What changed in this filing

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Item 1. Financial Statements

2023-08-08 compared with 2023-05-05 · 304 added, 200 removed, 801 unchanged (39% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

(In millions, except share and per share amounts)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Food and beverage

10 unchanged sentences

Operating costs and expenses

Operating loss

Operating income (loss)

Other expense, net:

Other expense

Other expense (income)

Interest expense:

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Equity in (earnings) loss of non-consolidated entities

Investment income

Investment expense (income)

Total other expense, net

Net loss before income taxes

Net earnings (loss) before income taxes

Income tax provision

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

Net earnings (loss)

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

Average shares outstanding:

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Net earnings (loss)

Other comprehensive loss:

8 unchanged sentences

(In millions, except share data)

March 31, 2023

June 30, 2023

December 31, 2022

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Deferred tax liability, net

Shareholder litigation liability

Other long-term liabilities

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

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

including Series A Convertible Participating Preferred Stock, 10,000,000 authorized, 9,954,065 issued and outstanding as of June 30, 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;

995,406,413 issued and outstanding as of June 30, 2023;

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

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

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

519,192,389 shares issued and outstanding as of June 30, 2023;

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

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(In millions)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

Cash flows from operating activities:

3 unchanged sentences

Deferred income taxes

Unrealized loss (gain) on investments Hycroft

Unrealized loss (gain) on investments in Hycroft

Amortization of net premium on corporate borrowings to interest expense

2 unchanged sentences

Gain on disposition of Saudi Cinema Company

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

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

Landlord contributions

1 unchanged sentence

Deferred rent

Net periodic benefit income

Net periodic benefit cost (income)

Non-cash shareholder litigation expense

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Capital expenditures

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

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Net cash provided by (used in) financing activities

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

Effect of exchange rate changes on cash and cash equivalents and

restricted cash

Net decrease in cash and cash equivalents and restricted cash

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2023

June 30, 2023

NOTE 1—BASIS OF PRESENTATION

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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.

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 Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations and satisfy its obligations currently and through the next twelve months.

The Company also believes it will comply with the minimum liquidity covenant requirement under its Senior Secured Revolving Credit Facility through the end of the covenant suspension period.

Pursuant to the Twelfth Amendment to Credit Agreement, the requisite revolving lenders party thereto agreed to extend the suspension period for the secured leverage ratio 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.

As of June 30, 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.

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

North American box office grosses were down approximately 21 % for the six months ended June 30, 2023 compared to the six months ended June 30, 2019.

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.

Depending on the Company’s assumptions regarding the timing and ability to achieve 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 the Company’s liquidity requirements and future cash burn rates will be correct, and the 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.

Additionally, the duration of labor stoppages, including but not limited to the Writers Guild of America strike that began on May 2, 2023, and the Screen Actors Guild – American Federation of Television and Radio Artists strike that began on July 14, 2023 cannot be reasonably estimated and may have a negative impact on the Company’s future liquidity and cash burn rates.

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.

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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.

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.

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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.

During the six months ended June 30, 2023 the Company raised gross proceeds of approximately $ 114.5 million and paid fees to a sales agent and incurred other third-party issuance costs of approximately $ 2.9 million and $ 8.3 million, respectively, through its at-the-market offering of approximately 70.5 million shares of its AMC Preferred Equity Units.

The Company paid $ 11.0 million of other third-party issuance costs during the six months ended June 30, 2023.

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

The below table summarizes the cash debt repurchase transactions during the six months ended June 30, 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.

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

Due to the seasonal nature of the Company’s business, 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.

Due to the seasonal nature of the Company’s business, results for the six months ended June 30, 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.

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Cash and Cash Equivalents.

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

At June 30, 2023, cash and cash equivalents for the U.S.

markets and International markets were $ 346.3 million and $ 89.0 million respectively, and at December 31, 2022, cash and cash equivalents were $ 508.0 million and $ 123.5 million, respectively.

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(In millions)

March 31, 2023

June 30, 2023

December 31, 2022

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Other comprehensive loss

Balance March 31, 2023

Balance June 30, 2023

Accumulated Depreciation and Amortization.

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:

Accumulated depreciation was $ 2,958.0 million and $ 2,853.8 million at June 30, 2023 and December 31, 2022, respectively, related to property.

Accumulated amortization of intangible assets was $ 17.3 million and $ 22.2 million at June 30, 2023 and December 31, 2022, respectively.

Other Expense (Income).

