What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-08 compared with 2023-11-08 · 243 added, 512 removed, 258 unchanged (75% of the section changed)

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These forward-looking statements are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions and speak only as of the date on which it is made.

Examples of forward-looking statements include statements we make regarding the impact of COVID-19, future attendance levels and our liquidity.

Examples of forward-looking statements include statements we make regarding future attendance levels, operating revenues and our liquidity.

These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, including those discussed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

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

● the risks and uncertainties relating to the sufficiency of our existing cash and cash equivalents and

available borrowing capacity to comply with the minimum liquidity requirement under our debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility (as defined in Note 6—Corporate Borrowings and Finance Lease Liabilities in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 thereof), fund operations, and satisfy obligations including cash outflows for deferred rent and planned capital expenditures currently and through the next twelve months.

● the risks and uncertainties relating to the sufficiency of our existing cash and cash equivalents and available borrowing capacity, including following the termination of our senior secured revolving credit facility (“Senior Secured Revolving Credit Facility”), to fund operations, and satisfy obligations including cash outflows for deferred rent and planned capital expenditures currently and through the next twelve months.

In order to achieve net positive operating cash flows and long-term profitability, operating revenues will need to increase from current levels to levels in line with pre-COVID-19 operating revenues.

However, there remain significant risks that may negatively impact operating revenues and attendance levels, including changes to movie studios release schedules and direct to streaming or other changing movie studio practices.

If we are unable to achieve increased levels of attendance and operating revenues, we may be required to obtain additional liquidity.

However, there remain significant risks that may negatively impact operating revenues and attendance levels, including changes to movie studios release schedules (including as a result of production delays and delays to the release of movies caused by labor stoppages, including but not limited to the Writers Guild of America strike and the Screen Actors Guild-American Federation of Television and Radio Artists strike that occurred during 2023, which has and is expected to negatively impact the box office during the first half of 2024) and direct to streaming or other changing movie studio practices.

If we are unable to achieve increased levels of attendance and operating revenues, we will be required to obtain additional liquidity.

If such additional liquidity is not obtained or insufficient, we likely would seek an in-court or out-of-court restructuring of our liabilities, and in the event of such future liquidation or bankruptcy proceeding, holders of our Common Stock and other securities would likely suffer a total loss of their investment;

● the impact of COVID-19 upon the operations of the exhibition industry;

the practices of distributors;

and the changing movie-going behavior of consumers;

● increased use of alternative film delivery methods including premium video on demand, streaming platforms, or other forms of entertainment;

● changing practices of distributors, which accelerated during the COVID-19 pandemic, including increased use of alternative film delivery methods including premium video on demand, streaming platforms, shrinking exclusive theatrical release windows or release of movies to theatrical exhibition and streaming platforms on the same date, the theatrical release of fewer movies, or transitioning to other forms of entertainment;

● the impact of changing movie-going behavior of consumers;

● the risk that the North American and international box office in the near term will not recover sufficiently, resulting in higher cash burn and the need to seek additional financing;

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

● risks relating to motion picture production, promotion, marketing, and performance, including labor stoppages affecting the production, supply and release schedule of theatrical motion picture content, 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, which remains ongoing and the duration of which cannot be reasonably predicted;

● shrinking exclusive theatrical release windows or release of movies to theatrical exhibition and streaming platforms on the same date, and the theatrical release of fewer movies;

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

● the dilution caused by recent and potential future sales of our Common Stock and future potential share issuances to repay, refinance, redeem or repurchase indebtedness (including expenses, accrued interest and premium, if any);

● intense competition in the geographic areas in which we operate among exhibitors, streaming platforms, or from other forms of entertainment;

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● risks relating to impairment losses, including with respect to goodwill and other intangibles, and theatre and other closure charges;

● general and international economic, political, regulatory, social and financial market conditions, including potential economic recession, inflation, the financial stability of the banking industry, and other risks that may negatively impact discretionary income and our operating revenues and attendance levels;

● general and international economic, political, regulatory, social and financial market conditions, including potential economic recession, inflation, rising interest rates, the financial stability of the banking industry, and other risks that may negatively impact discretionary income and our operating revenues and attendance levels;

● our lack of control over distributors of films;

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

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

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

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

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● the availability and/or cost of energy, particularly in Europe;

● the dilution caused by recent and potential future sales of our Common Stock, including the AMC Preferred Equity Unit Conversion;

● the market price and trading volume of our shares of Common Stock has been and may continue to be volatile, and purchasers of our securities could incur substantial losses;

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

● the potential for political, social, or economic unrest, terrorism, hostilities, cyber-attacks or war, including the conflict between Russia and Ukraine and that Sweden and Finland (countries where we operate

approximately 100 theatres) have either signed or completed accession protocols.

Their accession could cause a deterioration in the relationship each country has with Russia;

● the potential impact of financial and economic sanctions on the regional and global economy, or widespread health emergencies, such as COVID-19 or other pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance;

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

● other risks referenced from time to time in filings with the SEC.

● the potential for political, social, or economic unrest, terrorism, hostilities, cyber-attacks or war, including the conflict between Russia and Ukraine and other international conflicts;

● the potential impact of financial and economic sanctions on the regional and global economy, or widespread health emergencies, such as pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance;

● anti-takeover protections in our Third Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and our amended and restated bylaws may discourage or prevent a takeover of our Company, even if an acquisition would be beneficial to our stockholders;

● the expiration of our current equity incentive plan, which could cause difficulties in retaining and hiring executives and which could cause an adverse impact on cash flow or adverse accounting consequences from alternative forms of compensation;

● other risks and uncertainties referenced from time to time in filings with the SEC.

This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative but not exhaustive.

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Accordingly, all forward-looking statements should be evaluated with an understanding of their inherent uncertainty and we caution accordingly against relying on forward-looking statements.

Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason.

Actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Readers are urged to consider these factors carefully in evaluating the forward-looking statements.

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AMC is the world’s largest theatrical exhibition company and an industry leader in innovation and operational excellence.

We operate theatres in 11 countries throughout the U.S.

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

Our remaining revenues are generated from ancillary sources, including on-screen advertising, fees earned from our AMC Stubs® customer loyalty program, rental of theatre auditoriums, income from gift card and exchange ticket sales, and online ticketing fees.

As of September 30, 2023, we owned, operated or had interests in 904 theatres and 10,078 screens.

As of March 31, 2024, we operated theatres in 11 countries throughout the U.S.

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

The balance of our revenues are generated from ancillary sources, including on-screen advertising, fees earned from our customer loyalty programs, rental of theatre auditoriums, income from gift card and exchange ticket sales, theatrical distribution, retail popcorn sales, and online ticketing fees.

As of March 31, 2024, we owned, operated or had interests in 895 theatres and 10,005 screens.

Box Office Admissions and Film Content

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Movie Screens

The following table provides detail with respect to digital delivery, 3D enabled projection, large screen formats, such as IMAX ® and our proprietary Dolby Cinema™, other Premium Large Format (“PLF”) screens, enhanced food and beverage offerings and our premium seating as deployed throughout our circuit:

The following table provides detail with respect to large screen formats, such as IMAX ® and our proprietary Dolby Cinema™, other Premium Large Format (“PLF”) screens, enhanced food and beverage offerings and our premium seating as deployed throughout our circuit:

International Markets

Number of Screens

As of March 31,

Number of theatres:

Dolby Cinema™ theatres

Premium seating

Offering alcohol

Number of screens:

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Dolby Cinema TM

Other Premium Large Format ( “ PLF ” )

Dine-In theatres

Dolby Cinema™ theatres

Premium seating

Seating Concepts and Amenities

International Markets

Nine Months Ended

September 30,

Recliner screens operated

Recliner theatres operated

Dine-In screens operated

Dine-In theatres operated

Number of theatres offering alcohol

Loyalty Programs and Other Marketing

As of September 30, 2023, we had more than 31 million member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined.

During the nine months ended September 30, 2023 our AMC Stubs® members represented approximately 45.9% of AMC U.S.

As of March 31, 2024, we had approximately 33 million member households enrolled in AMC Stubs® A-List (“A-List”), AMC Stubs Premiere™ (“Premiere”) and AMC Stubs Insider™ (“Insider”) programs, combined.

During the three months ended March 31, 2024, our AMC Stubs® members represented approximately 48.6% of AMC U.S.

markets attendance.

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Holders of Shares

As of September 30, 2023, approximately 1.6 million shares of our Common Stock were directly registered with our transfer agent by 15,130 stockholders.

As of March 31, 2024, approximately 2.2 million shares of our Common Stock were directly registered with our transfer agent by 15,094 stockholders.

The balance of our outstanding Common Stock was held in “street name” through bank or brokerage accounts.

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Other than as discussed above, there have been no material changes from critical accounting estimates described in our Form 10-K.

Significant Events

Significant Events—For the Three Months Ended March 31, 2024

Debt for Equity Exchange.

During January 2024, we executed a debt for equity exchange transaction.

This transaction was treated as an early extinguishment of the debt.

In accordance with ASC 470-50-40-3, the reacquisition price of the extinguished debt was determined to be the fair value of the Common Stock exchanged.

The below table summarizes the debt for equity exchange that occurred during January 2024:

Aggregate Principal

Accrued Interest

(In millions, except for share data)

Extinguishment

Second Lien Notes due 2026

Vendor Dispute.

On January 26, 2024, we executed an agreement to collect $37.5 million as resolution of a dispute with a vendor.

