Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-Looking Statements
In addition to historical information, this Quarterly Report on Form 10–Q contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “may,” “will,” “forecast,” “estimate,” “project,” “intend,” “plan,” “expect,” “should,” “believe” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. 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, revenues and our liquidity. These forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, including those discussed in “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the following:
● the risks and uncertainties relating to the sufficiency of our existing cash and cash equivalents and available borrowing capacity to fund operations and satisfy obligations including cash outflows for planned capital expenditures currently and through the next twelve months. In order to achieve net positive cash flows from operating activities, 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) 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 is 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 Class A
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common stock (“Common Stock”) and other securities would likely suffer a total loss of their investment;
● the risks and uncertainties relating to the Refinancing Transactions (as defined below), 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 6.00%/8.00% Cash/PIK Toggle Senior Secured Exchangeable Notes (the “Exchangeable Notes”), (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 cash flows from operating activities to overcome liquidity concerns or may be insufficient to do so if the Company does not achieve revenue levels at least in line with pre-COVID-19 revenues and (iii) the impact on the market price of our Common Stock and our capital structure of litigation resulting from the Refinancing Transactions or the claims of default or any additional litigation that has arisen or may arise in connection with the Refinancing Transactions, including the Noteholder Action (as defined herein). See Note 11—Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for a description of the litigation;
● changing practices of distributors, which accelerated during the COVID-19 pandemic, including increased use of alternative film delivery methods including premium video on demand, streaming platforms, shrinking exclusive theatrical release windows or release of movies to theatrical exhibition and streaming platforms on the same date, the theatrical release of fewer movies, or transitioning to other forms of entertainment;
● the impact of changing movie-going behavior of consumers;
● the risk that the North American and international box office in the near term will not recover sufficiently, resulting in higher cash burn and the need to seek additional financing, which may not be available at favorable terms, or at all;
● risks and uncertainties relating to our significant indebtedness, including our borrowings and our ability to meet our debt covenants;
● the dilution caused by recent and potential future sales of our Common Stock and future potential share issuances to repay, refinance, redeem or repurchase indebtedness (including expenses, accrued interest and premium, if any);
● risks relating to motion picture production, promotion, marketing, and performance, including labor stoppages affecting the production, supply and release schedule of theatrical motion picture content and the financial burden imposed by tariffs on motion picture production;
● the seasonality of our revenue and working capital, which are dependent upon the timing of motion picture releases by distributors, such releases being seasonal and resulting in higher attendance and revenues generally during the summer months and holiday seasons, and higher working capital requirements during the other periods such as the first quarter;
● intense competition in the geographic areas in which we operate among exhibitors, streaming platforms, or from other forms of entertainment;
● certain covenants in the agreements that govern our indebtedness that limit or restrict our ability to take advantage of certain business opportunities, pay dividends, incur additional debt, pre-pay debt, and also to refinance debt and to do so at favorable terms, and such covenants that impose additional administrative and operational burdens on our business;
● 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 revenues and attendance levels;
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● our lack of control over distributors of films;
● limitations on the availability of capital or poor financial results may prevent us from deploying strategic initiatives;
● an issuance of preferred stock could dilute the voting power of the common stockholders and adversely affect the market value of our outstanding Common Stock;
● limitations on the authorized number of Common Stock shares could in the future prevent us from raising additional capital through Common Stock;
● our ability to achieve expected synergies, benefits and performance from our strategic initiatives;
● our ability to refinance our indebtedness on terms favorable to us or at all;
● our ability to optimize our theatre circuit through new construction, the transformation of our existing theatres, and strategically closing underperforming theatres may be subject to delay and unanticipated costs;
● failures, unavailability or security breaches of our information systems, including due to cybersecurity incidents;
● our ability to utilize interest expense deductions will be limited annually due to Section 163(j) of the Internal Revenue Code of 1986, as amended (the “Code”), as amended by the Tax Cuts and Jobs Act of 2017;
● our ability to recognize interest deduction carryforwards, net operating loss carryforwards and other tax attributes to reduce our future tax liability;
● our ability to recognize certain international deferred tax assets which currently do not have a valuation allowance recorded;
● review by antitrust authorities in connection with acquisition opportunities;
● risks relating to the incurrence of legal liability, including costs associated with the ongoing securities class action lawsuits;
● dependence on key personnel for current and future performance and our ability to attract and retain senior executives and other key personnel, including in connection with any future acquisitions;
● increased costs in order to comply or resulting from a failure to comply with governmental regulation, including the General Data Protection Regulation (“GDPR”) and all other current and pending privacy and data regulations in the jurisdictions where we have operations;
● supply chain disruptions may negatively impact our operating results;
● the availability and/or cost of energy, particularly in Europe;
● the market price and trading volume of our shares of Common Stock has been and may continue to be volatile, and purchasers of our securities could incur substantial losses;
● future offerings of debt, which would be senior to our Common Stock for purposes of distributions or upon liquidation, could adversely affect the market price of our Common Stock;
● the potential for political, social, or economic unrest, terrorism, hostilities, cyber-attacks or war, including the conflict between Russia and Ukraine and other international conflicts;
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● the potential impact of financial and economic sanctions on the regional and global economy, or widespread health emergencies, such as pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance;
● anti-takeover protections in our Third Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) and our amended and restated bylaws (the “Bylaws”) may discourage or prevent a takeover of our Company, even if an acquisition would be beneficial to our stockholders; and
● other risks and uncertainties referenced from time to time in filings with the SEC.
This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative but not exhaustive. In addition, new risks and uncertainties may arise from time to time. Accordingly, all forward-looking statements should be evaluated with an understanding of their inherent uncertainty and we caution accordingly against relying on forward-looking statements.
Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason. Actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Readers are urged to consider these factors carefully in evaluating the forward-looking statements. For further information about these and other risks and uncertainties as well as strategic initiatives, see “Item 1A. Risk Factors” of this Form 10-Q, “Item 1. Business” in our Annual Report on Form 10–K for the year ended December 31, 2024, and our other public filings.
All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. The forward-looking statements included herein are made only as of the date of this Quarterly Report on Form 10–Q, and we do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Overview
AMC is the world’s largest theatrical exhibition company and an industry leader in innovation and operational excellence. As of March 31, 2025, we operated theatres in 11 countries throughout the U.S. and Europe.
Our theatrical exhibition revenues are generated primarily from box office admissions and food and beverage sales. The balance of our revenues is generated from ancillary sources, including online ticketing fees, on-screen advertising, income from gift card and exchange ticket sales, rental of theatre auditoriums, retail popcorn and merchandise sales, fees earned from our customer loyalty programs, and theatrical distribution. As of March 31, 2025, we owned, operated or had interests in 865 theatres and 9,725 screens.
