What changed in this filing

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Item 1. Financial Statements

2023-05-05 compared with 2022-11-08 · 367 added, 476 removed, 634 unchanged (57% of the section changed)

3 unchanged sentences

Three Months Ended

Nine Months Ended

(In millions, except share and per share amounts)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

Food and beverage

12 unchanged sentences

Other expense, net:

Other expense (income)

Other expense

Interest expense:

3 unchanged sentences

Equity in (earnings) loss of non-consolidated entities

Investment expense (income)

Investment income

Total other expense, net

Net loss before income taxes

Income tax provision (benefit)

Net loss attributable to noncontrolling interests

Net loss attributable to AMC Entertainment Holdings, Inc.

Net loss per share:

Income tax provision

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

Average shares outstanding:

5 unchanged sentences

Three Months Ended

Nine Months Ended

(In millions)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Other comprehensive income (loss):

March 31, 2023

March 31, 2022

Other comprehensive loss:

Unrealized foreign currency translation adjustments

Realized loss on foreign currency transactions reclassified into investment expense (income), net of tax

Pension adjustments:

Net gain arising during the period

Other comprehensive income (loss):

Net gain (loss) arising during the period

Other comprehensive loss:

Total comprehensive loss

Comprehensive loss attributable to noncontrolling interests

Comprehensive loss attributable to AMC Entertainment Holdings, Inc.

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In millions, except share data)

September 30, 2022

March 31, 2023

December 31, 2022

8 unchanged sentences

Intangible assets, net

Deferred tax asset, net

Other long-term assets

19 unchanged sentences

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

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

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

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

including Series A Convertible Participating Preferred Stock, 10,000,000 authorized, 9,741,909 issued and outstanding as of March 31, 2023;

7,245,872 issued and outstanding December 31, 2022, represented by AMC Preferred Equity Units, each representing a 1/100th interest in a share of Series A Convertible Participating Preferred Stock, of which 1,000,000,000 is authorized;

974,190,794 issued and outstanding as of March 31, 2023;

724,587,058 issued and outstanding as of December 31, 2022

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

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

519,192,389 shares issued and outstanding as of March 31, 2023;

516,838,912 shares issued and outstanding as of December 31, 2022)

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

Three Months Ended

(In millions)

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

Cash flows from operating activities:

1 unchanged sentence

Depreciation and amortization

(Gain) loss on extinguishment of debt

Deferred income taxes

Loss on extinguishment of debt

Unrealized loss on investments in Hycroft

Unrealized loss on investments in NCM

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

Unrealized loss (gain) on investments Hycroft

Amortization of net premium on corporate borrowings to interest expense

Amortization of deferred financing costs to interest expense

PIK interest expense

Non-cash portion of stock-based compensation

Loss on disposition of assets

Gain on disposition of Baltics

Loss on dispositions

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

Gain on disposition of Saudi Cinema Company

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

Landlord contributions

2 unchanged sentences

Net periodic benefit income

Non-cash shareholder litigation expense

Change in assets and liabilities:

4 unchanged sentences

Capital expenditures

Proceeds from disposition of Baltics, net of cash and transaction costs

Acquisition of theatre assets

Proceeds from disposition of Saudi Cinema Company

Proceeds from disposition of long-term assets

Proceeds from sale of securities

Investments in non-consolidated entities, net

1 unchanged sentence

Cash flows from financing activities:

Repurchase of Senior Subordinated Notes due 2026

Proceeds from issuance of First Lien Notes due 2029

Proceeds from issuance of Odeon Term Loan due 2023

Proceeds from First Lien Toggle Notes due 2026

Principal payments under First Lien Notes due 2025

5 unchanged sentences

Repurchase of Second Lien Notes due 2026

Repayments under revolving credit facilities

Scheduled principal payments under Term Loan due 2026

Net proceeds from Class A common stock issuance

Net proceeds from Class A common stock issuance to Mudrick

Net proceeds from AMC Preferred Equity Units issuance

Payments related to sale of noncontrolling interest

Principal payments under finance lease obligations

4 unchanged sentences

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

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

Net decrease in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

2 unchanged sentences

Cash paid during the period for:

Interest (including amounts capitalized of $ 0.1 million and $ 0.2 million, respectively)

Income taxes paid (received), net

Income taxes paid, net

Schedule of non-cash activities:

1 unchanged sentence

Construction payables at period end

AMC Preferred Equity Units issuance costs payable at period end

Other third-party AMC Preferred Equity Units issuance costs payable

Extinguishment of Second Lien Notes due 2026 in exchange for share issuance

See Notes to Condensed Consolidated Financial Statements.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2022

March 31, 2023

NOTE 1—BASIS OF PRESENTATION

2 unchanged sentences

and its subsidiaries, (collectively with Holdings, unless the context otherwise requires, the “Company” or “AMC”), is principally involved in the theatrical exhibition business and owns, operates or has interests in theatres located in the United States and Europe.

Temporarily suspended or limited operations.

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.

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

or International theatres.

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

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

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

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

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

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

Three Months Ended

September 30,

(In millions)

Cash flows from operating activities:

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Net cash provided by (used in) financing activities

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

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

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents and restricted cash at end of period

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

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

Three Months Ended

Nine Months Ended

September 30,

(In millions)

Cash flows from operating activities:

Net cash used in operating activities

Cash flows from investing activities:

Net cash used in investing activities

Cash flows from financing activities:

Net cash provided by (used in) financing activities

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

Net decrease in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents and restricted cash at end of period

The Company’s net cash provided by (used in) operating activities deteriorated by $ 341.5 million during the three months ended March 31, 2022 compared to the three months ended December 31, 2021 from $ 46.5 million to $( 295.0 ) million.

The decline in net cash provided by operating activities from the three months ended December 31, 2021 to the three months ended March 31, 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 strong late fourth quarter 2021 results in early first quarter of 2022.

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

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

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

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

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

See Note 2—Leases 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.

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

● $ 34.8 million of capital expenditures and $ 27.9 million of investments in non-consolidated entities, partially offset by proceeds from the disposition of long-term assets of $ 7.2 million during the three months ended March 31, 2022.

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

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

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

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

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

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

The Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations, satisfy its obligations, including cash outflows to repay rent amounts that were deferred during the COVID-19 pandemic and planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under its debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility for at least the next 12 months.

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

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

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

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

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

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

The Company’s cash resources and needs will

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

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

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

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

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

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

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

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

See Note 13—Subsequent Events for more information.

Following the expiration of the Extended Covenant Suspension Period ending March 31, 2023, the Company will be subject to the financial covenant under the Senior Secured Revolving Credit Facility beginning with the quarter ending June 30, 2023.

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

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

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

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

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

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

See Note 13—Subsequent Events for more information.

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

The Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations, satisfy its obligations, and comply with the minimum liquidity covenant requirement under its Senior Secured Revolving Credit Facility for at least the next twelve months.