The proceeds, net of legal costs, were recorded to other income during the three months ended March 31, 2024.

The relationship with the vendor has been restored and remains in good standing.

Significant Events—For the Three Months Ended March 31, 2023

Saudi Cinema Company.

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

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

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

Debt Repurchases.

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:

The below table summarizes the cash debt repurchase transactions during the three months ended March 31, 2023, including related party transactions with Antara.

Aggregate Principal

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Additional Share Issuances Antara.

On December 22, 2022, we entered into the Forward Purchase Agreement with Antara pursuant to which we 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, we 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 our 10%/12% Cash/PIK Toggle Second Lien Notes due 2026.

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

On December 22, 2022, we entered into a forward purchase agreement (the “Forward Purchase Agreement”) with Antara pursuant to which we 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 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.

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

Equity Distribution Agreement.

During the nine months ended September 30, 2023, we 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 our Preferred Equity Offering of approximately 7.1 million shares of our AMC Preferred Equity Units.

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

We no longer have 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.

Share Issuances.

During the three months ended March 31, 2023, we raised gross proceeds of approximately $80.3 million and paid fees to a sales agent and incurred other third-party issuance costs of approximately $2.0 million and $7.8 million, respectively, through our at-the-market offering of approximately 4.9 million shares of our AMC Preferred Equity Units.

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

Special Awards.

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

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

On February 23, 2023, the Compensation Committee approved special awards in lieu of vesting of the 2022 PSU awards.

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

This modification resulted in the immediate additional vesting of 238,959 Common Stock PSUs and 238,959 AMC Preferred Equity Unit PSUs.

This was treated as a Type 3 modification (improbable-to-probable) which requires us 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 $14.9 million and $5.3 million, respectively.

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

NCM Bankruptcy.

On April 11, 2023, National CineMedia, LLC filed a petition under Chapter 11 of the U.S.

Bankruptcy Code in the Southern District of Texas.

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

Under the Chapter 11 Plan, NCM has assumed its agreements with us.

As part of the Plan, on August 7, 2023, NCM issued 16,581,829 common units that were owed to AMC as part of the annual common unit adjustment.

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

We have 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 us and appeal of the court’s order to approve cancellation of the NCM Common Unit issuance.

We do not expect its bankruptcy to

have a material impact on the Company.

Shareholder Litigation.

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

§ 242 against those directors and us, arising out of our creation of AMC Preferred Equity Units, the transactions between Antara and us that we announced on December 22, 2022 and the Charter Amendments.

This litigation prevented us 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, received a payment of one share of Common Stock for every 7.5 shares of Common Stock owned by the Settlement Payment Recipients.

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 in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information regarding the litigation and settlement.

Common Stock Equity Distribution Agreement.

On September 6, 2023, we entered into a Common Stock Equity Distribution Agreement with the Common Stock Sales Agents, to sell up to 40.0 million shares of our Common Stock, from time to time, through a Common Stock Offering.

Subject to 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 on our instructions for the sales, including any price, time or size limits specified by us.

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

On September 13, 2023, we announced that we had completed our Common Stock Offering.

During the nine months ended September 30, 2023, we 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 our Common Stock Offering of 40.0 million shares of our Common Stock.

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

This was treated as a Type 3 modification (improbable-to-probable) which required 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 $14.9 million and $5.3 million respectively.

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

Lease Termination.

During the three months ended March 31, 2023, we 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 and termination gain resulted in a $16.7 million reduction to rent expense.

Operating Results

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Three Months Ended

Nine Months Ended

(In millions)

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

March 31, 2024

March 31, 2023

Food and beverage

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Operating costs and expenses

Operating income (loss)

Operating loss

Other expense:

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Non-cash NCM exhibitor service agreement

Equity in (earnings) loss of non-consolidated entities

Investment expense (income)

Investment income

Total other expense, net

Net earnings (loss) before income taxes

Net loss before income taxes

Income tax provision

Net earnings (loss)

* Percentage change in excess of 100%

Three Months Ended

Nine Months Ended

September 30,

Operating Data:

Screen additions

March 31, 2024

March 31, 2023

Screen acquisitions

Screen dispositions

Construction openings (closures), net

Construction closures, net

Average screens (1)

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Three Months Ended

September 30,

(In millions)

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Operating costs and expenses

Operating income (loss)

Operating loss

Other expense (income):

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Non-cash NCM exhibitor service agreement

Equity in (earnings) loss of non-consolidated entities

Investment expense (income)

Total other expense, net

Net earnings (loss) before income taxes

Total other expense (income), net

Net loss before income taxes

Income tax provision

Net earnings (loss)

International Markets

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Three Months Ended

September 30,

Segment Operating Data:

Screen additions

Screen acquisitions

Screen dispositions

Construction openings (closures), net

Average screens (1)

Number of screens operated

Number of theatres operated

Screens per theatre

Attendance (in thousands) (1)

(1) Includes consolidated theatres only and excludes screens offline due to construction.

International Markets

Nine Months Ended

September 30,

(In millions)

Food and beverage

Other theatre

Total revenues

Operating Costs and Expenses

Film exhibition costs

Food and beverage costs

Operating expense

General and administrative expense:

Merger, acquisition and other costs

Depreciation and amortization

Operating costs and expenses

Operating income (loss)

Other expense (income):

Other expense (income)

Interest expense:

Corporate borrowings

Finance lease obligations

Non-cash NCM exhibitor service agreement

Equity in (earnings) loss of non-consolidated entities (1)

Investment expense (income)

Total other expense, net

Net loss before income taxes

Income tax provision

International Markets

Nine Months Ended

September 30,

Segment Operating Data:

Screen additions

Screen acquisitions

Screen dispositions

Construction openings (closures), net

Construction closures, net

Average screens (1)

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● does not reflect any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future.

During the three months ended September 30, 2023, Adjusted EBITDA in the U.S.

markets was $150.6 million compared to $1.2 million during the three months ended September 30, 2022.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance as a result of the popularity of new film releases compared to the prior year.

During the three months ended September 30, 2023, Adjusted EBITDA in the International markets was $43.1 million compared to $(14.1) million during the three months ended September 30, 2022.

The year-over-year improvement was primarily due to an increase in attendance as a result of the popularity of new film releases compared to the prior year, partially offset by a decline in government assistance.

During the three months ended September 30, 2023, Adjusted EBITDA in the U.S.

markets and International markets was $193.7 million compared to $(12.9) million during the three months ended September 30, 2022, driven by the aforementioned factors impacting Adjusted EBITDA.

During the nine months ended September 30, 2023, Adjusted EBITDA in the U.S.

markets was $336.3 million compared to $52.2 million during the nine months ended September 30, 2022.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance as a result of the popularity of new film releases compared to the prior year and decreases in rent expense.

During the nine months ended September 30, 2023, Adjusted EBITDA in the International markets was $47.0 million compared to $(20.1) million during the nine months ended September 30, 2022.

The year-over-year improvement was primarily due to the decreased net loss driven by the increase in attendance as a result of the popularity of new film releases compared to the prior year and decreases in rent expense, partially offset by a decline in gift card and package ticket expirations and theatre rentals for meetings, and decreases in government assistance.

During the nine months ended September 30, 2023, Adjusted EBITDA in the U.S.

markets and International markets was $383.3 million compared to $32.1 million during the nine months ended September 30, 2022, driven by the aforementioned factors impacting Adjusted EBITDA.

During the three months ended March 31, 2024, Adjusted EBITDA in the U.S.

markets was $(27.6) million compared to $10.9 million during the three months ended March 31, 2023.

The year-over-year decline was primarily driven by a decrease in attendance as a result of the popularity of new film releases, increases in rent expense due to a prior year rent credit for a theatre termination, decreases in legal settlement income, increases in general and administrative expenses and increases in operating expenses related to an increase in expected general liability and workers compensation costs compared to the prior year.

These declines were partially offset by increases in average ticket price, increases in food and beverage sales per patron, increases in other revenues and increases in cash distributions from non-consolidated entities.

During the three months ended March 31, 2024, Adjusted EBITDA in the International markets was $(4.0) million compared to $(3.8) million during the three months ended March 31, 2023.

The year-over-year decline was primarily driven by a decline in other revenues, increases in rent, increases in operating expenses related to the increase in attendance, general and administrative expenses and increases in foreign currency translation rates.

These declines were partially offset by an increase in attendance as a result of the popularity of new film releases, increases in food and beverage sales per patron, increases in legal settlement income and increases in Attributable EBITDA.

During the three months ended March 31, 2024, Adjusted EBITDA in the U.S.

markets and International markets was $(31.6) million compared to $7.1 million during the three months ended March 31, 2023, driven by the aforementioned factors impacting Adjusted EBITDA.

The following tables set forth our Adjusted EBITDA by reportable operating segment and our reconciliation of Adjusted EBITDA:

Three Months Ended

Nine Months Ended

Adjusted EBITDA (In millions)

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

March 31, 2024

March 31, 2023

International markets

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Three Months Ended

Nine Months Ended

(In millions)

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Net earnings (loss)

March 31, 2024

March 31, 2023

Income tax provision (1)

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Certain operating expense (2)

Equity in (earnings) loss of non-consolidated entities

Equity in earnings of non-consolidated entities

Cash distributions from non-consolidated entities (3)

Attributable EBITDA (4)

Investment expense (income) (4)

Investment income (5)

Other expense (income) (6)

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Adjusted EBITDA

(1) For information regarding the income tax provision, see Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q.

