What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-02 compared with 2024-05-08 · 399 added, 179 removed, 322 unchanged (64% 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 future attendance levels, operating revenues and our liquidity.

Examples of forward-looking statements include statements we make regarding future attendance levels, 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.

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● 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 (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.

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

However, there remain significant risks that may negatively impact 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 negatively impacted 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 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 risks and uncertainties relating to the Debt Refinancing, including, but not limited to, (i) the potential for additional future dilution of our Common Stock as a result of issuance of shares underlying our Exchangeable Notes, and (ii) the possibility that the extension of certain debt maturities will not provide

enough time for attendance and revenues to increase to sufficient levels and generate net positive operating cash flow and long-term profitability to overcome liquidity concerns or may be insufficient if the Company does not achieve revenue levels at least in line with pre-COVID-19 revenues;

● 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;

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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, 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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● 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.

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

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

As of June 30, 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.

As of June 30, 2024, we owned, operated or had interests in 886 theatres and 9,889 screens.

Box Office Admissions and Film Content

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International Markets

As of March 31,

As of June 30,

Number of theatres:

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Loyalty Programs and Other Marketing

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.

As of June 30, 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 six months ended June 30, 2024, our AMC Stubs® members represented approximately 48.9% of AMC U.S.

markets attendance.

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Holders of Shares

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.

As of June 30, 2024, approximately 1.6 million shares of our Common Stock were directly registered with our transfer agent by 14,983 stockholders.

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

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Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Annual Report on Form 10-K.

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

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.

There have been no material changes to our critical accounting estimates from what is described in our Form 10-K.

Significant Events—For the Six Months Ended June 30, 2024

Debt for Equity Exchanges.

The below table summarizes the various debt for equity exchange transactions that occurred during the six months ended June 30, 2024.

The transactions were treated as early extinguishments of 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

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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 proceeds, net of legal costs, were recorded to other income during the six months ended June 30, 2024.

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

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

Share Issuance.

During the six months ending June 30, 2024, we raised gross proceeds of $250.0 million and paid fees to sales agents and incurred other third-party issuance costs of approximately $6.3 million and $0.6 million, respectively, through our at-the-market offering of approximately 72.5 million shares of Common Stock.

We paid $0.7 million of other third-party issuance costs during the six months ended June 30, 2024.

Significant Events—For the Six Months Ended June 30, 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 three months ended March 31, 2023.

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

Debt Repurchases.

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

The below table summarizes the cash debt repurchase transactions during the six months ended June 30, 2023, including repurchases with a related party:

Aggregate Principal

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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.

During the six months ended June 30, 2023, we raised gross proceeds of approximately $114.5 million and paid fees to a sales agent and incurred other third-party issuance costs of approximately $2.9 million and $8.3 million, respectively, through our at-the-market offering of approximately 7.1 million shares of AMC Preferred Equity Units.

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

Special Awards.

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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.

During the six months ended June 30, 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.

During the six months ended June 30, 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.

NCM Bankruptcy.

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

Bankruptcy Code in the Southern District of Texas.

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

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

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

Operating Results

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Food and beverage

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Operating costs and expenses

Operating loss

Other expense:

Operating income (loss)

Other expense (income), net:

Other expense (income)

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Non-cash NCM exhibitor service agreement

Investment income

Total other expense, net

Net loss before income taxes

Investment expense (income)

Total other expense (income), net

Earnings (loss) before income taxes

Income tax provision

Net earnings (loss)

* Percentage change in excess of 100%

Three Months Ended

Six Months Ended

Operating Data:

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Screen acquisitions

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Operating costs and expenses

Operating loss

Operating income (loss)

Other expense (income):

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Total other expense (income), net

Net loss before income taxes

Income tax provision

Earnings (loss) before income taxes

Income tax provision (benefit)

Net earnings (loss)

International Markets

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

International Markets

Six Months Ended

(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

Investment expense (income)

Total other expense (income), net

Loss before income taxes

Income tax provision

International Markets

Six Months Ended

Segment Operating Data:

Screen acquisitions

Screen dispositions

Construction closures, net

Average screens (1)

Number of screens operated

Number of theatres operated

Screens per theatre

Attendance (in thousands) (1)

Adjusted EBITDA

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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 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.

During the three months ended June 30, 2024, Adjusted EBITDA in the U.S.

markets was $49.3 million compared to $174.8 million during the three months ended June 30, 2023.