Box Office Admissions and Film Content
Box office admissions are our largest source of revenue. We predominantly license theatrical films from distributors owned by major film production companies and from independent distributors on a film-by-film and theatre-by-theatre basis. Film exhibition costs are based on a share of admissions revenues and are accrued based on estimates of the final settlement pursuant to our film licenses. These licenses typically state that rental fees are based on the box office performance of each film, though in certain circumstances and less frequently, our rental fees are based on a mutually agreed settlement rate that is fixed. In some European territories, film rental fees are established on a weekly basis and some licenses use a per capita agreement instead of a revenue share, paying a flat amount per ticket.
Our revenues attributable to individual distributors may vary significantly from year to year depending upon the commercial success of each distributor’s films in any given year. Our results of operations may vary significantly from quarter to quarter and from year to year based on the timing and popularity of film releases.
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Movie Screens
The following table provides detail with respect to Premium Large Format (“PLF”) screens (IMAX®, Dolby Cinema TM , in-house), XL screens, SCREENX, premium seating, and our enhanced food and beverage offerings as deployed throughout our circuit as of March 31, 2025 and March 31, 2024:
U.S. Markets
International Markets
Consolidated
As of March 31,
As of March 31,
As of March 31,
Format
2025
2024
2025
2024
2025
2024
Number of theatres:
IMAX®
182
183
35
33
217
216
Dolby Cinema™ theatres
167
162
7
7
174
169
In-house PLF
59
60
79
76
138
136
Dine-in
48
49
3
3
51
52
Premium seating
364
362
85
82
449
444
XL screens
—
—
58
—
58
—
SCREENX
—
—
6
6
6
6
Number of screens:
IMAX®
183
184
35
33
218
217
Dolby Cinema™ theatres
167
162
7
7
174
169
In-house PLF
59
60
82
79
141
139
Dine-in
666
675
13
13
679
688
Premium seating
3,614
3,589
604
554
4,218
4,143
XL screens
—
—
65
—
65
—
SCREENX
—
—
6
6
6
6
In March 2025, we entered into an agreement with CJ 4DPLEX to open 40 4DX and an additional 25 SCREENX locations worldwide. The majority of the premium screens will be deployed in U.S. markets. The first auditoriums with SCREENX and 4DX screens are expected to open in 2025 with the full roll out expected to be completed by 2027.
We also entered into agreements with Dolby Laboratories, Inc and IMAX Corporation to expand and upgrade our offerings in those premium formats. We expect to open an additional 40 Dolby Cinema at AMC locations in the U.S. by the end of 2027 and twelve new IMAX locations by the end of 2033. Additionally, we plan to upgrade an additional 68 IMAX locations to IMAX with Laser .
Loyalty Programs and Other Marketing
On January 1, 2025, we introduced a new AMC Stubs tier—AMC Stubs® Premiere GO! (“Premiere GO! ”). Premiere GO! membership is earned by existing Insider (as defined below) members by visiting a certain number of times or earning a certain number of points within a calendar year. Premiere GO! allows members to earn additional points and other exclusive benefits.
As of March 31, 2025, we had a combined total of approximately 36 million member households enrolled in AMC Stubs® A-List (“A-List”), AMC Stubs Premiere™ (“Premiere”), Premiere GO! , and AMC Stubs Insider™ (“Insider”) programs, combined. During the three months ended March 31, 2025, our AMC Stubs® members represented approximately 50.5% of AMC U.S. markets attendance.
We currently have approximately 19 million members in our various International loyalty programs.
See “Item 1. Business” in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional discussion and information of our screens, seating concepts, amenities, loyalty programs and other marketing initiatives.
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Holders of Shares
As of March 31, 2025, approximately 1.8 million shares of our Common Stock were directly registered with our transfer agent by 14,693 stockholders. The balance of our outstanding Common Stock was held in “street name” through bank or brokerage accounts.
Critical Accounting Estimates
For a discussion of our critical accounting policies and the means by which we develop estimates therefore, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.
Significant Events—For the Three Months Ended March 31, 2025
Share Issuances. During the three months ended March 31, 2025, we were paid $108.7 million as initial gross cash proceeds associated with the establishment of forward positions for 30.0 million shares of Common Stock. The Valuation Period ended on March 17, 2025 with no True-Up Payment owed to the Company.
Additionally, during the three months ended March 31, 2025, we issued shares through an “at-the-market offering”. The below table summarizes the activity of the “at-the-market” offering during the three months ended March 31, 2025:
(In millions)
March 31, 2025
Shares issued through at-the-market offering
17.1
At-the-market offering gross proceeds
$
63.0
Sales agent fees paid
$
0.6
Other third-party issuance costs incurred
$
0.3
Other third-party issuance costs paid
$
1.5
As of January 15, 2025, all 50.0 million shares subject to the Sales and Registration Agreement have been sold.
Significant Events—For the Three Months Ended March 31, 2024
Debt for Equity Exchange. During January 2024, we executed a debt for equity exchange transaction. This transaction was treated as an early extinguishment of the debt. In accordance with ASC 470-50-40-3, the reacquisition price of the extinguished debt was determined to be the fair value of the Common Stock exchanged. The below table summarizes the debt for equity exchange.
Shares of
Aggregate Principal
Common Stock
Reacquisition
Gain on
Accrued Interest
(In millions, except for share data)
Repurchased
Exchanged
Cost
Extinguishment
Paid
Second Lien Notes due 2026
$
17.5
2,541,250
$
14.1
$
5.8
$
0.1
Vendor Dispute. On January 26, 2024, we executed an agreement to collect $37.5 million as resolution of a dispute with a vendor. The proceeds, net of legal costs, were recorded to other income during the three months ended March 31, 2024. The relationship with the vendor has been restored and remains in good standing.
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Operating Results
The following table sets forth our consolidated revenues, operating costs and expenses:
Three Months Ended
(In millions)
March 31, 2025
March 31, 2024
% Change
Revenues
Admissions
$
473.5
$
530.5
(10.7)
%
Food and beverage
283.4
321.2
(11.8)
%
Other theatre
105.6
99.7
5.9
%
Total revenues
862.5
951.4
(9.3)
%
Operating Costs and Expenses
Film exhibition costs
204.8
239.3
(14.4)
%
Food and beverage costs
57.2
63.0
(9.2)
%
Operating expense, excluding depreciation and amortization below
393.2
393.8
(0.2)
%
Rent
218.1
224.5
(2.9)
%
General and administrative:
Merger, acquisition and other costs
3.0
(0.1)
*
%
Other, excluding depreciation and amortization below
56.0
57.7
(2.9)
%
Depreciation and amortization
76.1
81.6
(6.7)
%
Operating costs and expenses
1,008.4
1,059.8
(4.8)
%
Operating loss
(145.9)
(108.4)
34.6
%
Other expense, net:
Other income
(58.8)
(42.8)
37.4
%
Interest expense:
Corporate borrowings
109.0
91.0
19.8
%
Finance lease obligations
1.2
0.9
33.3
%
Non-cash NCM exhibitor service agreement
8.9
9.3
(4.3)
%
Investment income
(5.7)
(5.1)
11.8
%
Total other expense, net
54.6
53.3
2.4
%
Loss before income taxes
(200.5)
(161.7)
24.0
%
Income tax provision
1.6
1.8
(11.1)
%
Net loss
$
(202.1)
$
(163.5)
23.6
%
* Percentage change in excess of 100%
Three Months Ended
Operating Data:
March 31, 2025
March 31, 2024
Screen acquisitions
—
1
Screen dispositions
80
45
Construction openings (closures), net
7
(10)
Average screens (1)
9,430
9,703
Number of screens operated
9,725
10,005
Number of theatres operated
865
895
Screens per theatre
11.2
11.2
Attendance (in thousands) (1)
41,903
46,631
(1) Includes consolidated theatres only and excludes screens offline due to construction.