(2) Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens, including the related accretion of interest, disposition of assets and other non-operating gains or losses included in operating expenses.

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Three Months Ended

Nine Months Ended

(In millions)

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Equity in (earnings) loss of non-consolidated entities

March 31, 2024

March 31, 2023

Equity in (earnings) of non-consolidated entities

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

Equity in earnings (loss) of International theatre joint ventures

Income tax provision (benefit)

Investment expense (income)

Interest expense

Impairment of long-lived assets

Equity in earnings of International theatre joint ventures

Income tax benefit

Investment expense

Depreciation and amortization

Attributable EBITDA

(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 our 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 our 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 the estimated fair value of our 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 our investment in common shares of Hycroft of $5.4 million, deterioration in estimated fair value of our investment in warrants to purchase common shares of Hycroft of $5.4 million, a $(15.5) million gain on the sale of our 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 our investment in common shares of Hycroft of $10.8 million, $11.1 million decline in estimated fair value of our investment in NCM Common Units, partially offset by appreciation in estimated fair value of our 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 a gain 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.

(5) Investment expense (income) during the three months ended March 31, 2024 primarily includes deterioration in estimated fair value of our investment in common shares of Hycroft of $0.5 million, deterioration in estimated fair value of our investment in warrants to purchase common shares of Hycroft of $0.5 million and interest income of $(6.1) million.

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

(6) Other expense (income) during the three months ended March 31, 2024 includes a vendor dispute settlement of $(36.2) million, foreign currency transaction losses of $3.2 million and gains on debt extinguishment of $(5.8) million.

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

(7) 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.

2 unchanged sentences

Segment Information

Our historical results of operations for the three and nine months ended September 30, 2023, and September 30, 2022, reflect the results of operations for our two theatrical exhibition reportable segments, U.S.

Our historical results of operations for the three months ended March 31, 2024 and March 31, 2023, reflect the results of operations for our two theatrical exhibition reportable segments, U.S.

markets and International markets.

Results of Operations—For the Three Months ended September 30, 2023, Compared to the Three Months ended September 30, 2022

Results of Operations—For the Three Months ended March 31, 2024, Compared to the Three Months ended March 31, 2023

Condensed Consolidated Results of Operations

Total revenues increased $437.5 million, or 45.2%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

Admissions revenues increased $252.4 million, or 46.3%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to an increase in attendance of 38.4% from 53.2 million patrons to 73.6 million patrons and a 5.8% increase in average ticket price.

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

The increase in average ticket price was primarily due to higher ticket prices, increased attendance for IMAX content, and increases in foreign currency translation rates partially offset by higher frequency of use by subscribers to our A-List program.

Food and beverage revenues increased $149.4 million, or 44.8%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to the increase in attendance and an increase in food and beverage per patron.

Food and beverage per patron increased 4.6% from $6.27 to $6.56 due primarily to increases in average prices, the percentage of guests making transactions, and increases in foreign currency translation rates, partially offset by a decline in units purchased per transaction and higher frequency from our AMC Stubs loyalty members.

Total other theatre revenues increased $35.7 million, or 39.8%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to increases in ticket fees due to the increase in attendance, the number of tickets purchased online and increases in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $223.2 million, or 20.6%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

Film exhibition costs increased $135.3 million, or 51.4%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 50.0% for the three months ended September 30, 2023, compared to 48.3% for the three months ended September 30, 2022.

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

Food and beverage costs increased $31.6 million, or 54.0%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

The increase in food and beverage costs was primarily due to the increase in food and beverage sales and increases in product costs.

As a percentage of food and beverage revenues, food and beverage costs were 18.7% for the three months ended September 30, 2023, and 17.6% for the three months ended September 30, 2022.

As a percentage of revenues, operating expense was 32.0% for the three months ended September 30, 2023, and 41.4% for the three months ended September 30, 2022.

Rent expense increased 0.5%, or $1.1 million, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to increases in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $74.2 million that have been deferred to future years as of September 30, 2023.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.7 million during the three months ended September 30, 2023, compared to $0.3 million during the three months ended September 30, 2022.

Other general and administrative expense increased 34.0%, or $13.8 million, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, due primarily to increases in

stock-based compensation expense of $10.8 million related to higher expectations of performance versus goals in the current year compared to the prior year and increases in foreign currency translation rates.

See Note 7—Stockholders’ Equity in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about stock-based compensation expense.

Depreciation and amortization.

Depreciation and amortization decreased $8.2 million, or 8.5%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to lower depreciation expense on theatres impaired during the year ended December 31, 2022, partially offset by accelerated depreciation related to the replacement of digital projectors and permanently closed theatres.

Other income.

Other income of $12.8 million during the three months ended September 30, 2023 was primarily due to $15.3 million of income related to the settlement of the Shareholder Litigation comprised of $16.1 million of non-cash income for the decrease in estimated fair value as of the date of the final Delaware Supreme Court order of settlement shares issued to holders of Common Stock on August 28, 2023 and partially offset by $0.8 million of contingent insurance recovery costs, gains on extinguishment of debt of $10.8 million related to the redemption of $24.2 million aggregate principal amount of the Second Lien Notes due 2026 and partially offset by $12.8 million in foreign currency transaction losses.

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

Interest expense.

Interest expense increased $8.0 million to $103.7 million for the three months ended September 30, 2023, compared to $95.7 million during the three months ended September 30, 2022, primarily due to:

● the issuance of $400.0 million 12.75% Odeon Senior Secured Notes due 2027 on October 20, 2022;

● the increase in interest rates on the Senior Secured Credit Facility Term Loan due 2026,

partially offset by:

● the extinguishment of $383.8 million of 10%/12% Cash/PIK/Toggle Second Lien Notes due 2026 from May 2022 to September 2023;

● the extinguishment of £147.6 million and €312.2 million ($476.6 million) 10.75%/11.25% Cash/PIK Term Loans due 2023 on October 20, 2022.

Equity in earnings of non-consolidated entities.

Equity in earnings of non-consolidated entities was $3.1 million for the three months ended September 30, 2023, compared to $2.8 million for the three months ended September 30, 2022.

Investment expense (income).

Investment income was ($3.0) million for the three months ended September 30, 2023, compared to expense of $18.3 million for the three months ended September 30, 2022.

Investment income in the current year includes $3.7 million in interest income and $0.1 million of increase in estimated fair value of our investment in common shares of Hycroft, partially offset by $0.8 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft.

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

Income tax provision.

The income tax provision was $2.3 million and $1.8 million for the three months ended September 30, 2023, and September 30, 2022, respectively.

See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net earnings (loss).

Net earnings (loss) was $12.3 million and $(226.9) million during the three months ended September 30, 2023, and September 30, 2022, respectively.

Net earnings during the three months ended September 30, 2023 compared to net loss for the three months ended September 30, 2022 was positively impacted by the increase in attendance as a result of the popularity of new film releases compared to the prior year, decreases in depreciation and amortization expense, increases in other income, increases in equity in earnings and decreases in investment expense, partially offset by increases in rent expense, increases in general and administrative expenses, increases in interest expense, increases in income tax provision and increases in foreign currency translation rates.

Theatrical Exhibition — U.S.

Total revenues increased $310.6 million, or 41.2%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

Admissions revenues increased $169.9 million or 40.7%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to an increase in attendance of 34.4% from 38.3 million patrons to 51.5 million patrons and a 4.6% increase in average ticket price.

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

The increase in average ticket price was primarily due to higher ticket prices and increased attendance for IMAX content, partially offset by higher frequency of use by subscribers to our A-List program.

Food and beverage revenues increased $110.4 million, or 40.5%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to the increase in attendance and an increase in food and beverage per patron.

Food and beverage per patron increased 4.5% from $7.11 to $7.43 due primarily to increases in average prices, the percentage of guests making transactions, partially offset by a decline in units purchased per transaction and higher frequency from our AMC Stubs loyalty members.

Total other theatre revenues increased $30.3 million, or 47.9%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to increases in ticket fees due to the increase in the number of tickets purchased online.

Operating costs and expenses.

Operating costs and expenses increased $158.1 million, or 19.1%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

Film exhibition costs increased $97.2 million, or 45.8%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 52.6% for the three months ended September 30, 2023, compared to 50.8% for the three months ended September 30, 2022.

Food and beverage costs increased $21.5 million or 49.3%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

The increase in food and beverage costs was primarily due to the increase in food and beverage sales, increases in product costs, and product mix.

As a percentage of food and beverage revenues, food and beverage costs were 17.0% for the three months ended September 30, 2023, and 16.0% for the three months ended September 30, 2022.

As a percentage of revenues, operating expense was 31.9% for the three months ended September 30, 2023, and 39.9% for the three months ended September 30, 2022.

Rent expense decreased 1.6%, or $2.7 million, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $67.8 million that have been deferred to future years as of September 30, 2023.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.6 million during the three months ended September 30, 2023, compared to $0.3 million during the three months ended September 30, 2022.

Other general and administrative expense increased 39.8%, or $10.6 million, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, due primarily to increases in stock-based compensation expense of $9.7 million related to higher expectations of performance versus goals in the current year compared to the prior year.

Depreciation and amortization.

Depreciation and amortization decreased $7.9 million, or 10.2%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to lower depreciation expense on theatres impaired during the year ended December 31, 2022, partially offset by accelerated depreciation related to the replacement of digital projectors and permanently closed theatres.