The year-over-year decline was primarily driven by a decrease in attendance as a result of the popularity of new film releases compared to the prior year.

These declines were partially offset by increases in average ticket price, increases in food and beverage sales per patron, decreases in general and administrative expenses and decreases in rent expense.

During the three months ended June 30, 2024, Adjusted EBITDA in the International markets was $(19.9) million compared to $7.7 million during the three months ended June 30, 2023.

The year-over-year decline was primarily driven by a decrease in attendance as a result of the popularity of new film releases compared to the prior year and declines in average ticket price and food and beverage sales per patron.

During the three months ended June 30, 2024, Adjusted EBITDA in the U.S.

markets and International markets was $29.4 million compared to $182.5 million during the three months ended June 30, 2023, driven by the aforementioned factors impacting Adjusted EBITDA.

During the six months ended June 30, 2024, Adjusted EBITDA in the U.S.

markets was $21.7 million compared to $185.7 million during the six months ended June 30, 2023.

The year-over-year decline was primarily driven by a decrease in attendance as a result of the popularity of new film releases compared to the prior year and increases in rent expense due to a prior year rent credit for a theatre termination.

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

During the six months ended June 30, 2024, Adjusted EBITDA in the International markets was $(23.9) million compared to $3.9 million during the six months ended June 30, 2023.

During the six months ended June 30, 2024, Adjusted EBITDA in the U.S.

markets and International markets was $(2.2) million compared to $189.6 million during the six months ended June 30, 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

Six Months Ended

Adjusted EBITDA (In millions)

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

International markets

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Net earnings (loss)

Income tax provision (1)

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Attributable EBITDA (4)

Investment income (5)

Investment expense (income) (5)

Other expense (income) (6)

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Equity in (earnings) of non-consolidated entities

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

Equity in earnings of International theatre joint ventures

Equity in (loss) of International theatre joint ventures

Income tax benefit

Investment expense

Interest expense

Depreciation and amortization

Attributable EBITDA

(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.

(5) Investment expense (income) during the three months ended June 30, 2024 includes appreciation in estimated fair value of our investment in common shares of Hycroft of $(0.4) million, appreciation in estimated fair

value of our investment in warrants to purchase common shares of Hycroft of $(0.3) million and interest income of $(5.4) million.

Investment expense (income) during the three months ended June 30, 2023 included deterioration in estimated fair value of our investment in common shares of Hycroft of $3.2 million, deterioration in estimated fair value of our investment in warrants to purchase common shares of Hycroft of $2.3 million, and interest income of $(2.5) million.

Investment expense (income) during the six months ended June 30, 2024 includes deterioration in estimated fair value of our 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 $0.2 million, and interest income of $(11.5) million.

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

(6) Other expense (income) during the three months ended June 30, 2024 includes shareholder litigation recoveries of $(19.1) million, foreign currency transaction gains of $(0.6) million and gains on debt extinguishment of $(85.3) million.

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

Other expense (income) during the six months ended June 30, 2024 includes shareholder litigation recoveries of $(19.1) million, gains on debt extinguishment of $(91.1) million, a vendor dispute settlement of $(36.2) million, and foreign currency transaction losses of $2.6 million.

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

(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.

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Segment Information

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.

Our historical results of operations for the three and six months ended June 30, 2024 and June 30, 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 March 31, 2024, Compared to the Three Months ended March 31, 2023

Results of Operations—For the Three Months ended June 30, 2024, Compared to the Three Months ended June 30, 2023

Condensed Consolidated Results of Operations

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.

Total revenues decreased $317.3 million, or 23.5%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Admissions revenues decreased $179.7 million, or 24.1%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to a decrease in attendance of 24.6% from 66.4 million patrons to 50.0 million patrons, partially offset by a 0.7% 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.

The availability and popularity of film product released during the three months ended June 30, 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, increases in IMAX and other PLF screen volumes as a percentage of attendance and increases in attendance for alternative content partially offset by lower attendance for 3D content.

Food and beverage revenues decreased $121.1 million, or 24.8%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to the decrease in attendance and a decrease in food and beverage per patron.

Food and beverage per patron decreased 0.3% from $7.36 to $7.34 due primarily to an

increase in revenues in International markets as a percentage of consolidated revenues from 15.8% during the three months ended June 30, 2023 to 17.1% during the three months ended June 30, 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.

markets and this change in the mix of revenues resulted in a decline in consolidated food and beverage per patron.