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

Three Months Ended

Six Months Ended

(In millions)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Decreases related to contingent lease guarantees

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Shareholder litigation contingency

Total other expense

Business interruption insurance recoveries

Total other expense (income)

Accounting Pronouncements Recently Adopted

Reference Rate Reform.

In March 2020, the FASB issued guidance providing optional expedients and exceptions to account for the effects of reference rate reform to contracts, hedging relationships, and other transactions affected by the transition from the use of London Interbank Offered Rate (LIBOR) to an alternative reference rate.

The Company elected to apply the optional expedients under ASC 848 to modifications of contracts that previously referenced LIBOR.

The optional expedients eliminate the need to remeasure the contracts or reassess any accounting determinations.

See Note 6—Corporate Borrowings and Finance Lease Liabilities for further discussion on the election of the optional expedients allowed under ASC 848.

NOTE 2—LEASES

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

As a result, deferred lease amounts were approximately $ 123.6 million as of March 31, 2023.

As a result, deferred lease amounts were approximately $ 96.5 million as of June 30, 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.

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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.

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Total deferred lease amounts

(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.

(1) During the six months ended June 30, 2023, the decrease in fixed operating lease deferred amounts includes $ 8.6 million of rent payments that are included in change in accounts payable and $ 50.0 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

Six Months Ended

(In millions)

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Cash flow and supplemental information is presented below:

Three Months Ended

Six Months Ended

(In millions)

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(1) Includes lease extensions and option exercises.

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

As of March 31, 2023

The following table represents the weighted-average remaining lease term and discount rate as of June 30, 2023:

As of June 30, 2023

Weighted Average

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Finance leases

Minimum annual payments, including deferred lease payments less contractual rent amounts due and not paid that were recorded in accounts payable, that are recorded as operating and finance lease liabilities and the net present value thereof as of March 31, 2023 are as follows:

Operating Lease

Financing Lease

Finance Lease

(In millions)

Nine months ending December 31, 2023 (1)

Six months ending December 31, 2023 (1)

Total lease payments

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Lease Payments

Nine months ended December 31, 2023

Six months ended December 31, 2023

Total deferred lease amounts recorded in accounts payable

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Operating Lease

Financing Lease

Finance Lease

(In millions)

Nine months ended December 31, 2023

Six months ended December 31, 2023

Total deferred lease amounts

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 .

As of June 30, 2023, the Company had signed additional operating lease agreements for four theatres that have not yet commenced with total minimum payments of approximately $ 89.1 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.

During the six months ended June 30, 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.

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Major revenue types

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Timing of revenue recognition

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(1) Amounts primarily include subscription and advertising revenues.

The following tables provide the balances of receivables and deferred revenue income:

The following tables provide the balances of receivables, net and deferred revenues and income:

(In millions)

March 31, 2023

June 30, 2023

December 31, 2022

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(In millions)

March 31, 2023

June 30, 2023

December 31, 2022

Current liabilities

Deferred revenue related to contracts with customers

Deferred revenues related to contracts with customers

Miscellaneous deferred income

Deferred revenue and income

Deferred revenues and income

The significant changes in contract liabilities with customers included in deferred revenues and income are as follows:

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Foreign currency translation adjustment

Balance March 31, 2023

Balance June 30, 2023

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

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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

Balance June 30, 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”).

The deferred revenues are being amortized to other theatre revenues over the remainder of the 30-year term of the Exhibitor Service Agreement (“ESA”) ending in February 2037.

NCM Bankruptcy .

On April 11, 2023, National CineMedia, LLC 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.

Under the Chapter 11 plan of reorganization, which became effective on August 7, 2023 (the “Plan”), NCM has assumed its agreements with us.

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 have been delayed during the pendency of the Chapter 11 proceedings.

Additionally, as part of the Plan, on August 7, 2023, NCM issued, 16,581,829 common units (“NCM Common Units”) that were owed to AMC as part of the annual common unit adjustment.

But under the terms of the Plan and the restructuring of the equity of NCM thereunder, the NCM Common Units were immediately cancelled upon the efficacy of the Plan.

AMC has filed appeals with the United States District Court for the Southern District of Texas, objecting to, among other things, certain terms of the Plan, including appeal of the court’s order to approve cancellation of the NCM Common Unit Issuance.

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 March 31, 2023 was $ 298.2 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 June 30, 2023 was $ 285.3 million.

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

Loyalty Programs.

As of 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.

