What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-08-09 compared with 2021-05-06 · 533 added, 319 removed, 437 unchanged (66% of the section changed)

3 unchanged sentences

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.

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

Examples of forward-looking statements include statements we make regarding the impact of COVID-19, future attendance levels, the sufficiency of future cash flows compliance with our debt covenants and our liquidity.

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.

1 unchanged sentence

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

● The risks and uncertainties relating to the sufficiency of our existing cash and cash equivalents and available borrowing capacity to comply with minimum liquidity requirements under our debt covenants, fund operations, and satisfy obligations including cash outflows for increased rent and planned capital expenditures currently and through early May of 2022.

This requires that we achieve significant increases in attendance levels beginning in the third quarter of 2021 and ultimately reaching approximately 85% of pre COVID-19 attendance levels by the fourth quarter of 2021 and through the first and second quarters of 2022 as the vaccine rollout continues and more Hollywood product is released in our theatres.

If we are unable to achieve more normalized levels of attendance and operating revenues as described above, we may be required to obtain additional liquidity.

● The risks and uncertainties relating to the sufficiency of our existing cash and cash equivalents and available borrowing capacity to comply with minimum liquidity and financial requirements under our debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility, 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, the Company believes it will need to increase attendance levels significantly from their current levels to achieve levels in line with pre COVID-19 attendance.

The Company believes the global re-opening of its theatres, the anticipated volume of titles available for theatrical release, and the anticipated broad appeal of many of those titles will support increased attendance levels.

However, there remain significant risks that may negatively impact attendance levels, including a resurgence of COVID related restrictions, potential movie-goer reluctance to attend theatres due to concerns about the COVID variant strains, movie studios release schedules and direct to streaming or other changing movie studio practices.

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

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

● the impact of the COVID-19 virus on us, the motion picture exhibition industry, and the economy in general, including our response to the COVID-19 virus related to suspension of operations at our theatres, personnel reductions and other cost-cutting measures and measures to maintain necessary liquidity and increases in expenses relating to precautionary measures at our facilities to protect the health and well-being of our customers and employees;

● the impact of the COVID variant strains on us, the motion picture exhibition industry, and the economy in general, including our response to the COVID variant strains related to suspension of operations at our theatres, personnel reductions and other cost-cutting measures and measures to maintain necessary liquidity and increases in expenses relating to precautionary measures at our facilities to protect the health and well-being of our customers and employees;

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

25 unchanged sentences

● geopolitical events, including the threat of terrorism or cyber-attacks, or widespread health emergencies, such as the novel coronavirus or other pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance;

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

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

● an issuance of preferred stock could dilute the voting power of the common stockholders and adversely affect the market value of our Class A common stock;

10 unchanged sentences

Temporarily Suspended or Limited Operations

On or before March 17, 2020, we temporarily suspended all theatre operations in our U.S.

Throughout the first quarter of 2020, we temporarily suspended theatre operations in our U.S.

markets and International markets in compliance with local, state, and federal governmental restrictions and recommendations on social gatherings to prevent the spread of COVID-19 and as a precaution to help ensure the health and safety of our guests and theatre staff.

As of March 17, 2020, all of our U.S.

and International theatre operations were temporarily suspended.

We resumed limited operations in the International markets in early June 2020 and limited operations in the U.S.

1 unchanged sentence

A COVID-19 resurgence during the fourth quarter of 2020 resulted in additional local, state, and federal governmental restrictions and many previously reopened theatres in International markets temporarily suspended operations again.

As a result of these temporarily suspended or limited operations, our revenues and expenses for the three months ended March 31, 2021 are significantly lower than the revenues and expenses for the three months ended March 31, 2020.

As a result of these temporarily suspended or limited operations, our revenues and expenses for the six months ended June 30, 2021 were significantly lower than the revenues and expenses for the six months ended June 30, 2020, with significantly lower revenues and expenses during the first quarter of 2021 compared to the first quarter of 2020, partially offset by increased revenues and expenses during the second quarter of 2021 compared to the second quarter of 2020.