Total other theatre revenues decreased $16.5 million, or 14.3%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to the decline in attendance which resulted in lower ticket fees, advertising revenues and income from gift cards and package tickets.

Operating costs and expenses.

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.

Operating costs and expenses decreased $185.1 million, or 14.7%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Film exhibition costs decreased $110.8 million, or 28.9%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to the decrease in attendance and lower film rental terms.

As a percentage of admissions revenues, film exhibition costs were 48.2% for the three months ended June 30, 2024, compared to 51.5% for the three months ended June 30, 2023.

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

Food and beverage costs decreased $21.8 million, or 23.8%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

The decrease in food and beverage costs was primarily due to lower food and beverage revenues.

As a percentage of food and beverage revenues, food and beverage costs were 19.0% for the three months ended June 30, 2024, compared to 18.8% for the three months ended June 30, 2023.

Operating expense decreased by $22.5 million, or 5.5%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

The decrease in operating expense was primarily due to the decrease in attendance.

As a percentage of revenues, operating expense was 37.8% for the three months ended June 30, 2024, compared to 30.6% for the three months ended June 30, 2023.

Rent expense decreased 1.1%, or $2.4 million, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Merger, acquisition, and other costs.

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.

Merger, acquisition, and other costs were $0.1 million during the three months ended June 30, 2024, compared to $0.6 million during the three months ended June 30, 2023.

Other general and administrative expense decreased $9.1 million, or 15.7%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, due primarily to declines in bonus expense as a result of lower than expected annual performance compared to annual targets in the current year compared to the prior year and lower stock-based compensation expense.

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 $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.

Depreciation and amortization decreased $18.0 million, or 18.6%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to theatre closures and lower depreciation expense on theatres impaired during the year ended December 31, 2023.

Other income.

Other income of $(108.2) million during the three months ended June 30, 2024 was primarily due to a gain on extinguishment of debt of $(85.3) million related to the redemption of $173.85 million aggregate principal amount of the Second Lien Notes due 2026, $(19.1) million of recoveries related to the Shareholder Litigation and $(2.6) million of other settlement proceeds.

Other income of $(31.1) million during the three months ended June 30, 2023 was primarily due to $(1.2) million of income related to a proposed settlement of the Shareholder Litigation comprised of $(1.2) million of non-cash income for the decrease in estimated fair value as of June 30, 2023 of settlement shares proposed to be issued to holders of AMC Class A Common Stock, gains on extinguishment of debt of $(21.6) million related to the redemption of $42.0 million aggregate principal amount of the Second Lien Notes due 2026 and $(7.5) million in foreign currency transaction gains.

See Note 1—Basis of Presentation in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for additional information about the components of other expense (income).

Interest expense.

Interest expense decreased $3.6 million to $99.0 million for the three months ended June 30, 2024, compared to $102.6 million during the three months ended June 30, 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.

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) expense.

Investment income was $(6.1) million for the three months ended June 30, 2024, compared to expense of $5.1 million for the three months ended June 30, 2023.

Investment income in the current year includes interest income of $(5.4) million, $(0.4) million of increase in estimated fair value of our investment in common shares of Hycroft, and $(0.3) million of increase in estimated fair value of our investment in warrants to purchase common shares of Hycroft.

Investment expense in the prior year includes $3.2 million of decline in estimated fair value of our investment in common shares of Hycroft, $2.3 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft and $2.1 million of expense for NCM common units, partially offset by interest income of $(2.5) million.

Income tax provision.

The income tax provision was $0.7 million and $0.4 million for the three months ended June 30, 2024, and June 30, 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 earnings (loss).

Net earnings (loss) was $(32.8) million and $8.6 million during the three months ended June 30, 2024, and June 30, 2023, respectively.

Net loss during the three months ended June 30, 2024 compared to net earnings for the three months ended June 30, 2023 was negatively impacted by the decrease in attendance as a result of the popularity of new film releases compared to the prior year and an increase in income tax provision, partially offset by decreases in rent expense, general and administrative expense, depreciation and amortization, interest expense and investment expense and increases in other income.

Theatrical Exhibition — U.S.

Total revenues decreased $271.5 million, or 25.0%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Admissions revenues decreased $150.7 million or 25.6%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to a decrease in attendance of 27.0% from 50.0 million patrons to 36.5 million patrons, partially offset by a 2.0% increase in average ticket price.

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

Food and beverage revenues decreased $106.9 million, or 26.0%, during the three months ended June 30, 2024, compared to the three months ended June 30, 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 1.5% from $8.22 to $8.34 due primarily to an increase in average prices and the percentage of guests making transactions, partially offset by lower units purchase per transaction.

