What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-08 compared with 2022-08-04 · 418 added, 366 removed, 520 unchanged (60% of the section changed)

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These risks and uncertainties include, but are not limited to, the following:

● 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, box office revenues will need to increase significantly compared to aggregate 2021 and the combined first and second quarter of 2022 to levels in line with pre COVID-19 box office revenues.

Domestic industry box office grosses increased significantly to approximately $3.7 billion during the first six months of 2022, compared to the first six months of 2021 of $1.1 billion, and were approximately 66% of domestic box office grosses of $5.6 billion during the first six months of 2019.

● 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, 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, box office revenues will need to increase significantly compared to aggregate 2021 and the combined first, second, and third quarter of 2022 to levels in line with pre COVID-19 box office revenues.

Domestic industry box office grosses increased significantly to approximately $5.7 billion during the first nine months of 2022, compared to the first nine months of 2021 of $1.4 billion, and were approximately 67% of domestic box office grosses of $8.5 billion during the first

nine months of 2019.

The Company believes 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’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 levels, including a 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 and direct to streaming or other changing movie studio practices and consumer behavior.

However, there remain significant risks that may negatively impact attendance levels, including the 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 and direct to streaming or other changing movie studio practices and consumer behavior.

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;

● the impact of COVID-19 variant strains on us, the motion picture exhibition industry, and the economy in general, including our response to COVID-19 variant strains and suspension of operations at our theatres, personnel reductions and other cost-cutting measures and measures to maintain necessary liquidity and increases in expenses relating to precautionary measures at our facilities to protect the health and well-being of our customers and employees;

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, AMC Preferred Equity Units, and other securities would likely suffer a total loss of their investment;

● the impact of the COVID-19 variant strains on us, the motion picture exhibition industry, and the economy in general, including our response to the COVID-19 variant strains and suspension of operations at our theatres, personnel reductions and other cost-cutting measures and measures to maintain necessary liquidity and increases in expenses relating to precautionary measures at our facilities to protect the health and well-being of our customers and employees;

● the seasonality of our revenue and working capital, which are dependent upon the timing of motion picture releases by distributors, such releases being seasonal and resulting in higher attendance and revenues generally occurring during the summer months and holiday seasons;

● the risk that the North American and international box office in the near term will not recover sufficiently from the seasonally low third quarter, resulting in higher cash burn;

● risks and uncertainties relating to our significant indebtedness, including our borrowings and our ability to meet our financial maintenance and other covenants;

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● risks relating to motion picture production and performance;

● general and international economic, political, regulatory, social and financial market conditions, including potential economic recession, inflation, and other risks that may negatively impact discretionary income and attendance levels;

● our lack of control over distributors of films;

● general and international economic, political, regulatory, social and financial market conditions, inflation, and other risks;

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

● an issuance of preferred stock, including the Preferred Equity Units, could dilute the voting power of the common stockholders and adversely affect the market value of our Common Stock and Preferred Equity Units;

● limitations on the authorized number of Common Stock shares prevents us from raising additional capital through Common Stock issuances;

● an issuance of preferred stock, including the AMC Preferred Equity Units, could dilute the voting power of the common stockholders and adversely affect the market value of our Common Stock and AMC

Preferred Equity Units;

● limitations on the authorized number of shares of Common Stock prevents us from raising additional capital through Common Stock issuances;

● our ability to achieve expected synergies, benefits and performance from our strategic initiatives;

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● failures, unavailability or security breaches of our information systems;

● our ability to utilize interest expense deductions may be limited annually due to Section 163(j) of the Tax Cuts and Jobs Act of 2017;

● our ability to utilize interest expense deductions will be limited annually due to Section 163(j) of the Tax Cuts and Jobs Act of 2017;

● our ability to recognize interest deduction carryforwards, net operating loss carryforwards and other tax attributes to reduce our future tax liability;

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● dependence on key personnel for current and future performance and our ability to attract and retain senior executives and other key personnel, including in connection with any future acquisitions;

● 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;

● increased costs in order to comply or resulting from a failure to comply with governmental regulation, including the General Data Protection Regulation (“GDPR”) and all other current and pending privacy and data regulations in the jurisdictions where we have operations.

● supply chain disruptions may negatively impact our operating results;

● the dilution caused by recent and potential future sales of our Common Stock and Preferred Equity Units could adversely affect the market price of the Common Stock and Preferred Equity Units;

● the market price and trading volume of our shares of Common Stock has been and may continue to be volatile and such volatility may also apply to our Preferred Equity Units, and purchasers of our securities could incur substantial losses;

● future offerings of debt, which would be senior to our Common Stock and Preferred Equity Units for purposes of distributions or upon liquidation, could adversely affect the market price of our Common Stock and Preferred Equity Units;

● the potential for political, social, or economic unrest, terrorism, hostilities, cyber-attacks or war, including the conflict between Russia and Ukraine and that Sweden and Finland (countries where we operate approximately 100 theatres) completed accession talks at NATO headquarters in Brussels on July 4, 2022 and NATO ambassadors signed the accession protocols on July 5, 2022, which could cause a deterioration in the relationship each country has with Russia, and the potential impact of financial and economic sanctions on the regional and global economy, or widespread health emergencies, such as COVID-19 or

other pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance;

● the availability and/or cost of energy in Europe may negatively impact our operating results;

● the dilution caused by recent and potential future sales of our Common Stock and AMC Preferred Equity Units could adversely affect the market price of the Common Stock and AMC Preferred Equity Units;

● the market price and trading volume of our shares of Common Stock has been and may continue to be volatile and such volatility may also apply to our AMC Preferred Equity Units, and purchasers of our securities could incur substantial losses;

● future offerings of debt, which would be senior to our Common Stock and AMC Preferred Equity Units for purposes of distributions or upon liquidation, could adversely affect the market price of our Common Stock and AMC Preferred Equity Units;

approximately 100 theatres) completed accession talks at NATO headquarters in Brussels on July 4, 2022 and NATO ambassadors signed the accession protocols on July 5, 2022, which could cause a deterioration in the relationship each country has with Russia, and the potential impact of financial and economic sanctions on the regional and global economy, or widespread health emergencies, such as COVID-19 or other pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance;

● anti-takeover protections in our amended and restated certificate of incorporation and our amended and restated bylaws may discourage or prevent a takeover of our Company, even if an acquisition would be beneficial to our stockholders;

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

As of March 31, 2021, we were operating at 585 domestic theatres, with limited seating capacities, representing approximately 99% of its 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, the Company operated at 97 international theatres, with limited seating capacities, representing approximately 27% of its 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 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.

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Our theatrical exhibition revenues are generated primarily from box office admissions and theatre food and beverage sales.

Our remaining revenues are 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, 2022, we owned, operated or had interests in 947 theatres and 10,552 screens.

exchange ticket sales, and online ticketing fees.

As of September 30, 2022, we owned, operated or had interests in 943 theatres and 10,518 screens.

Box Office Admissions and Film Content

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Theatrical releases may continue to be postponed and windows shortened while the box office and film production industry suffers from COVID-19 impacts.

As a result of the reduction in theatrical film releases in 2021, we licensed and exhibited a larger number of previously released films that had lower film rental terms during the six months ended June 30, 2021.

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 and fourth quarters of 2021 and all of 2022.

However, substantially all of our worldwide theatres were open for the entirety of the third and fourth quarters of 2021 and all of 2022.

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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Number of Screens

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Dolby Cinema TM

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We believe that maximizing comfort and convenience for our customers will be increasingly necessary to maintain and improve our relevance.

These renovations, in conjunction with capital contributions from our landlords, involve stripping theatres to their basic structure in order to replace finishes throughout, upgrading the sight and sound experience, installing modernized points of sale and, most importantly, replacing traditional theatre seats with plush, electric recliners that allow customers to

deploy a leg rest and fully recline at the push of a button.

These renovations, in conjunction with capital contributions from our landlords, involve stripping theatres to their basic

structure in order to replace finishes throughout, upgrading the sight and sound experience, installing modernized points of sale and, most importantly, replacing traditional theatre seats with plush, electric recliners that allow customers to deploy a leg rest and fully recline at the push of a button.

As of December 31, 2019, prior to the COVID-19 pandemic, the quality improvement in the customer experience could drive a 33% increase in attendance, on average, at these locations in their first year post-renovation.

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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, 2022, in our U.S.

As of September 30, 2022, in our U.S.

markets, we featured recliner seating in approximately 360 U.S.

theatres, including Dine-in Theatres, totaling approximately 3,482 screens and representing 45.1% of total U.S.

In our International markets, as of June 30, 2022, we had recliner seating in approximately 93 International theatres, totaling approximately 591 screens and representing 21.1% of total International screens.

Open-source internet ticketing makes our AMC seats (approximately 1.1 million as of June 30, 2022) in all our U.S.