As of January 1, 2021, we were operating at 394 domestic theatres with limited seating capacities, representing approximately 67% of our domestic theatres.

1 unchanged sentence

As of March 31, 2021, we were operating at 585 domestic theatres with limited seating capacities, representing approximately 99% of our domestic theatres.

As of June 30, 2021, we were operating at 593 domestic theatres, representing approximately 100% of our domestic theatres with remaining seating capacity restrictions winding down throughout the quarter.

As of January 1, 2021, we were operating at 109 International leased and partnership theatres, with limited seating capacities, representing approximately 30% of our International theatres.

As of March 31, 2021, we were operating at 97 International theatres with limited seating capacities, representing approximately 27% of our International theatres.

Our average screens operated during the three months ended March

31, 2021 declined by 24.2% from the prior year.

As of June 30, 2021, we were operating at 335 International theatres with limited seating capacities, representing approximately 95% of our International theatres.

Our average consolidated screens operated during the three months ended March 31, 2021 declined by 24.2% from the prior year.

Our average consolidated screens operated during the three months ended June 30, 2021 increased by 8,830 screens to 8,890 screens from 60

screens in the prior year.

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

2 unchanged sentences

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

As of March 31, 2021, we owned, operated or had interests in 945 theatres and 10,518 screens.

As of June 30, 2021, we owned, operated or had interests in 947 theatres and 10,552 screens.

Box Office Admissions and Film Content

Box office admissions are our largest source of revenue.

We predominantly license “first-run” 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 accrued based on the applicable admissions revenues and estimates of the final settlement pursuant to our film licenses.

These licenses typically state that rental fees are based on aggregate terms established prior to the opening of the picture.

In certain circumstances and less frequently, our rental fees are based on a mutually agreed settlement upon the conclusion of the picture.

In some European territories, rental fees are established on a weekly basis for the coming week’s percentage forecast.

Some European licenses use a per capita agreement instead, paying a flat amount per ticket, where the sum is agreed in long-term agreements in advance of the film showing.

Under an aggregate terms formula, we usually pay the distributor a specified percentage of box office gross or pay based on a scale of percentages tied to different amounts of box office gross, or in Europe, we pay based on the number of weeks since release.

The settlement process allows for negotiation based upon how a film actually performs.

The North American and International industry box offices have also been significantly impacted by the COVID-19 pandemic during the three months ended March 31, 2021.

As a result, studios have postponed new film releases or moved them to the home video market, and movie release dates may continue to move in the future.

Major movie releases that were previously scheduled to be released in 2020 have either been rescheduled for 2021 or slated for direct to streaming or premium video on demand (“PVOD”) in lieu of a theatrical release, which left a reduced slate of movie releases for 2020, and release dates may continue to move.

Certain competitors have decided to temporarily reclose their theatres in light of the ongoing pandemic and the reduced slate of movie releases, which may further exacerbate the trend described above.

As a result of the reduced slate of first-run movie releases, we have licensed and exhibited a larger number of films that were released in prior years or decades and where the film rental terms are much lower than for first-run movie releases.

The combination of theatre closures, reopening restrictions and limited new film distribution has resulted in a significantly lower industry box office for the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

In response to the current low attendance levels, (in addition to any local capacity restrictions) we have made adjustments to theatre operating hours in those markets where we are open to align screen availability and associated theatre operating costs with attendance levels for each theatre.

We also introduced AMC Private Screening, which allows moviegoers to reserve a separate AMC Safe & Clean auditorium for a private screening for up to 20 people, starting at $99 plus tax.

During 2020, we entered into an agreement with Universal, a division of Comcast Corporation (NASDAQ:CMCSA), to distribute films utilizing a minimum 17-day theatrical exhibition window, after which time Universal will have the option to make its titles available across PVOD platforms.

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.

The North American and International industry box offices have been significantly impacted by the COVID-19 pandemic.

As a result, film distributors have postponed new film theatrical releases and/or shortened the period of theatrical exclusivity (“the window”).

Theatrical releases may continue to be postponed and windows shortened while the box office suffers from COVID-19 impacts.