Total other theatre revenues decreased $13.9 million, or 15.9%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to the decline in attendance which resulted in lower ticket fees, advertising revenues and income from gift cards and package tickets.

Operating costs and expenses.

Operating costs and expenses decreased $159.7 million, or 16.2%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Film exhibition costs decreased $95.4 million, or 29.8%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to the decrease in attendance and lower film rental terms.

As a percentage of admissions revenues, film exhibition costs were 51.2% for the three months ended June 30, 2024, compared to 54.3% for the three months ended June 30, 2023.

Food and beverage costs decreased $18.3 million, or 25.4%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

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

As a percentage of food and beverage revenues, food and beverage costs were 17.7% for the three months ended June 30, 2024, and 17.5% for the three months ended June 30, 2023.

Operating expense decreased by $19.1 million, or 6.1%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

The decrease in operating expense was primarily due to the decrease in attendance.

As a percentage of revenues, operating expense was 36.0% for the three months ended June 30, 2024, compared to 28.7% for the three months ended June 30, 2023.

Rent expense decreased 3.2%, or $5.3 million, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.1 million during the three months ended June 30, 2024, compared to $0.6 million during the three months ended June 30, 2023.

Other general and administrative expense decreased $7.9 million, or 19.6%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, due primarily to declines in bonus expense as a result of lower expected annual performance compared to annual targets in the current year compared to the prior year and lower stock-based compensation expense.

Depreciation and amortization.

Depreciation and amortization decreased $13.2 million, or 17.7%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to theatre closures and lower depreciation expense on theatres impaired during the year ended December 31, 2023.

Other income.

Other income of $(108.8) million during the three months ended June 30, 2024 was primarily due to a gain on extinguishment of debt of $(85.3) million related to the redemption of $173.85 million aggregate principal amount of the Second Lien Notes due 2026, $(19.1) million of recoveries related to the Shareholder Litigation and $(2.6) million of other settlement proceeds.

Other income of $(25.0) million during the three months ended June 30, 2023 was primarily due to $(1.2) million of income related to a proposed settlement of the Shareholder Litigation comprised of $(1.2) million of non-cash income for the decrease in estimated fair value as of June 30, 2023 of settlement shares proposed to be issued to holders of AMC Class A Common Stock and gains on extinguishment of debt of $(21.6) million related to the redemption of $42.0 million aggregate principal amount of the Second Lien Notes due 2026.

Interest expense.

Interest expense decreased $3.4 million to $83.5 million for the three months ended June 30, 2024, compared to $86.9 million during the three months ended June 30, 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.

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 expense (income).

Investment income was $(5.5) million for the three months ended June 30, 2024, compared to expense of $5.1 million for the three months ended June 30, 2023.

Investment income in the current year includes interest income of $(4.8) million, $(0.4) million of increase in estimated fair value of our investment in common shares of Hycroft and $(0.3) million of increase 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 $0.6 million for the three months ended June 30, 2024, and June 30, 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 earnings.

Net earnings were $17.7 million and $31.7 million during the three months ended June 30, 2024, and June 30, 2023, respectively.

Net earnings during the three months ended June 30, 2024, compared to net earnings for the three months ended June 30, 2023, were negatively impacted by the decrease in attendance as a result of the popularity of new film releases compared to the prior year, partially offset by decreases in rent expense, general and administrative expense, depreciation and amortization, interest expense and investment expense and increases in other income.

Theatrical Exhibition—International Markets

Total revenues decreased $45.8 million, or 17.6%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Admissions revenues decreased $29.0 million, or 18.7%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to a decrease in attendance of 17.3% from 16.3 million patrons to 13.5 million patrons and a decrease in average ticket price of 1.7%.

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

Food and beverage revenues decreased $14.2 million, or 18.4%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to the decrease in attendance and a decrease in food and beverage per patron.

Food and beverage per patron decreased 1.5% from $4.72 to $4.65.

Total other theatre revenues decreased $2.6 million, or 9.2%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to the decline in attendance which resulted in lower ticket fees, advertising revenues and income from gift cards and package tickets.

Operating costs and expenses.

Operating costs and expenses decreased $25.4 million, or 9.2%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Film exhibition costs decreased $15.4 million, or 24.4%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to the decrease in attendance and lower film rental terms.