In our International markets, as of September 30, 2022, we had recliner seating in approximately 93 International theatres, totaling approximately 598 screens and representing 21.3% of total International screens.

Open-source internet ticketing makes our AMC seats (approximately 1.1 million as of September 30, 2022) 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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Our MacGuffins Bar and Lounges (“MacGuffins”) give us an opportunity to engage our legal age customers.

As of June 30, 2022, we offer alcohol in approximately 351 AMC theatres in the U.S.

As of September 30, 2022, we offer alcohol in approximately 351 AMC theatres in the U.S.

markets and 238 theatres in our International markets and continue to explore expansion globally.

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This program offers guests admission to movies at AMC up to three times per week including multiple movies per day and repeat visits to already seen movies from $19.95 to $24.95 per month depending upon geographic market.

AMC Stubs® A-List also includes premium offerings including IMAX®, Dolby Cinema™ at AMC, RealD, Prime and other proprietary PLF brands.

AMC Stubs® A-List also includes premium offerings including IMAX®, Dolby Cinema™ at AMC, RealD, Prime and other

proprietary PLF brands.

AMC Stubs® A-List members can book tickets online in advance and select specific seats at AMC Theatres with reserved seating.

Upon the temporary suspension of theatre operations due to the COVID-19

pandemic, all monthly A-List subscription charges were put on hold.

Upon the temporary suspension of theatre operations due to the COVID-19 pandemic, all monthly A-List subscription charges were put on hold.

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, 2022, we had more than 26,400,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined.

During the three and six months ended June 30, 2022 our AMC Stubs® members represented approximately 42.1% and 41.7% of AMC U.S.

As of September 30, 2022, we had more than 27,400,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined.

During the three and nine months ended September 30, 2022 our AMC Stubs® members represented approximately 43.5% and 42.4% of AMC U.S.

markets attendance, respectively.

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The movie-goers can earn points for spending money at the theatre, and those points can be redeemed for tickets and concession items at a later date.

We currently have more than 13,300,000 members in our various International loyalty programs.

We currently have approximately 14,000,000 members in our various International loyalty programs.

Our marketing efforts are not limited to our loyalty program as we continue to improve our customer connections through our website and mobile apps and expand our online and movie offerings.

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We elected the fair value option in accordance with ASC 825-10, and therefore, the fair value of the investment in common stock of Hycroft is remeasured at each subsequent reporting period and unrealized gains and losses are reported in investment expense (income).

During the three months ended June 30, 2022, we recorded deterioration in estimated fair value of our investment in warrants to purchase common shares of Hycroft of $20.0 million and deterioration in estimated fair value of our investment in common shares of Hycroft of $27.8 million.

During the six months ended June 30, 2022, we recorded appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft of $(15.1) million in investment expense (income) following ASC 815, which fall under Level 3 within the fair value measurement hierarchy and appreciation in estimated fair value of our investment in common shares of Hycroft of $(1.0) million in investment expense (income), which fall under Level 1 within the fair value measurement hierarchy.

During the three months ended September 30, 2022, we recorded deterioration in estimated fair value of our investment in warrants to purchase common shares of Hycroft of $7.7 million and deterioration in estimated fair value of our investment in common shares of Hycroft of $11.8 million.

During the nine months ended September 30, 2022, we recorded appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft of $(7.4) million in investment expense (income) following ASC 815, which fall under Level 3 within the fair value measurement hierarchy and deterioration in estimated fair value of our investment in common shares of Hycroft of $10.8 million in investment expense (income), which fall under Level 1 within the fair value measurement hierarchy.

Critical estimates.

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Significant Events

Equity Distribution Agreement.

On September 26, 2022, we 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 our 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 our instructions for the sales, including any price, time or size limits specified by us.

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

We raised gross proceeds of approximately $9.3 million during the three months ended September 30, 2022, through its at-the-market offering of approximately 2.7 million shares of its AMC Preferred Equity Units and paid fees to the Sales Agent of approximately $0.2 million.

See Note 13—Subsequent Events in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q for further information.

AMC Preferred Equity Units.

On August 4, 2022, we announced that the 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.

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.

We have 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.

Accordingly, all references to 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 in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q for further information.

Investment in Hycroft.

On March 14, 2022, we purchased 23.4 million units of Hycroft Mining Holding

Corporation (NASDAQ:

On March 14, 2022, we purchased 23.4 million units of Hycroft Mining Holding Corporation (NASDAQ:

HYMC) (“Hycroft”) for $27.9 million, with each unit consisting of one common share of Hycroft and one common share purchase warrant.

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Accordingly, the fair value of the investments in Hycroft are remeasured at each subsequent reporting period and unrealized gains and losses are reported in investment income.

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

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

See Note 9 — Fair Value Measurements in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I in this Form 10-Q for further information.

Debt refinancing.

We enhanced liquidity through debt refinancing at lower interest rates.

On February 14, 2022, we issued $950.0 million aggregate principal amount of our 7.5% First Lien Senior Secured Notes due 2029 (“First Lien Notes due 2029”), pursuant to an indenture, dated as of February 14, 2022, among us, the guarantors named therein and U.S.

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We 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 our 10.5% First Lien Notes due 2025 (“First Lien Notes due 2025”), the then outstanding $300 million aggregate principal amount of our 10.5% First Lien Notes due 2026 (“First Lien Notes due 2026”), and the then outstanding $73.5 million aggregate principal amount of our 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.

We recorded a loss on debt extinguishment related to this transaction of $135.0 million in other expense, during the six months ended June 30, 2022.

We recorded a loss on debt extinguishment related to this

transaction of $135.0 million in other expense, during the 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.

Second Lien Notes due 2026.

During the three months ended June 30, 2022, we 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 we 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 debt refinancing.

The Odeon Term Loan Facility outstanding at quarter end was due to mature on August 19, 2023 during the third fiscal quarter of our 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.

We used the $363 million net proceeds from the new notes and $146.7 million of existing cash to fund the payment in full of the £147.6 million ($167.7 million) and €312.2 million ($308.9 million) aggregate principal amounts of the Odeon Term Loan Facility and to pay related accrued interest, fees, costs, premiums and expenses.

We estimate we will record a loss on debt extinguishment related to this transaction of approximately $34.0 million in other expense in October 2022.

Operating Results

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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

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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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

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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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, 2022, Adjusted EBITDA in the U.S.

markets was $94.4 million compared to $(118.0) million during the three months ended June 30, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension or limited operations at our theatres, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films and lifting of seat restrictions, increases in cash distributions from non-consolidated entities, partially offset by increases in operating costs due to the increase in attendance and increases in rent expense.

During the three months ended June 30, 2022, Adjusted EBITDA in the International markets was $12.3 million compared to $(32.8) million during the three months ended June 30, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year and lifting of seat restrictions, partially offset by increases in operating costs due to the increase in attendance, decreases in government assistance, increases in rent expense, increases in general and administrative expenses excluding stock-based compensation and decreases in attributable EBITDA from non-consolidated entities.

During the three months ended June 30, 2022, Adjusted EBITDA in the U.S.

markets and International markets was $106.7 million compared to $(150.8) million during the three months ended June 30, 2021, driven by the aforementioned factors impacting Adjusted EBITDA.

During the six months ended June 30, 2022, Adjusted EBITDA in the U.S.

markets was $51.0 million compared to $(318.4) million during the six months ended June 30, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension or limited operations at our theatres, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films and lifting of seat restrictions, decreases in general and administrative expenses excluding stock-based compensation, and increased cash distributions from non-consolidated entities, partially offset by increases in operating costs due to the increase in attendance, increases in rent expense and decreases in government assistance.

During the six months ended June 30, 2022, Adjusted EBITDA in the International markets was $(6.0) million compared to $(127.1) million during the six months ended June 30, 2021.

During the three months ended September 30, 2022, Adjusted EBITDA in the U.S.

markets was $1.2 million compared to $(30.1) million during the three months ended September 30, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the popularity of film product compared to the prior year, partially offset by increases in operating costs due to the increase in attendance and increases in rent expense.

During the three months ended September 30, 2022, Adjusted EBITDA in the International markets was $(14.1) million compared to $24.7 million during the three months ended September 30, 2021.

The year-over-year decline was primarily due to the increased net loss driven by increases in operating costs due to an increase in attendance, inflationary cost pressures, and decreases in government assistance.

During the three months ended September 30, 2022, Adjusted EBITDA in the U.S.

markets and International markets was $(12.9) million compared to $(5.4) million during the three months ended September 30, 2021, driven by the aforementioned factors impacting Adjusted EBITDA.

During the nine months ended September 30, 2022, Adjusted EBITDA in the U.S.

markets was $52.2 million compared to $(348.5) million during the nine months ended September 30, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension or limited operations at our theatres, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films, and lifting of seat restrictions, increases in package ticket and gift card breakage, partially offset by increases in operating costs due to the increase in attendance, and increases in rent expense.