As of June 30, 2023, the amount of deferred revenues allocated to the loyalty programs included in deferred revenues and income in the condensed consolidated balance sheet was $ 72.7 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 three months ended March 31, 2023:

The following table summarizes the changes in goodwill by reporting unit for the six months ended June 30, 2023:

International

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Currency translation adjustment

Balance March 31, 2023

Balance June 30, 2023

NOTE 5—INVESTMENTS

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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.

The Company recorded a gain on the sale of $ 15.5 million in investment income during the six months ended June 30, 2023.

Investments in non-consolidated affiliates as of June 30, 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.

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

motion picture theatres (“Theatre Partnerships”) and approximately 50.0 % interests in 60 theatres in Europe.

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

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.

During the three months ended June 30, 2023 and June 30, 2022, the Company recorded equity in (earnings) loss of non-consolidated entities of $( 0.8 ) million and $ 1.0 million, respectively.

During the six months ended June 30, 2023 and June 30, 2022, the Company recorded equity in (earnings) loss of $( 2.2 ) million and $ 6.1 million, respectively.

Related Party Transactions with Equity Method Investees.

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.

At June 30, 2023 and December 31, 2022, the Company recorded net receivable amounts due from equity method investees of $ 0.3 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 $ 6.5 million and $ 4.0 million, respectively, during the three months ended June 30, 2023, and $ 6.5 million and $ 2.3 million, respectively, during the three months ended June 30, 2022.

The Company recorded related party transactions with equity method investees in other revenues and film exhibition costs of $ 11.5 million and $ 7.0 million, respectively, during the six months ended June 30, 2023, and $ 12.0 million and $ 3.4 million, respectively, during the six months ended June 30, 2022.

Investment in Hycroft

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

During the three 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.

During the three months ended June 30, 2023 and June 30, 2022, the Company recorded unrealized loss (gain) in investment income of $ 5.5 million and $( 47.8 ) million, respectively.

During the six months ended June 30, 2023 and June 30, 2022, the Company recorded unrealized loss (gain) in investment income of $ 10.1 million and $( 16.1 ) 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.

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(In millions)

March 31, 2023

June 30, 2023

December 31, 2022

First Lien Secured Debt:

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

Senior Secured Credit Facility-Term Loan due 2026 ( 8.218 % as of June 30, 2023 and 7.274 % as of December 31, 2022)

12.75 % Odeon Senior Secured Notes due 2027

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Subordinated Debt:

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

6.375 % Senior Subordinated Notes due 2024 (£ 4.0 million par value as of June 30, 2023)

5.75 % Senior Subordinated Notes due 2025

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Total carrying value of corporate borrowings and finance lease liabilities

Current maturities corporate borrowings

Current maturities finance lease obligations

Current maturities of corporate borrowings

Current maturities of finance lease liabilities

Total noncurrent carrying value of corporate borrowings and finance lease liabilities

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6.375 % Senior Subordinated Notes due 2024

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

The following table provides the principal payments required and maturities of corporate borrowing as of June 30, 2023:

(In millions)

Nine months ended December 31, 2023

Six 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:

The below table summarizes the cash debt repurchase transactions during the six months ended June 30, 2023, including the related party transactions with Antara, which became a related party on February 7, 2023:

Aggregate Principal

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Total debt repurchases

See Note 7—Stockholders’ Equity for discussion of the $ 100 million aggregate principal amount of Second Lien Notes due 2026 repurchased from Antara in exchange for 91,026,191 AMC Preferred Equity Units not included in the table above.

Financial Covenants

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 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 secured leverage ratio financial covenant 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 financial covenant suspension

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

Thirteenth Amendment to Credit Agreement

On June 23, 2023, the Company and Wilmington Savings Fund Society, FSB, as administrative agent, entered into the Thirteenth Amendment to Credit Agreement, pursuant to which LIBOR, the benchmark rate upon which certain loans, commitments and/or other extensions of credit under the Credit Agreement incur interest, fees or other amounts, was replaced with Term SOFR, a benchmark rate reported by CME Group Benchmark Administration Limited that is based on the secured overnight financing rate.

Term SOFR under the Credit Agreement is subject to a credit spread adjustment equal to 0.11448 % per annum, 0.26161 % per annum, and 0.42826 % per annum for interest periods of one-month, three-months, or six-months or longer, respectively.

The Thirteenth Amendment to Credit Agreement became effective at 5:00 p.m.

(New York time) on June 30, 2023.