As a percentage of admissions revenues, film exhibition costs were 37.9% for the three months ended June 30, 2024, compared to 40.7% for the three months ended June 30, 2023.

Food and beverage costs decreased $3.5 million, or 17.9%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

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

As a percentage of food and beverage revenues, food and beverage costs were 25.6% for the three months ended June 30, 2024, compared to 25.4% for the three months ended June 30, 2023.

Operating expense decreased by $3.4 million, or 3.4%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

The decrease in operating expense was primarily due to lower utilities expense and the decrease in attendance.

As a percentage of revenues, operating expense was 44.7% for the three months ended June 30, 2024, compared to 38.2% for the three months ended June 30, 2023.

Rent expense increased 5.5%, or $2.9 million, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Other general and administrative expense decreased $1.2 million, or 6.7%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Depreciation and amortization.

Depreciation and amortization decreased $4.8 million, or 21.6%, during the three months ended June 30, 2024, compared to the three months ended June 30, 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.

Other expense (income).

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.

Other expense (income) of $0.6 million during the three months ended June 30, 2024 was primarily due to equity in losses of non-consolidated entities of $1.1 million, partially offset by foreign currency transaction gains of $(0.5) million.

Other income of $(6.9) million during the three months ended June 30, 2023 was primarily due to $(7.5) million in foreign currency transaction gains, partially offset by equity in losses of non-consolidated entities of $0.5 million.

Interest expense.

Interest expense decreased $0.2 million to $15.5 million for the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Investment income.

Investment income was $(0.6) million for the three months ended June 30, 2024, compared to income of $0.0 million for the three months ended June 30, 2023.

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

Income tax provision (benefit).

The income tax provision was $0.1 million and $(0.2) million for the three months ended June 30, 2024, and June 30, 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 $50.5 million and $23.1 million during the three months ended June 30, 2024, and June 30, 2023, respectively.

Net loss during the three months ended June 30, 2024 compared to net loss for the three months ended June 30, 2023 was negatively impacted by the decrease in attendance as a result of the popularity of new film releases compared to the prior year, increases in rent expense, decreases in other income and decreases in income tax benefit, partially offset by decreases in general and administrative expense and decreases in depreciation and amortization expense.

Results of Operations—For the Six Months ended June 30, 2024 Compared to the Six Months ended June 30, 2023

Condensed Consolidated Results of Operations

Total revenues decreased $320.3 million, or 13.9%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Admissions revenues decreased $183.3 million, or 14.3%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to a decrease in attendance of 15.2% from 114.0 million patrons to 96.6 million patrons, partially offset by a 1.1% 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 six months ended June 30, 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.

Food and beverage revenues decreased $128.6 million, or 15.7%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to the decrease in attendance and a decrease in food and beverage per patron.

Food and beverage per patron decreased 0.7% from $7.17 to $7.12 due primarily to an increase in revenues in International markets as a percentage of consolidated revenues from 18.0% during the six months ended June 30, 2023 to 20.0% during the six months ended June 30, 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.

Total other theatre revenues decreased $8.4 million, or 4.1%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to the decline in attendance which resulted in lower ticket fees and advertising revenues.

Operating costs and expenses.

Operating costs and expenses decreased $187.9 million, or 8.1%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Film exhibition costs decreased $117.7 million, or 18.7%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to the decrease in attendance and lower film rental terms.

As a percentage of admissions revenues, film exhibition costs were 46.7% for the six months ended June 30, 2024, compared to 49.2% for the six months ended June 30, 2023.

Food and beverage costs decreased $20.2 million, or 13.2%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

The decrease in food and beverage costs was primarily due to lower food and beverage revenues.

As a percentage of food and beverage revenues, food and beverage costs were 19.3% for the six months ended June 30, 2024, compared to 18.7% for the six months ended June 30, 2023.

Operating expense decreased by $11.9 million, or 1.5%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

The decrease in operating expense was primarily due to the decrease in attendance.

As a percentage of revenues, operating expense was 39.5% for the six months ended June 30, 2024, compared to 34.5% for the six months ended June 30, 2023.

Rent expense increased 3.8%, or $16.4 million, during the six months ended June 30, 2024, compared to the six months ended June 30, 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.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.0 million during the six months ended June 30, 2024, compared to $0.8 million during the six months ended June 30, 2023.

Other general and administrative expense decreased $23.7 million, or 18.2%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, due primarily to lower stock-based compensation expense and declines in bonus expense, as a result of lower expected annual performance compared to annual targets in the current year compared to the prior year.