As a result of the reduction in theatrical film releases, we have licensed and exhibited a larger number of previously released films that have lower film rental terms.

The combination of theatre closures, reopening restrictions, reduced new film releases, and shortened windows of theatrical exclusivity has resulted in a significantly lower industry box office for the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

In response to the current low attendance levels, (in addition to any local capacity restrictions) we have made adjustments to theatre operating hours to align screen availability and associated theatre operating costs with attendance levels for each theatre.

During 2020, we entered into an agreement with Universal Pictures, a subsidiary of the NBC Universal Film and Entertainment division of Comcast Corporation (NASDAQ:CMCSA), to theatrically license films with an accelerated home entertainment window for premium video on demand (“PVOD”).

This multi-year agreement preserves exclusivity for theatrical viewing for at least the first three weekends of a film’s release, during which time a considerable majority of a movie’s theatrical box office revenue typically is generated.

AMC will also share in new revenue streams that will come to the movie ecosystem from PVOD.

It provides Universal the flexibility to release its movies on PVOD as early as 17 days after theatrical release, with compensation for AMC based in part on a portion of Universal’s PVOD revenue.

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.

1 unchanged sentence

Movie Screens

The following table provides detail with respect to digital delivery, 3D enabled projection, large screen formats, such as IMAX ® and our proprietary Dolby Cinema™, other Premium Large Format (“PLF”) screens, enhanced food and beverage offerings and our premium seating as deployed throughout our circuit on March 31, 2021.

This data represents available services in a pre-COVID-19 environment.

Due to mandated government attendance restrictions, the ability for guests to utilize all these amenities has been significantly curtailed:

Due to mandated government attendance restrictions, the ability for guests to utilize all these amenities was and in certain locations continues to be significantly curtailed.

markets, during the six months ended June 30, 2021, the mandated government attendance restrictions have significantly declined or were eliminated;

however, mandated government attendance restrictions continued in many of

the countries within the International markets.

International Markets

3 unchanged sentences

Screens As of

March 31, 2021

March 31, 2020

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Dolby Cinema TM

6 unchanged sentences

As part of our long-term strategy, we seek to continually upgrade the quality of our theatre circuit through substantial renovations featuring our seating concepts, acquisitions, new builds (including expansions), expansion of food and beverage offerings (including dine-in theatres), and by disposing of older screens through closures and sales.

As discussed above, certain aspects of our long-term strategy, such as growth capital expenditures, with the exception of prior commitments are suspended at this time as a result of the impact of the COVID-19 pandemic on our business.

We cannot currently determine when we will be able to resume these aspects of our long-term growth strategy.

As a result of the impact of COVID-19 on our business, capital expenditures are currently predominantly focused on maintenance spending.

Recliner seating is the key feature of theatre renovations.

4 unchanged sentences

Upon reopening a remodeled theatre, we typically increase the ticket price to reflect the enhanced consumer experience.

As of March 31, 2021, in our U.S.

As of June 30, 2021, in our U.S.

markets we featured recliner seating in approximately 349 U.S.

theatres, including Dine-in-Theatres, totaling approximately 3,386 screens and representing 43.8% of total U.S.

In our International markets, as of March 31, 2021, we had recliner seating in approximately 83 International theatres, totaling approximately 531 screens and representing 18.7% of total International screens.

Open-source internet ticketing makes our AMC seats (approximately 1.1 million as of March 31, 2021) in all our U.S.

In our International markets, as of June 30, 2021, we had recliner seating in approximately 86 International theatres, totaling approximately 550 screens and representing 19.5% of total International screens.

Open-source internet ticketing makes our AMC seats (approximately 1.1 million as of June 30, 2021) in all our U.S.

theatres and auditoriums, for all our showtimes as available as possible, on as many websites as possible.

1 unchanged sentence

Food and beverage sales are our second largest source of revenue after box office admissions.

Our deployment initiatives also apply to food and beverage enhancements.

We have expanded our menu of enhanced food and beverage products to include meals, healthy snacks, premium beers, wine and mixed drinks, and other gourmet products.