Other income.

Other income of $25.8 million during the three months ended September 30, 2023 was primarily due to $15.3 million of income related to the settlement of the Shareholder Litigation comprised of $16.1

million of non-cash income for the decrease in estimated fair value as of the date of the final Delaware Supreme Court order of settlement shares issued to holders of Common Stock on August 28, 2023 and partially offset by $0.8 million of contingent insurance recovery costs and gains on extinguishment of debt of $10.8 million related to the redemption of $24.2 million aggregate principal amount of the Second Lien Notes due 2026.

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

See Note 1—Basis of Presentation in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about the components of other income and Note 11—Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this form 10-Q for additional information about our legal contingencies and settlements.

Interest expense.

Interest expense increased $10.6 million to $88.2 million for the three months ended September 30, 2023, compared to $77.6 million during the three months ended September 30, 2022, primarily due to:

● the increase in interest rates on the Senior Secured Credit Facility Term Loan due 2026,

partially offset by:

● the extinguishment of $383.8 million of 10%/12% Cash/PIK/Toggle Second Lien Notes due 2026 from May 2022 to September 2023.

Equity in earnings of non-consolidated entities.

Equity in earnings of non-consolidated entities was $1.6 million for the three months ended September 30, 2023, compared to earnings of $3.5 million for the three months ended September 30, 2022.

Investment expense (income).

Investment income was $(2.4) million for the three months ended September 30, 2023, compared to expense of $18.4 million for the three months ended September 30, 2022.

Investment income in the current year includes $3.1 million in interest income and $0.1 million of increase in estimated fair value of our investment in common shares of Hycroft, partially offset by $0.8 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft.

Income tax provision.

The income tax provision was $0.6 million and $0.4 million for the three months ended September 30, 2023, and September 30, 2022, respectively.

See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net earnings (loss).

Net earnings (loss) was $17.7 million and $(166.7) million during the three months ended September 30, 2023 and September 30, 2022, respectively.

Net earnings during the three months ended September 30, 2023 compared to net loss for the three months ended September 30, 2022 was positively impacted by the increase in attendance as a result of the popularity of new film releases compared to the prior year, decreases in depreciation and amortization expense, decreases in rent expense, increases in other income and decreases in investment expense, partially offset by increases general and administrative expenses, increases in interest expense, decreases in equity in earnings and increases in income tax provision.

Theatrical Exhibition—International Markets

Total revenues increased $126.9 million, or 59.0%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

Admissions revenues increased $82.5 million, or 64.6%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to an increase in attendance of 48.5% from 14.8 million patrons to 22.1 million patrons and a 10.8% increase in average ticket price.

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

The increase in average ticket price was primarily due to increases in foreign currency translation rates and higher ticket prices.

Food and beverage revenues increased $39.0 million, or 64.0%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to the increase in attendance and an increase in food and beverage per patron.

Food and beverage per patron increased 10.5% from $4.10 to $4.53 due primarily to increases in foreign currency translation rates and average prices.

Total other theatre revenues increased $5.4 million, or 20.4%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to increases in ticket fees due to the increase in attendance, the number of tickets purchased online and increases in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $65.1 million, or 25.6%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

Film exhibition costs increased $38.1 million, or 74.4%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 42.5% for the three months ended September 30, 2023, compared to 40.1% for the three months ended September 30, 2022.

Food and beverage costs increased $10.1 million, or 67.8%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022.

The increase in food and beverage costs was primarily due to the increase in food and beverage sales and increases in product costs.

As a percentage of food and beverage revenues, food and beverage costs were 25.0% for the three months ended September 30, 2023, and 24.5% for the three months ended September 30, 2022.

As a percentage of revenues, operating expense was 32.3% for the three months ended September 30, 2023, and 46.6% for the three months ended September 30, 2022.

Rent expense increased 7.0%, or $3.8 million, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to the increase in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $6.4 million that have been deferred to future years as of September 30, 2023.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.1 million during the three months ended September 30, 2023, compared to $0.0 million during the three months ended September 30, 2022.

Other general and administrative expense increased 22.9%, or $3.2 million, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, due primarily to increases in stock-based compensation expense of $1.1 million related to higher expectations of performance versus goals in the current year compared to the prior year and increases in foreign currency translation rates.

Depreciation and amortization.

Depreciation and amortization decreased $0.3 million, or 1.5%, during the three months ended September 30, 2023, compared to the three months ended September 30, 2022, primarily due to lower depreciation expense on theatres impaired during the year ended December 31, 2022, partially offset by the increase in foreign currency translation rates.

Other expense.

Other expense of $13.0 million during the three months ended September 30, 2023, was primarily due to $12.8 million in foreign currency transaction losses.

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

Interest expense.

Interest expense decreased $2.6 million to $15.5 million for the three months ended September 30, 2023, compared to $18.1 million during the three months ended September 30, 2022, primarily due to:

● the issuance of $400.0 million 12.75% Odeon Senior Secured Notes due 2027 on October 20, 2022,

partially offset by:

● the extinguishment of £147.6 million and €312.2 million ($476.6 million) 10.75%/11.25% Cash/PIK Term Loans due 2023 on October 20, 2022.

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

Equity in (earnings) loss of non-consolidated entities was $(1.5) million for the three months ended September 30, 2023, compared to $0.7 million for the three months ended September 30, 2022.

Investment income.

Interest income was $0.6 million for the three months ended September 30, 2023, compared to income of $0.1 million for the three months ended September 30, 2022.

Income tax provision.

The income tax provision was $1.7 million and $1.4 million for the three months ended September 30, 2023, and September 30, 2022, respectively.

See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net loss was $5.4 million and $60.2 million during the three months ended September 30, 2023, and September 30, 2022, respectively.

Net loss during the three months ended September 30, 2023 compared to net loss for the three months ended September 30, 2022 was positively impacted by the increase in attendance as a result of the popularity of new film releases compared to the prior year, decreases in depreciation and amortization expense, decreases in equity losses, decreases in interest expense and increases in investment income, partially offset by increases in rent expense, increases in general and administrative expenses, increases in other expense, increases in income tax provision and increases in foreign currency translation rates.

Results of Operations—For the Nine Months ended September 30, 2023 Compared to the Nine Months ended September 30, 2022

C ondensed Consolidated Results of Operations

Total revenues increased $787.7 million, or 27.0%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

Admissions revenues increased $435.8 million, or 26.6%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to an increase in attendance of 23.9% from 151.4 million patrons to 187.6 million patrons and a 2.2% increase in average ticket price.

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

The increase in average ticket price was primarily due to increased attendance for 3D content partially offset by higher frequency of use by subscribers to our A-List program.

Food and beverage revenues increased $317.1 million, or 32.3%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to the increase in attendance and an increase in food and beverage per patron.

Food and beverage per patron increased 6.8% from $6.49 to $6.93 due primarily to an increase in average prices, the percentage of guests making transactions, and the lifting of COVID-19 restrictions on the sale of food and beverage in certain international markets, partially offset by lower units purchased per transaction and higher frequency from our AMC Stubs loyalty members.

Total other theatre revenues increased $34.8 million, or 11.7%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to higher ticket fees due to the increase in the number of tickets purchased online, increases in advertising and retail sales, and partially offset by lower income from gift cards and package tickets and lower income from theatre meetings.

Total revenues decreased $3.0 million, or 0.3%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Admissions revenues decreased $3.6 million, or 0.7%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to a decrease in attendance of 2.1% from 47.6 million patrons to 46.6 million patrons, partially offset by a 1.4% increase in average ticket price.

The decrease in attendance was primarily due to the popularity of film product in U.S.

Markets compared to the prior year.

The availability and popularity of film product released during the three months ended March 31, 2024, was negatively impacted by the Writers Guild of America and the Screen Actors Guild – American Federation of Television and Radio Artists strikes during 2023.

The increase in average ticket price was primarily due to increased ticket prices for all formats, increased attendance at IMAX and other PLF screens and an increase in foreign currency translation rates, partially offset by lower attendance for 3D content.

Food and beverage revenues decreased $7.5 million, or 2.3%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the decrease in attendance and a decrease in food and beverage per patron.

Food and beverage per patron decreased 0.1% from $6.90 to $6.89 due primarily to an increase in revenues in International markets as a percentage of consolidated revenues from 21.4% during the three months ended March 31, 2023 to 23.3% during the three months ended March 31, 2024.

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

markets and this change in the mix of revenues resulted in a decline in consolidated food and beverage per patron, partially offset by an increase in foreign currency translation rates.

Total other theatre revenues increased $8.1 million, or 8.8%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to higher income from gift cards and package tickets, higher income from AMC Theatres Perfectly Popcorn and an increase in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $413.8 million, or 12.9%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

Film exhibition costs increased $246.1 million, or 31.5%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 49.5% for the nine months ended September 30, 2023, compared to 47.7% for the nine months ended September 30, 2022.

Food and beverage costs increased $77.5 million, or 46.8%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

The increase in food and beverage costs was primarily due to the increase in food and beverage revenues and increases in product costs and obsolescence.

As a percentage of food and beverage revenues, food and beverage costs were 18.7% for the nine months ended September 30, 2023, and 16.9% for the nine months ended September 30, 2022.

As a percentage of revenues, operating expense was 33.6% for the nine months ended September 30, 2023, and 39.3% for the nine months ended September 30, 2022.