We recorded $2.1 million of stock-based compensation expense during the six months ended June 30, 2024 compared to $20.2 million during the six months ended June 30, 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.

Depreciation and amortization.

Depreciation and amortization decreased $30.0 million, or 15.8%, during the six months ended June 30, 2024, compared to the six months ended June 30, 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 $(151.0) million during the six months ended June 30, 2024 was primarily due to a gain on extinguishment of debt of $(91.1) million related to the redemption of $191.35 million aggregate principal amount of the Second Lien Notes due 2026, the favorable settlement of a vendor dispute of $(36.2) million, $(19.1) million of recoveries related to the Shareholder Litigation and $(3.6) million of other settlement proceeds.

Other expense of $5.9 million during the six months ended June 30, 2023 was primarily due to $125.4 million of expense related to a proposed settlement of the Shareholder Litigation comprised of $10.0 million of estimated legal fees and $115.4 million of non-cash expense for the estimated fair value as of June 30, 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 $(84.4) million related to the redemption of $141.4 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 $(16.2) million in foreign currency transaction gains.

Interest expense.

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.

Interest expense decreased $3.5 million to $200.2 million for the six months ended June 30, 2024, compared to $203.7 million during the six months ended June 30, 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 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 was $(11.2) million for the six months ended June 30, 2024, compared to $(8.4) million for the six months ended June 30, 2023.

Investment income in the current year includes interest income of $(11.5) million, partially offset by $0.1 million of decline in estimated fair value of our investment in common shares of Hycroft and $0.2 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.

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 $(4.8) million, partially offset by $5.5 million of decline in estimated fair value of our investment in common shares of Hycroft and $4.6 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.

Income tax provision.

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.

The income tax provision was $2.5 million and $2.3 million for the six months ended June 30, 2024, and June 30, 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 $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.

Net loss was $196.3 million and $226.9 million during the six months ended June 30, 2024, and June 30, 2023, respectively.

Net loss during the six months ended June 30, 2024 compared to net loss for the six months ended June 30, 2023 was positively impacted by decreases in general and administrative expense, decreases in depreciation and amortization, decreases in interest expense, and increases in investment income and other income 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 an increase in income tax provision.

Theatrical Exhibition—U.S.

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.

Total revenues decreased $286.9 million, or 16.0%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Admissions revenues decreased $163.1 million or 16.8%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to a decrease in attendance of 18.7% from 82.4 million patrons to 67.0 million patrons, partially offset by a 2.4% 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.

Food and beverage revenues decreased $119.1 million, or 17.8%, during the six months ended June 30, 2024, compared to the six months ended June 30, 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 $8.13 to $8.22 due primarily to an increase in average prices and the percentage of guests making transactions, partially offset by lower units purchase per transaction.

Total other theatre revenues decreased $4.7 million, or 3.2%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to the decline in attendance which resulted in lower ticket fees and advertising revenues.

Operating costs and expenses.

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.

Operating costs and expenses decreased $173.1 million, or 9.7%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Film exhibition costs decreased $106.8 million, or 21.0%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to the decrease in attendance and lower film rental terms.

As a percentage of admissions revenues, film exhibition costs were 49.6% for the six months ended June 30, 2024, compared to 52.3% for the six months ended June 30, 2023.

Food and beverage costs decreased $17.3 million, or 14.9%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

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

As a percentage of food and beverage revenues, food and beverage costs were 17.9% for the six months ended June 30, 2024, and 17.3% for the six months ended June 30, 2023.

Operating expense decreased by $10.6 million, or 1.8%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

The decrease in operating expense was primarily due to the decrease in attendance.

As a percentage of revenues, operating expense was 38.6% for the six months ended June 30, 2024, compared to 33.0% for the six months ended June 30, 2023.

Rent expense increased 3.0%, or $9.7 million, during the six months ended June 30, 2024, compared to the six months ended June 30, 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.

Merger, acquisition, and other costs.

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.

Merger, acquisition, and other costs were $0.0 million during the six months ended June 30, 2024, compared to $0.8 million during the six months ended June 30, 2023.

Other general and administrative expense decreased $22.7 million, or 24.2%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, due primarily to declines in stock-based compensation expense and lower bonus expense, as a result of lower expected annual performance compared to annual targets in the current year compared to the prior year.

We recorded $1.9 million of stock-based compensation expense during the six months ended June 30, 2024 compared to $18.1 million during the six months ended June 30, 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.