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Segment Operating Results
The following table sets forth our revenues, operating costs and expenses by reportable segment:
U.S. Markets
International Markets
Consolidated
Three Months Ended
Three Months Ended
Three Months Ended
March 31,
March 31,
March 31,
(In millions)
2025
2024
2025
2024
2025
2024
Revenues
Admissions
$
331.1
$
371.6
$
142.4
$
158.9
$
473.5
$
530.5
Food and beverage
217.2
246.3
66.2
74.9
283.4
321.2
Other theatre
68.7
71.2
36.9
28.5
105.6
99.7
Total revenues
617.0
689.1
245.5
262.3
862.5
951.4
Operating Costs and Expenses
Film exhibition costs
151.2
177.1
53.6
62.2
204.8
239.3
Food and beverage costs
41.0
45.0
16.2
18.0
57.2
63.0
Operating expense, excluding depreciation and amortization below
288.4
286.8
104.8
107.0
393.2
393.8
Rent
162.6
165.7
55.5
58.8
218.1
224.5
General and administrative expense:
Merger, acquisition and other costs
3.0
(0.1)
—
—
3.0
(0.1)
Other, excluding depreciation and amortization below
37.7
38.6
18.3
19.1
56.0
57.7
Depreciation and amortization
58.8
63.5
17.3
18.1
76.1
81.6
Operating costs and expenses
742.7
776.6
265.7
283.2
1,008.4
1,059.8
Operating loss
(125.7)
(87.5)
(20.2)
(20.9)
(145.9)
(108.4)
Other expense (income), net:
Other income
(45.4)
(8.9)
(13.4)
(33.9)
(58.8)
(42.8)
Interest expense:
Corporate borrowings
93.8
76.2
15.2
14.8
109.0
91.0
Finance lease obligations
—
—
1.2
0.9
1.2
0.9
Non-cash NCM exhibitor service agreement
8.9
9.3
—
—
8.9
9.3
Investment income
(5.5)
(4.5)
(0.2)
(0.6)
(5.7)
(5.1)
Total other expense (income), net
51.8
72.1
2.8
(18.8)
54.6
53.3
Loss before income taxes
(177.5)
(159.6)
(23.0)
(2.1)
(200.5)
(161.7)
Income tax provision
0.9
0.6
0.7
1.2
1.6
1.8
Net loss
$
(178.4)
$
(160.2)
$
(23.7)
$
(3.3)
$
(202.1)
$
(163.5)
U.S. Markets
International Markets
Consolidated
Three Months Ended
Three Months Ended
Three Months Ended
March 31,
March 31,
March 31,
2025
2024
2025
2024
2025
2024
Segment Operating Data:
Screen acquisitions
—
—
—
1
—
1
Screen dispositions
45
43
35
2
80
45
Construction openings (closures), net
(5)
(1)
12
(9)
7
(10)
Average screens (1)
7,103
7,287
2,327
2,416
9,430
9,703
Number of screens operated
7,135
7,325
2,590
2,680
9,725
10,005
Number of theatres operated
540
558
325
337
865
895
Screens per theatre
13.2
13.1
8.0
8.0
11.2
11.2
Attendance (in thousands) (1)
26,907
30,490
14,996
16,141
41,903
46,631
(1) Includes consolidated theatres only and excludes screens offline due to construction.
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Segment Information
Our historical results of operations for the three months ended March 31, 2025 and March 31, 2024, 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, 2025, Compared to the Three Months ended March 31, 2024
Consolidated Results of Operations
Revenues. Total revenues decreased $88.9 million, or 9.3%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Admissions revenues decreased $57.0 million, or 10.7%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to a decrease in attendance of 10.1% from 46.6 million patrons to 41.9 million patrons and a 0.7% decrease in average ticket price. Attendance decreased due to the popularity of film product compared to the prior year. The decrease in average ticket price was primarily due to decreases in foreign currency translation rates.
Food and beverage revenues decreased $37.8 million, or 11.8%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to the decrease in attendance and a decrease in food and beverage per patron of 1.9% from $6.89 to $6.76 due primarily to decreases in foreign currency translation rates.
Total other theatre revenues increased $5.9 million, or 5.9%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to increases in income from expirations of package tickets and income from gift cards in our International markets, partially offset by decreases in ticket fees due to the decrease in attendance, decreases in gift card and package ticket income in U.S. markets and decreases in foreign currency translation rates.
Operating costs and expenses. Operating costs and expenses decreased $51.4 million, or 4.8%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Film exhibition costs decreased $34.5 million, or 14.4%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to the decrease in admissions revenues and lower film rental terms. As a percentage of admissions revenues, film exhibition costs were 43.3% for the three months ended March 31, 2025, compared to 45.1% for the three months ended March 31, 2024. The decrease in film exhibition cost percentage is primarily due to the concentration of box office revenues in lower grossing films in the current year, which typically results in lower film exhibition costs.
Food and beverage costs decreased $5.8 million, or 9.2%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. 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 20.2% for the three months ended March 31, 2025, compared to 19.6% for the three months ended March 31, 2024.
Operating expense decreased by $0.6 million, or 0.2%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease in operating expense was primarily due to decreases in foreign currency translation rates. As a percentage of revenues, operating expense was 45.6% for the three months ended March 31, 2025, compared to 41.4% for the three months ended March 31, 2024. Rent expense decreased $6.4 million, or 2.9%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due primarily to a decrease in average screens of 2.8% and decreases in foreign currency translation rates.
Merger, acquisition, and other costs. Merger, acquisition, and other costs were $3.0 million during the three months ended March 31, 2025, compared to $(0.1) million during the three months ended March 31, 2024. The current year expense relates to severance costs in U.S. markets.
Other. Other general and administrative expense decreased $1.7 million, or 2.9%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due primarily to lower insurance costs and decreases in foreign currency translation rates.
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Depreciation and amortization. Depreciation and amortization decreased $5.5 million, or 6.7%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to theatre closures and lower depreciation expense on theatres impaired during the year ended December 31, 2024, and the decrease in foreign currency translation rates.
Other income. Other income of $(58.8) million during the three months ended March 31, 2025 was primarily due to $(45.1) million of income related to the decrease in fair value of the Conversion Option derivative liability, $(13.0) million in foreign currency transaction gains and $(0.8) million in equity in earnings related to non-consolidated entities. 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. See Note 1—Basis of Presentation in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for additional information about the components of other income.