Rent expense decreased 2.7%, or $18.0 million, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, due primarily to the early termination of one theatre lease for a benefit of $16.7 million, which included an early termination payment from the landlord for $13.0 million.

Operating costs and expenses decreased $2.8 million, or 0.3%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Film exhibition costs decreased $6.9 million, or 2.8%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the decrease in attendance and lower film rental terms.

As a percentage of admissions revenues, film exhibition costs were 45.1% for the three months ended March 31, 2024, compared to 46.1% for the three months ended March 31, 2023.

Food and beverage costs increased $1.6 million, or 2.6%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

The increase in food and beverage costs was primarily due to higher product costs.

As a percentage of food and beverage revenues, food and beverage costs were 19.6% for the three months ended March 31, 2024, compared to 18.7% for the three months ended March 31, 2023.

Operating expense increased by $10.6 million, or 2.8%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

The increase in operating expense was primarily due to an increase in expected general liability and workers compensation costs compared to the prior year and an increase in foreign currency translation rates.

As a percentage of revenues, operating expense was 41.4% for the three months ended March 31, 2024, compared to 40.2% for the three months ended March 31, 2023.

Rent expense increased 9.1%, or $18.8 million, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the early termination of one theatre lease for a benefit of $16.7 million in the prior year, which included an early termination payment from the landlord for $13.0 million and an increase in foreign currency translation rates.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $1.5 million during the nine months ended September 30, 2023, compared to $0.4 million during the nine months ended September 30, 2022.

Other general and administrative expense increased $23.6 million, or 14.6%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022 due primarily to stock-based compensation expense of $20.2 million related to a February 23, 2023 special award grant accounted for as a modification to the 2022 PSU awards which lowered the Adjusted EBITDA and free cash flow performance targets such that 200% vesting was achieved for both tranches.

This modification resulted in the immediate additional vesting of 238,959 Common Stock PSUs and 238,959 Preferred Equity Unit PSUs.

The modification was treated as a Type 3 modification (improbable to probable) which required us to recognize additional stock compensation expense based on the modification date fair values of the Common Stock PSUs and AMC Preferred Equity Unit PSUs of $62.30 per unit and $22.20 per unit, respectively, during the nine months ended September 30, 2023.

Merger, acquisition, and other costs were $(0.1) million during the three months ended March 31, 2024, compared to $0.2 million during the three months ended March 31, 2023.

Other general and administrative expense decreased $14.6 million, or 20.2%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, due primarily to declines in stock-based compensation expense.

We recorded $2.1 million of stock-based compensation expense during the three months ended March 31, 2024 compared to $20.2 million during the three months ended March 31, 2023 related to special awards in each year accounted for as a modification to the respective 2023 and 2022 PSU awards which lowered the Adjusted EBITDA and free cash flow performance targets such that 200% vesting was achieved for both tranches in 2023 and 2022, partially offset by increased rent expense, salaries expense and an increase in foreign currency translation rates.

See Note 7—Stockholders’ Deficit in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about stock-based compensation expense.

Depreciation and amortization.

Depreciation and amortization decreased $13.9 million, or 4.7%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to lower depreciation expense on theatres impaired during the year ended December 31, 2022, partially offset by accelerated depreciation related to the replacement of digital projectors and permanently closed theatres.

Depreciation and amortization decreased $12.0 million, or 12.8%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to theatre closures and lower depreciation expense on theatres impaired during the year ended December 31, 2023, partially offset by an increase in foreign currency translation rates.

Other expense (income).

Other income of $(4.7) million during the nine months ended September 30, 2023 was primarily due to a gain on extinguishment of debt of $95.2 million related to the redemption of $165.6 million aggregate principal amount of the Second Lien Notes due 2026, a gain on extinguishment of debt of $2.3 million related to the redemption of $4.1 million aggregate principal amount of our Senior Subordinated Notes due 2026, a receipt of $14.0 million in settlement of the Lao Action and $3.2 million in foreign currency transaction gains, and partially offset by, $110.1 million of expense related to the settlement of the Shareholder Litigation comprised of $10.8 million of estimated legal fees and contingent insurance recovery costs and $99.3 million of non-cash expense for the estimated fair value as of the date of the final Delaware Supreme Court order of settlement shares issued to holders of Common Stock on August 28, 2023.

Other expense of $91.6 million during the nine months ended September 30, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, the $73.5 million aggregate principal amount of the First Lien Toggle Notes due 2026 and $14.7 million of foreign currency transaction losses, partially offset by a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026 and $18.9 million in government assistance related to COVID-19.

Other income of $(42.8) million during the three months ended March 31, 2024 was primarily due to the favorable settlement of a vendor dispute of $36.2 million, a gain on extinguishment of debt of $5.8 million related to the redemption of $17.5 million aggregate principal amount of the Second Lien Notes due 2026 and equity in earnings of non-consolidated entities of $3.7 million, partially offset by foreign currency transaction losses of $3.2 million.

Other expense of $37.8 million during the three months ended March 31, 2023 was primarily due to $126.6 million of expense related to a proposed settlement of the Shareholder Litigation comprised of $10 million of

estimated legal fees and $116.6 million of non-cash expense for the estimated fair value as of March 31, 2023 of settlement shares proposed to be issued to holders of AMC Class A Common Stock, partially offset by a gain on extinguishment of debt of $62.8 million related to the redemption of $99.4 million aggregate principal amount of the Second Lien Notes due 2026, a gain on extinguishment of debt of $2.3 million related to the redemption of $4.1 million aggregate principal amount of our Senior Subordinated Notes due 2026, a receipt of $14.0 million in settlement of the Lao Action, $8.7 million in foreign currency transaction gains and equity in earnings of non-consolidated entities of $1.4 million.

Interest expense.

Interest expense increased $29.0 million to $307.4 million for the nine months ended September 30, 2023 compared to $278.4 million during the nine months ended September 30, 2022 primarily due to:

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

● the issuance of $400.0 million 12.75% Odeon Senior Secured Notes due 2027 on October 20, 2022;

● the increase in interest rates on the Senior Secured Credit Facility Term Loan due 2026,

partially offset by:

● the extinguishment of $383.8 million of 10%/12% Cash/PIK/Toggle Second Lien Notes due 2026 from May 2022 to September 2023;

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

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

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

● the extinguishment of £147.6 million and €312.2 million ($476.6 million) 10.75%/11.25% Cash/PIK Term Loans due 2023 on October 20, 2022.

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

Equity in (earnings) loss of non-consolidated entities was ($5.3) million for the nine months ended September 30, 2023, compared to a loss of $3.3 million for the nine months ended September 30, 2022.

The decrease in equity losses from the prior year is primarily related to our 10.0% interest in Saudi Cinema Company, LLC that was sold on January 24, 2023.

Investment (income) expense.

Investment income was $(11.4) million for the nine months ended September 30, 2023, compared to investment expense of $12.2 million for the nine months ended September 30, 2022.

Investment income in the current year includes a gain on sale of our 10.0% interest in Saudi Cinema Company, LLC of $15.5 million and interest income of $8.5 million, partially offset by $5.4 million of decline in estimated fair value of our investment in common shares of Hycroft and $5.4 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft and $1.8 million of expense for NCM Common Units.

Investment expense in the prior year includes $10.8 million of decline in estimated fair value of our investment in common shares of Hycroft partially offset by $7.4 million of appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft, and an $11.1 million decline in estimated fair value of our investment in NCM Common Units partially offset by interest income of $3.3 million.

Interest expense increased $0.1 million to $101.2 million for the three months ended March 31, 2024, compared to $101.1 million during the three months ended March 31, 2023, primarily due to an increase in interest rates on the Senior Secured Credit Facility Term Loan Due 2026, partially offset by lower interest expense on the Second Lien Notes due 2026 due to redemptions of principal balances.

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

Investment income.

Investment income was $5.1 million for the three months ended March 31, 2024, compared to income of $(13.5) million for the three months ended March 31, 2023.

Investment income in the current year includes interest income of $6.1 million, partially offset by $0.5 million of decline in estimated fair value of our investment in common shares of Hycroft and $0.5 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft.

Investment income in the prior year includes a gain on sale of our 10.0% interest in Saudi Cinema Company, LLC of $15.5 million and interest income of $2.3 million, partially offset by $2.3 million of decline in estimated fair value of our investment in common shares of Hycroft and $2.3 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft.

Income tax provision.

The income tax provision was $4.6 million and $2.5 million for the nine months ended September 30, 2023, and September 30, 2022, respectively.

The income tax provision was $1.8 million and $1.9 million for the three months ended March 31, 2024, and March 31, 2023, respectively.

See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net loss was $214.6 million and $685.9 million during the nine months ended September 30, 2023, and September 30, 2022, respectively.

Net loss during the nine months ended September 30, 2023 compared to net loss for the nine months ended September 30, 2022 was positively impacted by the increase in attendance as a result of the popularity of new film releases compared to the prior year, decreases in rent expense, decreases in depreciation and amortization expense, decreases in other expense, decreases in equity in losses and decreases in investment expense, partially offset by increases in general and administrative expenses, increases in interest expense and an increase in income tax provision.

Net loss was $163.5 million and $235.5 million during the three months ended March 31, 2024, and March 31, 2023, respectively.