Pursuant to the Twelfth Amendment to Credit Agreement, the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant applicable to the Senior Secured Revolving Credit Facility under the Credit Agreement through March 31, 2024.

The current maturity date of the Senior Secured Revolving Credit Facility is April 22, 2024;

since the financial covenant applicable to the Senior Secured Revolving Credit Facility is tested as of the last day of any fiscal quarter for which financial statements have been (or were required to have been) delivered, the financial covenant has been effectively suspended through maturity of the Senior Secured Revolving Credit Facility.

As of March 31, 2023, the Company was subject to a minimum liquidity requirement of $ 100 million as a condition to the financial covenant suspension period under the Credit Agreement.

The Company’s current cash burn rates are not sustainable long-term.

In order to achieve net positive operating cash flows and long-term profitability, the Company believes that operating revenues will need to increase significantly to levels in line with pre-COVID operating revenues.

Until such time as the Company is able to achieve positive operating cash flow, it is difficult to estimate the Company’s liquidity requirements, future cash burn rates, future operating revenues, and attendance levels.

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

There can be no assurance that the operating revenues, 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 limited ability to predict studio film release dates, the overall production and theatrical release levels and success of individual titles.

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

The Company may, at any time and from time to time, seek to retire or purchase its outstanding debt through cash purchases and/or exchanges for equity (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 it may determine, and will depend on prevailing market conditions, its liquidity requirements, contractual restrictions and other factors.

The amounts involved may be material.

The Company 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 $ 195.8 million as of September 30, 2022.

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

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

AMC Preferred Equity Units.

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

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

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

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

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

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

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

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

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

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

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

On December 22, 2022, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”) with Antara Capital LP (“Antara”) pursuant to which the Company agreed to (i) sell to Antara 106,595,106 AMC Preferred Equity Units for an aggregate purchase price of $ 75.1 million and (ii) simultaneously purchase from Antara $ 100.0 million aggregate principal amount of the Company’s 10 %/ 12 % Cash/PIK Toggle Second Lien Notes due 2026 in exchange for 91,026,191 AMC Preferred Equity Units.

On February 7, 2023, the Company issued 197,621,297 AMC Preferred Equity Units to Antara in exchange for $ 75.1 million in cash and $ 100.0 million aggregate principal amount of the Company’s 10 %/ 12 % Cash/PIK Toggle Second Lien Notes due 2026.

The Company recorded $ 193.7 million to stockholders’ deficit as a result of the transaction.

The Company paid $ 1.4 million of accrued interest in cash upon exchange of the notes.

See Note 7—Stockholders’ Equity for more information.

During the three months ended March 31, 2023 the Company raised gross proceeds of approximately $ 80.3 million and paid fees to a sales agent and incurred other third-party issuance costs of approximately $ 2.0 million and $ 7.8 million, respectively, through its at-the-market offering of approximately 49.3 million shares of its AMC Preferred Equity Units.

The Company paid $ 6.8 million of other third-party issuance costs during the three months ended March 31, 2023.

See Note 7—Stockholders’ Equity and Note 13—Subsequent Events for further information regarding at-the-market offerings.

The below table summarizes the cash debt repurchase transactions during the three months ended March 31, 2023, including related party transactions with Antara, which became a related party on February 7, 2023.

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

Aggregate Principal

Reacquisition

Accrued Interest

(In millions)

Extinguishment

Related party transactions:

Second Lien Notes due 2026

5.875 % Senior Subordinated Notes due 2026

Total related party transactions

Non-related party transactions:

Second Lien Notes due 2026

Total non-related party transactions

Total debt repurchases

Use of Estimates.

8 unchanged sentences

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

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

Due to the seasonal nature of the Company’s business, results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023.

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

markets and International markets.

Cash and equivalents.

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

Cash and Cash Equivalents.

At March 31, 2023, cash and cash equivalents for the U.S.

markets and International markets were $ 383.9 million and $ 111.7 million respectively, and at December 31, 2022, cash and cash equivalents were $ 508.0 million and $ 123.5 million, respectively.

1 unchanged sentence

Restricted cash is cash held in the Company’s bank accounts in International markets as a guarantee for certain landlords.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the condensed consolidated balance sheets to the total of the amounts in the condensed consolidated statements of cash flows.

(In millions)

March 31, 2023

December 31, 2022

Cash and cash equivalents

Restricted cash

Total cash and cash equivalents and restricted cash in the statement of cash flows

Accumulated Other Comprehensive Loss.

3 unchanged sentences

Balance December 31, 2022

Other comprehensive income (loss)

Balance September 30, 2022

Other comprehensive loss

Balance March 31, 2023

Accumulated Depreciation and Amortization.

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

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

Other expense (income).

The following table sets forth the components of other expense (income):

Accumulated depreciation was $ 2,915.9 million and $ 2,853.8 million at March 31, 2023 and December 31, 2022, respectively, related to property.

Accumulated amortization of intangible assets was $ 16.8 million and $ 22.2 million at March 31, 2023 and December 31, 2022, respectively.

Other Expense.

The following table sets forth the components of other expense:

Three Months Ended

Nine Months Ended

(In millions)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

Decreases related to contingent lease guarantees

3 unchanged sentences

Non-operating components of net periodic benefit income

Loss on extinguishment of debt

Financing fees related to modification of debt agreements

Total other expense (income)

Accounting Pronouncements Recently Adopted

Government Assistance.

In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, Government Assistance (Topic 832) Disclosures by Business Entities about Government Assistance (“ASU 2021-10”).

The amendments in ASU 2021-10 require annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy, including (1) information about the nature of the transactions and the related accounting policy used to account for the transactions, (2) the line items on the balance sheet and income statement that are affected by the transactions and the amounts applicable to each financial statement line item, and (3) significant terms and conditions of the transactions, including commitments and contingencies.

The Company is applying the amendments in ASU 2021-10 prospectively as of January 1, 2022 and the annual government assistance disclosure requirements are effective for the Company during the year ending December 31, 2022.

Gain on extinguishment - Senior Subordinated Notes due 2026

Loss on extinguishment - First Lien Notes due 2025

Loss on extinguishment - First Lien Notes due 2026

Loss on extinguishment - First Lien Toggle Notes due 2026

Gain on extinguishment - Second Lien Notes due 2026

Derivative stockholder settlement

Shareholder litigation contingency

Total other expense

NOTE 2—LEASES

4 unchanged sentences

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

Equipment leases primarily consist of food and beverage equipment.

Equipment leases primarily consist of sight and sound and food and beverage equipment.

The Company received rent concessions from 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 $ 123.6 million as of March 31, 2023.

In instances where there were no substantive changes to the lease terms, i.e., modifications that resulted in total payments of the modified lease being substantially the same or less than the total payments of the existing lease, the Company elected the relief as provided by the FASB staff related to the accounting for certain lease concessions.

1 unchanged sentence

The deferred payment amounts have been recorded in the Company’s lease liabilities to reflect the change in the timing of payments.