Interest expense. Interest expense increased $17.9 million to $119.1 million for the three months ended March 31, 2025, compared to $101.2 million during the three months ended March 31, 2024, primarily due to increased interest expense of $18.3 million on the New Term Loans (as defined herein) compared to the Existing Term Loans (as defined herein), and interest expense of $10.8 million on the Exchangeable Notes issued on July 22, 2024, partially offset by declines in interest expense of $9.5 million on the Second Lien Notes due to redemptions of principal balances, declines in interest expense related to the revolving credit facility of $1.0 million and declines in interest expense on the Senior Subordinated Notes due 2025 of $0.8 million due to redemptions of principal balances. See Note 6—Corporate Borrowings and Finance Lease Liabilities in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for additional information about our indebtedness.
Investment income. Investment income was $(5.7) million for the three months ended March 31, 2025, compared to income of $(5.1) million for the three months ended March 31, 2024. Investment income in the current year includes interest income of $(2.9) million, $(2.4) million of increase in estimated fair value of our investment in common shares of Hycroft and $(0.4) million of increase in estimated fair value of our investment in warrants to purchase common shares of Hycroft. Investment income in the prior year includes interest income of $(6.1) million, partially offset by $0.5 million of decrease of our investment in common shares of Hycroft and a decline in estimated fair value of $0.5 million in our investment in warrants to purchase common shares of Hycroft.
Income tax provision. The income tax provision was $1.6 million, compared to a provision of $1.8 million, for the three months ended March 31, 2025, and March 31, 2024, respectively. See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for further information.
Net loss. Net loss was $202.1 million and $163.5 million during the three months ended March 31, 2025, and March 31, 2024, respectively. Net loss during the three months ended March 31, 2025 compared to net loss for the three months ended March 31, 2024 was negatively impacted by the decrease in attendance as a result of the popularity of new film releases compared to the prior year, an increase in interest expense, and an increase in general and administrative expense, partially offset by increases in other income, decreases in rent expense, decreases in depreciation and amortization, increases in investment income, and decreases in income tax provision.
Theatrical Exhibition — U.S. Markets
Revenues. Total revenues decreased $72.1 million, or 10.5%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Admissions revenues decreased $40.5 million, or 10.9%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to a decrease in attendance of 11.8% from 30.5 million patrons to 26.9 million patrons, partially offset by a 1.0% increase in average ticket price. Attendance decreased due to the popularity of film product compared to the prior year.
Food and beverage revenues decreased $29.1 million, or 11.8%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to the decrease in attendance and a decrease in food and beverage per patron of 0.1% from $8.08 to $8.07.
Total other theatre revenues decreased $2.5 million, or 3.5%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to decreases in income from gift cards and package tickets and decreases in ticket fees due to the decrease in attendance.
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Operating costs and expenses. Operating costs and expenses decreased $33.9 million, or 4.4%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Film exhibition costs decreased $25.9 million, or 14.6%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to the decrease in admissions revenues and lower film rental terms. As a percentage of admissions revenues, film exhibition costs were 45.7% for the three months ended March 31, 2025, compared to 47.7% for the three months ended March 31, 2024. The decrease in film exhibition cost percentage is primarily due to the concentration of box office revenues in lower grossing films in the current year, which typically results in lower film exhibition costs.
Food and beverage costs decreased $4.0 million, or 8.9%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. 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 18.9% for the three months ended March 31, 2025, compared to 18.3% for the three months ended March 31, 2024.
Operating expense increased by $1.6 million, or 0.6%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. As a percentage of revenues, operating expense was 46.7% for the three months ended March 31, 2025, compared to 41.6% for the three months ended March 31, 2024. Rent expense decreased $3.1 million, or 1.9%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due primarily to a decrease in average screens of 2.5%.
Merger, acquisition, and other costs. Merger, acquisition, and other costs were $3.0 million during the three months ended March 31, 2025, compared to $(0.1) million during the three months ended March 31, 2024. The current year expense relates to severance costs in U.S. markets.
Other. Other general and administrative expense decreased $0.9 million, or 2.3%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due primarily to lower insurance costs.
Depreciation and amortization. Depreciation and amortization decreased $4.7 million, or 7.4%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to theatre closures and lower depreciation expense on theatres impaired during the year ended December 31, 2024.
Other income. Other income of $45.4 million during the three months ended March 31, 2025 was primarily due to $45.1 million of income related to the decrease in fair value of the Conversion Option derivative liability and $0.7 million in equity in earnings related to non-consolidated entities. 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. See Note 1—Basis of Presentation in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for additional information about the components of other income.
Interest expense. Interest expense increased $17.2 million to $102.7 million for the three months ended March 31, 2025, compared to $85.5 million during the three months ended March 31, 2024, primarily due to increased interest expense of $18.3 million on the New Term Loans compared to the Existing Term Loans, and interest expense of $10.8 million on the Exchangeable Notes issued on July 22, 2024, partially offset by declines in interest expense of $9.5 million on the Second Lien Notes due to redemptions of principal balances, declines in interest expense related to the revolving credit facility of $1.0 million and declines in interest expense on the Senior Subordinated Notes due 2025 of $0.8 million due to redemptions of principal balances. See Note 6—Corporate Borrowings and Finance Lease Liabilities in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for additional information about our indebtedness.
Investment income. Investment income was $(5.5) million for the three months ended March 31, 2025, compared to investment income of $(4.5) million for the three months ended March 31, 2024. Investment income in the current year includes interest income of $(2.7) million, $(2.4) million of increase in estimated fair value of our investment in common shares of Hycroft and $(0.4) million of increase in estimated fair value of our investment in warrants to purchase common shares of Hycroft. Investment income in the prior year includes $(5.5) million of interest income, partially offset by $0.5 million of decrease in the estimated fair value of our investment in common shares of Hycroft and a decline in the estimated fair value of $0.5 million of our investment in warrants to purchase common shares of Hycroft.
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Income tax provision. The income tax provision was $0.9 million, compared to a provision of $0.6 million, for the three months ended March 31, 2025, and March 31, 2024, respectively. See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for further information.
Net loss. Net loss was $178.4 million and $160.2 million during the three months ended March 31, 2025, and March 31, 2024, respectively. Net loss during the three months ended March 31, 2025 compared to net loss for the three months ended March 31, 2024 was negatively impacted by the decrease in attendance as a result of the popularity of new film releases compared to the prior year, an increase in interest expense, an increase in general and administrative expense, and an increase in income tax provision, partially offset by increases in other income, decreases in depreciation and amortization, decreases in rent expense, and increases in investment income.
Theatrical Exhibition—International Markets
Revenues. Total revenues decreased $16.8 million, or 6.4%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Admissions revenues decreased $16.5 million, or 10.4%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to a decrease in attendance of 7.1% from 16.1 million patrons to 15.0 million patrons and a 3.5% decrease in average ticket price. Attendance decreased due to the popularity of film product compared to the prior year. The decrease in average ticket price was primarily due to decreases in foreign currency translation rates.