Our long-term growth strategy calls for investment across a spectrum of enhanced food and beverage formats, ranging from simple, less capital-intensive food and beverage design improvements to the development of new dine-in theatre options.

As a result of the COVID-19 pandemic, we have temporarily modified our food and beverage operations to include more simplified concession menus, cashless transactions technology, hand sanitizer and disinfecting wipes, and condiment and drink refills available by request, all in an effort to reduce the number of touch-

points between guests and employees.

We offer enhanced food and beverage products that include meals, healthy snacks, premium liquor, beer and wine options, and other gourmet products.

Our long-term growth strategy calls for investment across a spectrum of enhanced food and beverage formats, ranging from simple, less capital-intensive food and beverage menu improvements to the expansion of our dine-in theatre brand.

As a result of the COVID-19 pandemic, we have streamlined our concession menus to focus on our best-selling products and expanded cashless transactions technology through the deployment of mobile ordering across all brands, all in an effort to reduce the number of touch-points between guests and employees.

We have also upgraded our Coca Cola Freestyle beverage machines to include a mobile app allowing guests to dispense drinks without the need to utilize the machine’s touch screen.

Our MacGuffins Bar and Lounges (“MacGuffins”) give us an opportunity to engage our legal age customers.

As of March 31, 2021, we offer alcohol in approximately 341 AMC theatres in the U.S.

As of June 30, 2021, we offer alcohol in approximately 342 AMC theatres in the U.S.

markets and 241 theatres in our International markets and continue to explore expansion globally.

15 unchanged sentences

As we reopened theatres, A-List members had the option to reactivate their subscription, which restarted the monthly charge for the program.

As of March 31, 2021, we had more than 23,400,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined.

As of June 30, 2021, we had more than 23,800,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined.

Our AMC Stubs® members represented approximately 37.1% of AMC U.S.

markets attendance during the year ended March 31, 2021.

markets attendance as of June 30, 2021.

Our large database of identified movie-goers also provides us with additional insight into our customers’ movie preferences.

16 unchanged sentences

In addition, it is common for us to closely monitor certain locations where operating performance may not meet our expectations.

We review long-lived assets, including definite-lived intangible assets and theatre assets (including operating lease right-of-use assets) whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be fully recoverable.

We review long-lived assets, including definite-lived intangible assets and theatre assets (including operating

lease right-of-use assets) whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be fully recoverable.

We identify impairments related to internal use software when management determines that the remaining carrying value of the software will not be realized through future use.

5 unchanged sentences

The fair value of assets is determined as either the expected selling price less selling costs (where appropriate) or the present value of the estimated future cash flows, adjusted as necessary for market participant factors.

We recorded impairment charges primarily related to long-lived assets and definite lived intangible assets of $106.5 million during the three months ended March 31, 2020.

No impairment charges were recorded during the three months ended March 31, 2021.

We recorded impairment charges primarily related to long-lived assets and definite lived intangible assets of $0 million and $106.5 million during the three and six months ended June 30, 2020, respectively.

No impairment charges were recorded during the three and six months ended June 30, 2021.

There are a number of estimates and significant judgments that are made by management in performing these impairment evaluations.

5 unchanged sentences

Given the nature of our business and our recent history, future impairments are possible and they may be material, based upon business conditions that are constantly changing and the competitive business environment in which we operate.

During the three months ended March 31, 2020, we recorded non-cash impairment of long-lived assets of $81.4 million on 57 theatres in the U.S.

During the six months ended June 30, 2020, we recorded non-cash impairment charges of long-lived assets of $81.4 million on 57 theatres in the U.S.

During the three months ended March 31, 2020, we recorded impairment losses related to definite-lived intangible assets of $8.0 million.

During the six months ended June 30, 2020, we recorded impairment losses related to definite-lived intangible assets of $8.0 million.

In addition, we recorded an impairment loss of $7.2 million within investment expense (income), related to equity interest investments without a readily determinable fair value accounted for under the cost method.

No non-cash impairment charges of long-lived assets were recorded during the three months ended March 31, 2021.