Net loss during the three months ended March 31, 2024 compared to net loss for the three months ended March 31, 2023 was positively impacted by decreases in general and administrative expense, depreciation and amortization expense, increases in other income and decrease in income tax provision, partially offset by the decrease in attendance as a result of the popularity of new film releases compared to the prior year, increases in rent expense, increases in interest expense, decreases in investment income and the increase in foreign currency translation rates.

Theatrical Exhibition — U.S.

Total revenues increased $631.5 million, or 28.4%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

Admissions revenues increased $331.0 million, or 26.9%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to an increase in attendance of 24.4% from 107.6 million patrons to 133.9 million patrons and a 1.9% increase in average ticket price.

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

The increase in average ticket price was primarily due to increased attendance for 3D content partially offset by higher frequency of use by subscribers to our A-List program.

Food and beverage revenues increased $258.7 million, or 32.6%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to the increase in attendance and an increase in food and beverage per patron.

Food and beverage per patron increased 6.6% from $7.37 to $7.86 due primarily to an increase in average prices and the percentage of guests making transactions, partially offset by lower units purchased per transaction and higher frequency from our AMC Stubs loyalty members.

Total other theatre revenues increased $41.8 million, or 20.8%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to higher ticket fees due to the increase in the number of tickets purchased online, advertising and retail sales, and partially offset by lower income from gift cards and package tickets and lower income from theatre meetings.

Total revenues decreased $15.4 million, or 2.2%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Admissions revenues decreased $12.4 million or 3.2%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to a decrease in attendance of 5.8% from 32.4 million patrons to 30.5 million patrons, partially offset by a 2.7% increase in average ticket price.

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

The increase in average ticket price was primarily due to increased ticket prices for all formats and increased attendance at IMAX and other PLF screens, partially offset by lower attendance for 3D content.

Food and beverage revenues decreased $12.2 million, or 4.7%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the decrease in attendance, partially offset by an increase in food and beverage per patron.

Food and beverage per patron increased 1.1% from $7.99 to $8.08 due primarily to an increase in average prices, partially offset by lower units purchase per transaction.

Total other theatre revenues increased $9.2 million, or 14.8%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to higher income from gift cards and package tickets and higher income from AMC Theatres Perfectly Popcorn.

Operating costs and expenses.

Operating costs and expenses increased $345.3 million, or 14.3%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

Film exhibition costs increased $198.3 million, or 32.0%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 52.4% for the nine months ended September 30, 2023, compared to 50.4% for the nine months ended September 30, 2022.

Food and beverage costs increased $61.1 million, or 50.9%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

The increase in food and beverage costs was primarily due to the increase in food and beverage revenues and increases in product costs and obsolescence.

As a percentage of food and beverage revenues, food and beverage costs were 17.2% for the nine months ended September 30, 2023, and 15.1% for the nine months ended September 30, 2022.

As a percentage of revenues, operating expense was 32.6% for the nine months ended September 30, 2023, and 37.6% for the nine months ended September 30, 2022.

Rent expense decreased 3.5%, or $17.5 million, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, due primarily to the early termination of one theatre lease for a benefit of $16.7 million, which included an early termination payment from the landlord for $13.0 million.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $67.8 million that have been deferred to future years as of September 30, 2023.

Operating costs and expenses decreased $13.4 million, or 1.7%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Film exhibition costs decreased $11.4 million, or 6.0%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the decrease in attendance and lower film rental terms.

As a percentage of admissions revenues, film exhibition costs were 47.7% for the three months ended March 31, 2024, compared to 49.1% for the three months ended March 31, 2023.

Food and beverage costs increased $1.0 million or 2.3%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

The increase in food and beverage costs was primarily due to higher product costs.

As a percentage of food and beverage revenues, food and beverage costs were 18.3% for the three months ended March 31, 2024, and 17.0% for the three months ended March 31, 2023.

Operating expense increased by $8.5 million, or 3.1%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

The increase in operating expense was primarily due to an increase in expected general liability and workers compensation costs compared to the prior year.

As a percentage of revenues, operating expense was 41.6% for the three months ended March 31, 2024, compared to 39.5% for the three months ended March 31, 2023.

Rent expense increased 10.0%, or $15.0 million, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, due primarily to the early termination of one theatre lease for a benefit of $16.7 million in the prior year, which included an early termination payment from the landlord for $13.0 million.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $1.4 million during the nine months ended September 30, 2023, compared to $0.9 million during the nine months ended September 30, 2022.

Other general and administrative expense increased $19.6 million, or 17.6%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, due primarily to stock-based compensation expense of $18.1 million related to a February 23, 2023, special award grant accounted for as a modification to the 2022 PSU awards discussed further in Condensed Consolidated Results of Operations.

Merger, acquisition, and other costs were $(0.1) million during the three months ended March 31, 2024, compared to $0.2 million during the three months ended March 31, 2023.

Other general and administrative expense decreased $14.8 million, or 27.7%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, due primarily to declines in stock-based compensation expense.

We recorded $1.9 million of stock-based compensation expense during the three months ended March 31, 2024 compared to $18.1 million during the three months ended March 31, 2023 related to special awards in each year accounted for as a modification to the respective 2023 and 2022 PSU awards which lowered the Adjusted EBITDA and free cash flow performance targets such that 200% vesting was achieved for both tranches in 2023 and 2022, partially offset by increased rent expense and salaries expense.

Depreciation and amortization.

Depreciation and amortization decreased $10.3 million, or 4.5%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to lower depreciation expense on theatres impaired during the year ended December 31, 2022, partially offset by accelerated depreciation related to the replacement of digital projectors and permanently closed theatres.

Depreciation and amortization decreased $11.4 million, or 15.2%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to theatre closures and lower depreciation expense on theatres impaired during the year ended December 31, 2023.

Other expense (income).

Other income of $(1.8) million during the nine months ended September 30, 2023 was primarily due to a gain on extinguishment of debt of $95.2 million related to the redemption of $165.6 million aggregate principal amount of the Second Lien Notes due 2026, a gain on extinguishment of debt of $2.3 million related to the redemption of $4.1 million aggregate principal amount of our Senior Subordinated Notes due 2026 and a receipt of $14.0 million in settlement of the Lao Action and partially offset by, $110.1 million of expense related to the settlement of the Shareholder Litigation comprised of $10.8 million of estimated legal fees and contingent insurance recovery costs and $99.3 million of non-cash expense for the estimated fair value as of the date of the final Delaware Supreme Court order of settlement shares issued to holders of Common Stock on August 28, 2023.

Other expense of $92.9 million during the nine months ended September 30, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, and the $73.5 million aggregate principal amount of the First Lien Toggle Notes due 2026, partially offset by a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026 and $2.7 million in government assistance related to COVID-19.

Other income of $(8.9) million during the three months ended March 31, 2024 was primarily due to a gain on extinguishment of debt of $5.8 million related to the redemption of $17.5 million aggregate principal amount of the Second Lien Notes due 2026 and equity in earnings of non-consolidated entities of $3.5 million.

Other expense of $46.8 million during the three months ended March 31, 2023 was primarily due to $126.6 million of expense related to a proposed settlement of the Shareholder Litigation comprised of $10.0 million of estimated legal fees and $116.6 million of non-cash expense for the estimated fair value as of March 31, 2023 of settlement shares proposed to be issued to holders of AMC Class A Common Stock, partially offset by a gain on extinguishment of debt of $62.8 million related to the redemption of $99.4 million aggregate principal amount of the Second Lien Notes due 2026, a gain on extinguishment of debt of $2.3 million related to the redemption of $4.1 million aggregate principal amount of our Senior Subordinated Notes due 2026, a receipt of $14.0 million in settlement of the Lao Action and equity in earnings of non-consolidated entities of $0.9 million.

Interest expense.

Interest expense increased $39.1 million to $260.8 million for the nine months ended September 30, 2023 compared to $221.7 million during the nine months ended September 30, 2022 primarily due to:

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

● the increase in interest rates on the Senior Secured Credit Facility Term Loan due 2026,

partially offset by:

● the extinguishment of $383.8 million of 10%/12% Cash/PIK/Toggle Second Lien Notes due 2026 from May 2022 to September 2023;

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

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

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

Equity in earnings of non-consolidated entities.

Equity in earnings of non-consolidated entities was $3.8 million for the nine months ended September 30, 2023, compared to earnings of $2.7 million for the nine months ended September 30, 2022.

Investment expense.

Investment expense was $4.7 million for the nine months ended September 30, 2023, compared to investment expense of $12.3 million for the nine months ended September 30, 2022.

Investment expense in the current year includes $5.4 million of decline in estimated fair value of our investment in common shares of Hycroft, $5.4 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft and $1.8 million of expense for NCM Common Units, partially offset by interest income of $7.9 million.

Investment expense in the prior year includes $10.8 million of deterioration in estimated fair value of our investment in common shares of Hycroft and $7.4 million of appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft and a $11.1 million decline in estimated fair value of our investment in NCM Common Units offset by interest income of $3.3 million.

Interest expense decreased $0.2 million to $85.5 million for the three months ended March 31, 2024, compared to $85.7 million during the three months ended March 31, 2023, primarily due to lower interest expense on the Second Lien Notes due 2026 due to redemptions of principal balances, partially offset by an increase in interest rates on the Senior Secured Credit Facility Term Loan Due 2026.

Investment expense (income).

Investment income was $(4.5) million for the three months ended March 31, 2024, compared to investment expense of $2.0 million for the three months ended March 31, 2023.