During the nine months ended September 30, 2022, Adjusted EBITDA in the International markets was $(20.1) million compared to $(102.4) million during the nine months ended September 30, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year and lifting of seat restrictions, partially offset by increases in operating costs due to the increase in attendance, decreases in government assistance, increases in rent expense, and increases in general and administrative expenses excluding stock-based compensation.

During the six months ended June 30, 2022, Adjusted EBITDA in the U.S.

markets and International markets was $45.0 million compared to $(445.5) million during the six months ended June 30, 2021, driven by the aforementioned factors impacting Adjusted EBITDA.

During the nine months ended September 30, 2022, Adjusted EBITDA in the U.S.

markets and International markets was $32.1 million compared to $(450.9) million during the nine months ended September 30, 2021, 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

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

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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, includes 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 (income) 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, included 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 (income) 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.

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Segment Information

Our historical results of operations for the three and six months ended June 30, 2022 and June 30, 2021 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, 2022 and September 30, 2021 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, 2022 Compared to the Three Months ended June 30, 2021

Results of Operations— For the Three Months ended September 30, 2022 Compared to the Three Months ended September 30, 2021

Condensed Consolidated Results of Operations

Total revenues increased $721.7 million, during the three months ended June 30, 2022, compared

to the three months ended June 30, 2021.

Admissions revenues increased $418.0 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to an increase in attendance from 22.1 million patrons to 59.1 million patrons and a 4.3% 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 or limited 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 3D, IMAX and Premium content and lower frequency on our A-List subscription program, partially offset by a decrease in foreign currency translation rates.

Food and beverage revenues increased $235.2 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 8.3% from $7.32 to $6.71 due primarily to an increase in revenues in International markets as a percentage of consolidated revenues from 12.8% during the three months ended June 30, 2021 to 17.5% during the three months ended June 30, 2022.

Food and beverage per patron in International markets is much lower in our International markets than in our U.S.

markets and this change in the mix of revenues resulted in a decline in consolidated food and beverage per patron along with a decrease in foreign currency translation rates.

Additionally, we experienced decreases in the percentage of patrons making purchases due to attendance increases and a decrease in units sold per transaction due to the decline in private theatre rentals from the prior year.

The higher number of private theatre rentals in the prior year resulted in larger party sizes and larger individual orders.

Total other theatre revenues increased $68.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen and other advertising due to the increase in attendance, partially offset by the decrease in foreign currency translation rates.

Total revenues increased $205.2 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021.

Admissions revenues increased $120.2 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to an increase in attendance of 32.9% from 40.0 million patrons to 53.2 million patrons partially offset by a 3.6% decrease in average ticket price.

The increase in attendance was primarily due to the popularity of film product compared to the prior year.

The decrease in average ticket price was primarily due to higher frequency on our A-List subscription program, and a decrease in foreign currency translation rates, partially offset by increases in 3D and Premium content.

Food and beverage revenues increased $68.1 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 5.4% from $6.63 to $6.27 due primarily to decreases in the percentage of patrons making purchases due to attendance increases, a decrease in average prices and a decrease in foreign currency translation rates.

Total other theatre revenues increased $16.9 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to increases in ticket fees and screen and other advertising due to the increase in attendance, partially offset by the decrease in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $441.2 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Film exhibition costs increased $229.8 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 50.5% for the three months ended June 30, 2022, compared to 42.4% for the three months ended June 30, 2021.

Operating costs and expenses increased $174.9 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021.

Film exhibition costs increased $86.7 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 48.3% for the three months ended September 30, 2022, compared to 41.5% for the three months ended September 30, 2021.

The increase in film exhibition cost percentage is primarily due to the concentration of box office revenues in higher grossing films in the current year, which typically results in higher film exhibition costs.

Additionally, lower film exhibition costs were paid on films with shorter exclusive theatrical windows in the prior year.

Food and beverage costs increased $38.3 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Food and beverage costs increased $15.6 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021.

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, 2022 and 2021.

As a percentage of revenues, operating expense was 34.5% for the three months ended June 30, 2022, and 55.4% for the three months ended June 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 8.2%, or $16.9 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by 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 $218.9 million that have been deferred to future years as of June 30, 2022.

As a percentage of food and beverage revenues, food and beverage costs were 17.6% for the three months ended September 30, 2022 and 16.2% for the three months ended September 30, 2021.

As a percentage of revenues, operating expense was 41.4% for the three months ended September 30, 2022, and 42.1% for the three months ended September 30, 2021.

Rent expense increased 3.9%, or $8.3 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by 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 $195.8 million that have been deferred to future years as of September 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $(0.3) million during the three months ended June 30, 2022, compared to $4.3 million during the three months ended June 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 24.1%, or $13.1 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower

expense for SPSUs that fully vested in 2021, and annual incentive plans based on the improvement in operating performance.

Merger, acquisition, and other costs were $0.3 million during the three months ended September 30, 2022, compared to $1.4 million during the three months ended September 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense decreased 14.5%, or $6.9 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021 due primarily to lower amounts of

expense for stock-based compensation expense due primarily to lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021 and decreases in foreign currency translation rates, partially offset by an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year.

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 7.9%, or $8.3 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Depreciation and amortization decreased 6.6%, or $6.8 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Other income.

Other income of $43.7 million during the three months ended June 30, 2022 was primarily due to a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026, $8.5 million in government assistance related to COVID-19 and partially offset by $3.6 million of foreign currency transaction losses.

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, estimated credit income of $3.7 million related to decreases in contingent lease guarantees, partially offset by $3.4 million of foreign currency transaction losses.

Other income of $1.0 million during the three months ended September 30, 2022 was primarily due to $7.0 million in government assistance related to COVID-19 and partially offset by $6.3 million of foreign currency transaction losses.

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, and $0.7 million of foreign currency transaction gains, partially offset by $14.4 million of loss on the extinguishment of debt.

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 decreased $8.6 million to $90.3 million for the three months ended June 30, 2022 compared to $98.9 million during the three months ended June 30, 2021 primarily due to:

Interest expense decreased $3.6 million to $95.7 million for the three months ended September 30, 2022 compared to $99.3 million during the three months ended September 30, 2021 primarily due to:

● the extinguishment of $72.5 million of 10%/12% Cash/PIK/Toggle Second Lien Notes due 2026 in May of 2022;

● the extinguishment of $500.0 million of 10.5% First Lien Notes due 2025 on February 14, 2022;

● the extinguishment of $300.0 million of 10.5% First Lien Notes due 2026 on February 14, 2022;

● the extinguishment of $73.5 million of 15%/17% Cash/PIK/Toggle Second Lien Notes due 2026;

● the extinguishment of $73.5 million of 15%/17% Cash/PIK/Toggle Second Lien Notes due 2026 on February 14, 2022;

● the decline in foreign currency translation rates,

2 unchanged sentences

● increases in interest rates on the Senior Secured Credit Facility Term Loan due 2026 .

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $1.0 million for the three months ended June 30, 2022, compared to $2.7 million for the three months ended June 30, 2021.

Investment expense (income).

Investment expense was $57.3 million for the three months ended June 30, 2022, compared to investment income of $(6.3) million for the three months ended June 30, 2021.

Investment expense in the current year includes $27.8 million of decline in estimated fair value of our investment in common shares of Hycroft Mining Holding Corporation, $20.0 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft Mining Holding Corporation and $9.6 million decline in estimated fair value of our investment in NCM common units.

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

Equity in earnings of non-consolidated entities.

Equity in earnings of non-consolidated entities was $2.8 million for the three months ended September 30, 2022, compared to $6.7 million for the three months ended September 30, 2021.

Investment expense.

Investment expense was $18.3 million for the three months ended September 30, 2022, compared to $0.0 million for the three months ended September 30, 2021.

Investment expense in the current year includes $11.8 million of decline in estimated fair value of our investment in common shares of Hycroft Mining Holding Corporation, $7.7 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft Mining Holding Corporation and $1.6 million decline in estimated fair value of our investment in NCM common units, partially offset by interest income of $2.8 million.

Income tax provision (benefit).

The income tax provision (benefit) was $0.6 million and $(5.2) million for the three months ended June 30, 2022 and June 30, 2021, respectively.

The income tax provision (benefit) was $1.8 million and $(1.9) million for the three months ended September 30, 2022 and September 30, 2021, 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 $121.6 million and $344.0 million during the three months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the three months ended June 30, 2022 compared to net loss for the three months ended June 30, 2021 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 or limited operationally due to the COVID-19 pandemic and lifting of seating restrictions, decreases in depreciation and amortization expense, decreases in interest expense, increases in other income and decreases in foreign currency translation rates, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in investment income and a decrease in income tax benefit.