The deferred payment amounts included in current maturities of operating lease liabilities and long-term operating lease liabilities are reflected in the condensed consolidated statements of cash flows as part of the change in accrued expenses and other liabilities.

Those leases that did not meet the criteria for treatment under the FASB relief were evaluated as lease modifications.

The deferred payment amounts included in accounts payable for contractual rent amounts due and not paid are reflected in accounts payable on the condensed consolidated balance sheets and in the condensed consolidated statements of cash flows as part of the change in accounts payable.

The deferred payment amounts included in accounts payable for contractual rent amounts due and not paid are reflected in accounts payable on the condensed consolidated balance sheets and in the

condensed consolidated statements of cash flows as part of the change in accounts payable.

In addition, the Company included deferred lease payments in operating lease right-of-use assets as a result of lease remeasurements.

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

September 30,

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

(In millions)

4 unchanged sentences

Total deferred lease amounts

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

(1) During the three months ended March 31, 2023, the decrease in fixed operating lease deferred amounts includes $ 5.7 million of rent payments that are included in change in accounts payable and $ 26.8 million included in deferred rent and other non-cash rent in the condensed consolidated statement of cash flows.

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

Three Months Ended

Nine Months Ended

September 30,

(In millions)

3 unchanged sentences

Theatre properties

Operating expense (income)

Operating expense

Office and other

10 unchanged sentences

Cash flow and supplemental information is presented below:

Nine Months Ended

September 30,

Three Months Ended

(In millions)

8 unchanged sentences

(1) Includes lease extensions and option exercises.

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

As of September 30, 2022

The following table represents the weighted-average remaining lease term and discount rate as of March 31, 2023:

As of March 31, 2023

Weighted Average

4 unchanged sentences

Finance leases

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

Operating Lease

1 unchanged sentence

(In millions)

Three months ending December 31, 2022 (1)

Nine months ending December 31, 2023 (1)

Total lease payments

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Lease Payments

Three months ended December 31, 2022

Three months ended March 31, 2023

Total deferred lease amounts recorded in AP

Nine months ended December 31, 2023

Total deferred lease amounts recorded in accounts payable

(2) The minimum annual payments table above includes deferred undiscounted cash rent amounts that were due and not paid related to operating and finance leases, as shown below:

2 unchanged sentences

(In millions)

Three months ended December 31, 2022

Nine months ended December 31, 2023

Total deferred lease amounts

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

As of March 31, 2023, the Company had signed additional operating lease agreements for three theatres that have not yet commenced with minimum annual payments of approximately $ 79.5 million, which are expected to commence between years 2023 and 2024 and carry lease terms ranging from 10 to 20 years .

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

During the three months ended March 31, 2023, the Company received a $ 13.0 million buyout incentive from a landlord which provided the landlord the right to terminate the lease of one theatre.

The incentive was treated as a reduction to rent expense in the Company’s condensed consolidated statement of operations.

NOTE 3—REVENUE RECOGNITION

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Three Months Ended

Nine Months Ended

(In millions)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

Major revenue types

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Three Months Ended

Nine Months Ended

(In millions)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

Timing of revenue recognition

5 unchanged sentences

(In millions)

September 30, 2022

March 31, 2023

December 31, 2022

4 unchanged sentences

(In millions)

September 30, 2022

March 31, 2023

December 31, 2022

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Foreign currency translation adjustment

Balance September 30, 2022

Balance March 31, 2023

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

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Balance December 31, 2022

Common Unit Adjustment–additions of common units

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

Balance September 30, 2022

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

Balance March 31, 2023

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

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Gift Cards and Exchange Tickets.

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

The total amount of non-redeemed gift cards and exchange tickets included in deferred revenues and income in the condensed consolidated balance sheet as of March 31, 2023 was $ 298.2 million.

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

Loyalty Programs.

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

As of March 31, 2023, the amount of deferred revenues allocated to the loyalty programs included in deferred revenues and income in the condensed consolidated balance sheet was $ 67.0 million.

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

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NOTE 4—GOODWILL

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

The following table summarizes the changes in goodwill by reporting unit for the three months ended March 31, 2023:

International

Consolidated Goodwill

(In millions)

Domestic Theatres

International Theatres

Gross Carrying Amount

Accumulated Impairment Losses

Net Carrying Amount

Gross Carrying Amount

Accumulated Impairment Losses

Net Carrying Amount

Gross Carrying Amount

Accumulated Impairment Losses

Net Carrying Amount

Balance December 31, 2022

Currency translation adjustment

Balance September 30, 2022

Balance March 31, 2023

NOTE 5—INVESTMENTS

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

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

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

On December 30, 2022, the Company entered into an agreement to sell its 10.0 % investment in Saudi Cinema Company, LLC for SAR 112.5 million ($ 30.0 ) million, and on January 24, 2023, the Saudi Ministry of Commerce recorded the sale of equity and the Company received the proceeds on January 25, 2023.

The Company recorded a gain on the sale of $ 15.5 million in investment income during the three months ended March 31, 2023.

Investments in non-consolidated affiliates as of March 31, 2023 include interests in Digital Cinema Distribution Coalition, LLC (“DCDC”) of 14.6 %, AC JV, LLC (“AC JV”), owner of Fathom Events, of 32.0 %, SV Holdco LLC (“SV Holdco”), owner of Screenvision, of 18.4 % and Digital Cinema Media Ltd.

(“DCM”) of 50.0 %.

The Company also has partnership interests in three U.S.

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

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

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

During the three months ended March 31, 2023 and March 31, 2022, the Company recorded equity in (earnings) loss of non-consolidated entities of $( 1.4 ) million and $ 5.1 million, respectively.

Related Party Transactions with Equity Method Investees.

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

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

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

At March 31, 2023 and December 31, 2022, the Company recorded net receivable amounts due from equity method investees of $ 0.5 million and $ 1.7 million, respectively, primarily related to on-screen advertising revenue and other transactions.

The Company recorded related party transactions with equity method investees in other revenues and film exhibition costs of $ 5.0 million and $ 3.0 million, respectively, during the three months ended March 31, 2023, and $ 5.5 million and $ 1.4 million, respectively, during the three months ended March 31, 2022.

Investment in Hycroft

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Each warrant is exercisable for one common share of Hycroft at a price of $ 1.068 per share over a 5-year term through March 2027.

Hycroft filed a resale registration statement to register the common shares and warrant shares for sale under the Securities Act on April 14, 2022 which became effective on June 2, 2022.

Hycroft filed a resale registration statement to register the common shares and warrant shares for sale under the Securities Act of 1933, as amended (the “Securities Act”) on April 14, 2022 which became effective on June 2, 2022.

The Company accounts for the common shares of Hycroft under the equity method and has elected the fair value option in accordance with ASC 825-10.

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

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

During the three months ended March 31, 2023 and March 31, 2022, the Company recorded unrealized (gain) loss in investment income of $ 4.6 million and $( 63.9 ) million, respectively.