Investment income in the current year includes interest income of $5.5 million, partially offset by $0.5 million of decline in estimated fair value of our investment in common shares of Hycroft and $0.5 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft.

Investment expense in the prior year includes $2.3 million of decline in estimated fair value of our investment in common shares of Hycroft and $2.3 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft, partially offset by interest income of $2.3 million.

Income tax provision.

The income tax provision was $1.6 million and $0.7 million for the nine months ended September 30, 2023, and September 30, 2022, respectively.

The income tax provision was $0.6 million and $0.4 million for the three months ended March 31, 2024, and March 31, 2023, respectively.

See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net loss was $171.0 million and $520.6 million during the nine months ended September 30, 2023, and September 30, 2022, respectively.

Net loss during the nine months ended September 30, 2023 compared to net loss for the nine months ended September 30, 2022 was positively impacted by the increase in attendance as a result of the popularity of new film releases compared to the prior year, decreases in rent expense, decreases in depreciation and amortization expense, decreases in other expense, increases in equity in earnings and decreases in investment expense, partially offset by increases in general and administrative expenses, increases in interest expense and an increase in income tax provision.

Net loss was $160.2 million and $220.4 million during the three months ended March 31, 2024 and March 31, 2023, respectively.

Net loss during the three months ended March 31, 2024 compared to net loss for the three months ended March 31, 2023 was positively impacted by decreases in general and administrative expense, depreciation and amortization expense, increases in other income, decreases in interest expense and increases in investment income and partially offset by the decrease in attendance as a result of the popularity of new film releases compared to the prior year, increases in rent expense and increases in income tax provision.

Theatrical Exhibition—International Markets

Total revenues increased $156.2 million, or 22.4%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

Admissions revenues increased $104.8 million, or 25.5%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to an increase in attendance of 22.6% from 43.8 million patrons to 53.7 million patrons and a 2.3% increase in average ticket price.

Total revenues increased $12.4 million, or 5.0%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Admissions revenues increased $8.8 million, or 5.9%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to an increase in attendance of 5.8% from 15.3 million patrons to 16.1 million patrons and an increase in foreign currency translation rates.

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

The increase in average ticket price was primarily due to higher ticket prices.

Food and beverage revenues increased $58.4 million, or 30.9%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to the increase in attendance and an increase in food and beverage per patron.

Food and beverage per patron increased 7.0% from $4.31 to $4.61 due primarily to an increase in average prices and the lifting of COVID-19 restrictions on the sale of food and beverage in certain international markets.

Total other theatre revenues decreased $7.0 million, or 7.2%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to the decline in gift card and package ticket expirations and lower income from theatre meetings, partially offset by higher ticket fees due to the increase in the number of tickets purchased online, advertising and retail sales.

Food and beverage revenues increased $4.7 million, or 6.7%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the increase in attendance and an increase in food and beverage per patron.

Food and beverage per patron increased 0.9% from $4.60 to $4.64 due primarily to an increase in foreign currency translation rates.

Total other theatre revenues decreased $1.1 million, or 3.7%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to lower advertising and retail merchandise revenues, partially offset by an increase in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $68.5 million, or 8.6%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

Film exhibition costs increased $47.8 million, or 29.5%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 40.8% for the nine months ended September 30, 2023, compared to 39.5% for the nine months ended September 30, 2022.

Food and beverage costs increased $16.4 million, or 36.0%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

The increase in food and beverage costs was primarily due to the increase in food and beverage revenues and increases in product costs.

As a percentage of food and beverage revenues, food and beverage costs were 25.1% for the nine months ended September 30, 2023, and 24.2% for the nine months ended September 30, 2022.

As a percentage of revenues, operating expense was 36.9% for the nine months ended September 30, 2023, and 44.6% for the nine months ended September 30, 2022.

Rent expense decreased 0.3%, or $0.5 million, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $6.4 million that have been deferred to future years as of September 30, 2023.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.1 million during the nine months ended September 30, 2023, compared to $(0.5) million during the nine months ended September 30, 2022.

Other general and administrative expense increased $4.0 million, or 8.0%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, due primarily to stock-based compensation expense of $2.1 million related to a February 23, 2023 special award grant accounted for as a modification to the 2022 PSU awards discussed further in Condensed Consolidated Results of Operations.

Operating costs and expenses increased $10.6 million, or 3.9%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

Film exhibition costs increased $4.5 million, or 7.8%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to the increase in attendance and higher film rental terms.

As a percentage of admissions revenues, film exhibition costs were 39.1% for the three months ended March 31, 2024, compared to 38.4% for the three months ended March 31, 2023.

Food and beverage costs increased $0.6 million, or 3.4%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

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

As a percentage of food and beverage revenues, food and beverage costs were 24.0% for the three months ended March 31, 2024, compared to 24.8% for the three months ended March 31, 2023.

Operating expense increased by $2.1 million, or 2.0%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023.

The increase in operating expense was primarily due to the increase in attendance and foreign currency translation rates, partially offset by lower utilities expense.

As a percentage of revenues, operating expense was 40.8% for the three months ended March 31, 2024, compared to 42.0% for the three months ended March 31, 2023.

Rent expense increased 6.9%, or $3.8 million, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, due primarily to higher common area maintenance costs and an increase in foreign currency translation rates.

Other general and administrative expense increased $0.2 million, or 1.1%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, due primarily to higher payroll costs and an increase in foreign currency translation rates, partially offset by declines in stock-based compensation expense.

We recorded $0.2 million of stock-based compensation expense during the three months ended March 31, 2024 compared to $2.1 million during the three months ended March 31, 2023 related to special awards in each year accounted for as a modification to the respective 2023 and 2022 PSU awards which lowered the Adjusted EBITDA and free cash flow performance targets such that 200% vesting was achieved for both tranches in 2023 and 2022, partially offset by increased rent expense, salaries expense and an increase in foreign currency translation rates.

Depreciation and amortization.

Depreciation and amortization decreased $3.6 million, or 5.6%, during the nine months ended September 30, 2023, compared to the nine months ended September 30, 2022, primarily due to lower depreciation expense on theatres impaired during the year ended December 31, 2022.

Depreciation and amortization decreased $0.6 million, or 3.2%, during the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily due to theatre closures and locations impaired in 2023 and lower depreciation expense on theatres impaired during the year ended December 31, 2023, partially offset by an increase in foreign currency translation rates.

Other income.

Other income of $2.9 million during the nine months ended September 30, 2023, was primarily due to $3.2 million in foreign currency transaction gains.

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

Other income of $33.9 million during the three months ended March 31, 2024 was primarily due to the favorable settlement of a vendor dispute of $36.2 million, equity in earnings of non-consolidated entities of $0.2 million, partially offset by foreign currency transaction losses of $3.2 million.

Other income of $9.0 million during the three months ended March 31, 2023 was primarily due to $8.7 million in foreign currency transaction gains and equity in earnings of non-consolidated entities of $0.4 million.

Interest expense.

Interest expense decreased $10.1 million to $46.6 million for the nine months ended September 30, 2023, compared to $56.7 million during the nine months ended September 30, 2022, primarily due to:

● the issuance of $400.0 million 12.75% Odeon Senior Secured Notes due 2027 on October 20, 2022.

partially offset by:

● the extinguishment of £147.6 million and €312.2 million ($476.6 million) 10.75%/11.25% Cash/PIK Term Loans due 2023 on October 20, 2022.

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

Equity in (earnings) loss of non-consolidated entities was $(1.5) million for the nine months ended September 30, 2023, compared to $6.0 million for the nine months ended September 30, 2022.

The decrease in equity losses from the prior year is primarily related to our 10.0% interest in Saudi Cinema Company, LLC that was sold on January 24, 2023.

Interest expense increased $0.3 million to $15.7 million for the three months ended March 31, 2024, compared to $15.4 million during the three months ended March 31, 2023.

Investment income.

Investment income was $16.1 million for the nine months ended September 30, 2023, compared to investment income of $0.1 million for the nine months ended September 30, 2022.

Investment income in the current year includes a gain on sale of our 10.0% interest in Saudi Cinema Company, LLC of $15.5 million and interest income of $0.6 million.

Investment income was $0.6 million for the three months ended March 31, 2024, compared to income of $15.5 million for the three months ended March 31, 2023.

Investment income in the current year includes interest income of $0.6 million.

Investment income in the prior year includes a gain on sale of our 10.0% interest in Saudi Cinema Company, LLC of $15.5 million

Income tax provision.

The income tax provision was $3.0 million and $1.8 million for the nine months ended September 30, 2023, and September 30, 2022, respectively.

The income tax provision was $1.2 million and $1.5 million for the three months ended March 31, 2024, and March 31, 2023, respectively.

See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

Net loss was $43.6 million and $165.3 million during the nine months ended September 30, 2023, and September 30, 2022, respectively.

Net loss during the nine months ended September 30, 2023 compared to net loss for the nine months ended September 30, 2022 was positively impacted by the increase in attendance as a result of the popularity of new film releases compared to the prior year, decreases in rent expense, decreases in depreciation and amortization expense, increases in other income, decreases in interest expense, decreases in equity in losses and increases in investment income, partially offset by increases in general and administrative and an increase in income tax provision.

Net loss was $3.3 million and $15.1 million during the three months ended March 31, 2024, and March 31, 2023, respectively.