During the three months ended March 31, 2020, we performed a quantitative impairment evaluation of our indefinite-lived intangible assets related to the AMC, Odeon and Nordic trade names and recorded impairment charges of $5.9 million related to Odeon trade names and $2.4 million related to Nordic trade names during the three months ended March 31, 2020.

No non-cash impairment charges of long-lived assets were recorded during the three months ended June 30, 2020 or during the three and six months ended June 30, 2021.

To estimate fair value of our indefinite-lived trade names, we employed a derivation of the Income Approach known as the Royalty Savings Method.

2 unchanged sentences

Related cash flows were discounted at 12.5% for AMC and 14.0% for Odeon and Nordic.

No impairment charges related to our indefinite-lived trade names were recorded during the three months ended March 31, 2021.

No impairment charges related to our indefinite-lived trade names were recorded during the three months ended June 30, 2020 or during the three and six months ended June 30, 2021.

We evaluate the goodwill recorded at our two reporting units (Domestic Theatres and International Theatres) for impairment annually as of the beginning of the fourth fiscal quarter or more frequently as specific events or circumstances dictate.

In accordance with ASC 350-20-35-30, we performed an assessment to determine whether there were any events or changes in circumstances that would warrant an interim ASC 350 impairment analysis as of March 31, 2021.

Based on increases in our enterprise market capitalization from December 31, 2020 to March 31, 2021, we performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of our two reporting units is less than their respective carrying amounts as of March 31, 2021.

We concluded that it is not more likely than not that the fair value of our two reporting units have been reduced below their respective carrying amounts.

As a result, we concluded that an interim quantitative impairment test as of March 31, 2021 was not required.

Based on increases in our enterprise market capitalization from December 31, 2020 to March 31, 2021 and from December 31, 2020 to June 30, 2021, we performed a qualitative impairment test to evaluate whether it is more likely than not that the fair value of our two reporting units is less than their respective carrying amounts as of March 31, 2021 and June 30, 2021, respectively.

We concluded that it is not more likely than not that the fair value of

our two reporting units have been reduced below their respective carrying amounts.

As a result, we concluded that interim quantitative impairment tests as of March 31, 2021 and June 30, 2021 were not required.

At March 31, 2020, we performed the Step 1 quantitative goodwill impairment test and used an enterprise value approach to measure fair value of the reporting units.

The enterprise fair values of the Domestic Theatres and International Theatres reporting units were less than their carrying values and goodwill impairment charges of $1,124.9 million and $619.4 million, respectively, was recorded as of March 31, 2020 for our Domestic Theatres and International Theatres reporting units.

Based on the suspension of operations at all of our theatres on or before March 17, 2020 due to the COVID-19 pandemic during the first quarter of 2020, the suspension of operations during the second and third quarters of 2020, the temporary suspension of operations of certain of our International Theatres during the fourth quarter of 2020 again after operations had previously been resumed, and the further delay or cancellation of film releases than originally estimated, we performed the Step 1 quantitative goodwill impairment test as of December 31, 2020.

The impairment test for goodwill involves estimating the fair value of the reporting unit and comparing that value to our carrying value.

If the estimated fair value of the reporting unit is less than our carrying value, the difference is recorded as a goodwill impairment charge, not to exceed the total amount of goodwill allocated to that reporting unit.

In performing the Step 1 quantitative goodwill impairment test as of December 31, 2020, we used an enterprise value approach to measure fair value of the reporting units.

The enterprise fair value of the Domestic Theatres and International Theatres reporting units were less than their carrying values as of March 31, 2020 and September 30, 2020, and the fair value of the International Theatres reporting unit was less than its fair value as of December 31, 2020 and goodwill impairment charges of $1,276.1 million and $1,030.3 million, were recorded during the year ended December 31, 2020 for our Domestic Theatres and International Theatres reporting units, respectively.

The enterprise fair values of the Domestic Theatres and International Theatres reporting units were less than their carrying values and goodwill impairment charges of $1,124.9 million and $619.4 million, respectively, were recorded as of March 31, 2020 for our Domestic Theatres and International Theatres reporting units.

Significant Events

Additional equity financing.

On December 11, 2020, we entered into an equity distribution agreement with Goldman Sachs & Co.