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

NCM Transaction

Pursuant to the Company’s Common Unit Adjustment Agreement, from time-to-time common units of NCM held by the Founding Members will be adjusted up or down through a formula (“Common Unit Adjustment” or “CUA”), primarily based on increases or decreases in the number of theatre screens operated and theatre attendance generated by each Founding Member.

The CUA is computed annually, except that an earlier CUA will occur for a Founding Member if its acquisition or disposition of theatres, in a single transaction or cumulatively since the most recent CUA, will cause a change of 2 % or more in the total annual attendance of all of the Founding Members.

In March 2022, the NCM CUA resulted in a positive adjustment of 5,954,646 common units for the Company.

The Company received the units and recorded the common units as an addition to deferred revenues for the ESA at fair value of $ 15.0 million, based upon a price per share of National CineMedia, Inc.

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

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

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

NOTE 6—CORPORATE BORROWINGS AND FINANCE LEASE LIABILITIES

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(In millions)

September 30, 2022

March 31, 2023

December 31, 2022

First Lien Secured Debt:

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

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

7.5 % First Lien Notes due 2029

10.5 % First Lien Notes due 2025

Senior Secured Credit Facility-Term Loan due 2026 ( 7.684 % as of March 31, 2023 and 7.274 % as of December 31, 2022)

12.75 % Odeon Senior Secured Notes due 2027

7.5 % First Lien Notes due 2029

15 %/ 17 % Cash/PIK Toggle First Lien Secured Notes due 2026

Second Lien Secured Debt:

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Subordinated Debt:

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

6.375 % Senior Subordinated Notes due 2024 (£ 4.0 million par value as of March 31, 2023)

5.75 % Senior Subordinated Notes due 2025

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Current maturities corporate borrowings

Current maturities finance lease liabilities

Current maturities finance lease obligations

Total noncurrent carrying value of corporate borrowings and finance lease liabilities

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

September 30,

(In millions)

10 %/ 12 % Cash/PIK Toggle Second Lien Subordinated Notes due 2026

15 %/ 17 % Cash/PIK Toggle First Lien Secured Notes due 2026

10.5 % First Lien Notes due 2026

10.5 % First Lien Notes due 2025

Senior Secured Credit Facility-Term Loan due 2026

10.75 % in Year 1, 11.25 % thereafter Cash/PIK Odeon Term Loan Facility due 2023

12.75 % Odeon Senior Secured Notes due 2027

6.375 % Senior Subordinated Notes due 2024

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

The following table provides the principal payments required and maturities of corporate borrowing as of March 31, 2023:

(In millions)

Three months ended December 31, 2022

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

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

See Note 13 – Subsequent Events for more information

First Lien Notes due 2029

On February 14, 2022, the Company issued $ 950.0 million aggregate principal amount of its 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 the Company, the guarantors named therein and U.S.

Bank Trust Company, National Association, as trustee and collateral agent.

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

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

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

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.

The First Lien Notes due 2029 have not been registered under the Securities Act of 1933, as amended, and will mature on February 15, 2029.

The Company may redeem some or all of the First Lien Notes due 2029 at any time on or after February 15, 2025, at the redemption prices equal to (i) 103.750 % for the twelve-month period beginning on February 15, 2025;

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

In addition, the Company may redeem up to 35 % of the aggregate principal amount of the First Lien Notes due 2029 using net proceeds from certain equity offerings completed prior to February 15, 2025 at a redemption price equal to 107.5 % of

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

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

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

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

The First Lien Notes due 2029 are secured, on a pari passu basis with the Senior Secured Credit Facilities, on a first-priority basis by substantially all of the tangible and intangible assets owned by the Company and guarantors that secure obligations under the Senior Secured Credit Facilities including pledges of capital stock of certain of the Company’s and the guarantor’s wholly-owned material subsidiaries (but limited to 65 % of the voting stock of any foreign subsidiary), subject to certain thresholds, exceptions and permitted liens.

The indentures governing the First Lien Notes due 2029 contain covenants that restrict the ability of the Company to, among other things:

(i) incur additional indebtedness, including additional senior indebtedness;

(ii) pay dividends on or make other distributions in respect of its capital stock;

(iii) purchase or redeem capital stock or prepay subordinated debt or other junior securities (iv) create liens ranking pari passu in right of payment with or subordinated in right of payment to First Lien Notes due 2029;

(v) enter into certain transactions with its affiliates;

and (vi) merge or consolidate with other companies or transfer all or substantially all of their respective assets.

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

The indentures governing the First Lien Notes due 2029 also provides for events of default, which, if any occur, would permit or require the principal, interest and any other monetary obligations on all the then outstanding notes to be due and payable immediately.

Nine months ended December 31, 2023

Debt Repurchases

The below table summarizes the cash debt repurchase transactions during the three months ended March 31, 2023, including the related party transactions with Antara, which became a related party on February 7, 2023:

Aggregate Principal

Reacquisition

Accrued Interest

(In millions)

Extinguishment

Related party transactions:

Second Lien Notes due 2026

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

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

Odeon Term Loan Facility due 2023

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

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

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

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

See Note 13—Subsequent Events for more information.

5.875 % Senior Subordinated Notes due 2026

Total related party transactions

Non-related party transactions:

Second Lien Notes due 2026

Total non-related party transactions

Total debt repurchases

Financial Covenants

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

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

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

See Note 13—Subsequent Events for more information.

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

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

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

The Company entered the Ninth Amendment to Credit Agreement pursuant to which the requisite revolving lenders party thereto agreed to extend the fixed date for the termination of 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 by the Eleventh Amendment to Credit Agreement from March 31, 2022 to March 31, 2023 and further extended by the Twelfth Amendment to Credit Agreement from March 31, 2023 to March 31, 2024, in each case, as described, and on the terms and conditions specified, therein.

The Company is currently subject to a minimum liquidity requirement of $ 100 million as a condition to the Extended Covenant Suspension Period.

The current maturity date of the Senior Secured Revolving Credit Facility is April 22, 2024;

NOTE 7—STOCKHOLDERS’ EQUITY

8 unchanged sentences

Equity Distribution Agreement

Share Issuances

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

1 unchanged sentence

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

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

On December 22, 2022, the Company entered into a forward purchase agreement (the “Forward Purchase Agreement”) with Antara pursuant to which the Company agreed to (i) sell to Antara 106,595,106 AMC Preferred Equity Units for an aggregate purchase price of $ 75.1 million and (ii) simultaneously purchase from Antara $ 100.0 million aggregate principal amount of the Company’s 10 %/ 12 % Cash/PIK Toggle Second Lien Notes due 2026 in exchange for 91,026,191 AMC Preferred Equity Units.

The Company recorded $ 193.7 million to stockholders’ deficit as a result of the transaction.

The Company paid $ 1.4 million of accrued interest in cash upon exchange of the notes.

During the three months ended March 31, 2023 the Company raised gross proceeds of approximately $ 80.3 million and paid fees to the Sales Agent and incurred other third-party issuance costs of approximately $ 2.0 million and $ 7.8 million, respectively, through its at-the-market offering of approximately 49.3 million shares of its AMC Preferred Equity Units.