Food and beverage revenues decreased $8.7 million, or 11.6%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to the decrease in attendance and a decrease in food and beverage per patron of 5.0% from $4.64 to $4.41 due primarily to decreases in foreign currency translation rates.
Total other theatre revenues increased $8.4 million, or 29.5%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to increases in income from expirations of package tickets, income from gift cards and advertising income, partially offset by decreases in ticket fees due to the decrease in attendance and decreases in foreign currency translation rates.
Operating costs and expenses. Operating costs and expenses decreased $17.5 million, or 6.2%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. Film exhibition costs decreased $8.6 million, or 13.8%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to the decrease in admissions revenues and lower film rental terms. As a percentage of admissions revenues, film exhibition costs were 37.6% for the three months ended March 31, 2025, compared to 39.1% for the three months ended March 31, 2024. The decrease in film exhibition cost percentage is primarily due to the concentration of box office revenues in lower grossing films in the current year, which typically results in lower film exhibition costs.
Food and beverage costs decreased $1.8 million, or 10.0%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. 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 24.5% for the three months ended March 31, 2025, compared to 24.0% for the three months ended March 31, 2024.
Operating expense decreased by $2.2 million, or 2.1%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease in operating expense was primarily due to decreases in foreign currency translation rates. As a percentage of revenues, operating expense was 42.7% for the three months ended March 31, 2025, compared to 40.8% for the three months ended March 31, 2024. Rent expense decreased $3.3 million, or 5.6%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due primarily to a decrease in average screens of 3.7% and decreases in foreign currency translation rates.
Other. Other general and administrative expense decreased $0.8 million, or 4.2%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to decreases in foreign currency translation rates.
Depreciation and amortization. Depreciation and amortization decreased $0.8 million, or 4.4%, during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to theatre closures and lower depreciation expense on theatres impaired during the year ended December 31, 2024, and the decrease in foreign currency translation rates.
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Other income. Other income of $(13.4) million during the three months ended March 31, 2025 was primarily due to $(13.0) million in foreign currency transaction gains. 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 and insurance recoveries of $(1.1) million, partially offset by foreign currency transaction losses of $3.2 million. See Note 1—Basis of Presentation in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for additional information about the components of other income.
Interest expense. Interest expense increased $0.7 million to $16.4 million for the three months ended March 31, 2025, compared to $15.7 million for the three months ended March 31, 2024. See Note 6—Corporate Borrowings and Finance Lease Liabilities in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for additional information about our indebtedness.
Investment income. Investment income was $0.2 million for the three months ended March 31, 2025, compared to investment income of $0.6 million for the three months ended March 31, 2024. Investment income in the current and prior year is comprised of interest income.
Income tax provision. The income tax provision was $0.7 million and $1.2 million for the three months ended March 31, 2025, and March 31, 2024, respectively. See Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for further information.
Net loss. Net loss was $23.7 million and $3.3 million during the three months ended March 31, 2025, and March 31, 2024, respectively. Net loss during the three months ended March 31, 2025 compared to net loss for the three months ended March 31, 2024 was negatively impacted by the decrease in attendance as a result of the popularity of new film releases compared to the prior year, decreases in other income, increases in interest expense, and decreases in investment income, partially offset by decreases in rent expense, decreases in depreciation and amortization, decreases in general and administrative expense, and decreases in income tax provision.
Adjusted EBITDA
We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net earnings (loss) plus (i) income tax provision (benefit), (ii) interest expense and (iii) depreciation and amortization, as further adjusted to eliminate the impact of certain items that we do not consider indicative of our ongoing operating performance and to include attributable EBITDA from equity investments in theatre operations in International markets. These further adjustments are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. The preceding definition of and adjustments made to GAAP measures to determine Adjusted EBITDA are broadly consistent with Adjusted EBITDA as defined in our debt indentures. During 2024, we changed the definition of Adjusted EBITDA to no longer further adjust for “cash distributions from non-consolidated entities” and “other non-cash rent benefit.” All comparative period information for Adjusted EBITDA has been re-cast to conform with the current definition.
The following tables set forth our Adjusted EBITDA by reportable operating segment and our reconciliation of Adjusted EBITDA:
Three Months Ended
Adjusted EBITDA (In millions)
March 31, 2025
March 31, 2024
U.S. markets
$
(57.4)
$
(20.2)
International markets
(0.6)
(1.0)
Total Adjusted EBITDA
$
(58.0)
$
(21.2)
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Three Months Ended
(In millions)
March 31, 2025
March 31, 2024
Net loss
$
(202.1)
$
(163.5)
Plus:
Income tax provision (1)
1.6
1.8
Interest expense
119.1
101.2
Depreciation and amortization
76.1
81.6
Certain operating expense (2)
2.8
0.5
Equity in earnings of non-consolidated entities (3)
(0.8)
(3.7)
Attributable EBITDA (4)
0.4
0.6
Investment income (5)
(5.7)
(5.1)
Other income (6)
(58.1)
(38.8)
Merger, acquisition and other costs (7)
3.0
(0.1)
Stock-based compensation expense (8)
5.7
4.3
Adjusted EBITDA
$
(58.0)
$
(21.2)
(1) For information regarding the income tax provision, see Note 8—Income Taxes in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q.
(2) Amounts represent preopening expense related to temporarily closed screens under renovation, theatre and other closure expense for the permanent closure of screens, including the related accretion of interest, disposition of assets and other non-operating gains or losses included in operating expenses. We have excluded these items as they are non-cash in nature or related to theatres that are not open.
(3) Equity in earnings of non-consolidated entities during the three months ended March 31, 2025 primarily consisted of equity in earnings from AC JV of $(0.8) million. Equity in earnings of non-consolidated entities during the three months ended March 31, 2024 primarily consisted of equity in earnings from AC JV of $(3.3) million.
(4) Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain International markets. See below for a reconciliation of our equity in (earnings) of non-consolidated entities to attributable EBITDA. Because these equity investments are in theatre operators in regions where we hold a significant market share, we believe attributable EBITDA is more indicative of the performance of these equity investments and management uses this measure to monitor and evaluate these equity investments. We also provide services to these theatre operators including information technology systems, certain on-screen advertising services and our gift card and package ticket program.
Three Months Ended
(In millions)
March 31, 2025
March 31, 2024
Equity in (earnings) of non-consolidated entities
$
(0.8)
$
(3.7)
Less:
Equity in (earnings) of non-consolidated entities excluding International theatre joint ventures
(0.8)
(3.5)
Equity in earnings of International theatre joint ventures
—
0.2
Investment expense
—
0.1
Depreciation and amortization
0.4
0.3
Attributable EBITDA
$
0.4
$
0.6
(5) Investment income during the three months ended March 31, 2025 includes interest income of $(2.9) million, increases in the estimated fair value of our investment in common shares of Hycroft of $(2.4) million, and increases in the estimated fair value of our investment in warrants to purchase common shares of Hycroft of $(0.4) million.