Riley Securities, Inc., as sales agents to sell up to 178.0 million shares of our Class A common stock, par value $0.01 per share, through an “at-the-market” offering program.

On January 25, 2021, we entered into equity distribution agreements with Goldman Sachs & Co.

Riley Securities, Inc., as sales agents to sell up to 50.0 million shares of our Class A common stock, par value $0.01 per share, through an “at-the-market” offering program.

During the three months ended March 31, 2021, we raised gross proceeds of approximately $596.9 million through our at-the-market offering for the remaining available shares under the equity distribution agreement of 187,066,293 shares of our Class A common stock and paid fees to the sales agents of approximately $14.9 million and other fees of $0.4 million.

Class A common stock issuance.

In December of 2020 and the first half of 2021, we entered into equity distribution agreements with sales agents to sell up to 241.6 million shares of our Class A common stock, par value $0.01 per share, through “at-the-market” offering programs.

During the six months ended June 30, 2021, we raised gross proceeds of approximately $1,611.8 million related to the “at-the-market” offering programs and paid fees to the sales agents of approximately $40.3 million and other fees of $0.7 million.

We intend to use the net proceeds from the sale of the Class A common stock pursuant to the equity distribution agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness or working capital, capital expenditures and other investments.

See Note 13—Subsequent Event in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for information regarding the additional at-the-market offerings of 43 million shares of the Company’s Class A common stock.

Baltics’ theatre sale agreement.

On August 28, 2020, we entered into an agreement to sell our equity interest in Forum Cinemas OU, which consists of nine theatres located in the Baltics’ region (Latvia, Lithuania and Estonia) and was included in our International markets reportable segment, for total consideration of approximately €77.25 million, including cash of approximately €64.35 million or $76.6 million prior to any transaction costs.

This transaction was undertaken by us to further increase our liquidity and strengthen our balance sheet at a transaction multiple that demonstrates that market participants ascribe positive value to the business.

The completion of the sale will take place in several steps and is contingent upon clearance from each regulatory competition council in each country.

We received $37.5 million (€31.53 million) cash consideration upon entering into the sale agreement on August 28, 2020, transferred an equity interest of 49% in Forum Cinemas OU to the purchaser and recorded an initial noncontrolling interest of $34.9 million in total equity (deficit).

During the three months ended March 31, 2021 and the three months ended December 31, 2020, we received cash consideration for the remaining interest in Estonia and Latvia of $4.1

million (€3.4 million) and $6.4 million (€5.4 million), respectively.

Transaction costs of $1.4 million and net gain of $1.2 million related to the sale of 49% equity interest of Lithuania and Estonia and the 100% disposal of Latvia were recorded in additional paid-in capital during the six months ended December 31, 2020.

Additional transaction costs of $0.1 million and net gain of $0.3 million related to the sale of 51% equity interest of Estonia were recorded in additional paid-in capital during the three months ended March 31, 2021.

The transaction costs and net gain recorded in additional paid-in capital will be recognized in earnings when the remaining 51% interest in Lithuania is disposed.

At March 31, 2021, the carrying amounts of the major classes of assets and liabilities included as part of the disposal group that were previously included in the International markets reportable segment were;

goodwill of $36.3 million, property, net, of $9.1 million, operating lease right-of-use assets, net of $12.4 million, and current and long-term operating lease liabilities of $1.2 million and $11.4 million, respectively.

The remaining cash consideration of approximately $31.9 million (€26.3 million) was paid upon completion of the sale of the remaining 51% equity interest in Lithuania on May 6, 2021.

At March 31, 2021, our noncontrolling interest of 49% in Lithuania was $22.4 million in net assets.

The gross proceeds raised from the “at-the-market” sale of Class A common stock during the six months ended June 30, 2021 are summarized in the table below:

"At-the-market"

Equity Distribution Agreement Dates

Number of Class A common stock shares sold (in millions)

Gross Proceeds (in millions)

December 11, 2020

Goldman Sachs & Co.

Riley Securities, Inc.

January 25, 2021

Goldman Sachs & Co.