The Company paid $ 6.8 million of other third-party issuance costs during the three months ended March 31, 2023.

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

Shareholder Litigation

Two putative stockholder class actions have been filed that assert a breach of fiduciary duty against certain of the Company’s directors and a claim for breach of 8 Del.

§ 220 against those directors and the Company, arising out of the Company’s creation of the APEs, the Antara Transactions, and the Charter Amendment Proposals.

See Note 11—Commitments and Contingencies for further information regarding the litigation.

Stock-Based Compensation

1 unchanged sentence

Three Months Ended

Nine Months Ended

September 30,

(In millions)

Board of directors stock award expense

Equity classified awards:

Special awards expense

Board of director stock award expense

Restricted stock unit expense

Performance stock unit expense

Special performance stock unit expense

Total equity classified awards:

Liability classified awards:

Restricted and performance stock unit expense

Total liability classified awards:

Total stock-based compensation expense

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

As of March 31, 2023, the estimated remaining unrecognized compensation cost related to stock-based compensation grants was approximately $ 37.2 million, which reflects assumptions related to attainment of performance targets based on the scales as described below.

The weighted average period over which this remaining compensation expense is expected to be recognized is approximately 1.2 years.

2 unchanged sentences

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

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

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

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

Special Awards

On February 23, 2023, AMC’s Board of Directors approved special awards in lieu of vesting of the 2022 PSU awards.

The special awards were accounted for as modification to the 2022 PSU awards which lowered the Adjusted EBITDA and free cash flow performance targets such that 200 % vesting was achieved for both tranches.

This modification resulted in the immediate additional vesting of 2,389,589 Common Stock 2022 PSUs and 2,389,589 AMC Preferred Equity Unit 2022 PSUs.

This was treated as a Type 3 modification (improbable-to-probable) which requires the Company to recognize additional stock compensation expense based on the modification date fair values of the Common Stock PSUs and AMC Preferred Equity Units PSUs of $ 6.23 and $ 2.22 , respectively.

During the three months ended March 31, 2023, the Company recognized $ 20.2 million of additional stock compensation expense.

Awards Granted in 2023

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

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

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

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

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

During the three months ended March 31, 2023, AMC’s Board of Directors approved awards of stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan.

The grant date fair value of these equity classified awards was based on the closing price of AMC’s Class A common stock and AMC Preferred Equity Units of $ 6.23 and $ 2.22 , respectively.

AMC’s Board of Directors also granted awards to non-section 16 officers that are expected to be settled in cash.

Participants receiving cash settlement shall receive an amount of cash equal to the closing price of an AMC Preferred Equity Unit multiplied by the number of underlying cash based RSUs and PSUs awarded.

These awards have been classified as liabilities and are included within accrued expenses and other liabilities in the condensed consolidated balance sheets.

The vesting requirements and vesting periods are identical to the equity classified awards described below.

The Company recognizes expense related to these awards based on the fair value of the AMC Preferred Equity Units, giving effect to the portion of services rendered during the requisite services period.

As of March 31, 2023 there were 1,723,830 nonvested underlying AMC Preferred Equity Unit RSUs and PSUs related to awards granted to non-section 16 officers.

There are 1,149,186 nonvested underlying AMC Preferred Equity Unit RSUs and PSUs (2023 Tranche Year) that are currently classified as liabilities and 574,644 nonvested underlying AMC Preferred Equity Unit PSUs (2024 & 2025 Tranche Year) which have not been granted for accounting purposes as the performance targets for the 2024 and 2025 PSU Tranche Years have yet to be established.

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

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

Each unit represents the right to receive one share of Common Stock or one AMC Preferred Equity Unit at a future date.

The 2023 award agreements generally had the following features:

● Stock Award Agreement:

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

During the three months ended March 31, 2023, the Company granted awards of 85,552 fully vested shares of Common Stock and 153,696 AMC Preferred Equity Units to its independent members of AMC’s Board of Directors with a grant date fair value of $ 0.9 million.

● Restricted Stock Unit Award Agreement:

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

During the three months ended March 31, 2023, the Company granted RSU awards of 2,827,979 to certain members of management with a grant date fair value of $ 11.6 million.

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

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

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

These RSUs will be settled within 30 days of vesting.

● Performance Stock Unit Award Agreement:

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

During the three months ended March 31, 2023, total PSUs of 942,613 were awarded (“2023 PSU award”) to certain members of management and executive officers, with the total PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year within the performance period (“Tranche Year”).

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

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Therefore, the grant date (and fair value measurement date) for each Tranche Year is the date at the beginning of each year when a mutual understanding of the key terms and conditions are reached per ASC 718, Compensation – Stock compensation.

The 2022 PSU award grant date fair value for the 2022 Tranche Year award of 464,540 units was approximately $ 4.5 million and the 2021 PSU award grant date fair value for the 2022 Tranche Year award of 1,757,080 units was approximately $ 17.3 million, measured using performance targets at 100 %.

The 2020 PSU award for the 2022 Tranche Year was previously granted in year 2020, and was subsequently modified on October 30, 2020 where the grant date fair value was not determined until February 16, 2022 when the performance targets were established.

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

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

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

Shares of RSU

The 2023 PSU award grant date fair value for the 2023 Tranche Year award of 942,613 units was $ 3.9 million, the 2022 PSU award grant date fair value for the 2023 Tranche Year award of 461,016 units was $ 1.9 million, and the 2021 PSU award grant date fair value for the 2023 Tranche Year Award of 1,601,522 units was $ 6.8 million, measured using performance targets at 100 %.

The following table represents the equity classified nonvested RSU and PSU activity for the three months ended March 31, 2023:

AMC Preferred

RSUs and PSUs

Nonvested at January 1, 2023

Granted - Special Award

( 1,246,290 )

Vested - Special Award

( 1,284,818 )

( 1,294,464 )

Cancelled (2)

Cancelled - Special Award (2)

( 1,104,771 )

Nonvested at September 30, 2022

( 1,095,125 )

Nonvested at March 31, 2023

Tranche Years 2024 and 2025 awarded under the 2023 PSU award and Tranche Year 2024 awarded under the 2022 PSU award with grant date fair values to be determined in years 2024 and 2025, respectively

Total Nonvested at September 30, 2022

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

Total Nonvested at March 31, 2023

(1) The number of PSU shares granted under the Tranche Year 2023 assumes the Company will attain a performance target at 100 % for the Adjusted EBITDA target and 100 % for the free cash flow target.

The PSUs vest ratably based on a scale ranging from 80 % to 120 % of the performance target with the vested amount ranging from 50 % to 200 % for Tranche Year 2022 awards granted under the 2022, 2021 and 2020 PSU awards.

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

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

As a result, the Company paid taxes for restricted unit withholdings of approximately $ 13.1 million during the three months ended March 31, 2023.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Nine Months Ended September 30, 2022

For the Three Months Ended March 31, 2023

Preferred Stock

Series A Convertible

Class A Voting

Participating

Depositary Shares of

Class A Common Stock

Preferred Stock

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(In millions, except share and per share data)

Equity Units (2)

Equity (Deficit)

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Other comprehensive loss

AMC Preferred Equity Units issuance

Antara Forward Purchase Agreement (2)

Taxes paid for restricted unit withholdings

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Balances March 31, 2023

Other comprehensive income

Stock-based compensation

Balances June 30, 2022

Other comprehensive income

AMC Preferred Equity Units issuance

Stock-based compensation

Balances September 30, 2022

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

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

(1) Includes 85,552 Class A common stock shares and 153,696 AMC Preferred Equity Units awarded to the Board of Directors, 2,267,925 vested Class A common stock RSUs and PSUs, and 2,540,754 AMC Preferred Equity Units RSUs and PSUs.

(2) Includes $ 75.1 million of cash proceeds and $ 118.6 million carrying value of the debt exchanged for AMC Preferred Equity Units.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Nine Months Ended September 30, 2021

For the Three Months Ended March 31, 2022

Preferred Stock

Series A Convertible

Depositary Shares

Participating

Class A and Class B Common Stock

Depositary Shares of

Preferred Stock

Preferred Equity

Treasury Stock

AMC Preferred

Comprehensive

Stockholders’

Noncontrolling

(In millions, except share and per share data)

Income (Loss)

Equity (Deficit)

Balances December 31, 2021

Other comprehensive loss

Baltics noncontrolling capital contribution

Class A common stock, accrued dividend equivalent adjustment

Class A common stock issuance

Convertible Notes due 2026 stock conversion

Wanda forfeit and cancellation of Class B shares

( 5,666,000 )

Taxes paid for restricted unit withholdings

Stock-based compensation (1)

Balances March 31, 2022

Other comprehensive income

100% liquidation of Baltics

Class A common stock, accrued dividend equivalent adjustment

Class A common stock issuance

( 7,465,250 )

Class A common stock issuance to Mudrick

Stock-based compensation

Balances June 30, 2021

Other comprehensive loss

Class A common stock, accrued dividend equivalent adjustment

Class A common stock issuance fees

Stock-based compensation

Balances September 30, 2021

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

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

NOTE 8—INCOME TAXES

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

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

The Company is using a discrete income tax calculation for the three months ended March 31, 2023 due to the lingering effects of the COVID-19 pandemic on the industry.

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

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

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

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

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

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

The effective tax rate for the three months ended March 31, 2023 reflects the impact of these valuation allowances against U.S.

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

The actual effective rate for the three months ended March 31, 2023 was ( 0.8 )%.

The Company’s consolidated tax rate for the three months ended March 31, 2023 differs from the U.S.

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

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

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

At March 31, 2023 and December 31, 2022, the Company has recorded net deferred tax liabilities of $ 32.7 million and $ 32.1 million, respectively.

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

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Recurring Fair Value Measurements.

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

Fair Value Measurements at September 30, 2022 Using

The following table summarizes the fair value hierarchy of the Company’s financial assets and liabilities carried at fair value on a recurring basis as of March 31, 2023:

Fair Value Measurements at March 31, 2023 Using

Total Carrying

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(In millions)

September 30, 2022

March 31, 2023

Other long-term assets:

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Investment in Hycroft Mining Holding Corporation

Investment in NCM

Total assets at fair value

Valuation Techniques.

The Company’s money market mutual funds are invested in funds that seek to preserve principal, are highly liquid, and therefore are recorded on the balance sheet at the principal amounts deposited, which equals fair value.

The equity method investment in Hycroft was measured at fair value using Hycroft’s stock price at the date of measurement.

The investment in NCM was measured at fair value using NCM, Inc.’s underlying stock price at the date of measurement.

To estimate the fair value of the Company’s investment in Hycroft warrants, the Company valued the warrants using the Black Scholes pricing model.

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

Fair Value Measurements at September 30, 2022 Using

Fair Value Measurements at March 31, 2023 Using

Significant other

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(In millions)

September 30, 2022

March 31, 2023

Current maturities of corporate borrowings

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Quoted market prices and observable market based inputs were used to estimate fair value for Level 2 inputs.

The Level 3 fair value measurement represents the transaction price of the corporate borrowings under estimated market conditions.

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

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markets and International markets.

The International markets reportable segment has operations in or partial interest in theatres in the United Kingdom,

Germany, Spain, Italy, Ireland, Portugal, Sweden, Finland, Norway, Denmark, and Saudi Arabia.

The International markets reportable segment has operations in or partial interest in theatres in the United Kingdom, Germany, Spain, Italy, Ireland, Portugal, Sweden, Finland, Norway, Denmark, and Saudi Arabia.

On December 30, 2022, the Company entered into an agreement to sell its 10.0 % investment Saudi Cinema Company, LLC for SAR 112.5 million $( 30.0 ) million, subject to certain closing conditions.

On January 24, 2023, the Saudi Ministry of Commerce recorded the sale of equity and the Company received the proceeds on January 25, 2023.

See Note 5—Investments for further information.

Each segment’s revenue is derived from admissions, food and beverage sales and other ancillary revenues, primarily screen advertising, AMC Stubs® membership fees and other loyalty programs, ticket sales, gift card income and exchange ticket income.

The measure of segment profit and loss the Company uses to evaluate performance and allocate its resources is Adjusted EBITDA, as defined in the reconciliation table below.

The measure of segment profit and loss the Company uses to

evaluate performance and allocate its resources is Adjusted EBITDA, as defined in the reconciliation table below.

The Company does not report asset information by segment because that information is not used to evaluate the performance of or allocate resources between segments.

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Three Months Ended

Nine Months Ended

Revenues (In millions)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

International markets

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Three Months Ended

Nine Months Ended

Adjusted EBITDA (In millions)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

International markets

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Three Months Ended

Nine Months Ended

Capital Expenditures (In millions)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

International markets

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Long-term assets, net (In millions)

September 30, 2022

March 31, 2023

December 31, 2022

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Three Months Ended

Nine Months Ended

(In millions)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Income tax provision (benefit)

March 31, 2023

March 31, 2022

Income tax provision

Interest expense

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Attributable EBITDA (3)

Investment expense (income) (4)

Investment income (4)

Other expense (5)

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Three Months Ended

Nine Months Ended

(In millions)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

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 non-consolidated entities excluding International theatre joint ventures

Equity in earnings (loss) of International theatre joint ventures

Income tax provision

Investment income

Interest expense

Income tax benefit

Investment expense

Impairment of long-lived assets

Depreciation and amortization

Other expense

Attributable EBITDA

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

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

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

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

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

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

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

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

(4) Investment income during the three months ended March 31, 2023 primarily includes deterioration in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $ 2.3 million, deterioration in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft Mining Holding Corporation of $ 2.3 million, a $( 15.5 ) million gain on the sale of the Company’s investment in Saudi Cinema Company, LLC, and interest income of $( 2.3 ) million.

Investment income during the three months ended March 31, 2022 includes appreciation in estimated fair

value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $ 28.8 million and appreciation in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft Mining Holding Corporation of $ 35.1 million.

(5) Other expense during the three months ended March 31, 2023 includes a non-cash litigation contingency reserve charge of $ 116.6 million, partially offset by foreign currency transaction gains of $( 8.7 ) million and gains on debt extinguishment of $( 65.1 ) million.

Other expense during the three months ended March 31, 2022 included loss on debt extinguishment of $ 135.0 million and foreign currency transaction losses of $ 4.8 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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As additional information becomes available, any potential liability related to these actions is assessed and the estimates are revised, if necessary.

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

financial position or overall trends in results of operations.

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

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

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District Court for the Southern District of New York.

The Actions, which name certain of the Company’s officers and directors and, in the case of the Hawaii Action, the underwriters of the Company’s February 8, 2017 secondary public offering, as defendants, assert claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) with respect to alleged material misstatements and omissions in the registration statement for the secondary public offering and in certain other public disclosures.

The Actions, which named certain of the Company’s officers and directors and, in the case of the Hawaii Action, the underwriters of the Company’s February 8, 2017 secondary public offering, as defendants, asserted claims under Sections 11, 12(a)(2) and 15 of the Securities Act and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) with respect to alleged material misstatements and omissions in the registration statement for the secondary public offering and in certain other public disclosures.

On May 30, 2018, the court consolidated the Actions.

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District Court for the District of Kansas.

The Gantulga Action, which was filed on behalf of the Company, asserts claims under Section 14(a) of the Exchange Act and for breaches of fiduciary duty and unjust enrichment based on allegations substantially similar to the Actions.

The Gantulga Action, which was filed on behalf of the Company, asserts

claims under Section 14(a) of the Exchange Act and for breaches of fiduciary duty and unjust enrichment based on allegations substantially similar to the Actions.

On October 12, 2018, the parties filed a joint motion to transfer the action to the U.S.

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

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

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

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

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On January 14, 2022, defendants moved to dismiss the complaint.

On March 21, 2023, the court granted defendants’ motion to dismiss.

On December 31, 2019, the Company received a stockholder litigation demand, requesting that the Board investigate the allegations in the Actions and pursue claims on the Company’s behalf based on those allegations.

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On January 8, 2021, the Special Litigation Committee filed a report with the court recommending that the court dismiss all of the claims asserted in the Lao Action, and moved to dismiss all of the claims in the Lao Action.

On June 6, 2022, the parties signed a stipulation of settlement to resolve the Lao Action for $ 17,375,000 (the “Settlement Amount”).

The settlement is subject to court approval.

Plaintiff’s counsel intends to apply to the court for a fee and expense award, and any amount awarded by the court will be paid out of the Settlement Amount.

The remainder of the Settlement Amount, less any taxes and tax related expenses, will be paid to the Company.

On June 6, 2022, the parties signed a stipulation of settlement to resolve the Lao Action for $ 17.4 million (the “Settlement Amount”).

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

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

On September 28, 2022, the court held a hearing to

consider whether to approve the proposed settlement.

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

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

A second hearing regarding approval of the settlement was held on November 30, 2022.

Following the hearing, also on November 30, 2022, the court issued an order and final judgment approving the settlement and dismissing the action.

The order and final judgment included a fee and expense award to Plaintiff’s counsel in the amount of $ 3.4 million to be paid out of the Settlement Amount.

On January 6, 2023, the remainder of the Settlement Amount of $ 14.0 million was paid to the Company.

The Company recorded the settlement as a gain in other income once all contingencies were resolved during the three months ended March 31, 2023.

On December 27, 2022, the Company received a letter form a purported stockholder, demanding to inspect certain of the Company’s books and records pursuant to 8 Del.

§ 220 in order to investigate allegations concerning:

(i) the proposal that was approved by the Board on January 27, 2021 to amend the Company’s Certificate of Incorporation to increase the total number of shares of the Company’s Common Stock;

(ii) the Company’s creation, distribution, and/or sale of AMC Preferred Equity Units (APE’s);

(iii) the transactions between the Company and Antara Capital, LP that the Company announced on December 22, 2022 (the “Antara Transactions”);

(iv) the special meeting of the holders of the Company’s Common Stock and APEs held March 14, 2023 for the purpose of voting on amendments to the Company’s Certificate of Incorporation that, together will enable APEs to convert into shares of the Company’s Common Stock:

and (v) the independence of the members of the Board (the “December 27, 2022 Demand”).

On January 4, 2023, the Company rejected the December 27, 2022 Demand.

On February 7, 2023, without conceding the propriety of the December 27, 2022 Demand in any respect and while reserving all rights, the Company, in an effort to avoid unnecessary litigation, allowed the stockholder who made the December 27, 2022 Demand to inspect certain of the Company’s books and records concerning the subject matter of December 27, 2022 Demand.

On February 6, 2023, the Company received a letter from another purported stockholder, demanding to inspect certain of the Company’s books and records pursuant to 8 Del.

§ 220 in order to investigate allegations similar to those made in the December 27, 2022 Demand (the “February 6, 2023 Demand” and, together with the December 27, 2022 Demand, the “Books and Records Demands”).

On February 13, 2023, the Company rejected the February 6, 2023 Demand.

Also, on February 13, 2023, without conceding the propriety of the February 6, 2023 Demand in any respect and while reserving all rights, the Company, in an effort to avoid unnecessary litigation, allowed the stockholder who made the February 6, 2023 Demand to inspect the same books and records that it allowed the stockholder who made the December 27, 2022 Demand to inspect.

On February 20, 2023, two putative stockholder class actions were filed in the Delaware Court of Chancery, captioned Allegheny County Employees’ Retirement System v.

AMC Entertainment Holdings, Inc., et al., C.A No.

2023-0215-MTZ (Del.

Ch.) (the “Allegheny Action”), and Munoz v Adam M.

Aron, et al., C.A.

2023-0216-MTZ (Del.

Ch.) (the “Munoz Action”) and which have been subsequently consolidated into In re AMC Entertainment Holdings, Inc.

Stockholder Litigation C.A.

2023-0215-MTZ (Del.

Ch.) (the “Shareholder Litigation”).

The Allegheny Action asserts a claim for breach of fiduciary duty against certain of the Company’s directors and a claim for breach of 8 Del.

§ 220 against those directors and the Company, arising out of the Company’s creation of the APEs, the Antara Transactions, and the Charter Amendment Proposals.

The Munoz Action, which was filed by the stockholders who made the Books and Records Demands, assert a claim for breach of fiduciary duty against the Company’s current directors and former director Lee Wittlinger, arising out of the same conduct challenged in the Allegheny Action.

The Allegheny Action seeks a declaration that the issuance of the APEs violated 8 Del.