Investment income during the three months ended March 31, 2024 included interest income of $(6.1) million, partially offset by a decline in the estimated fair value of our investment in common shares of Hycroft of $0.5 million, and a decline in the estimated fair value of our investment in warrants to purchase common shares of Hycroft of $0.5 million.
(6) Other income during the three months ended March 31, 2025 includes a decrease in fair value of the derivative liability for the embedded conversion feature in the Exchangeable Notes of $(45.1) million and
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foreign currency transaction gains of $(13.0) million.
Other income during the three months ended March 31, 2024 included a vendor dispute settlement of $(36.2) million and gains on debt extinguishment of $(5.8) million, partially offset by foreign currency transaction losses of $3.2 million.
(7) Merger, acquisition and other costs are excluded as they are non-operating in nature.
(8) Non-cash expense included in general and administrative: other.
Adjusted EBITDA is a non-GAAP financial measure commonly used in our industry and should not be construed as an alternative to net earnings (loss) as an indicator of operating performance (as determined in accordance with U.S. GAAP). Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it provides management and investors with additional information to measure our performance and estimate our value.
Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. For example, Adjusted EBITDA:
● does not reflect our capital expenditures, future requirements for capital expenditures or contractual commitments;
● does not reflect changes in, or cash requirements for, our working capital needs;
● does not reflect the significant interest expenses, or the cash requirements necessary to service interest or principal payments on our debt;
● excludes income tax payments that represent a reduction in cash available to us; and
● 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, 2025, Adjusted EBITDA in the U.S. markets was $(57.4) million compared to $(20.2) million during the three months ended March 31, 2024. The year-over-year decline was primarily driven by a decrease in attendance due to the popularity of new film releases compared to the prior year. These declines were partially offset by decreases in rent expense and decreases in general and administrative: other expenses. During the three months ended March 31, 2025, Adjusted EBITDA in the International markets was $(0.6) million compared to $(1.0) million during the three months ended March 31, 2024. The year-over-year decline was primarily driven by a decrease in attendance due to the popularity of new film releases compared to the prior year. These declines were partially offset by increases in other revenues related to package ticket expirations and gift card income, decreases in rent expense and decreases in general and administrative: other expenses. During the three months ended March 31, 2025, Adjusted EBITDA in the U.S. markets and International markets was $(58.0) million compared to $(21.2) million during the three months ended March 31, 2024, driven by the aforementioned factors impacting Adjusted EBITDA.
LIQUIDITY AND CAPITAL RESOURCES
Our consolidated revenues are primarily collected in cash, principally through admissions and food and beverage sales. We have an operating “float” which partially finances our operations and which generally permits us to maintain a smaller amount of working capital capacity. This float exists because admissions revenues are received in cash, while exhibition costs (primarily film rentals) are ordinarily paid to distributors 20 to 45 days following receipt of admissions revenues. Film distributors generally release the films which they anticipate will be the most successful during the summer and year-end holiday seasons. 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, 2025, and December 31, 2024 of $(925.5) million and $(846.1) million, respectively. As of March 31, 2025 and December 31, 2024, working capital included operating lease liabilities of $532.4 million and $524.9 million, respectively, and deferred revenues of $412.0 million and $432.4 million, respectively.
As of March 31, 2025, we had cash and cash equivalents of $378.7 million.
We took action to lower our future interest expense of our fixed-rate debt through debt buybacks and enhanced
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liquidity through equity issuances. See Note 6 — Corporate Borrowings and Finance Lease Liabilities and Note 7—Stockholders’ Deficit in the Notes to the Condensed Consolidated Financial Statements under Part I, Item 1 of this Form 10-Q for further information.
We expect, from time to time, to continue to seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material and, to the extent equity is used, dilutive.
Liquidity Requirements
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. Our current cash burn rates are not sustainable long-term. In order to achieve sustainable net positive cash flows from operating activities 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 40% for the three months ended March 31, 2025, compared to the three months ended March 31, 2019. Until such time as we are able to achieve sustainable net positive cash flows from operating activities, 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 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. 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.
Cash Flows from Operating Activities
Net cash used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $370.0 million and $188.3 million during the three months ended March 31, 2025 and March 31, 2024, respectively. The increase in net cash used in operating activities was primarily due to an increase in cash used for working capital items due to a 20.2% increase in attendance in the fourth quarter of 2024 compared to the fourth quarter of 2023, which drove accounts payable higher at December 31, 2024 than December 31, 2023, a 10.1% decline in attendance in the first quarter of 2025 compared to the first quarter of 2024, increases in cash paid for interest, and decreases in cash received from vendor disputes, partially offset by declines in operating lease payments made in the first quarter of 2025 compared to the first quarter of 2024.
Cash Flows from Investing Activities
Net cash used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $46.9 million and $50.0 million during the three months ended March 31, 2025 and March 31, 2024, respectively. Cash outflows from investing activities include capital expenditures of $47.0 million and $50.5 million during the three months ended March 31, 2025, and March 31, 2024, respectively.
We fund the costs of constructing, maintaining, and remodeling our theatres through existing cash balances, cash generated from operations, lease incentives, 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. We estimate that our capital expenditures, net of lease incentives, will be approximately $175 million to $225 million for year ended December 31, 2025, to maintain and enhance operations.
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Cash Flows from Financing Activities
Net cash provided by (used in) financing activities, as reflected in the condensed consolidated statements of cash flows, were $158.0 million and $(9.0) million during the three months ended March 31, 2025 and March 31, 2024, respectively. Cash flows provided by financing activities during the three months ended March 31, 2025, were primarily due to net proceeds from equity issuances of $169.6 million, partially offset by the repurchase of Senior Subordinated Notes due 2025 of $1.3 million, principal payments under term loan borrowings of $5.0 million, and taxes paid for restricted unit withholdings of $4.4 million. See Note 6—Corporate Borrowings and Finance Lease Liabilities and Note 7—Stockholders’ Deficit in the Notes to the Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for further information, including a summary of principal payments required and maturities of corporate borrowings as of March 31, 2025.
Cash flows provided by financing activities during the three months ended March 31, 2024, were primarily due to $5.0 million of scheduled term loan principal payments and taxes paid for restricted unit withholdings of $2.2 million.
Covenant Compliance
As of March 31, 2025, we believe that we were in full compliance with all agreements, including related covenants, governing our outstanding debt.
Formation of Unrestricted Subsidiaries
On July 22, 2024, American-Multi Cinema Inc. (“Multi-Cinema”), a direct subsidiary of AMC Entertainment Holdings, Inc. (“Holdings”), assigned or transferred the net assets (“Theatre Net Assets”) of 175 theatres and transferred a 100% interest in certain intellectual property assets to its direct subsidiary Centertainment Development, LLC (“Centertainment”), and the Theatre Net Assets were in turn transferred to Centertainment’s direct wholly-owned subsidiary Muvico, LLC (“Muvico”). Theatre Net Assets include lease contracts and theatre property, including furniture, fixtures, plant and equipment, and other working capital items associated directly with the theatre locations. At the same time, Muvico licensed the intellectual property back to Multi-Cinema for its continued use in the operation of its retained theatres and entered into a management agreement for Multi-Cinema to operate the theatres transferred to Muvico. Muvico and Centertainment (collectively, the “Muvico Group”) are unrestricted subsidiaries under the indenture governing Holdings’ Existing First Lien Notes.
Unrestricted Subsidiaries’ Financial Information and Operating Metrics
Pursuant to the indenture governing Holdings’ Existing First Lien Notes, the indenture governing Muvico’s Exchangeable Notes, and the New Term Loan Credit Agreement governing Holdings’ and Muvico’s New Term Loans, we are presenting the following financial information and operating metrics for the Muvico Group separately from Holdings and its restricted subsidiaries (the “Restricted Subsidiaries” and collectively with Holdings, the “AMC Group”). AMC Theatres of UK Limited, which is an unrestricted subsidiary under the indenture governing Holdings’ Existing First Lien Notes has been included with the Restricted Subsidiaries for the purposes of the following presentation of financial information and operating metrics (this subsidiary is individually immaterial). The financial information presented for AMC Group and Muvico Group is presented on a standalone basis with discrete identification of the assets, liabilities, revenues and expenses associated with the Theatre Net Assets that were transferred to Muvico. Intercompany transactions between entities within the AMC Group or within the Muvico Group have been eliminated. Certain entities within the AMC Group and within the Muvico Group are parties to intercompany management, licensing, and debt agreements with each other. These transactions are reflected discretely within the columnar presentation below and are properly eliminated upon consolidation. The financial information is also prepared using the historical cost carrying values of Holdings, the top parent entity.
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Holdings and Muvico are co-borrowers and joint and severally liable for the New Term Loan borrowings. Pursuant to ASC 405-40 we have allocated fifty percent (50%) of the liabilities, interest expense and cash flows each to Muvico and Holdings, respectively. The basis of this allocation is the amount we expect each party to pay.
Three Months Ended March 31, 2025
AMCEH &
Restricted
Muvico Group
Subsidiaries/AMC
Unrestricted
Group (1)
Subsidiaries
Eliminations
Consolidated
(In millions)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues
Admissions
$
340.2
$
133.3
$
—
$
473.5
Food and beverage
216.4
67.0
—
283.4
Other theatre (3)
93.6
16.2
(4.2)
105.6
Total revenues
650.2
216.5
(4.2)
862.5
Operating costs and expenses
Film exhibition costs
145.4
59.4
—
204.8
Food and beverage costs
44.9
12.3
—
57.2
Operating expense, excluding depreciation and amortization below
301.5
91.7
—
393.2
Rent
162.7
55.4
—
218.1
General and administrative:
Merger, acquisition and other costs
3.0
—
—
3.0
Other, excluding depreciation and amortization below (3)
58.0
2.2
(4.2)
56.0
Depreciation and amortization
57.3
18.8
—
76.1
Operating costs and expenses
772.8
239.8
(4.2)
1,008.4
Operating loss
(122.6)
(23.3)
—
(145.9)
Other expense (income), net:
Other income
(13.7)
(45.1)
—
(58.8)
Interest expense:
Corporate borrowings
68.3
40.7
—
109.0
Finance lease obligations
1.2
—
—
1.2
Intercompany interest expense
—
2.7
(2.7)
—
Non-cash NCM exhibitor services agreement
8.9
—
—
8.9
Intercompany interest income
(2.7)
—
2.7
—
Investment income
(3.8)
(1.9)
—
(5.7)
Total other expense (income), net
58.2
(3.6)
—
54.6
Loss before income taxes
(180.8)
(19.7)
—
(200.5)
Income tax provision (2)
1.6
—
—
1.6
Net loss
$
(182.4)
$
(19.7)
$
—
$
(202.1)
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Table of Contents
Three Months Ended March 31, 2025
AMCEH &
Restricted
Muvico Group
Subsidiaries/AMC
Unrestricted
Group (1)
Subsidiaries
Consolidated
(unaudited)
(unaudited)
(unaudited)
Net loss
$
(182.4)
$
(19.7)
$
(202.1)
Other comprehensive income:
Unrealized foreign currency translation adjustments
52.7
—
52.7
Total comprehensive loss
$
(129.7)
$
(19.7)
$
(149.4)
(1) This column provides the information required to be presented for (i) Holdings and its Restricted Subsidiaries under the indentures governing the Exchangeable Notes and Existing First Lien Notes and (ii) AMC Group under the New Term Loan Credit Agreement. Transactions between Holdings and its restricted subsidiaries have been eliminated.
(2) Muvico is a disregarded entity for federal and state income tax purposes with all tax expense and deferred taxes recorded at the AMC Group level.
(3) Includes intercompany management fee revenues of $2.2 million recorded by AMCEH & Restricted Subsidiaries/AMC Group and intercompany license fee revenues of $2.0 million recorded by Muvico Group Unrestricted Subsidiaries. Corresponding amounts of expense are included in general and administrative: other for Muvico Group Unrestricted Subsidiaries and AMCEH & Restricted Subsidiaries/AMC Group.
Three Months Ended March 31, 2025
AMCEH &
Restricted
Muvico Group
Subsidiaries/AMC
Unrestricted
Group (3)
Subsidiaries
Consolidated
Key operating metrics:
(unaudited)
(unaudited)
(unaudited)
Average ticket price
$
10.76
$
12.96
$
11.30
Attendance (in thousands) (1)
31,619
10,284
41,903
Number of screens operated (2)
7,490
2,235
9,725
Number of theatres operated (2)
692
173
865
Adjusted EBITDA (4)
$
(53.4)
$
(4.6)
$
(58.0)
(1) Includes consolidated theatres only and excludes screens offline due to construction.
(2) The screens and theatres of the Muvico Group are operated by Multi-Cinema pursuant to the management agreement.
(3) This column provides the information required to be presented for (i) Holdings and its Restricted Subsidiaries under the indentures governing the Exchangeable Notes and Existing First Lien Notes and (ii) AMC Group under the New Term Loan Credit Agreement.
(4) Below is a reconciliation of net earnings (loss) to Adjusted EBITDA for AMCEH & Restricted Subsidiaries/AMC Group and Muvico Group. The reconciling items below have the same definitions and are of the same nature as of the reconciling items presented previously in Management’s Discussion and Analysis section of this Form 10-Q.
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Table of Contents
Three Months Ended March 31, 2025
AMCEH &
Restricted
Muvico Group
Subsidiaries/AMC
Unrestricted
Group (1)
Subsidiaries
Eliminations
Consolidated
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Net loss
$
(182.4)
$
(19.7)
$
—
$
(202.1)
Plus:
Income tax provision
1.6
—
—
1.6
Interest expense
78.4
43.4
(2.7)
119.1
Depreciation and amortization
57.3
18.8
—
76.1
Certain operating expense (income)
2.9
(0.1)
—
2.8
Equity in earnings of non-consolidated entities
(0.8)
—
—
(0.8)
Attributable EBITDA
0.4
—
—
0.4
Investment income
(6.5)
(1.9)
2.7
(5.7)
Other income
(13.0)
(45.1)
—
(58.1)
Merger, acquisition and other costs
3.0
—
—
3.0
Stock-based compensation expense
5.7
—
—
5.7
Adjusted EBITDA
$
(53.4)
$
(4.6)
$
—
$
(58.0)
(1) This column provides the information required to be presented for (i) Holdings and its Restricted Subsidiaries under the indentures governing the Exchangeable Notes and Existing First Lien Notes and (ii) AMC Group under the New Term Loan Credit Agreement.