Net loss during the three months ended March 31, 2024 compared to net loss for the three months ended March 31, 2023 was positively impacted by the increase in attendance as a result of the popularity of new film releases compared to the prior year, decreases in depreciation and amortization expense, increases in other income and decreases in income tax provision, partially offset by, increases in general and administrative expense, increases in rent expense, increases in interest expense, decreases in investment income and the increase in foreign currency translation rates.

LIQUIDITY AND CAPITAL RESOURCES

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Consequently, we typically generate higher revenues during such periods and experience higher working capital requirements following such periods.

We had working capital deficit (excluding restricted cash) as of September 30, 2023, and December 31, 2022 of $(571.1) million and $(811.1) million, respectively.

As of September 30, 2023 and December 31, 2022, working capital included operating lease liabilities of $512.3 million and $567.3 million, respectively, and deferred revenues of $411.0 million and $402.7 million, respectively.

We had working capital deficit (excluding restricted cash) as of March 31, 2024, and December 31, 2023 of $(626.5) million and $(456.4) million, respectively.

As of March 31, 2024 and December 31, 2023, working capital included operating lease liabilities of $508.9 million and $508.8 million, respectively, and deferred revenues of $394.2 million and $421.8 million, respectively.

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

As of September 30, 2023, we had cash and cash equivalents of $729.7 million.

Additionally, during the first, second, and third quarters of 2023 we continued to lower our future interest expense through purchases of debt below par value and debt exchanges for equity and enhanced liquidity through equity issuances.

See Note 6 — Corporate Borrowings and Finance Lease Liabilities and Note 7—Stockholders’ Equity in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

We believe our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund our operations and satisfy our obligations.

We also believe we will comply with the minimum liquidity covenant requirement under our 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.

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 September 30, 2023, we were subject to a minimum liquidity requirement of $100 million as a condition to the financial covenant suspension period under the Credit Agreement.

As of March 31, 2024, we had cash and cash equivalents of $624.2 million.

We have continued to lower our future interest expense through debt exchanges for equity and enhanced liquidity through equity issuances.

See Note 6 — Corporate Borrowings and Finance Lease Liabilities, Note 7—Stockholders’ Deficit, and Note 13—Subsequent Events in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information.

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

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

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

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

As of March 31, 2024, we were subject to a minimum liquidity requirement of $100.0 million as a condition to the financial covenant suspension period under the Credit Agreement.

As of April 19, 2024, and in anticipation of the maturity of the Senior Secured Revolving Credit Facility, we voluntarily terminated the commitments under the Senior Secured Revolving Credit Facility in full and paid off any remaining obligations with respect to the Senior Secured Revolving Credit Facility.

The financial covenants and related covenant suspension conditions are no longer in effect pursuant to the terms of the Credit Agreement.

The termination of the Senior Secured Revolving Credit Facility does not otherwise affect the senior secured term loan facility under the Credit Agreement.

We currently do not expect to replace the Senior Secured Revolving Credit Facility.

As of March 31, 2024, we had $9.2 million of letters of credit outstanding under the Senior Secured Revolving Credit Facility.

We have entered into a new letter of credit facility in order to continue to provide letters of credit in the ordinary course of business following the termination of the Senior Secured Revolving Credit Facility.

Our current cash burn rates are not sustainable long-term.

In order to achieve net positive operating cash flows and long-term profitability, we believe that operating revenues will need to increase to levels in line with pre-COVID-19 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 we are able to achieve positive operating cash flow, it is difficult to estimate our liquidity requirements, future cash burn rates, future operating revenues and attendance levels.

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

In order to achieve sustainable net positive operating cash flows and long-term profitability, we believe that operating revenues will need to increase to levels in line with pre-COVID-19 operating revenues.

North American box office grosses were down approximately 32% for the three months ended March 31, 2024, compared to the three months ended March 31, 2019.

Until such time as we are able to achieve sustainable net positive operating cash flow, it is difficult to estimate our future cash burn rates and liquidity requirements.

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

There can be no assurance that the operating revenues, attendance levels and other assumptions used to estimate our liquidity requirements and future cash burn rates will be correct, and our ability to be predictive is uncertain due to limited ability to predict studio film release dates, the overall production and theatrical release levels and success of individual titles.

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 we will be successful in generating the additional liquidity necessary to meet our obligations beyond twelve months from the issuance of these financial statements on terms acceptable to us or at all.

Additionally, the effects of labor stoppages, including but not limited to the Writers Guild of America strike and the Screen Actors Guild-American Federation of Television and Radio Artists strike that occurred during 2023, cannot be reasonably estimated and have had and are expected to continue to have a negative impact in 2024 on the film slate for exhibition, the Company’s future liquidity and cash burn rates.

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

On March 28, 2024, we entered into a Common Stock equity distribution agreement with certain sales agents to sell shares of Common Stock, from time to time, having an aggregate offering price of $250,000,000, through an at-the-market offering program.

The Company intends to use any net proceeds from the sale of Common Stock pursuant to the program to bolster liquidity, to repay, refinance, redeem or repurchase its existing indebtedness (including expenses, accrued interest and premium, if any) and for general corporate purposes.

Through the date of this filing, the Company has received gross proceeds of approximately $103.5 million through its at-the-market offering of approximately 32.0

million shares of its Common Stock and paid fees to the sales agents of approximately $2.6 million.

Cash Flows from Operating Activities

Cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $137.4 million and $595.2 million during the nine months ended September 30, 2023 and September 30, 2022, respectively.

The improvement in cash flows used in operating activities was primarily due to the increase in attendance and decrease in net loss, decreases in working capital used, and reductions in rent repayments for rent that was deferred during the COVID-19 pandemic, partially offset by increases in cash interest paid during the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I in this Form 10-Q for a summary of the estimated future repayment terms for the remaining $74.2 million of rentals that were deferred during the COVID-19 pandemic.

Net cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $188.3 million and $189.9 million during the three months ended March 31, 2024 and March 31, 2023, respectively.

The decrease in cash flows used in operating activities was primarily due to reductions in rent repayments that were deferred during the COVID-19 pandemic and a lease termination payment received during the three months ended March 31, 2023, partially offset by the decrease in attendance and increase in working capital used.

The increase in working capital used was primarily due to timing of incentive bonus payments which were made during the three months ended March 31, 2024 in the current year and during the three months ended June 30, 2023 in the prior year.

Cash Flows from Investing Activities

Cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $116.4 million and $153.7 million during the nine months ended September 30, 2023, and September 30, 2022, respectively.

Cash outflows from investing activities include capital expenditures of $153.5 million and $129.7 million during the nine months ended September 30, 2023, and September 30, 2022, respectively.

During the nine months ended September 30, 2023, cash flows used in investing activities also included proceeds from the sale of our investment in Saudi Cinema Company, LLC of $30.0 million and proceeds from the disposition of long-term assets of $8.6 million.

During the nine months ended September 30, 2022, cash flows used in investing activities included investment in Hycroft common stock for $25.0 million, investment in Hycroft warrants for $2.9 million, acquisition of theatre assets for $17.8 million, partially offset by proceeds from the disposition of long-term assets of $10.8 million and proceeds of $11.4 million from the sale of securities in conjunction with the liquidation of a non-qualified deferred compensation plan.

Net cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $50.0 million and $16.6 million during the three months ended March 31, 2024 and March 31, 2023, respectively.

Cash outflows from investing activities include capital expenditures of $50.5 million and $47.4 million during the three months ended March 31, 2024, and March 31, 2023, respectively.

During the three months ended March 31, 2023, cash flows used in investing activities included proceeds from the sale of our investment in Saudi Cinema Company, LLC of $30.0 million and proceeds from the disposition of long-term assets of $0.8 million.

We fund the costs of constructing, maintaining, and remodeling our theatres through existing cash balances, cash generated from operations, landlord contributions, or borrowed funds, as necessary.

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Cash Flows from Financing Activities

Cash flows provided by (used in) financing activities, as reflected in the condensed consolidated statements of cash flows, were $355.3 million and $(135.5) million during the nine months ended September 30, 2023, and September 30, 2022, respectively.

Cash flows provided by financing activities during the nine months ended September 30, 2023, were primarily due to equity issuances of $492.4 million, net of issuance costs, partially offset by the repurchase of Second Lien Notes due 2026 for $99.8 million, and taxes paid for restricted unit withholdings of $14.2 million.

See Note 6—Corporate Borrowings and Finance Lease Liabilities and Note 7—Stockholders’ Equity in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q for further information, including a summary of principal payments required and maturities of corporate borrowings as of September 30, 2023.

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

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

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

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

Net cash flows (used in) provided by financing activities, as reflected in the condensed consolidated statements of cash flows, were $(9.0) million and $68.9 million during the three months ended March 31, 2024 and March 31, 2023, respectively.

Cash flows used in financing activities during the three months ended March 31, 2024, were primarily due to scheduled principal payments under the Term Loan due 2026 and taxes paid for restricted unit withholdings of $2.2 million.

See Note 6—Corporate Borrowings and Finance Lease Liabilities condensed consolidated financial statements in Item 1 of Part I of this Form 10-Q for further information, including a summary of principal payments required and maturities of corporate borrowings as of March 31, 2024.

Cash flows provided by financing activities during the three months ended March 31, 2023, were primarily due to equity issuances of $146.6 million, net of issuance costs, partially offset by the repurchase of Second Lien Notes due 2026 for $54.8 million, and taxes paid for restricted unit withholdings of $13.1 million.

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.

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Item 2. Management’s Discussion and Analysis