§ 242(b), an order that holders of the Company’s Common Stock be provided with a separate vote from the holders of the APEs on the Charter Amendment Proposals or that the APEs be enjoined from voting on the Charter Amendment Proposals, and an award of money damages.

The Munoz Action seeks to enjoin the APEs from voting on the Charter Amendment Proposals.

On February 27, 2023, the Delaware Court of Chancery entered a status quo order that (i) allowed the March 14, 2023 vote on the Charter Amendment Proposals to proceed, but precludes the Company from implementing the Charter Amendment Proposals pending a ruling by the court on the plaintiffs’ then-anticipated preliminary injunction motion, and (ii) scheduled a hearing on the plaintiffs’ then-anticipated preliminary injunction motion for April 27, 2023 (the “Status Quo Order”).

On April 2, 2023, the parties entered into a binding settlement term sheet to settle the Shareholder Litigation, which among other things, provided that the parties would jointly request that the Status Quo Order be lifted.

Pursuant to the term sheet, the Company agreed to make a non-cash settlement payment to record holders of Common Stock as of the time (the “Settlement Class Time”) at which the Reverse Stock Split is effective (and after giving effect to the Reverse Stock Split) of one share of Class A common stock for every 7.5 shares of Common Stock owned by such record holders (the “Settlement Payment”).

The Company’s obligation to make the Settlement Payment is contingent on

the Status Quo Order being lifted and the Company effecting the Charter Amendment Proposals.

The defendants agreed to the settlement and the payment of the Settlement Payment solely to eliminate the burden, expense, and uncertainty of further litigation, and continue to expressly deny any liability or wrongdoing with respect to the matters alleged in the Shareholder Litigation.

On April 3, 2023, the plaintiffs filed an unopposed motion to lift the Status Quo Order.

In connection with the proposed settlement payment, the Company recorded a $ 126.6 million contingency reserve charge to other expense during the three months ended March 31, 2023.

The contingency reserve charge is based on the estimated fair value of $ 116.6 million for the Settlement Payment and the expected attorneys’ fees, net of probable insurance recoveries of $ 10.0 million.

The contingent liability is included in accrued expenses in other liabilities within the condensed consolidated balance sheets.

On April 5, 2023 the court denied the motion to lift the Status Quo Order.

Unless and until the court lifts the Status Quo Order, the Company cannot proceed with filing the amendment to the Company’s certificate of incorporation to effect the Charter Amendment Proposals.

On April 27, 2023, the parties jointly filed a Stipulation and Agreement of Compromise, Settlement, and Release (the “Settlement Stipulation”) with the court, which fully memorializes the settlement that the parties agreed to in the term sheet.

The court has set a hearing to consider approval of the settlement for June 29-30, 2023.

Any settlement of the Shareholder Litigation is subject to court approval.

NOTE 12—LOSS PER SHARE

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

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

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

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

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

Three Months Ended

Nine Months Ended

(In millions)

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

March 31, 2023

March 31, 2022

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

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Diluted loss per common share

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

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

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

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

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

Vested RSUs and PSUs have dividend rights identical to the Company’s Common Stock and AMC Preferred Equity Units and are treated as outstanding shares for purposes of computing basic and diluted earnings per share.

Unvested RSUs of 5,319,571 for the three months ended March 31, 2023 and unvested RSUs of 5,614,052 for the three months ended March 31, 2022 were not included in the computation of diluted loss per share because they would be anti-dilutive.

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

Unvested PSUs of 2,978,289 at certain performance targets for the three months ended March 31, 2023 and unvested PSUs of 2,953,978 at certain performance targets for the three months ended March 31, 2022, were not included in the computation of diluted loss per share because they would not be issuable if the end of the reporting period were the end of the contingency period or they would be anti-dilutive.

NOTE 13—SUBSEQUENT EVENTS

Equity Distribution Agreement.

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

Odeon Senior Secured Notes due 2027.

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

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

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

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

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

(i) incur additional indebtedness or guarantee indebtedness;

(ii) create liens;

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

(iv) make investments;

(v) enter into transactions with affiliates;

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

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

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

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

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

During April 2023, the Company raised gross proceeds of approximately $ 34.2 million through its at-the-market offering of approximately 21.2 million shares of its AMC Preferred Equity Units and paid fees to the sales agent of approximately $ 0.9 million.

The shares were sold pursuant to the Equity Distribution Agreement described in Note 7—Stockholders’ Equity.

The Company no longer has any authorized AMC Preferred Equity Units available for issuance under the Equity Distribution Agreement.

Related Party Debt Repurchase.

On April 6, 2023, the Company repurchased $ 9.0 million aggregate principal of the Second Lien Notes due 2026 from Antara, a related party, for $ 6.2 million and recorded a gain on extinguishment of $ 4.4 million in other expense (income).

Accrued interest of $ 0.3 million was paid in connection with the repurchase.

NCM Bankruptcy .

On April 11, 2023, National Cine-Media, LLC (“NCM”) filed a petition under Chapter 11 of the U.S.

Bankruptcy Code in the Southern District of Texas.

NCM is the in-theatre advertising provider for the majority of our theatres in the United States.

NCM has indicated that it plans to assume its agreements with us and we do not expect its bankruptcy to have a material impact on the Company.

However, certain payments due to AMC from NCM for periods prior to the bankruptcy filing may be delayed, and NCM failed to issue the common units that were owed to AMC as part of the annual common unit adjustment on April 12, 2023.

We will continue to monitor the bankruptcy proceedings and take such actions as are necessary to preserve AMC’s contractual rights.

Shareholder Litigation.

On April 2, 2023, the Company entered into a binding settlement term sheet with the named plaintiffs in the Shareholder Litigation to settle the Shareholder Litigation and to request that the status quo order (the “Status Quo Order”) in the Shareholder Litigation be lifted.

Pursuant to the binding settlement term sheet, the Company agreed to make a non-cash settlement payment to record holders of Common Stock as of the time (the “Settlement Class Time”) at which the Reverse Stock Split is effective (and after giving effect to the Reverse Stock Split) of one share of Class A common stock for every 7.5 shares of Common Stock owned by such record holders (the

“Settlement Payment”).

On April 3, 2023, the plaintiffs filed an unopposed motion to lift the Status Quo Order.

On April 5, 2023, the court denied the motion to lift the Status Quo Order.

Unless and until the court lifts the Status Quo Order, the Company cannot proceed with filing the amendment to the Company’s certificate of incorporation to effect the Charter Amendment Proposals.

Further, any settlement of the Shareholder Litigation is subject to court approval.

On April 26, 2023, the Company and the plaintiffs jointly filed a Stipulation and Agreement of Compromise, Settlement, and Release (the “Settlement Stipulation”) with the court.

The terms of the Settlement Stipulation are substantially the same as the previously entered binding settlement term sheet.

The court has set a hearing to consider approval of the Settlement Stipulation on June 29-30, 2023.

See Note 11—Commitments and Contingencies for further information regarding the litigation.

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

What changed 10-Q

Item 1. Financial Statements