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Table of Contents
As of March 31, 2025
AMCEH &
Restricted
Muvico Group
Subsidiaries/AMC
Unrestricted
Group (3)
Subsidiaries
Eliminations
Consolidated
(In millions, except share data)
(unaudited)
(unaudited)
(unaudited)
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents (1)
$
195.5
$
183.2
$
—
$
378.7
Restricted cash
49.0
—
—
49.0
Receivables, net
89.4
3.2
—
92.6
Other current assets
74.7
39.6
—
114.3
Total current assets
408.6
226.0
—
634.6
Property, net
1,053.9
361.7
—
1,415.6
Operating lease right-of-use assets, net
2,477.9
817.2
—
3,295.1
Intangible assets, net
41.2
104.4
—
145.6
Goodwill
2,362.2
—
—
2,362.2
Other long-term assets
199.2
0.7
—
199.9
Intercompany receivables (2)
—
1,457.7
(1,457.7)
—
Investment in subsidiary
600.0
—
(600.0)
—
Total assets
$
7,143.0
$
2,967.7
$
(2,057.7)
$
8,053.0
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable
$
210.2
$
22.7
$
—
$
232.9
Accrued expenses and other liabilities
243.5
22.9
—
266.4
Deferred revenues and income
408.4
3.6
—
412.0
Current maturities of corporate borrowings
52.8
10.0
—
62.8
Current maturities of finance lease liabilities
4.6
—
—
4.6
Current maturities of operating lease liabilities
390.6
141.8
—
532.4
Total current liabilities
1,310.1
201.0
—
1,511.1
Corporate borrowings
2,591.7
1,383.7
—
3,975.4
Finance lease liabilities
45.4
—
—
45.4
Operating lease liabilities
2,902.2
780.0
—
3,682.2
Exhibitor services agreement
458.0
—
—
458.0
Deferred tax liability, net (4)
35.0
—
—
35.0
Intercompany payables (2)
1,457.7
—
(1,457.7)
—
Other long-term liabilities
80.7
3.0
—
83.7
Total liabilities
8,880.8
2,367.7
(1,457.7)
9,790.8
Commitments and contingencies
Stockholders’ deficit:
AMC Entertainment Holdings, Inc.'s stockholders' deficit:
Preferred stock
—
—
—
—
Class A common stock
4.3
—
—
4.3
Additional paid-in capital
6,886.1
558.3
(558.3)
6,886.1
Accumulated other comprehensive loss
(79.3)
—
—
(79.3)
Accumulated deficit
(8,548.9)
41.7
(41.7)
(8,548.9)
Total stockholders' deficit
(1,737.8)
600.0
(600.0)
(1,737.8)
Total liabilities and stockholders’ deficit
$
7,143.0
$
2,967.7
$
(2,057.7)
$
8,053.0
(1) The cash held in bank accounts differs from the book balance due to deposits in transit, payments in transit, and certain cash equivalents.
(2) Intercompany receivables (payables) includes intercompany loans, fees receivable/payable pursuant to the management agreement and intellectual property license agreement, the intercompany receivable/payable created by allocating the New Term Loans borrowings between Holdings and Muvico, and other intercompany balances created due to the Refinancing Transactions.
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(3) This column provides the information required to be presented for (i) Holdings and its Restricted Subsidiaries under the indentures governing the Exchangeable Notes and Existing First Lien Notes and (ii) AMC Group under the New Term Loan Credit Agreement.
(4) Muvico is a disregarded entity for federal and state income tax purposes with all tax expense and deferred taxes recorded at the AMC Group level.
Three Months Ended March 31, 2025
AMCEH &
Restricted
Muvico Group
Subsidiaries/AMC
Unrestricted
Group (1)
Subsidiaries
Consolidated
(unaudited)
(unaudited)
(unaudited)
Net loss
$
(182.4)
$
(19.7)
$
(202.1)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
57.3
18.8
76.1
Gain on derivative liability
—
(45.1)
(45.1)
Deferred income taxes
0.9
—
0.9
Unrealized gains on investments in Hycroft
(2.8)
—
(2.8)
Amortization of net discount on corporate borrowings to interest expense
1.0
3.2
4.2
Amortization of deferred financing costs to interest expense
1.5
0.4
1.9
PIK interest expense
—
8.6
8.6
Non-cash portion of stock-based compensation
5.7
—
5.7
Equity in earnings from non-consolidated entities, net of distributions
0.1
—
0.1
Lease incentives
4.2
—
4.2
Deferred rent
(23.3)
(3.5)
(26.8)
Net periodic benefit cost
0.3
—
0.3
Change in assets and liabilities:
Receivables
71.6
2.3
73.9
Other assets
(15.0)
0.6
(14.4)
Accounts payable
(118.8)
(15.6)
(134.4)
Accrued expenses and other liabilities
(103.5)
(6.0)
(109.5)
Intercompany receivables and payables
(96.9)
96.9
—
Other, net
(10.9)
0.1
(10.8)
Net cash provided by (used in) operating activities
(411.0)
41.0
(370.0)
Cash flows from investing activities:
Capital expenditures
(37.2)
(9.8)
(47.0)
Other, net
0.1
—
0.1
Net cash used in investing activities
(37.1)
(9.8)
(46.9)
Cash flows from financing activities:
Net proceeds from equity issuances
169.6
—
169.6
Scheduled principal payments under Term Loan borrowings
(2.5)
(2.5)
(5.0)
Principal payments under finance lease obligations
(0.8)
—
(0.8)
Repurchase of Senior Subordinated Notes due 2025
(1.3)
—
(1.3)
Cash used to pay deferred financing costs
(0.1)
—
(0.1)
Taxes paid for restricted unit withholdings
(4.4)
—
(4.4)
Proceeds (payments) of intercompany loans
138.1
(138.1)
—
Net cash provided by (used in) financing activities
298.6
(140.6)
158.0
Effect of exchange rate changes on cash and cash equivalents and restricted cash
5.8
—
5.8
Net decrease in cash and cash equivalents and restricted cash
(143.7)
(109.4)
(253.1)
Cash and cash equivalents and restricted cash at beginning of period
388.2
292.6
680.8
Cash and cash equivalents and restricted cash at end of period
$
244.5
$
183.2
$
427.7
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Table of Contents
(1) This column provides the information required to be presented for (i) Holdings and its Restricted Subsidiaries under the indentures governing the Exchangeable Notes and Existing First Lien Notes and (ii) AMC Group under the New Term Loan Credit Agreement.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.