Net loss was $226.9 million and $224.2 million during the three months ended September 30, 2022 and September 30, 2021, respectively.

Net loss during the three months ended September 30, 2022 compared to net loss for the three months ended September 30, 2021 was negatively impacted by increases in rent expense, decreases in other income, decreases in equity in earnings, increases in investment expense and a decrease in income tax benefit, partially offset by the increase in attendance as a result of the popularity of new film releases compared to the prior year, decreases in depreciation and amortization expense, decreases in interest expense, decreases in general and administrative expenses, and decreases in foreign currency translation rates.

Theatrical Exhibition–U.S.

Total revenues increased $533.1 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Admissions revenues increased $307.1 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to an increase in attendance from 17.8 million patrons to 43.5 million patrons and a 5.7% 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 or limited 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 increases in 3D, IMAX and Premium content and lower frequency on our A-List subscription program and strategic pricing initiatives put in place over the prior year.

Food and beverage revenues increased $186.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance and partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 4.9% from $7.91 to $7.52 due primarily to decreases in the percentage of patrons making purchases as attendance increases and a decrease in units sold per transaction due to the decline in private theatre rentals from the prior year.

The higher number of private theatre rentals in the prior year resulted in larger party sizes and larger individual orders.

Total other theatre revenues increased $39.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen and other advertising due to the increase in attendance.

Total revenues increased $215.4 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021.

Admissions revenues increased $124.4 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to an increase in attendance of 43.6% from 26.7 million patrons to 38.3 million patrons offset by a 0.7% decrease in average ticket price.

The increase in attendance was primarily due to the popularity of film product compared to the prior year.

The decrease in average ticket price was primarily due to higher frequency on our A-List subscription program partially offset by increases in 3D and Premium content.

Food and beverage revenues increased $74.6 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to the increase in attendance and partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 4.0% from $7.41 to $7.11 due primarily to decreases in the percentage of patrons making purchases as attendance increases and a decrease in average prices.

Total other theatre revenues increased $16.4 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to increases in ticket fees and screen and other advertising due to the increase in attendance.

Operating costs and expenses.

Operating costs and expenses increased $336.3 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Film exhibition costs increased $184.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 53.6% for the three months ended June 30, 2022 and 43.4% for the three months ended June 30, 2021.

Operating costs and expenses increased $172.7 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021.

Film exhibition costs increased $85.3 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 50.8% for the three months ended September 30, 2022 and 43.2% for the three months ended September 30, 2021.

Additionally, lower film exhibition costs were paid on films with shorter exclusive theatrical windows in the prior year.

Food and beverage costs increased $27.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Food and beverage costs increased $15.2 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021.

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 14.6% for the three months ended June 30, 2022, compared to 14.4% for the three months ended June 30, 2021.

As a percentage of revenues, operating expense was 32.5% for the three months ended June 30, 2022 and 49.9% for the three months ended June 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 7.8%, or $12.1 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by 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 $188.3 million that have been deferred to future years as of June 30, 2022.

As a percentage of food and beverage revenues, food and beverage costs were 16.0% for the three months ended September 30, 2022, compared to 14.4% for the three months ended September 30, 2021.

As a percentage of revenues, operating expense was 39.9% for the three months ended September 30, 2022 and 43.0% for the three months ended September 30, 2021.

Rent expense increased 5.2%, or $8.3 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by 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 $160.0 million that have been deferred to future years as of September 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.4 million during the three months ended June 30, 2022, compared to $3.5 million during the three months ended June 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 23.8%, or $9.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021, and annual incentive plans based on the improvement in operating performance.

Merger, acquisition, and other costs were $0.3 million during the three months ended September 30, 2022, compared to $1.3 million during the three months ended September 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense decreased 10.4%, or $3.1 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021 due primarily to lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021, partially offset by an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year.

Depreciation and amortization.

Depreciation and amortization decreased 3.2%, or $2.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to lower

depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021.

Depreciation and amortization decreased 1.7%, or $1.3 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021.

Other expense (income).

Other income of $(38.8) million during the three months ended June 30, 2022 was primarily due to a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026.

Other income of $(2.0) million during the three months ended September 30, 2022 was primarily due to government assistance related to COVID-19 of $1.6 million.

Other expense of $13.6 million for the three months ended September 30, 2021 was primarily due to a loss on extinguishment of debt of $14.4 million, partially offset by government assistance related to COVID-19 of $0.4 million.

Interest expense.

Interest expense decreased $7.7 million to $71.6 million for the three months ended June 30, 2022 compared to $79.3 million during the three months ended June 30, 2021, primarily due to:

Interest expense decreased $0.9 million to $77.6 million for the three months ended September 30, 2022 compared to $78.5 million during the three months ended September 30, 2021, primarily due to:

● the extinguishment of $72.5 million of 10%/12% Cash/PIK/Toggle Second Lien Notes due 2026 in May of 2022;

● the extinguishment of $500.0 million of 10.5% First Lien Notes due 2025 on February 14, 2022;

● the extinguishment of $300.0 million of 10.5% First Lien Notes due 2026 on February 14, 2022;

● the extinguishment of $73.5 million of 15%/17% Cash/PIK/Toggle Second Lien Notes due 2026;

● the extinguishment of $73.5 million of 15%/17% Cash/PIK/Toggle Second Lien Notes due 2026 on February 14, 2022;

partially offset by:

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● increases in interest rates on the Senior Secured Credit Facility Term Loan due 2026.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated was $0.5 million for the three months ended June 30, 2022, compared to $0.3 million for the three months ended June 30, 2021.

Investment expense (income).

Investment expense was $57.3 million for the three months ended June 30, 2022, compared to investment income of $(0.8) million for the three months ended June 30, 2021.

Equity in earnings of non-consolidated entities.

Equity in earnings of non-consolidated was $3.5 million for the three months ended September 30, 2022, compared to $6.1 million for the three months ended September 30, 2021.

Investment expense.

Investment expense was $18.4 million for the three months ended September 30, 2022, compared to $0.0 million for the three months ended September 30, 2021.

Income tax provision (benefit).

The income tax provision (benefit) was $0.2 million and $(3.4) million for the three months ended June 30, 2022 and June 30, 2021, respectively.

The income tax provision (benefit) was $0.4 million and $(2.3) million for the three months ended September 30, 2022 and September 30, 2021, 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 $88.1 million and $269.6 million during the three months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the three months ended June 30, 2022 compared to net loss for the three months ended June 30, 2021 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 or limited operationally due to the COVID-19 pandemic and lifting of seating restrictions, decreases in depreciation and amortization expense, decreases in interest expense and increases in other income, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in investment income and a decrease in income tax benefit.

Net loss was $166.7 million and $202.2 million during the three months ended September 30, 2022 and September 30, 2021, respectively.

Net loss during the three months ended September 30, 2022 compared to net loss for the three months ended September 30, 2021 was positively impacted by the increase in attendance as a result of the popularity of new film releases compared to the prior year, decreases in general and administrative expenses, decreases in depreciation and amortization expense, decreases in interest expense and increases in other income, partially offset by increases in rent expense, increases in investment expense and a decrease in income tax benefit.

Theatrical Exhibition - International Markets

Total revenues increased $188.6 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Admissions revenues increased $110.9 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to an increase in attendance from 4.3 million patrons to 15.6 million patrons and a 5.2% 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 or limited 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 was primarily due to strategic pricing initiatives put in place over the prior year, partially offset by a decrease in foreign currency translation rates.

Food and beverage revenues increased $48.7 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 8.5% from $4.85 to $4.44 due primarily to decreases in foreign currency translation rates.

Total other theatre revenues increased $29.0 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, 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 the decrease in foreign currency translation rates.

Total revenues decreased $10.2 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021.

Admissions revenues decreased $4.2 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, due to a 13.3% decrease in average ticket price, partially offset by an increase in attendance of 11.6% from 13.3 million patrons to 14.8 million patrons.

The decrease in average ticket price was primarily due to a decrease in foreign currency translation rates.

The increase in attendance was primarily due to the popularity of film product compared to the prior year.

Food and beverage revenues decreased $6.5 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to the decrease in food and beverage per patron, partially offset by the increase in attendance.

Food and beverage per patron decreased 19.1% from $5.07 to $4.10 due primarily to decreases in foreign currency translation rates and decreases in the percentage of patrons making purchases due to attendance increases.

Total other theatre revenues increased $0.5 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to increases in advertising and theatre rentals for meetings, partially offset by the decrease in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $104.9 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Film exhibition costs increased $45.3 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 40.1% for the three months ended June 30, 2022, compared to 37.8% for the three months ended June 30, 2021.

Food and beverage costs increased $10.8 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

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 24.2% for the three months ended June 30, 2022, compared to 29.0% for the three months ended June 30, 2021.