The Company elected to apply the optional expedients allowed under ASC 848 regarding the discontinuation of LIBOR and reference rate reform.

Pursuant to ASC 848 the Thirteenth Amendment to Credit Agreement was determined to be an insubstantial modification.

NOTE 7—STOCKHOLDERS’ EQUITY

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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.

During the six months ended June 30, 2023 the Company raised gross proceeds of approximately $ 114.5 million and paid fees to the Sales Agent and incurred other third-party issuance costs of approximately $ 2.9 million and $ 8.3 million, respectively, through its at-the-market offering of approximately 70.5 million shares of its AMC Preferred Equity Units.

The Company paid $ 11.0 million of other third-party issuance costs during the six months ended June 30, 2023.

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

Special Meeting of Stockholders

The Company’s board of directors called a special meeting of the Company’s stockholders on March 14, 2023 (the “Special Meeting”).

At the Special Meeting, the Company’s stockholders considered the following proposals:

To approve an amendment to our Third Amended and Restated Certificate of Incorporation (“Certificate of Incorporation”) to increase the total number of authorized shares of Common Stock from 524,173,073 shares of Common Stock to 550,000,000 shares of Common Stock (the “Share Increase Proposal”);

To approve an amendment to our Certificate of Incorporation to effectuate a reverse stock split at a ratio of one share of Common Stock for every ten shares of Common Stock, which together with the Share Increase Proposal, shall permit the full conversion of all outstanding shares of Series A Preferred Stock into shares of Common Stock (the “Reverse Split Proposal” and collectively with the Share Increase Proposal, the “Charter Amendment Proposals”);

To approve one or more adjournments of the Special Meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Special Meeting to approve and adopt the Charter Amendment Proposals (the “Adjournment Proposal”).

Each of the Share Increase Proposal and the Reverse Split Proposal is cross-conditioned on the approval of the other, such that approval of both proposals is required for each of them to take effect.

At the Special Meeting the Company’s stockholders voted in favor of all of the proposals;

however, the Company is unable to effectuate the proposals due to litigation as further described below and in Note 11—Commitments and Contingencies.

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.

§ 242 against those directors and the Company, arising out of the Company’s creation of AMC Preferred Equity Units (“AMC Preferred Equity Units” or “APEs”), the transactions between the Company and Antara Capital, LP that the Company announced on December 22, 2022 the (“Antara Transactions”), and the Charter Amendment Proposals.

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

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Three Months Ended

Six Months Ended

(In millions)

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Total stock-based compensation expense

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.

As of June 30, 2023, the estimated remaining unrecognized compensation cost related to stock-based compensation grants was approximately $ 28.8 million, which reflects assumptions related to attainment of performance targets based on the scales as described below.

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

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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.

During the six months ended June 30, 2023, the Company recognized $ 20.2 million of additional stock compensation expense.

Awards Granted in 2023

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.

During the six months ended June 30, 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.

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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.

As of June 30, 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 1,149,113 nonvested underlying AMC Preferred Equity Unit RSUs and PSUs (2023 Tranche Year) that are currently classified as liabilities and 574,717 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.

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● Stock Award Agreement:

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.

During the six months ended June 30, 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 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.

During the six months ended June 30, 2023, the Company granted 2,827,979 RSU awards 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.

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● Performance Stock Unit Award Agreement:

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”).

During the six months ended June 30, 2023, total PSUs of 942,552 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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The 2023 PSU award grant date fair value for the 2023 Tranche Year award of 942,552 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:

The following table represents the equity classified nonvested RSU and PSU activity for the six months ended June 30, 2023:

AMC Preferred

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( 1,095,125 )

Nonvested at March 31, 2023

Nonvested at June 30, 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 March 31, 2023

Total Nonvested at June 30, 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.

(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 $ 13.1 million during the three months ended March 31, 2023.

As a result, the Company paid taxes for restricted unit withholdings of approximately $ 14.2 million during the six months ended June 30, 2023.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Three Months Ended March 31, 2023

For the Six Months Ended June 30, 2023

Preferred Stock

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Balances March 31, 2023

Other comprehensive loss

AMC Preferred Equity Units issuance

Taxes paid for restricted unit withholdings

Stock-based compensation

Balances June 30, 2023

(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.

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Condensed Consolidated Statements of Stockholders’ Deficit

For the Three Months Ended March 31, 2022

For the Six Months Ended June 30, 2022

Preferred Stock

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Balances March 31, 2022

Other comprehensive income

Stock-based compensation

Balances June 30, 2022

(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.