Depreciation and amortization.

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.

Depreciation and amortization decreased $24.6 million, or 16.5%, during the six months ended June 30, 2024, compared to the six months ended June 30, 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 $(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.

Other income of $(117.7) million during the six months ended June 30, 2024 was primarily due to a gain on extinguishment of debt of $(91.1) million related to the redemption of $191.35 million aggregate principal amount of the Second Lien Notes due 2026, $(19.1) million of recoveries related to the Shareholder Litigation and $(3.6) million of other settlement proceeds.

Other expense of $21.8 million during the six months ended June 30, 2023 was primarily due to $125.4 million of expense related to a proposed settlement of the Shareholder Litigation comprised of $10.0 million of estimated legal fees and $115.4 million of non-cash expense for the estimated fair value as of June 30, 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 $(84.4) million related to the redemption of $141.4 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 and a receipt of $(14.0) million in settlement of the Lao Action.

Interest expense.

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.

Interest expense decreased $3.6 million to $169.0 million for the six months ended June 30, 2024, compared to $172.6 million during the six months ended June 30, 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.

Investment income was $(10.0) million for the six months ended June 30, 2024, compared to expense of $7.1 million for the six months ended June 30, 2023.

Investment income in the current year includes interest income of $(10.3) million, partially offset by $0.1 million of decrease in the estimated fair value of our investment in common shares of Hycroft and $0.2 million of decrease in estimated fair value of our investment in warrants to purchase common shares of Hycroft.

Investment expense in the prior year includes $5.5 million of decline in estimated fair value of our investment in common shares of Hycroft, $4.6 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 $(4.8) million.

Income tax provision.

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.

The income tax provision was $1.2 million and $1.0 million for the six months ended June 30, 2024, and June 30, 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 $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.

Net loss was $142.5 million and $188.7 million during the six months ended June 30, 2024, and June 30, 2023, respectively.

Net loss during the six months ended June 30, 2024, compared to net loss for the six months ended June 30, 2023, were positively impacted by decreases in general and administrative expense, depreciation and amortization, interest expense and investment expense and decreases in other expense, 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 $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.

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.

Total revenues decreased $33.4 million, or 6.5%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Admissions revenues decreased $20.2 million, or 6.6%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to a decrease in attendance of 6.1% from 31.6 million patrons to 29.7 million patrons and a decrease in average ticket price of 0.4%.

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

Food and beverage revenues decreased $9.5 million, or 6.4%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to the decrease in attendance and a decrease in food and beverage per patron.

Food and beverage per patron decreased 0.2% from $4.66 to $4.65.

Total other theatre revenues decreased $3.7 million, or 6.4%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to the decline in attendance which resulted in lower ticket fees and advertising revenues.

Operating costs and expenses.

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.

Operating costs and expenses decreased $14.8 million, or 2.7%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Film exhibition costs decreased $10.9 million, or 9.0%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to the decrease in attendance and lower film rental terms.

As a percentage of admissions revenues, film exhibition costs were 38.6% for the six months ended June 30, 2024, compared to 39.6% for the six months ended June 30, 2023.

Food and beverage costs decreased $2.9 million, or 7.8%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

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

As a percentage of food and beverage revenues, food and beverage costs were 24.7% for the six months ended June 30, 2024, compared to 25.1% for the six months ended June 30, 2023.

Operating expense decreased by $1.3 million, or 0.6%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

The decrease in operating expense was primarily due to lower utilities expense and the decrease in attendance.

As a percentage of revenues, operating expense was 42.6% for the six months ended June 30, 2024, compared to 40.0% for the six months ended June 30, 2023.

Rent expense increased 6.2%, or $6.7 million, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Other general and administrative expense decreased $1.0 million, or 2.7%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Depreciation and amortization.

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.

Depreciation and amortization decreased $5.4 million, or 13.2%, during the six months ended June 30, 2024, compared to the six months ended June 30, 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.

Other income.

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.

Other income of $(33.3) million during the six months ended June 30, 2024, was primarily due to the favorable settlement of a vendor dispute of $(36.2) million.

Other income of $(15.9) million during the six months ended June 30, 2023, was primarily due to $(16.2) million in foreign currency transaction gains.

Interest expense.

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.

Interest expense increased by $0.1 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Investment income.

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

Investment income was $(1.2) million for the six months ended June 30, 2024, and $(15.5) million for the six months ended June 30, 2023.

Investment income in the current year includes $(1.2) million of interest income.