As a percentage of revenues, operating expense was 41.3% for the three months ended June 30, 2022, and 84.5% for the three months ended June 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 9.5%, or $4.8 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by 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 $30.6 million that have been deferred to future years as of June 30, 2022.

Operating costs and expenses increased $2.2 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021.

Film exhibition costs increased $1.4 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to the increase in film exhibition cost percentage.

As a percentage of admissions revenues, film exhibition costs were 40.1% for the three months ended September 30, 2022, compared to 37.8% for the three months ended September 30, 2021.

Food and beverage costs increased $0.4 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021.

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

As a percentage of food and beverage revenues, food and beverage costs were 24.5% for the three months ended September 30, 2022, compared to 21.5% for the three months ended September 30, 2021.

As a percentage of revenues, operating expense was 46.6% for the three months ended September 30, 2022, compared to 40.1% for the three months ended September 30, 2021.

Utilities expense increased $8.1 million or 73.7% during the three months ended September 30, 2022, compared to the three months ended September 30, 2021 due to higher energy costs in Europe than experienced in the prior year which caused the majority of the increase in operating expense as a percentage of revenue from the prior year.

Rent expense was unchanged during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by 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 $35.8 million that have been deferred to future years as of September 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $(0.7) million during the three months ended June 30, 2022, compared to $0.8 million during the three months ended June 30, 2021, primarily due to legal and professional costs related to strategic contingency planning in the prior year.

Other general and administrative expense increased 25.0%, or $3.6 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021, and annual incentive plans based on the improvement in operating performance.

Merger, acquisition, and other costs were $0.0 million during the three months ended September 30, 2022, compared to $0.1 million during the three months ended September 30, 2021, primarily due to legal and professional costs related to strategic contingency planning in the prior year.

Other general and administrative expense decreased 21.3%, or $3.8 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021 due primarily to lower amounts of expense for stock-based compensation expense due primarily to lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021 and decreases in foreign currency translation rates, partially offset by an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year.

Depreciation and amortization.

Depreciation and amortization decreased 21.6%, or $5.8 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Other income.

Other income of $4.9 million during the three months ended June 30, 2022 was primarily due to $8.5 million in government assistance related to COVID-19 and partially offset by $3.6 million of foreign currency transaction losses.

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, estimated credit income of $4.0 million related to decreases in contingent lease guarantees, partially offset by $3.4 million of foreign currency transaction losses.

Depreciation and amortization decreased 21.7%, or $5.5 million, during the three months ended September 30, 2022, compared to the three months ended September 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Other expense (income).

Other expense of $1.0 million during the three months ended September 30, 2022 was primarily due to $6.3 million of foreign currency transaction losses, partially offset by $5.4 million in government assistance related to COVID-19.

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 and $0.7 million of foreign currency transaction gains.

Interest expense.

Interest expense decreased $0.9 million to $18.7 million for the three months ended June 30, 2022 compared to $19.6 million during the three months ended June 30, 2021, primarily due to:

● the decline in foreign currency translation rates.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $0.5 million for the three months ended June 30, 2022, compared to $2.4 million for the three months ended June 30, 2021.

Interest expense decreased $2.7 million to $18.1 million for the three months ended September 30, 2022 compared to $20.8 million during the three months ended September 30, 2021, primarily due to the decline in foreign currency translation rates.

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

Equity in (earnings) loss of non-consolidated entities was $0.7 million for the three months ended September 30, 2022, compared to ($0.6) million for the three months ended September 30, 2021.

Investment income .

Investment income was $0.0 million for the three months ended June 30, 2022, compared

to investment income of $5.5 million for the three months ended June 30, 2021.

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

Investment income was $0.1 million for the three months ended September 30, 2022, compared to $0.0 million for the three months ended September 30, 2021.

Income tax provision (benefit).

The income tax provision (benefit) was $0.4 million and $(1.8) million for the three months ended June 30, 2022 and June 30, 2021, respectively.

The income tax provision (benefit) was $1.4 million and $0.4 million for the three months ended September 30, 2022 and September 30, 2021, 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 $33.5 million and $74.4 million during the three months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the three months ended June 30, 2022 compared to net loss for the three months ended June 30, 2021 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 depreciation and amortization expense, decreases in interest expense, and decreases in foreign currency translation rates, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in other income, decreases in investment income and a decrease in income tax benefit.

Results of Operations— For the Six Months ended June 30, 2022 Compared to the Six Months ended June 30, 2021

Net loss was $60.2 million and $22.0 million during the three months ended September 30, 2022 and September 30, 2021, respectively.

Net loss during the three months ended September 30, 2022 compared to net loss for the three months ended September 30, 2021 was negatively impacted by the decline in total revenues and increased film and food and beverage costs, increases in operating expense, declines in other income, decreases in equity in earnings and increases in income tax provision, partially offset by decreases in depreciation and amortization expense, decreases in interest expense, decreases in general and administrative expenses, decreases in other income and decreases in foreign currency translation rates.

Results of Operations— For the Nine Months ended September 30, 2022 Compared to the Nine Months ended September 30, 2021

Condensed Consolidated Results of Operations

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

Admissions revenues increased $792.3 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to an increase in attendance from 28.9 million patrons to 98.2 million patrons and a 6.4% increase in average ticket price.

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

Admissions revenues increased $912.5 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to an increase in attendance from 68.9 million patrons to 151.4 million patrons and a 2.5% 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 or limited 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.

Food and beverage revenues increased $437.6 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 9.8% from $7.33 to $6.61 due primarily to an increase in revenues in International markets as a percentage of consolidated revenues from 11.0% during the six months ended June 30, 2021 to 19.7% during the six months ended June 30, 2022.

Food and beverage per patron in International markets is much lower in our International markets than in our U.S.

markets and this change in the mix of revenues resulted in a decline in consolidated food and beverage per patron along with a decrease in foreign currency translation rates.

Additionally, we experienced a decrease in units sold per transaction due to the decline in private theatre rentals from the prior year and a decrease in the percentage of patrons making purchases due to attendance increases.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year, increases in 3D, IMAX and Premium content, partially offset by a decrease in foreign currency translation rates.

Food and beverage revenues increased $505.7 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 6.2% from $6.92 to $6.49 due primarily to a decrease in units sold per transaction due to the decline in private theatre rentals from the prior year, a decrease in the percentage of patrons making purchases due to attendance increases and the decline in foreign currency translation rates.

The higher number of private theatre rentals in the prior year resulted in larger party sizes and larger individual orders.

Total other theatre revenues increased $129.2 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen and other advertising due to the increase in attendance, partially offset by the decrease in foreign currency translation rates.

Total other theatre revenues increased $146.1 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen and other advertising due to the increase in attendance, partially offset by the decrease in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $817.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Film exhibition costs increased $397.6 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 47.4% for the six months ended June 30, 2022, compared to 40.0% for the six months ended June 30, 2021.

The increase in film exhibition cost percentage is primarily due to the concentration of box office revenues in higher grossing films in the current year,

which typically results in higher film exhibition costs.

Operating costs and expenses increased $992.6 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

Film exhibition costs increased $484.3 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 47.7% for the nine months ended September 30, 2022, compared to 40.9% for the nine months ended September 30, 2021.

Additionally, lower film exhibition costs were paid on films with shorter exclusive theatrical windows in the prior year.

Food and beverage costs increased $71.2 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Food and beverage costs increased $86.8 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

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 six months ended June 30, 2022 and 17.0% for the six months ended June 30, 2021.

As a percentage of revenues, operating expense was 38.3% for the six months ended June 30, 2022, and 71.8% for the six months ended June 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 12.1%, or $48.0 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by theatre closures and the decrease in foreign currency translation rates.

As a percentage of food and beverage revenues, food and beverage costs were 16.9% for the nine months ended September 30, 2022, compared to 16.5% for the nine months ended September 30, 2021.

As a percentage of revenues, operating expense was 39.3% for the nine months ended September 30, 2022, compared to 55.1% for the nine months ended September 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 9.2%, or $56.3 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by 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 $195.8 million that have been deferred to future years as of September 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.1 million during the six months ended June 30, 2022, compared to $11.0 million during the six months ended June 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 13.6%, or $14.4 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021 and annual incentive plans based on the improvement in operating performance.

Merger, acquisition, and other costs were $0.4 million during the nine months ended September 30, 2022, compared to $12.4 million during the nine months ended September 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 4.9%, or $7.5 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021 due primarily to higher insurance and company meeting costs.

Depreciation and amortization.

Depreciation and amortization decreased 10.8%, or $23.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Depreciation and amortization decreased 9.4%, or $30.5 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Other expense (income).