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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 months ended March 31, 2023 due to the lingering effects of the COVID-19 pandemic on the industry.

The Company is using a discrete income tax calculation for the three and six months ended June 30, 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 three months ended March 31, 2023 reflects the impact of these valuation allowances against U.S.

The effective tax rate for the six months ended June 30, 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.

The actual effective rate for the six months ended June 30, 2023 was ( 1.0 )%.

The Company’s consolidated tax rate for the six months ended June 30, 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 March 31, 2023 and December 31, 2022, the Company has recorded net deferred tax liabilities of $ 32.7 million and $ 32.1 million, respectively.

At June 30, 2023 and December 31, 2022, the Company has recorded net deferred tax liabilities of $ 32.5 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 March 31, 2023:

Fair Value Measurements at March 31, 2023 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 June 30, 2023:

Fair Value Measurements at June 30, 2023 Using

Total Carrying

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(In millions)

March 31, 2023

June 30, 2023

Other long-term assets:

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

Fair Value Measurements at March 31, 2023 Using

Fair Value Measurements at June 30, 2023 Using

Significant other

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(In millions)

March 31, 2023

June 30, 2023

Current maturities of corporate borrowings

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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, and Denmark.

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.

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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

Six Months Ended

Revenues (In millions)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

International markets

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Three Months Ended

Six Months Ended

Adjusted EBITDA (In millions)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

International markets

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Three Months Ended

Six Months Ended

Capital Expenditures (In millions)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

International markets

1 unchanged sentence

Long-term assets, net (In millions)

March 31, 2023

June 30, 2023

December 31, 2022

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Net earnings (loss)

Income tax provision

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Attributable EBITDA (3)

Investment income (4)

Other expense (5)

Investment expense (income) (4)

Other expense (income) (5)

Other non-cash rent benefit (6)

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2023

March 31, 2022

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

Equity in (earnings) loss of non-consolidated entities

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

Equity in earnings (loss) of International theatre joint ventures

Equity in loss of International theatre joint ventures

Income tax benefit

Investment expense

Interest expense

Impairment of long-lived assets

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Attributable EBITDA

(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.

(4) Investment expense (income) during the three months ended June 30, 2023 primarily includes deterioration in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $ 3.2 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 and interest income of $( 2.5 ) million.

During the three months ended June 30, 2022, investment expense (income) included deterioration in estimated fair value of the Company’s investment in common shares of Hycroft Mining Corporation of $ 27.8 million and deterioration in estimated fair value of the Company's investment in warrants to purchase common shares of Hycroft Mining Holding Corporation of $ 20.0 million.

Investment expense (income) during the six months ended June 30, 2023 includes deterioration in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $ 5.5 million, deterioration in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft Mining Holding Corporation of $ 4.6 million, $( 15.5 ) million gain on the sale of the Company’s investment in Saudi Cinema Company, LLC and interest income of $( 4.8 ) million.

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

(5) Other expense (income) during the three months ended June 30, 2023 includes a non-cash litigation contingency adjustment of $( 1.2 ) million, income related to foreign currency transaction gains of $( 7.5 ) million and gains on debt extinguishment of $( 21.6 ) million.

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

Other expense (income) during the six months ended June 30, 2023 includes a non-cash litigation contingency charge of $ 115.4 million, partially offset by gains on debt extinguishment of $( 86.7 ) million and foreign currency transaction gains of $( 16.2 ) million.

During the six months ended June 30, 2022, other expense (income) included loss on debt extinguishment of $ 96.4 million and foreign currency transaction losses of $ 8.4 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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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 March 21, 2023, the court granted defendants’ motion to dismiss.

On June 14, 2023, the parties to the Gantulga, Kenna, Manuel, Dinkevich, and Lyon Actions signed a stipulation of settlement, which subject to the approval of the court, will resolve those actions.

As consideration for the proposed settlement, the Company agreed to certain corporate governance reforms and the payment of a $ 1.0 million fee and expense award to the plaintiffs’ attorneys to be paid by the Company’s director’s and officer’s insurance carriers.

Defendants agreed to the settlement solely to eliminate the burden, expense, and uncertainties inherent in further litigation.

Defendants have denied, and continue to deny, all allegations of wrongdoing, fault, liability, or damages with respect to the matters alleged in the Gantulga, Kenna, Manuel, Dinkevich, and Lyon Actions.

