUs that have service and performance conditions, if dilutive.

Diluted loss per share includes the effects of unvested RSUs with a service condition only and unvested

contingently issuable RSUs and PSUs that have service and performance conditions, if dilutive.

The following table sets forth the computation of basic and diluted loss per common share:

Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Net loss for basic loss per share attributable to AMC Entertainment Holdings, Inc.

5 unchanged sentences

Diluted loss per common share

Vested RSUs, PSUs, and special performance stock units (“SPSUs”) have dividend rights identical to the Company’s Common Stock and are treated as outstanding shares for purposes of computing basic and diluted earnings per share.

Unvested RSUs of 2,727,867 for the three and six months ended June 30, 2022 and unvested RSUs of 3,812,964 for the three and six months ended June 30, 2021 were not included in the computation of diluted loss per share because they would be anti-dilutive.

Vested RSUs, PSUs, and special performance stock units (“SPSUs”) have dividend rights identical to the Company’s Common Stock and AMC Preferred Equity Units and are treated as outstanding shares for purposes of computing basic and diluted earnings per share.

Unvested RSUs of 5,428,148 for the three and nine months ended September 30, 2022 and unvested RSUs of 7,588,246 for the three and nine months ended September 30, 2021 were not included in the computation of diluted loss per share because they would be anti-dilutive.

Unvested PSUs and SPSUs are subject to performance and market conditions, respectively, and are included in diluted earnings per share, if dilutive, based on the number of shares, if any, that would be issuable under the terms of the Company’s 2013 Equity Incentive Plan if the end of the reporting period were the end of the contingency period.

Unvested PSUs of 1,426,728 at certain performance targets for the three and six months ended June 30, 2022, unvested PSUs of 2,161,222 at certain performance targets for the three and six months ended June 30, 2021, and unvested SPSUs of 1,156,656 at the minimum market condition for the three and six months ended June 30, 2021, were not included in the computation of diluted loss per share because they would not be issuable if the end of the reporting period were the end of the contingency period or they would be anti-dilutive.

NOTE 13—SUPPLEMENTAL BALANCE SHEET INFORMATION

Other current assets and other long-term assets consist of the following:

(In millions)

June 30, 2022

December 31, 2021

Other current assets:

Income taxes receivable

Merchandise inventory

Other long-term assets:

Investments in real estate

Deferred financing costs revolving credit facility

Investments in equity method investees

Computer software

Investment in common stock

Pension asset

Investment in Hycroft common stock (2)

Investment in Hycroft warrants (2)

(1) The increase primarily relates to prepaid insurance.

(2) The equity method investment in Hycroft is measured under the fair value option.

See Note 5 — Investments and Note 9 — Fair Value Measurements for further information regarding the investment in Hycroft .

Unvested PSUs of 2,838,090 at certain performance targets for the three and nine months ended September 30, 2022, unvested PSUs of 4,298,996 at certain performance targets for the three and nine months ended September 30, 2021, and unvested SPSUs of 2,313,312 at the minimum market condition for the three and nine months ended September 30, 2021, were not included in the computation of diluted loss per share because they would not be issuable if the end of the reporting period were the end of the contingency period or they would be anti-dilutive.

As of September 30, 2022, approximately 4.9 million shares of our Class A common stock and approximately 4.7 million shares of our AMC Preferred Equity Units were directly registered with our transfer agent by 15,205 shareholders.

NOTE 13—SUBSEQUENT EVENTS

On August 4, 2022, the Company announced that its Board of Directors declared a special dividend of one AMC Preferred Equity Unit (a “AMC Preferred Equity Unit”) for each share of Common Stock outstanding at the close of business on August 15, 2022.

The special dividend is expected to be paid at the close of business on August 19, 2022.

Each AMC Preferred Equity Unit is a depositary share and represents an interest in one one-hundredth (1/100th) of a share of Series A Convertible Participating Preferred Stock, par value $ 0.01 (the “Preferred Stock”).

Each AMC Preferred Equity Unit is designed to have the same economic and voting rights as a share of Common Stock.

The AMC Preferred Equity Units will be evidenced by a depositary receipt pursuant to a Deposit Agreement (the “Deposit Agreement”) among the Company, Computershare Inc.

and Computershare Trust Company, N.A., collectively acting as depositary and conversion agent (together, the “Depositary”).

The Company will deposit the underlying shares of the Preferred Stock with the Depositary pursuant to the Deposit Agreement.

Subject to the terms of the Deposit Agreement, the AMC Preferred Equity Units will be entitled to all the rights and preferences of the Preferred Stock, as applicable, in proportion to the fraction of a share of Preferred Stock the AMC Preferred Equity Units represent.

As a consequence of the special dividend of AMC Preferred Equity Units, in accordance with the terms of the Company's 2013 Equity Incentive Plan, and effective upon payment of the dividend the Company will adjust the terms of outstanding awards issued pursuant to the 2013 Equity Incentive Plan to add one AMC Preferred Equity Unit to each share of Common Stock subject to the outstanding awards (approximately 5,422,554 AMC Preferred Equity Units in aggregate).

In addition, for each share of Common Stock available and held in reserve for future awards (currently approximately 1,883,800 shares in aggregate), the Company will reserve an equal number of AMC Preferred Equity Units to be issued in connection with such future awards (such that when combined with the AMC Preferred Equity Units subject to outstanding awards, the adjusted reserve will reflect approximately 7,306,354 AMC Preferred Equity Units in the aggregate).

To provide for the issuance of the Preferred Stock underlying the AMC Preferred Equity Units, on August 4, 2022, the Company filed a Certificate of Designations (the “Certificate of Designations”) with the Secretary of State of the State of Delaware, to designate 10,000,000 shares of the Company’s authorized preferred stock as the Preferred Stock with the preferences, limitations, voting powers and relative rights as set forth in the Certificate of Designations.

Equity Distribution Agreement.

As part of the Equity Distribution Agreement described in Note 7—Stockholders’ Equity, the Company raised gross proceeds of approximately $ 28.0 million through the date of this filing through its at-the-market offering of approximately 12.2 million shares of its AMC Preferred Equity Units and paid fees to the Sales Agent of approximately $ 0.7 million.

Odeon Senior Secured Notes due 2027.

The Odeon Term Loan Facility outstanding at quarter end was due to mature on August 19, 2023 during the third fiscal quarter of the Company’s next calendar year.

On October 20, 2022, Odeon Finco PLC, a direct subsidiary of Odeon Cinemas Group Limited (“Odeon”) and an indirect subsidiary of the Company issued $ 400.0 million aggregate principal amount of its 12.75 % Odeon Senior Secured Notes due 2027 (“Odeon Notes due 2027”), at an issue price of 92.00 %.

The Odeon Notes due 2027 bear a cash interest rate of 12.75 % per annum and will be payable semi-annually in arrears on May 1 and November 1, beginning on May 1, 2023.

The Odeon Notes due 2027 are guaranteed on a senior secured basis by certain subsidiaries of Odeon and by Holdings on a standalone and unsecured basis.

The Odeon Notes due 2027 contain covenants that limit Odeon and certain subsidiaries’ ability to, among other things:

(i) incur additional indebtedness or guarantee indebtedness;

(ii) create liens;

(iii) declare or pay dividends, redeem stock or make other distributions to stockholders;

(iv) make investments;

(v) enter into transactions with affiliates;

(vi) consolidate, merge, sell or otherwise dispose of all or substantially all of their respective assets;

and (vii) impair the security interest in the collateral.

These covenants are subject to a number of important limitations and exceptions.

The Company used the $ 363 million net proceeds from the new notes and $ 146.7 million of existing cash to fund the repayment in full of the £ 147.6 million and € 312.2 million ($ 167.7 million and $ 308.9 million, respectively using October 20, 2022 exchange rates) aggregate principal amounts of the Odeon Term Loan Facility and to pay related accrued interest, fees, costs, premiums and expenses.

The Company estimates it will record a loss on debt extinguishment related to this transaction of approximately $ 34.0 million in other expense in October 2022.

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 1. Financial Statements