Other expense of $92.6 million during the six months ended June 30, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, and the $73.5 million aggregate principal amount of the First Lien Toggle Notes due 2026 and $8.4 million of foreign currency transaction expense, partially offset by a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026 and $10.8 million in government assistance related to COVID-19.

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 $91.6 million during the nine months ended September 30, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, and the $73.5 million aggregate principal amount of the First Lien Toggle Notes due 2026 and $14.7 million of foreign currency transaction expense, partially offset by a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026 and $18.9 million in 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, foreign currency transaction gains of $1.1 million, and estimated credit income of $5.7 million related to contingent lease guarantees, partially offset by a $14.4 million loss on extinguishment of debt and $1.0 million of financing fees related to the write-off of unamortized deferred charges on the Odeon revolver.

Interest expense.

Interest expense decreased $79.0 million to $182.7 million for the six months ended June 30, 2022 compared to $261.7 million during the six months ended June 30, 2021 primarily due to:

Interest expense decreased $82.6 million to $278.4 million for the nine months ended September 30, 2022, compared to $361.0 million during the nine months ended September 30, 2021 primarily due to:

● the extinguishment of $72.5 million of 10%/12% Cash/PIK/Toggle Second Lien Notes due 2026 in May of 2022;

● the conversion of $600.0 million 2.95% Convertible Notes due 2026 to 44,422,860 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;

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● the extinguishment of $300.0 million of 10.5% First Lien Notes due 2026 on February 14, 2022;

● the extinguishment of $73.5 million of 15%/17% Cash/PIK/Toggle Second Lien Notes due 2026;

● the extinguishment of $73.5 million of 15%/17% Cash/PIK/Toggle Second Lien Notes due 2026 on February 14, 2022;

● the decline in foreign currency translation rates,

3 unchanged sentences

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

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $6.1 million for the six months ended June 30, 2022, compared to $5.5 million for the six months ended June 30, 2021.

Investment income.

Investment income was $6.1 million for the six months ended June 30, 2022, compared to investment income of $8.3 million for the six months ended June 30, 2021.

Investment income in the current year includes $1.0 million of appreciation in estimated fair value of our investment in common shares of Hycroft Mining Holding Corporation and $15.1 million of appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft Mining Holding Corporation and a $9.5 million decline in estimated fair value of our investment in NCM common units.

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

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

Equity in loss of non-consolidated entities was $3.3 million for the nine months ended September 30, 2022, compared to earnings of $1.2 million for the nine months ended September 30, 2021.

Investment expense (income).

Investment expense was $12.2 million for the nine months ended September 30, 2022, compared to investment income of $8.3 million for the nine months ended September 30, 2021.

Investment expense in the current year includes $10.8 million of decline in estimated fair value of our investment in common shares of Hycroft Mining Holding Corporation partially offset by $7.4 million of appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft Mining Holding Corporation, an $11.1 million decline in estimated fair value of our investment in NCM common units offset by interest income of $3.3 million.

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 $0.7 million and $(12.0) million for the six months ended June 30, 2022 and June 30, 2021, respectively.

The income tax provision (benefit) was $2.5 million and $(13.9) million for the nine months ended September 30, 2022 and September 30, 2021, 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 $459.0 million and $911.2 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the six months ended June 30, 2022 compared to net loss for the six months ended June 30, 2021 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 or limited operationally due to the COVID-19 pandemic and lifting of seating restrictions, decreases in depreciation and amortization expense, decreases in interest expense, and decreases in foreign currency translation rates, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in other income, decreases in investment income and a decrease in income tax benefit.

Net loss was $685.9 million and $1,135.4 million during the nine months ended September 30, 2022 and September 30, 2021, respectively.

Net loss during the nine months ended September 30, 2022 compared to net loss for the nine months ended September 30, 2021 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 or limited operationally due to the COVID-19 pandemic and lifting of seating restrictions, decreases in depreciation and amortization expense, decreases in interest expense, decreases in general and administrative expenses and decreases in foreign currency translation rates, partially offset by increases in rent expense, decreases in other income, decreases in investment income and a decrease in income tax benefit.

Theatrical Exhibition–U.S.

Total revenues increased $959.0 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Admissions revenues increased $553.0 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to an increase in attendance from 24.0 million patrons to 69.3 million patrons and an 8.8% increase in average ticket price.

Total revenues increased $1,174.4 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

Admissions revenues increased $677.4 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to an increase in attendance from 50.7 million patrons to 107.6 million patrons and an 5.1% 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 or limited 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.

Food and beverage revenues increased $332.9 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance and partially offset by the decrease in food and beverage per patron.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year and increases in 3D, IMAX and Premium content.

Food and beverage revenues increased $407.5 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to the increase in attendance and partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 3.2% from $7.61 to $7.37 due primarily to a decrease in units sold per transaction due to the decline in private theatre rentals from the prior year and a decrease in the percentage of patrons making purchases due to attendance increases.

The higher number of private theatre rentals in the prior year resulted in larger party sizes and larger individual orders.

Total other theatre revenues increased $73.1 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen and other advertising due to the increase in attendance.

Total other theatre revenues increased $89.5 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen and other advertising due to the increase in attendance.

Operating costs and expenses.

Operating costs and expenses increased $588.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Film exhibition costs increased $303.0 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 50.2% for the six months

ended June 30, 2022 and 40.3% for the six months ended June 30, 2021.

Operating costs and expenses increased $761.4 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

Film exhibition costs increased $388.3 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 50.4% for the nine months ended September 30, 2022 and 41.9% for the nine months ended September 30, 2021.

Additionally, lower film exhibition costs were paid on films with shorter exclusive theatrical windows in the prior year.

Food and beverage costs increased $47.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Food and beverage costs increased $62.9 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

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 14.7% for the six months ended June 30, 2022, compared to 15.3% for the six months ended June 30, 2021.

As a percentage of revenues, operating expense was 36.5% for the six months ended June 30, 2022 and 64.3% for the six months ended June 30, 2021 due to the low levels of attendance in the prior year.

Rent expense increased 14.4%, or $41.9 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by 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 $188.3 million that have been deferred to future years as of June 30, 2022.

As a percentage of food and beverage revenues, food and beverage costs were 15.1% for the nine months ended September 30, 2022, compared to 14.8% for the nine months ended September 30, 2021.

As a percentage of revenues, operating expense was 37.6% for the nine months ended September 30, 2022 and 53.4% for the nine months ended September 30, 2021 due to the low levels of attendance in the prior year.

Rent expense increased 11.1%, or $50.2 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by 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 $160.0 million that have been deferred to future years as of September 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.6 million during the six months ended June 30, 2022, compared to $7.2 million during the six months ended June 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 11.4%, or $8.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021, and annual incentive plans based on the improvement in operating performance.

Merger, acquisition, and other costs were $0.9 million during the nine months ended September 30, 2022, compared to $8.5 million during the nine months ended September 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 5.3%, or $5.6 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021 due primarily to higher insurance and meeting costs.

Depreciation and amortization.

Depreciation and amortization decreased 8.1%, or $13.3 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021.

Other expense (income).

Other expense of $94.9 million during the six months ended June 30, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, and the $73.5 million aggregate principal amount of the First Lien Toggle Notes due 2026, partially offset by a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026.

Other income during the six months ended June 30, 2021 was primarily related to $4.2 million in government assistance related to COVID-19.

Depreciation and amortization decreased 6.0%, or $14.6 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021.

Other expense.

Other expense of $92.9 million during the nine months ended September 30, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, and the $73.5 million aggregate principal amount of the First Lien Toggle Notes due 2026, partially offset by a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026.

Other expense of $10.2 million during the nine months ended September 30, 2021 was primarily related to a $14.4 million loss on extinguishment of debt, partially offset by $4.6 million in government assistance related to COVID-19.

Interest expense.

Interest expense decreased $88.3 million to $144.1 million for the six months ended June 30, 2022 compared to $232.4 million during the six months ended June 30, 2021, primarily due to:

Interest expense decreased $89.2 million to $221.7 million for the nine months ended September 30, 2022 compared to $310.9 million during the nine months ended September 30, 2021, primarily due to:

● the extinguishment of $72.5 million of 10%/12% Cash/ PIK/Toggle Second Lien Notes due 2026 in May of 2022;

● the conversion of $600.0 million 2.95% Convertible Notes due 2026 to 44,422,860 Common Stock 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 extinguishment of $500.0 million of 10.5% First Lien Notes due 2025 on February 14, 2022;

● the extinguishment of $300.0 million of 10.5% First Lien Notes due 2026 on February 14, 2022;

● the extinguishment of $73.5 million of 15%/17% Cash/PIK/Toggle second Lien Notes due 2026,

● the extinguishment of $73.5 million of 15%/17% Cash/PIK/Toggle second Lien Notes due 2026 on February 14, 2022,

partially offset by:

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● the issuance of $950.0 million of 7.5% First Lien Senior Secured Notes due 2029 on February 14, 2022.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $0.8 million for the six months ended June 30, 2022, compared to $1.2 million for the six months ended June 30, 2021.

Investment income.

Investment income was $6.1 million for the six months ended June 30, 2022, compared to investment income of $2.8 million for the six months ended June 30, 2021.

Equity in earnings of non-consolidated entities.

Equity in earnings of non-consolidated entities was $2.7 million for the nine months ended September 30, 2022, compared to $4.9 million for the nine months ended September

Investment expense (income).

Investment expense was $12.3 million for the nine months ended September 30, 2022, compared to investment income of $(2.8) million for the nine months ended September 30, 2021.

Investment expense in the current year includes $10.8 million of deterioration in estimated fair value of our investment in common shares of Hycroft Mining Holding Corporation and $7.4 million of appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft Mining Holding Corporation and a $11.1 million decline in estimated fair value of our investment in NCM common units offset by interest income of $(3.3) million.

Income tax provision (benefit).

The income tax provision (benefit) was $0.3 million and $(7.9) million for the six months ended June 30, 2022 and June 30, 2021, respectively.

The income tax provision (benefit) was $0.7 million and $(10.2) million for the nine months ended September 30, 2022 and September 30, 2021, 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 $353.9 million and $709.7 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the six months ended June 30, 2022 compared to net loss for the six months ended June 30, 2021 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 depreciation and amortization expense, decreases in interest expense and increases in investment income, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in other income and a decrease in income tax benefit.

Net loss was $520.6 million and $911.9 million during the nine months ended September 30, 2022 and September 30, 2021, respectively.

Net loss during the nine months ended September 30, 2022 compared to net loss for the nine months ended September 30, 2021 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 depreciation and amortization expense, decreases in general and administrative expenses and decreases in interest expense, partially offset by increases in rent expense, decreases in other income and a decrease in income tax benefit.

Theatrical Exhibition - International Markets

Total revenues increased $400.1 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Admissions revenues increased $239.3 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to an increase in attendance from 4.8 million patrons to 28.9 million patrons and an 8.4% increase in average ticket price.

Total revenues increased $389.9 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

Admissions revenues increased $235.1 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to an increase in attendance from 18.1 million patrons to 43.7 million patrons partially offset by a 3.1% decrease in average ticket price.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year, partially offset by a decrease in foreign currency translation rates.

Food and beverage revenues increased $104.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

The decrease in average ticket price was primarily due a decrease in foreign currency translation rates, partially offset by strategic pricing initiatives put in place over the prior year.

Food and beverage revenues increased $98.2 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 13.8% from $5.00 to $4.31 due primarily to decreases in foreign currency translation rates.

Total other theatre revenues increased $56.1 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, 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 the decrease in foreign currency translation rates.

Total other theatre revenues increased $56.6 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, 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 the decrease in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $229.0 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Film exhibition costs increased $94.6 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 39.3% for the six months ended June 30, 2022, compared to 37.9% for the six months ended June 30, 2021.

Food and beverage costs increased $23.5 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Operating costs and expenses increased $231.2 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

Film exhibition costs increased $96.0 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 39.5% for the nine months ended September 30, 2022, compared to 37.8% for the nine months ended September 30, 2021.

Food and beverage costs increased $23.9 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

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 24.0% for the six months ended June 30, 2022, compared to 31.0% for the six months ended June 30, 2021.

As a percentage of revenues, operating expense was 43.8% for the six months ended June 30, 2022, and 119.5% for the six months ended June 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 5.7%, or $6.1 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially

offset by 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 $30.6 million that have been deferred to future years as of June 30, 2022.

As a percentage of food and beverage revenues, food and beverage costs were 24.2% for the nine months ended September 30, 2022, compared to 24.0% for the nine months ended September 30, 2021.

As a percentage of revenues, operating expense was 44.6% for the nine months ended September 30, 2022, and 61.1% for the nine months ended September 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 3.8%, or $6.1 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by 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 $35.8 million that have been deferred to future years as of September 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $(0.5) million during the six months ended June 30, 2022, compared to $3.8 million during the six months ended June 30, 2021, primarily due to legal and professional costs related to strategic contingency planning in the prior year.

Other general and administrative expense increased 18.9%, or $5.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021, and annual incentive plans based on the improvement in operating performance.

Merger, acquisition, and other costs were $(0.5) million during the nine months ended September 30, 2022, compared to $3.9 million during the nine months ended September 30, 2021, primarily due to legal and professional costs related to strategic contingency planning in the prior year.

Other general and administrative expense increased 4.0%, or $1.9 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021.

The decrease in foreign currency translation rates reduced expenses in the current year compared to the prior year.

Depreciation and amortization.

Depreciation and amortization decreased 19.0%, or $10.4 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Depreciation and amortization decreased 19.9%, or $15.9 million, during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Other income.

Other income of $2.3 million during the six months ended June 30, 2022 was primarily due to $10.8 million in government assistance related to COVID-19 and partially offset by $8.4 million of foreign currency transaction losses.

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 and estimated credit income of $6.0 million related to decreases in contingent lease guarantees.

Other income of $1.3 million during the nine months ended September 30, 2022 was primarily due to $16.2 million in government assistance related to COVID-19 and partially offset by $14.7 million of foreign currency transaction losses.

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 decreases in contingent lease guarantees.

Interest expense.

Interest expense increased $9.3 million to $38.6 million for the six months ended June 30, 2022 compared to $29.3 million during the six months ended June 30, 2021, 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 decline in foreign currency translation rates.

Interest expense increased $6.6 million to $56.7 million for the nine months ended September 30, 2022 compared to $50.1 million during the nine months ended September 30, 2021, 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 decline in foreign currency translation rates.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $5.3 million for the six months ended June 30, 2022, compared to $4.3 million for the six months ended June 30, 2021.

Equity in loss of non-consolidated entities was $6.0 million for the nine months ended September 30, 2022, compared to $3.7 million for the nine months ended September 30, 2021.

Investment income .

Investment income was $0.0 million for the six months ended June 30, 2022, compared to investment income of $5.5 million for the six months ended June 30, 2021.

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 $0.1 million for the nine months ended September 30, 2022, compared to investment income of $5.5 million for the nine months ended September 30, 2021.

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 $0.4 million and $(4.1) million for the six months ended June 30, 2022 and June 30, 2021, respectively.

The income tax provision (benefit) was $1.8 million and $(3.7) million for the nine months ended September 30, 2022 and September 30, 2021, 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 $105.1 million and $201.5 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the six months ended June 30, 2022 compared to net loss for the six months ended June 30, 2021 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 depreciation and amortization expense, and decreases in foreign currency translation rates, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in other income, increases in interest expense, decreases in investment income and a decrease in income tax benefit.

Net loss was $165.3 million and $223.5 million during the nine months ended September 30, 2022 and September 30, 2021, respectively.

Net loss during the nine months ended September 30, 2022 compared to net loss for the nine months ended September 30, 2021 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 depreciation and amortization expense, decreases in general and administrative expenses, and decreases in foreign currency translation rates, partially offset by increases in rent expense, decreases in other income, increases in interest expense, decreases in investment income and a decrease in income tax benefit.

LIQUIDITY AND CAPITAL RESOURCES

Our consolidated revenues are primarily collected in cash, principally through box office admissions and food and beverage sales.

Prior to the impact of COVID-19 on our business, we had an operating “float” which partially financed our operations and which generally permitted us to maintain a smaller amount of working capital capacity.

Prior to the impact of COVID-19 on our business, we had an operating “float” which partially

financed our operations and which generally permitted us to maintain a smaller amount of working capital capacity.

This float existed because admissions revenues are received in cash, while exhibition costs (primarily film rentals) are ordinarily paid to distributors from 20 to 45 days following receipt of box office admissions revenues.

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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, 2022 and December 31, 2021 of $(428.0) million and $54.6 million, respectively.

As of June 30, 2022 and December 31, 2021, working capital included operating lease liabilities of $582.2 million and $605.2 million, respectively, and deferred revenues of $373.1 million and $408.6 million, respectively.

As of June 30, 2022, we had $211.1 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, 2022 and December 31, 2021 of $(738.6) million and $54.6 million, respectively.

As of September 30, 2022 and December 31, 2021, working capital included operating lease liabilities of $565.6 million and $605.2 million, respectively, and deferred revenues of $343.4 million and $408.6 million, respectively.

As of September 30, 2022, we had $211.2 million unused borrowing capacity, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility.

As of December 31, 2021, we had $209.1 million unused borrowing capacity, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility.

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 a further discussion of our Financial Covenants.

As of June 30, 2022, we had cash and cash equivalents of approximately $1.0 billion.

See Note 6—Corporate Borrowings and Finance Lease Liabilities in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for a further discussion of our Financial Covenants.