On June 23, 2023, plaintiffs filed a motion to preliminarily approve the settlement.

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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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.

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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.

The Company recorded the settlement as a gain in other income once all contingencies were resolved during the six months ended June 30, 2023.

On December 27, 2022, the Company received a letter from 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:

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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”).

The Allegheny Action sought 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 sought 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 precluded 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 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.

In connection with the proposed settlement payment, the Company recorded a $ 125.4 million contingency charge to other expense during the six months ended June 30, 2023.

The contingency charge is based on the estimated fair value of $ 115.4 million for the Settlement Payment and the expected attorneys’ fees, net of probable insurance recoveries of $ 10.0 million.

The expected attorneys’ fee portion of 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

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 memorialized the settlement that the parties agreed to in the term sheet.

On June 29 – 30, 2023, the court held a settlement hearing to consider whether to approve the settlement as outlined in the Settlement Stipulation.

On July 21, 2023, the court issued an opinion which, citing issues with the scope of the release sought under the proposed settlement, declined to approve the settlement as presented.

On July 22, 2023, the parties filed an addendum to the Settlement Stipulation in an effort to address the issues with the scope of the release raised by the court and requested that the court approve the settlement with the revised release set forth in the addendum.

On July 24, 2023, the court responded to the parties’ July 22, 2023 filings requesting additional submissions in relation to the proposed settlement.

The Company provided the additional requested submissions to the court on July 26, 2023.

The Status Quo Order remains in place.

Unless and until the court lifts the Status Quo Order, the Company will not proceed with filing the amendment to the Company’s Certificate of Incorporation to effect the Charter Amendment Proposals.

Nor will the Company make the litigation settlement payment contemplated by the Settlement Stipulation.

See Note 13—Subsequent Events for further information.

NOTE 12—EARNINGS (LOSS) PER SHARE

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

3 unchanged sentences

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

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

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

Trading of the AMC

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

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

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

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

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

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

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

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

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

Three Months Ended

Six Months Ended

(In millions)

March 31, 2023

March 31, 2022

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

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

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

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

Net earnings (loss) for diluted earnings (loss) per share attributable to AMC Entertainment Holdings, Inc.

Denominator (shares in thousands):

Weighted average shares for basic loss per common share

Weighted average shares for diluted loss per common share

Basic loss per common share

Diluted loss per common share

Weighted average shares for basic earnings (loss) per common share

Common equivalent shares for RSUs and PSUs

Weighted average shares for diluted earnings (loss) per common share

Basic earnings (loss) per common share

Diluted earnings (loss) per common share

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 RSUs of 4,914,387 and 5,319,571 for the three and six months ended June 30, 2023, respectively were not included in the computation of diluted earnings (loss) per share because they would be anti-dilutive.

Unvested RSUs of 5,455,734 for the three and six months ended June 30, 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.

Unvested PSUs of 2,929,044 and 2,978,228 for the three and six months ended June 30, 2023, respectively were not included in the computation of diluted earnings (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.

Unvested PSUs of 2,853,456 at certain performance targets for the three and six months ended June 30, 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.

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.

As previously disclosed, on April 3, 2023, the Company entered into a binding settlement term sheet with the named plaintiffs in the Shareholder Litigation to settle the Shareholder Litigation, which among other things, provided that the parties would jointly request that the Status Quo Order be lifted.

On April 27, 2023, the parties jointly filed the Settlement Stipulation with the court, which fully memorialized the settlement that the parties agreed to in the term sheet.

On June 29 – 30, 2023, the court held a settlement hearing to consider whether to

approve the settlement as outlined in the Settlement Stipulation.

On July 21, 2023, the court issued an opinion which, citing issues with the scope of the release sought under the proposed settlement, declined to approve the settlement as presented.

On July 24, 2023, the court responded to the parties’ July 22, 2023 filings requesting additional submissions in relation to the proposed settlement.

The Company provided the additional requested submissions to the court on July 26, 2023.

The Status Quo Order remains in place.

Nor will the Company make the litigation settlement payment contemplated by the Settlement Stipulation.

Debt Repurchases.

The below table summarizes the cash debt repurchases during July 2023, including related party transactions with Antara:

Aggregate Principal

Reacquisition

Accrued Interest

(In millions)

Extinguishment

Related party transactions:

Second Lien Notes due 2026

Non-related party transactions:

Second Lien Notes due 2026

Total debt repurchases

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