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 $1.2 million and $1.5 million for the three months ended March 31, 2024, and March 31, 2023, respectively.

The income tax provision was $1.3 million and $1.3 million for the six months ended June 30, 2024, and June 30, 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 $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.

Net loss was $53.8 million and $38.2 million during the six months ended June 30, 2024, and June 30, 2023, respectively.

Net loss during the six months ended June 30, 2024 compared to net loss for the six months ended June 30, 2023 was negatively impacted 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 interest expense, partially offset by decreases in general and administrative expense, decreases in depreciation and amortization expense an increases in other income.

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 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.

We had working capital deficit (excluding restricted cash) as of June 30, 2024, and December 31, 2023 of ($624.0) million and $(456.4) million, respectively.

As of June 30, 2024 and December 31, 2023, working capital included operating lease liabilities of $512.2 million and $508.8 million, respectively, and deferred revenues of $399.1 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 March 31, 2024, we had cash and cash equivalents of $624.2 million.

As of June 30, 2024, we had cash and cash equivalents of $770.3 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.

See Note 6 — Corporate Borrowings and Finance Lease Liabilities and 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 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.

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

On July 22, 2024, we completed a series of refinancing transactions with two creditor groups to refinance and extend to 2029 and 2030 the maturities of approximately $1.6 billion of the Company’s debt maturing in 2026.

On August 1, 2024, the Company completed follow-on open market repurchases of the Company’s Existing Term Loans, and in exchange, issued to such selling holders the Company’s New Term Loans pursuant to the New Term Loan Credit Agreement, by and among the Company and Muvico, LLC as co-borrowers, the lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent.

As of August 1, 2024, the Company completed open market purchase of $1,864.0 million aggregate principal amount of its Existing Term Loans and issued $1,993.3 million aggregate principal amount of the New Term Loans.

Accordingly, as of such date, the Company had approximately $31.0 million aggregate principal amount of Existing Term Loans outstanding.

See 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 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.

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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 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.

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

North American box office grosses were down approximately 36% for the six months ended June 30, 2024, compared to the six months ended June 30, 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 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.

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

There can be no assurance that the 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 and the Screen Actors Guild-American Federation of Television and Radio Artists strike that occurred during 2023 had a negative impact in 2024 on the film slate for exhibition, the Company’s 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.

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 $250.0 million, through an at-the-market offering program.

During the six months ended June 30, 2024, we raised gross proceeds of $250.0 million and paid fees to sales agents and incurred other third-party issuance costs of approximately $6.3 million and $0.6 million, respectively, through the at-the-market offering of approximately 72.5 million shares of Common Stock.

We paid $0.7 million of other third-party issuance costs during the six months ended June 30, 2024.

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

Cash Flows from Operating Activities

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.

Net cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $222.9 million and $203.3 million during the six months ended June 30, 2024 and June 30, 2023, respectively.

The increase in net cash flows used in operating activities was primarily due to the decline in attendance due to the impact of the Writers Guild of America and Screen Actors Guild – American Federation of Television and Radio Artists strikes that occurred during 2023.

All things being equal, a decline in attendance results in less operating cash inflows that could be used to pay for the costs associated with our operations, thus creating an increase in net cash used in operations.

The additional cash used in operating activities due to the decline in attendance was partially offset by reductions in rent repayments that were deferred during the COVID-19 pandemic and vendor dispute and other settlement proceeds received during the six months ended June 30, 2024.

Cash Flows from Investing Activities

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.

Net cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $93.5 million and $57.4 million during the six months ended June 30, 2024 and June 30, 2023, respectively.

Cash outflows from investing activities include capital expenditures of $95.1 million and $96.0 million during the six months ended June 30, 2024, and June 30, 2023, respectively.

During the six months ended June 30, 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 $6.0 million.

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

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

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Cash Flows from Financing Activities

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.

Net cash flows provided by financing activities, as reflected in the condensed consolidated statements of cash flows, were $227.3 million and $62.4 million during the six months ended June 30, 2024 and June 30, 2023, respectively.

Cash flows provided by financing activities during the six months ended June 30, 2024, were primarily due to net proceeds from equity issuances of $243.0 million, 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 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 June 30, 2024.

Cash flows provided by financing activities during the six months ended June 30, 2023, were primarily due to net proceeds from equity issuances of $175.7 million, partially offset by the repurchase of Second Lien Notes due 2026 for $82.4 million, and taxes paid for restricted unit withholdings of $14.2 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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis