What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-08 compared with 2023-08-08 · 353 added, 300 removed, 805 unchanged (45% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In millions, except share and per share amounts)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Food and beverage

23 unchanged sentences

Net earnings (loss)

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

Net earnings (loss) per share:

Average shares outstanding:

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AMC ENTERTAINMENT HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS )

Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Net earnings (loss)

Other comprehensive loss:

Other comprehensive income (loss):

Unrealized foreign currency translation adjustments

Pension adjustments:

Net gain (loss) arising during the period

Other comprehensive loss:

Total comprehensive loss

Net gain arising during the period

Other comprehensive income (loss)

Total comprehensive income (loss)

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

(In millions, except share data)

June 30, 2023

September 30, 2023

December 31, 2022

23 unchanged sentences

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, 9,954,065 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;

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

including Series A Convertible Participating Preferred Stock, no shares authorized, issued , and outstanding as of September 30, 2023;

10,000,000 authorized;

7,245,872 issued and outstanding December 31, 2022, represented by AMC Preferred Equity Units, each representing an interest in a share of Series A Convertible Participating Preferred Stock, of which no shares are authorized, issued, and outstanding as of September 30, 2023;

100,000,000 authorized;

72,458,706 issued and outstanding as of December 31, 2022

Class A common stock ($ .01 par value, 550,000,000 shares authorized;

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

198,356,898 shares issued and outstanding as of September 30, 2023;

524,173,073 authorized;

51,683,892 shares issued and outstanding as of December 31, 2022)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

Cash flows from operating activities:

8 unchanged sentences

Gain on disposition of Saudi Cinema Company

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

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

Landlord contributions

26 unchanged sentences

Scheduled principal payments under Term Loan due 2026

Net proceeds from AMC Preferred Equity Units issuance

Net proceeds from equity issuances

Principal payments under finance lease obligations

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restricted cash

Net decrease in 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

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Construction payables at period end

Other third-party AMC Preferred Equity Units issuance costs payable

Other third-party equity issuance costs payable

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2023

September 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.

Stock Split and Reverse Stock Split .

On August 4, 2022, the Company announced that its Board of Directors declared a special dividend of one AMC Preferred Equity Unit for each share of Class A common stock (“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 Common Stock as of August 22, 2022, the ex-dividend date.

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.

On August 24, 2023, the Company effectuated a reverse stock split at a ratio of one share of Common Stock for every ten shares of Common Stock.

As a result of the reverse stock split, each share of Series A Convertible Participating Preferred Stock became convertible into ten shares of Common Stock, and by extension each AMC Preferred Equity Unit became equivalent to one -tenth (1/10th) of a share of Common Stock.

The reserve stock split did not impact the number of AMC Preferred Equity Units outstanding.

The Company concluded that this change in conversion ratio is analogous to a reverse stock split of the AMC Preferred Equity Units even though the reverse stock split did not have an effect on the number of AMC Preferred Equity Units outstanding.

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

References made to AMC Preferred Equity Units have been retroactively adjusted to reflect the effect of the reverse stock split on their equivalent Common Stock shares.

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.

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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 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 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.

As of September 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 cash burn rates are not sustainable long-term.

In order to achieve sustainable 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 16 % for the nine months ended September 30, 2023, compared to the nine months ended September 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.

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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.

Additionally, the effects of labor stoppages, including but not limited to the Writers Guild of America strike that began on May 2, 2023 and ended on September 27, 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 future film slate for exhibition, 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.

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.

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.

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.

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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 10,659,511 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 9,102,619 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 19,762,130 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.

1 unchanged sentence

See Note 7—Stockholders’ Equity for more information.

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.

During the nine months ended September 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 $ 8.7 million, respectively, through its at-the-market offering of approximately 7.1 million shares of its AMC Preferred Equity Units.

The Company paid $ 11.5 million of other third-party issuance costs during the nine months ended September 30, 2023.

During the nine months ended September 30, 2023, the Company raised gross proceeds of approximately $ 325.5 million and paid fees to a sales agent and incurred other third-party issuance costs of approximately $ 8.2 million and $ 0.5 million, respectively, through its at-the-market offering of 40.0 million shares of its Common Stock.

The Company paid $ 0.1 million of other third-party issuance costs during the nine months ended September 30, 2023.

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

The below table summarizes the cash debt repurchase transactions during the nine months ended September 30, 2023, including related party transactions with Antara, which was a related party from February 7, 2023 to August 25, 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 six months ended June 30, 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 nine months ended September 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 June 30, 2023, cash and cash equivalents for the U.S.

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

markets and International markets were $ 620.7 million and $ 109.0 million respectively, and at December 31, 2022, cash and cash equivalents were $ 508.0 million and $ 123.5 million, respectively.

3 unchanged sentences

(In millions)

June 30, 2023

September 30, 2023

December 31, 2022

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Other comprehensive loss

Balance June 30, 2023

Balance September 30, 2023

Accumulated Depreciation and Amortization.

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.

Accumulated depreciation was $ 2,994.3 million and $ 2,853.8 million at September 30, 2023 and December 31, 2022, respectively, related to property.

Accumulated amortization of intangible assets was $ 16.1 million and $ 22.2 million at September 30, 2023 and December 31, 2022, respectively.

Other Expense (Income).

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Decreases related to contingent lease guarantees

2 unchanged sentences

Foreign currency transaction (gains) losses

Non-operating components of net periodic benefit income

Non-operating components of net periodic benefit cost (income)

Gain on extinguishment - Senior Subordinated Notes due 2026

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Derivative stockholder settlement

Shareholder litigation contingency

Shareholder litigation

Business interruption insurance recoveries

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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 $ 96.5 million as of June 30, 2023.

Deferred lease payments were approximately $ 74.2 million as of September 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.

The Company elected not to account for these concessions as a lease modification, and therefore the Company has remeasured the related lease liability and right-of-use asset but did not reassess the lease classification or change the discount rate to the current rate in effect upon the remeasurement.

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

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

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 for contractual rent amounts due and not paid are included in accounts payable in the condensed consolidated balance sheets and in change in accounts payable in the condensed consolidated statements of cash flows.

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 is provided below:

September 30,

(In millions)

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Total deferred lease amounts

(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.

(1) During the nine months ended September 30, 2023, the decrease in fixed operating lease deferred amounts includes $ 13.3 million of rent payments that are included in change in accounts payable and $ 66.7 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

Nine Months Ended

September 30,

(In millions)

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Cash flow and supplemental information is presented below:

Six Months Ended

Nine Months Ended

September 30,

(In millions)

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(1) Includes lease extensions and option exercises.

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

As of June 30, 2023

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

As of September 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 June 30, 2023 are as follows:

Minimum annual payments, including deferred lease payments and excluding 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, 2023 are as follows:

Operating Lease

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(In millions)

Six months ending December 31, 2023 (1)

Three months ending December 31, 2023 (1)

Total lease payments

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Lease Payments

Six months ended December 31, 2023

Three months ended December 31, 2023

Total deferred lease amounts recorded in accounts payable

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(In millions)

Six months ended December 31, 2023

Three months ended December 31, 2023

Total deferred lease amounts

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 .

As of September 30, 2023, the Company had signed additional operating lease agreements for five theatres that have not yet commenced with total minimum payments of approximately $ 78.2 million, which are expected to commence between years 2023 and 2025 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 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.

During the nine months ended September 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

Nine Months Ended

(In millions)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Major revenue types

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Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Timing of revenue recognition

5 unchanged sentences

(In millions)

June 30, 2023

September 30, 2023

December 31, 2022

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(In millions)

June 30, 2023

September 30, 2023

December 31, 2022

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Foreign currency translation adjustment

Balance June 30, 2023

Balance September 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 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”).

Balance September 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”) and subsequent adjustments related to the NCM Bankruptcy, as discussed in greater detail below.

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.

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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.

NCM is the in-theatre advertising provider for the majority of the Company’s 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 the Company.

As part of the Plan, on August 7, 2023, NCM issued 16,581,829 common units (“NCM Common Units”) that were owed to the Company 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.

The Company 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 modification of the terms of the exhibitor services agreement with other parties that were not granted to the Company and appeal of the court’s order to approve cancellation of the NCM Common Unit issuance.

The Company does not expect its bankruptcy to have a material impact on the Company.

Gift Cards and Exchange Tickets.

The total amount of non-redeemed gift cards and exchange tickets included in deferred revenues and income in the condensed consolidated balance sheet as of June 30, 2023 was $ 285.3 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 September 30, 2023 was $ 273.2 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 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.

As of September 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 $ 75.6 million.

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

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NOTE 4—GOODWILL

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

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

International

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Currency translation adjustment

Balance June 30, 2023

Balance September 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 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 recorded a gain on the sale of $ 15.5 million in investment income during the nine months ended September 30, 2023.

Investments in non-consolidated affiliates as of September 30, 2023 include interests in Digital Cinema Distribution Coalition, LLC of 14.6 %, AC JV, LLC, owner of Fathom Events, of 32.0 %, SV Holdco LLC, owner of Screenvision, of 18.4 % and Digital Cinema Media Ltd.

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.

motion picture theatres 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 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.

During the three months ended September 30, 2023 and September 30, 2022, the Company recorded equity in (earnings) loss of non-consolidated entities of $( 3.1 ) million and $( 2.8 ) million, respectively.

During the nine months ended September 30, 2023 and September 30, 2022, the Company recorded equity in (earnings) loss of $( 5.3 ) million and $ 3.3 million, respectively.

Related Party Transactions with Equity Method Investees.

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.

At September 30, 2023, and December 31, 2022, the Company recorded net receivable amounts due from equity method investees of $ 0.6 million and $ 1.7 million, respectively, primarily related to on-screen advertising revenue, content delivery expenses and other transactions.

The Company recorded related party transactions with equity method investees in other revenues, film exhibition costs and operating expenses of $ 7.9 million, $ 4.9 million and $ 0.2 million, respectively, during the three months ended September 30, 2023, and $ 4.3 million, $ 3.1 million and $ 0.3 million, respectively, during the three months ended September 30, 2022.

The Company recorded related party transactions with equity method investees in other revenues, film exhibition costs and operating expenses of $ 19.4 million, $ 12.0 million and $ 0.8 million, respectively, during the nine months ended September 30, 2023, and $ 16.3 million, $ 6.5 million and $ 0.8 million, respectively, during the nine months ended September 30, 2022.

Investment in Hycroft

8 unchanged sentences

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 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.

During the three months ended September 30, 2023 and September 30, 2022, the Company recorded unrealized loss in investment income of $ 0.7 million and $ 19.5 million, respectively.

During the nine months ended September 30, 2023 and September 30, 2022, the Company recorded unrealized loss in investment income of $ 10.8 million and $ 3.4 million, respectively.

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

2 unchanged sentences

(In millions)

June 30, 2023

September 30, 2023

December 31, 2022

First Lien Secured Debt:

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

Senior Secured Credit Facility-Term Loan due 2026 ( 8.427 % as of September 30, 2023 and 7.274 % as of December 31, 2022)

12.75 % Odeon Senior Secured Notes due 2027

3 unchanged sentences

Subordinated Debt:

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

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

5.75 % Senior Subordinated Notes due 2025

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

September 30,

(In millions)

3 unchanged sentences

6.375 % Senior Subordinated Notes due 2024

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

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

(In millions)

Six months ended December 31, 2023

Three months ended December 31, 2023

Debt Repurchases

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:

The below table summarizes the cash debt repurchase transactions during the nine months ended September 30, 2023, including the related party transactions with Antara, which was a related party from February 7, 2023 to August 25, 2023:

Aggregate Principal

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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 through the end of the 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 Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to 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 the 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.

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, thus the financial covenant has been effectively suspended through maturity of the Senior Secured Revolving Credit Facility.

As of September 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.

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.

On June 23, 2023, the Company and Wilmington Savings Fund Society, FSB, as administrative agent, entered into the Thirteenth Amendment to the 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.

The Thirteenth Amendment to the 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.

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

NOTE 7—STOCKHOLDERS’ EQUITY

AMC Preferred Equity Units

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

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

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 9,954,065 have been issued under the depositary agreement as Series A Convertible Participating Preferred Stock, leaving 40,000,000 unallocated Preferred Stock shares.

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

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

Stock Split and Reverse Stock Split

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

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

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.

On August 24, 2023, the Company effectuated a reverse stock split at a ratio of one share of Common Stock for every ten shares of Common Stock.

The reverse stock split did not impact the number of AMC Preferred Equity Units outstanding.

References made to AMC Preferred Equity Units have been retroactively adjusted to reflect the effect of the reverse stock split on their equivalent Common Stock shares.

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”).

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

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

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.

On September 6, 2023, the Company entered into a Common Stock equity distribution agreement (the “Common Stock Equity Distribution Agreement”) with Citigroup Global Markets, Inc., Barclays Capital Inc., B.

Riley Securities, Inc.

and Goldman Sachs & Co.

LLC, as the sales agents (“Common Stock Sales Agents”), to sell up to 40.0 million shares of the Company’s Common Stock, from time to time, through an “at-the-market” offering program (the “Common Stock Offering”).

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

The Company intends to use the net proceeds from the sale of Common Stock pursuant to the Common Stock 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.

On September 13, 2023, the Company announced that it had completed the Common Stock Offering.

During the nine months ended September 30, 2023, the Company raised gross proceeds of approximately $ 325.5 million and paid fees to the Common Stock Sales Agents and incurred other third-party issuance costs of approximately $ 8.2 million and $ 0.5 million, respectively, through its Common Stock Offering of 40.0 million shares of its Common Stock.

The Company paid $ 0.1 million of other third-party issuance costs during the nine months ended September 30, 2023.

On September 26, 2022, the Company entered into an equity distribution agreement (the “Preferred Equity Units Equity Distribution Agreement”) with Citigroup Global Markets Inc., as a sales agent (“Sales Agent”), to sell up to 42.5 million shares of the Company’s AMC Preferred Equity Units, from time to time, through an “at-the-market” offering program (the “Preferred Equity Offering”).

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

The Company intends to use the net proceeds, from the sale of AMC Preferred Equity Units pursuant to the Preferred Equity Units 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.

Following the Charter Amendments and AMC Preferred Equity Unit Conversion, the Company no longer sells shares under the Preferred Equity Units Distribution Agreement.

During the nine months ended September 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 $ 8.7 million, respectively, through its Preferred Equity Offering of approximately 7.1 million shares of its AMC Preferred Equity Units.

The Company paid $ 11.5 million of other third-party issuance costs during the nine months ended September 30, 2023.

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

Furthermore, the AMC Preferred Equity Units ceased trading on the NYSE on August 24, 2023 and were converted to Common Shares on August 25, 2023.

On December 22, 2022, the Company entered into the Forward Purchase Agreement with Antara pursuant to which the Company agreed to (i) sell to Antara 10,659,511 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 9,102,619 AMC Preferred Equity Units.

1 unchanged sentence

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

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.

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

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, shall permit the full conversion of all outstanding shares of Series A Preferred Stock into shares of Common Stock (the “Reverse Stock Split” and collectively with the Share Increase, the “Charter Amendments”);

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

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.

§ 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.

Two putative stockholder class actions were filed in the Delaware Chancery Court that assert a breach of fiduciary duty against certain of the Company’s directors and a claim for breach of 8 Del.

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

This litigation prevented the Company from immediately implementing the Charter Amendments.

On April 2, 2023, the parties entered into a binding settlement term sheet to settle the litigation and allow implementation of the Charter Amendments.

On August 11, 2023, the Delaware Chancery Court approved the settlement and on Monday, August 21, 2023, the Delaware Supreme Court confirmed the ruling of the Chancery Court.

Pursuant to the settlement term sheet, record holders of Common Stock at the close of business on August 24, 2023, after giving effect to the Reverse Stock Split, but prior to the conversion of AMC Preferred Equity Units into Common Stock (“Settlement Payment Recipients”), received a payment of one share of Common Stock for every 7.5 shares of Common Stock owned by the Settlement Payment Recipients (the “Settlement Payment”).

On August 28, 2023, the Company made the Settlement Payment and issued 6,897,018 shares of Common Stock.

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

Charter Amendments and AMC Preferred Equity Unit Conversion

Each AMC Preferred Equity Unit was a depositary share and represented an interest in a share of Series A Convertible Participating Preferred Stock evidenced by a depositary receipt pursuant to a deposit agreement.

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

On August 14, 2023, the Company filed an amendment to its Certificate of Incorporation to effectuate the Charter Amendments as of August 24, 2023.

The Charter Amendments permitted the conversion of all of the Company’s outstanding AMC Preferred Equity Units into shares of Common Stock (the “Conversion”).

On August 25, 2023, 99,540,642 shares of Common Stock were issued as part of the Conversion.

On August 25, 2023, AMC Preferred Equity Units ceased trading and were subsequently delisted from the NYSE.

On August 25, 2023, the Company filed a Certificate of Elimination of Series A Convertible Participating Preferred Stock with the Secretary of State of Delaware that eliminated the Series A Convertible Participating Preferred Stock from the Company’s Certificate of Incorporation.

As of September 30, 2023, the Company has 50,000,000 authorized shares of preferred stock.

AMC’s Board of Directors approved equitable adjustments to all outstanding awards under the 2013 Equity Incentive Plan subsequent to the effectiveness of the Charter Amendments.

The outstanding awards were proportionally adjusted consistent with the ratio used for the Reverse Stock Split and all awards previously convertible into AMC Preferred Equity Units are now convertible into Common Stock.

Stock-Based Compensation

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

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Total stock-based compensation expense

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.

As of September 30, 2023, the estimated remaining unrecognized compensation cost related to stock-based compensation grants was approximately $ 20.1 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.

1 unchanged sentence

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

On August 19, 2022, the Compensation Committee approved an adjustment to the 2013 Equity Incentive Plan to entitle each participant one AMC Preferred Equity Unit and one share of Common Stock for each restricted stock unit (“RSU”) or performance stock unit (“PSU”) for awards granted prior to the AMC Preferred Equity Unit special dividend.

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

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This modification resulted in the immediate additional vesting of 238,959 Common Stock 2022 PSUs and 238,959 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 six months ended June 30, 2023, the Company recognized $ 20.2 million of additional stock compensation expense.

During the nine months ended September 30, 2023, the Company recognized $ 20.2 million of stock compensation expense related to these awards.

Awards Granted in 2023

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.

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.

During the nine months ended September 30, 2023, AMC’s Board of Directors approved awards of stock, RSUs, and PSUs to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan.

Each RSU or PSU is convertible into one share of Common Stock upon vesting.

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

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 at a future date.

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

Upon vesting, 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.

Following the completion of the Charter Amendments, grantees will now receive an amount of cash equal to the closing price of Common Stock multiplied by the number of underlying cash-based RSUs and PSUs award.

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 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.

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 Company recognizes expense related to these awards based on the fair value of the Common Stock shares, giving effect to the portion of services rendered during the requisite services period.

As of September 30, 2023, there were 169,401 nonvested underlying Common Stock RSUs and PSUs related to awards granted to non-section 16 officers.

There are 112,894 nonvested underlying Common Stock RSUs and PSUs (2023 Tranche Year) that are currently classified as liabilities and 56,507 nonvested underlying Common Stock 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.

The 2023 award agreements generally had the following features:

● Stock Award Agreement:

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.

During the nine months ended September 30, 2023, the Company granted awards of 8,555 fully vested shares of Common Stock and 15,370 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 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.

During the nine months ended September 30, 2023, the Company granted 313,831 RSU awards to certain members of management with a grant date fair value of $ 12.0 million.

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

2 unchanged sentences

● Performance Stock Unit Award Agreement:

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”).

During the nine months ended September 30, 2023, total PSUs of 287,664 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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If the performance targets are met at 100 % , the 2023 PSU awards will vest at 287,664 units in the aggregate.

No PSUs will vest for each Tranche Year if the Company does not achieve 80% of the Tranche Year’s Adjusted EBITDA and free cash flow targets.

PSUs will vest for each Tranche Year if the Company does not achieve 80% of the Tranche Year’s Adjusted EBITDA and free cash flow targets.

The Compensation Committee establishes the annual performance targets at the beginning of each year.

1 unchanged sentence

The 2023 PSU award grant date fair value for the 2023 Tranche Year award of 95,883 units was $ 3.9 million, the 2022 PSU award grant date fair value for the 2023 Tranche Year award of 46,192 units was $ 1.9 million, and the 2021 PSU award grant date fair value for the 2023 Tranche Year Award of 160,280 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 six months ended June 30, 2023:

AMC Preferred

RSUs and PSUs

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

RSUs and PSUs (3)

1 unchanged sentence

Granted - Special Award

( 1,246,290 )

Vested - Special Award

( 1,284,818 )

( 1,294,464 )

Cancelled (2)

Cancelled - Special Award (2)

( 1,104,771 )

( 1,095,125 )

Nonvested at June 30, 2023

Nonvested at September 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 June 30, 2023

Total Nonvested at September 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 $ 14.2 million during the six months ended June 30, 2023.

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

(3) Includes AMC Preferred Equity Unit RSUs and PSUs that were converted to Common Stock RSUs and PSUs as a result of the Charter Amendments.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Six Months Ended June 30, 2023

For the Nine Months Ended September 30, 2023

Preferred Stock

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Other comprehensive loss

AMC Preferred Equity Units issuance

Share issuance

Antara Forward Purchase Agreement (2)

3 unchanged sentences

Other comprehensive loss

AMC Preferred Equity Units issuance

Share issuance

Taxes paid for restricted unit withholdings

1 unchanged sentence

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.

Other comprehensive income

AMC Preferred Equity Unit conversion

( 9,954,065 )

( 99,540,642 )

Settlement payment

Share issuance

Stock-based compensation

Balances September 30, 2023

(1) Includes 8,555 Common Stock shares and 15,370 AMC Preferred Equity Units awarded to the Board of Directors, 226,791 vested Common Stock RSUs and PSUs, and 254,074 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 Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

Preferred Stock

17 unchanged sentences

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.

Other comprehensive loss

Share issuance

Stock-based compensation

Balances September 30, 2022

(1) Includes 4,165 Common Stock shares and 4,165 AMC Preferred Equity Units awarded to Board of Directors, 279,985 vested Common Stock RSUs and PSUs, and 279,985 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 six months ended June 30, 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 nine months ended September 30, 2023 due to the lingering effects of the COVID-19 pandemic and ongoing labor stoppages 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.

7 unchanged sentences

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

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

The effective tax rate for the nine months ended September 30, 2023 reflects the impact of these valuation allowances against U.S.

and international deferred tax assets generated during the period.

The actual effective rate for the nine months ended September 30, 2023 was ( 2.2 )%.

The Company’s consolidated tax rate for the nine months ended September 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 June 30, 2023 and December 31, 2022, the Company has recorded net deferred tax liabilities of $ 32.5 million and $ 32.1 million, respectively.

At September 30, 2023 and December 31, 2022, the Company has recorded net deferred tax liabilities of $ 32.8 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.

9 unchanged sentences

Recurring Fair Value Measurements.

The following table summarizes the fair value hierarchy of the Company’s financial assets and liabilities carried at fair value on a recurring basis as of June 30, 2023:

Fair Value Measurements at June 30, 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 September 30, 2023:

Fair Value Measurements at September 30, 2023 Using

Total Carrying

4 unchanged sentences

(In millions)

June 30, 2023

September 30, 2023

Other long-term assets:

Investment in Hycroft Mining Holding Corporation warrants

Investment in Hycroft warrants

Marketable equity securities:

Investment in Hycroft Mining Holding Corporation

Investment in Hycroft

Total assets at fair value

9 unchanged sentences

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

Fair Value Measurements at June 30, 2023 Using

Fair Value Measurements at September 30, 2023 Using

Significant other

3 unchanged sentences

(In millions)

June 30, 2023

September 30, 2023

Current maturities of corporate borrowings

18 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Revenues (In millions)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

International markets

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

Adjusted EBITDA (In millions)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

International markets

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Capital Expenditures (In millions)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

International markets

1 unchanged sentence

Long-term assets, net (In millions)

June 30, 2023

September 30, 2023

December 31, 2022

4 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Net earnings (loss)

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See below for a reconciliation of the Company’s equity in loss of non-consolidated entities to attributable EBITDA.

Because these equity investments are in theatre operators in regions where the Company holds a significant market share, the Company believes attributable EBITDA is more indicative of the performance of these equity investments and management uses this measure to monitor and evaluate these equity investments.

Because these equity investments in theatre operators are in regions where the Company holds a significant market share, the Company believes attributable EBITDA is more indicative of the performance of these equity investments and management uses this measure to monitor and evaluate these equity investments.

The Company also provides services to these theatre operators including information technology systems, certain on-screen advertising services and the Company’s gift card and package ticket program.

Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

June 30, 2023

June 30, 2022

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

September 30, 2023

September 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 loss of International theatre joint ventures

Income tax benefit

Investment expense

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

Equity in earnings (loss) of International theatre joint ventures

Income tax provision (benefit)

Investment expense (income)

Interest expense

2 unchanged sentences

Attributable EBITDA

(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.

(4) Investment expense (income) during the three months ended September 30, 2023 primarily includes appreciation in estimated fair value of the Company’s investment in common shares of Hycroft of $( 0.1 ) million, deterioration in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft of $ 0.8 million and interest income of $( 3.7 ) million.

During the three months ended September 30, 2022, investment expense (income) included deterioration in estimated fair value of the Company’s investment in common shares of Hycroft of $ 11.8 million, deterioration in estimated fair value of the Company's investment in warrants to purchase common shares of Hycroft of $ 7.7 million, and $ 1.6 million decline in estimated fair value of the Company’s investment in NCM Common Units, partially offset by interest income of $( 2.8 ) million.

Investment expense (income) during the nine months ended September 30, 2023 includes deterioration in estimated fair value of the Company’s investment in common shares of Hycroft of $ 5.4 million, deterioration in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft of $ 5.4 million, $ 1.8 million of expense for NCM Common Units, $( 15.5 ) million gain on the sale of the Company’s investment in Saudi Cinema Company, LLC and interest income of $( 8.5 ) million.

During the nine months ended September 30, 2022, investment expense (income) included deterioration in estimated fair value of the Company’s investment in common shares of Hycroft of $ 10.8 million, $ 11.1 million decline in estimated fair value of the Company’s investment in NCM Common Units, partially offset by appreciation in estimated fair value of the Company’s investment to purchase common shares of Hycroft of $( 7.4 ) million and interest income of $( 3.3 ) million.

(5) Other expense (income) during the three months ended September 30, 2023 includes a non-cash litigation adjustment of $( 16.1 ) million, income related to foreign currency transaction losses of $ 12.8 million and gains on debt extinguishment of $( 10.8 ) million.

During the three months ended September 30, 2022, other expense (income) included foreign currency transaction losses of $ 6.3 million.

Other expense (income) during the nine months ended September 30, 2023 includes a non-cash litigation charge of $ 99.3 million, partially offset by gains on debt extinguishment of $( 97.5 ) million and foreign currency transaction gains of $( 3.2 ) million.

During the nine months ended September 30, 2022, other expense (income) included loss on debt extinguishment of $ 96.4 million and foreign currency transaction losses of $ 14.7 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.

66 unchanged sentences

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.

As consideration for the proposed settlement, the Company agreed to certain corporate governance reforms.

The Company also agreed to 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.

1 unchanged sentence

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

On October 6, 2023, the Court preliminarily approved the proposed settlement as being fair, reasonable, and adequate, and scheduled a telephonic hearing for December 18, 2023 at 11:00 a.m.

eastern time, to, among other things, consider whether to approve the proposed 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.

On May 5, 2020, the Board determined not to pursue the claims sought in the demand at this time.

On May 5, 2020, the Board determined not to pursue the claims sought in the demand at that time.

On July 15, 2020, the Company received a second stockholder litigation demand requesting substantially the same action as the stockholder demand it received on December 31, 2019.

On September 23, 2020, the Board determined not to pursue the claims sought in the demand at this time.

On September 23, 2020, the Board determined not to pursue the claims sought in the demand at that time.

On April 22, 2019, a putative stockholder class and derivative complaint, captioned Lao v.

2 unchanged sentences

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

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

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

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

8 unchanged sentences

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 six months ended June 30, 2023.

The Company recorded the settlement as a gain in other income once all contingencies were resolved during the nine months ended September 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.

1 unchanged sentence

(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:

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

(iii) 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, would 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”).

15 unchanged sentences

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.

§ 242 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 asserted a claim for breach of fiduciary duty against certain of the Company’s directors and a claim for breach of 8 Del.

§ 242 against those directors and the Company, arising out of the Company’s creation of the APEs, the Antara Transactions, and the Charter Amendments.

The Munoz Action, which was filed by the stockholders who made the Books and Records Demands, asserted 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 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”).

§ 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 Amendments

or that the APEs be enjoined from voting on the Charter Amendments, and an award of money damages.

The Munoz Action sought to enjoin the APEs from voting on the Charter Amendments.

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 Amendments to proceed, but precluded the Company from implementing the Charter Amendments 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.

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 would be effective (and after giving effect to the Reverse Stock Split) of one share of Common Stock for every 7.5 shares of Common Stock owned by such record holders.

The Company’s obligation to make the Settlement Payment was contingent on the Status Quo Order being lifted and the Company effecting the Charter Amendments.

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 $ 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.

5 unchanged sentences

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.

On August 11, 2023, the court approved the settlement of the Shareholder Litigation and lifted the Status Quo Order.

On August 14, 2023, the Company filed the amendment to its Third Amended and Restated Certificate of Incorporation, which was previously approved by the Company’s stockholders at the special meeting held on March 14, 2023 to implement the Charter Amendments effective as of August 24, 2023.

The Reverse Stock Split occurred on August 24, 2023, the conversion of APEs into Common Stock occurred on August 25, 2023, and the Settlement Payment was made on August 28, 2023.

On September 15, 2023, the Court entered an order dismissing the Shareholder Litigation in its entirety and with prejudice.

On October 13, 2023, a purported Company stockholder who objected to the settlement of the Shareholder Litigation filed a notice of appeal to the settlement.

In connection with the Settlement Payment, the Company recorded a $ 110.1 million charge to other expense during the nine months ended September 30, 2023.

The charge was based on the estimated fair value of $ 99.3 million for the Settlement Payment and $ 10.8 million of legal fees, net of probable insurance recoveries.

The Company made the Settlement Payment on August 28, 2023, and recorded the disbursement to stockholders’ equity.

The legal fee liabilities are included in accrued expenses and other liabilities or accounts payable within the condensed consolidated balance sheets.

On August 14, 2023, a putative class action on behalf of APE holders, captioned Simons v.

AMC Entertainment Holdings, Inc.

2023-0835-MTZ (the “Simons Action”), was filed against the Company in the Delaware Court of Chancery.

The Simons Action asserts claims for a declaratory judgment, injunctive relief, and breach of contract, and alleges that the Settlement Payment in the Shareholder Litigation violates the Certificate of Designations that govern the APEs prior to the conversion of the APEs into Common Stock.

On September 12, 2023, the Company filed a motion to dismiss the Complaint.

On May 4, 2023, the Company filed a lawsuit in the Superior Court of the State of Delaware against seventeen insurers participating in its directors & officers insurance program, seeking recovery for losses incurred in connection with its defense and settlement of the Shareholder Litigation, including the Settlement Payment.

The insurance recovery action is captioned, AMC Entertainment Holdings, Inc.

XL Specialty Insurance Co., et al ., Case No.

N23C-05-045 AML CCLD (Del.

May 4, 2023) (the “Coverage Action”).

In the suit, AMC seeks to collect coverage under its Executive and Corporate Securities Liability Insurance Policies sold by the defendants, which provide coverage for the policy period of January 1, 2022, through January 1, 2023 (the “Policies”) in excess of a $ 10 million deductible.

The primary insurer in the Coverage Action has paid its full $ 5 million limit to reimburse the Company for its payment of the class counsel fee award.

The remainder of the insurers contest whether they owe coverage for the Settlement Payment, claiming it does not constitute a “Loss” under their insurance policies.

AMC may have claims for coverage from additional insurers as well, however, those insurers’ policies contain mandatory arbitration provisions, so they have not been included in the Coverage Action.

On October 6, 2023, an action captioned Matthew, et al.

Citigroup Global Markets, et al.

1:23-cv-12302-FDS (the “Matthew Action”), was filed in the U.S.

District Court for the District of Massachusetts.

The Matthew Action names the Company as a nominal defendant, but does not seek any relief on behalf of the Company.

NOTE 12—EARNINGS (LOSS) PER SHARE

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

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

The Company has 50,000,000 Preferred Stock shares authorized, 10,000,000 of which have currently been allocated and 9,954,065 have been issued under depositary agreement as Series A Convertible Participating Preferred Stock, leaving 40,000,000 unallocated Preferred Stock shares.

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

Trading of the AMC

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

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

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.

On August 24, 2023, the Company effectuated a reverse stock split at a ratio of one share of Common Stock for every ten shares of Common Stock.

The reverse stock split did not impact the number of AMC Preferred Equity Units outstanding.

References made to AMC Preferred Equity Units have been retroactively adjusted to reflect the effect of the reverse stock split on their equivalent Common Stock shares.

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

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Three Months Ended

Six Months Ended

Nine Months Ended

(In millions)

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.

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Net earnings (loss) for basic earnings (loss) per share

Net earnings (loss) for diluted earnings (loss) per share

Denominator (shares in thousands):

4 unchanged sentences

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 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.

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

Unvested RSUs of 467,353 and 548,419 for the three and nine months ended September 30, 2023, respectively were not included in the computation of diluted earnings (loss) per share because they would be anti-dilutive.

Unvested RSUs of 542,815 for the three and nine months ended September 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 2,929,044 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

Shareholder 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 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.

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

Unvested PSUs of 192,052 and 294,251 for the three and nine months ended September 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 283,809 at certain performance targets for the three and nine months ended September 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.

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