As of September 30, 2022, we had cash and cash equivalents of $684.6 million.

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

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

Additionally, we enhanced future liquidity through debt refinancing at lower interest rates.

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 further information.

Additionally, we 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 in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q 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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Cash and cash equivalents and restricted cash at end of period

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:

Our 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 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

5 unchanged sentences

Our 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 we paid for expenses related to the strong second quarter 2022 results in early third quarter of 2022.

Our 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.

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

See Note 2—Leases for a summary of the estimated future repayment terms for the remaining $218.9 million of rentals that were deferred during the COVID-19 pandemic.

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 $195.8 million of rentals that were deferred during the COVID-19 pandemic.

Our net cash used in investing activities included:

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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.

Our net cash used in financing activities included:

● $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 our debt issuance of $950.0 million, during the three months ended March 31, 2022.

● $57.9 million of principal and premium payments of, and $1.8 million of cash used to pay for

deferred financing costs during the three months ended June 30, 2022.

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 to repay rent amounts that were deferred during the COVID-19 pandemic 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 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.

● $57.9 million of principal and premium payments and $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.

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 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 our debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility for at least the next 12 months.

In order to achieve net positive operating cash flows and long-term profitability, we believe 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.

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.

We believe 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.

Our 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 the 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.

Our 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.

We currently estimate that our 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.

We 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.

We are 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.

Following the expiration of the Extended Covenant Suspension Period ending March 31, 2023, we 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 we were 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.

We were 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 in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I in this Form 10-Q for more information.

We currently expect we will be able to comply with this financial covenant;

however, we do 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 our next calendar year.

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

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

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

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

The 11.25% Odeon Term Loan 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 we completely repaid the Odeon Term Loan using existing cash and $363.0 million net proceeds from the issuance of new senior secured notes.

Accordingly, we have 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

See Note 13—Subsequent Events in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I in this Form 10-Q for more information.

We or our affiliates actively seek and expect, at any time and from time to time, to continue to seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity (including AMC Preferred Equity Units) or debt, in open-market purchases, privately negotiated transactions or otherwise.

Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors.

The amounts involved may be material.

The amounts involved may be material and to the extent equity is used, dilutive.

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

Our cash expenditures for rent increased significantly during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

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

Including repayments of deferred lease amounts, our 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 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 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.

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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.

While our current cash burn rates have improved, these levels are not sustainable.

In order to achieve net positive operating cash flows and long-term profitability, we believe 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.

Our current cash burn rates are not sustainable.

Further, we cannot accurately predict what future changes may occur to the supply or release date of movie titles available for theatrical exhibition once moviegoers are prepared to return in large numbers.

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Studio negotiations regarding evolving theatrical release models and film licensing terms are ongoing.

There can be no assurance that the attendance levels and other assumptions used to estimate our liquidity requirements and future cash burn rates will be correct, and our ability to be predictive is uncertain due to the unknown magnitude and duration of the COVID-19 pandemic.

Further, there can be no assurances that we will be successful in generating the additional liquidity necessary to meet our obligations beyond twelve months from the issuance of these financial statements on terms acceptable to us or at all.

If we are unable to maintain or renegotiate our minimum liquidity covenant requirements, it could have a significant adverse effect on our business, financial condition and operating results.

If we are unable to maintain compliance with our debt covenant requirements, it could have a significant adverse effect on our business, financial condition and operating results.

Cash Flows from Operating Activities

Cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $371.6 million and $546.7 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

The decrease in cash flows used in operating activities was primarily due to the increase in attendance and decrease in net loss, partially offset by increased working capital used during the six months ended June 30, 2022 compared to the six months ended June 30, 2021 and an increase in cash paid for interest.

Cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $595.2 million and $660.6 million during the nine months ended September 30, 2022 and September 30, 2021, respectively.

The decrease in cash flows used in operating activities was primarily due to the increase in attendance and decrease in net loss, partially offset by increases in working capital used during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 and an increase in cash paid for interest.

We will also continue to repay rent amounts that were deferred during the COVID-19 pandemic, which increase cash outflows from operating activities.

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Cash Flows from Investing Activities

Cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $102.9 million and $2.5 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Cash outflows from investing activities include capital expenditures of $75.2 million and $29.8 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

During the six months ended June 30, 2022, cash flows used in investing activities included investment in Hycroft common stock for $25.0 million, investment in Hycroft warrants for $2.9 million, acquisition of theatre assets for $17.8 million and proceeds from the disposition of long-term assets of $7.2 million related to one property and other assets as well as proceeds of $11.4 million from the sale of securities in conjunction with the liquidation of a non-qualified deferred compensation plan.

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.

Cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $153.7 million and $31.3 million during the nine months ended September 30, 2022 and September 30, 2021, respectively.

Cash outflows from investing activities include capital expenditures of $129.7 million and $53.9 million during the nine months ended September 30, 2022 and September 30, 2021, respectively.

During the nine months ended September 30, 2022, cash flows used in investing activities included investment in Hycroft common stock for $25.0 million, investment in Hycroft warrants for $2.9 million, acquisition of theatre assets for $17.8 million, partially offset

by proceeds from the disposition of long-term assets of $10.8 million and proceeds of $11.4 million from the sale of securities in conjunction with the liquidation of a non-qualified deferred compensation plan.

During the nine months ended September 30, 2021, cash flows used in investing activities included proceeds from the disposition of assets primarily related to proceeds 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.

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.

We generally lease our theatres pursuant to long-term non-cancelable operating leases, which may require the developer, who owns the property, to reimburse us for the construction costs.

We estimate that our capital expenditures, net of landlord contributions, will be approximately $150 million and $200 million for year ended December 31, 2022 to maintain and enhance operations.

We estimate that our capital expenditures, net of landlord contributions, will be approximately $150 million to $200 million for year ended December 31, 2022 to maintain and enhance operations.

Cash Flows from Financing Activities

Cash flows provided by (used in) financing activities, as reflected in the condensed consolidated statements of cash flows, were $(136.0) million and $2,066.9 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Cash flows from financing activities during the six months ended June 30, 2022 was primarily due to principal and premium payments under the First Lien Notes due 2025 of $534.5 million, principal and premium payments under the First Lien Notes due 2026 of $325.6 million, principal and premium payments under the First Lien Toggle Notes due 2026 of $88.1 million, taxes paid for restricted unit withholdings of $52.2 million, repurchase of Second Lien Notes due 2026 of $50.0 million, and cash used to pay for deferred financing costs of $19.5 million, partially offset by the issuance of the First Lien Notes due 2029 of $950.0 million.

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 summary of principal payments required and maturities of corporate borrowings as of June 30, 2022.

Cash flows provided by 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.

Cash flows provided by (used in) financing activities, as reflected in the condensed consolidated statements of cash flows, were $(135.5) million and $2,018.6 million during the nine months ended September 30, 2022 and September 30, 2021, respectively.

Cash flows from financing activities during the nine months ended September 30, 2022 was primarily due to principal and premium payments under the First Lien Notes due 2025 of $534.5 million, principal and premium payments under the First Lien Notes due 2026 of $325.6 million, principal and premium payments under the First Lien Toggle Notes due 2026 of $88.1 million, taxes paid for restricted unit withholdings of $52.2 million, repurchase of Second Lien Notes due 2026 of $50.0 million, and cash used to pay for deferred financing costs of $19.3 million, partially offset by the issuance of the First Lien Notes due 2029 of $950.0 million and net proceeds from AMC Preferred Equity Unit share issuances.

See Note 6—Corporate Borrowings and Finance Lease Liabilities and Note 7 — Stockholders’ Equity 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 summary of principal payments required and maturities of corporate borrowings as of September 30, 2022.

Cash flows provided by 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, 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 First Lien Toggle Notes due 2026 of $40.3 million, payment of deferred financing costs of $19.9 million, and principal payments under the Term Loan due 2026 of $15.0 million.

First Lien Notes due 2029.

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We 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 our 10.5% First Lien Notes due 2025, the then outstanding $300 million aggregate principal amount of our 10.5% First Lien Notes due 2026, and the then outstanding $73.5 million aggregate principal amount of our 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026 and to pay related accrued interest, fees, costs, premiums and expenses.

We recorded a loss on debt extinguishment related to this transaction of $135.0 million in other expense, during the six months ended June 30, 2022.

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

The First Lien Notes due 2029 bear cash interest at a rate of 7.5% per annum payable semi-annually in arrears on February 15 and August 15, beginning on August 15, 2022.

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The First Lien Notes due 2029 are general senior secured obligations of the Company and are secured on a pari passu basis with the Senior Secured Credit Facilities.

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

Equity Distribution Agreement.

On September 26, 2022, we 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 our instructions for the sales, including any price, time or size limits specified by us.

We intend 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.

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