Riley Securities, Inc.

April 27, 2021

Goldman Sachs & Co.

Riley Securities, Inc.

and Citigroup Global Markets Inc.

Riley Securities, Inc.

and Citigroup Global Markets Inc.

(1) On December 11, 2020, we entered into an equity distribution agreement with Goldman Sachs & Co.

Riley Securities, Inc., as sales agents to sell up to 178.0 million shares of our Class A common stock, of which approximately 40.93 million shares of our Class A common stock were sold and settled during December 2020 and approximately 137.07 million shares of our Class A common stock were sold and settled during the six months ended June 30, 2021.

Class A common stock issuance to Mudrick.

On June 1, 2021, we issued to Mudrick 8.5 million shares of our Class A common stock and raised gross proceeds of $230.5 million and paid fees of approximately $0.1 million related to this transaction.

We issued the shares in reliance on an exemption from registration provided by section 4(a)(2) of the Securities Act of 1933.

We intend to use the proceeds from the share sale primarily for the pursuit of value creating acquisitions of theatre assets and leases, as well as investments to enhance the consumer appeal of our theatres.

In addition, with these funds, we intend to continue exploring deleveraging opportunities.

Baltics’ theatre sale.

On August 28, 2020, we entered into an agreement to sell our equity interest in Forum Cinemas OU, which consisted of nine theatres located in the Baltics’ region (Latvia, Lithuania and Estonia) and was included in our International markets reportable segment.

The completion of the sale took place in several steps and was contingent upon clearance from each regulatory competition council in each country.

In October 2020, we completed the divestiture of our equity interest in Latvia.

In February 2021, we received cash consideration for the remaining equity interest in Estonia of $3.8 million (€3.2 million), net of cash of $0.3 million.

In May 2021, we received cash consideration of $31.4 million (€26.2 million), net of cash of $0.1 million and transaction costs of $0.3 million, which completed the sale of our remaining 51% equity interest in Lithuania and eliminated our noncontrolling interest in Forum Cinemas OU.

We recorded the net gain from the sale of our equity interest in Forum Cinemas OU of $5.5 million, net of transaction costs of $2.6 million, in investment income, during the three and six months ended June 30, 2021.

Operating Results

1 unchanged sentence

Three Months Ended

Six Months Ended

(In millions)

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Food and beverage

27 unchanged sentences

Three Months Ended

Six Months Ended

Operating Data:

Screen additions

Screen acquisitions

Screen dispositions

26 unchanged sentences

Depreciation and amortization

Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill

Operating costs and expenses

8 unchanged sentences

Investment expense (income)

Total other expense, net

Total other expense (income), net

Net loss before income taxes

8 unchanged sentences

Screen additions

Screen acquisitions

Screen dispositions

8 unchanged sentences

(1) Includes consolidated theatres only and excludes screens offline due to construction and temporary suspension of operations as consequence of the COVID-19 pandemic.

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

Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill

Operating costs and expenses

Operating loss

Other expense (income):

Other expense (income)

Interest expense:

Corporate borrowings

Finance lease obligations

Non-cash NCM exhibitor service agreement

Equity in loss of non-consolidated entities (1)

Investment expense (income)

Total other expense (income), net

Net loss before income taxes

Income tax provision (benefit)

net loss attributable to noncontrolling interests

Net loss attributable to AMC Entertainment Holdings, Inc.

International Markets

Six Months Ended

Segment Operating Data:

Screen additions

Screen acquisitions

Screen dispositions

Construction openings (closures), net

Average screens (1)

Number of screens operated

Number of theatres operated

Total number of circuit screens

Total number of circuit theatres

Screens per theatre

Attendance (in thousands) (1)

(1) Includes consolidated theatres only and excludes screens offline due to construction and temporary suspension of operations as consequence of the COVID-19 pandemic.

Adjusted EBITDA

5 unchanged sentences

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.

Adjusted EBITDA decreased $297.8 million during the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Adjusted EBITDA in U.S.

markets decreased $196.6 million, primarily due to the decrease in attendance largely attributable to the limited or temporary suspension of operations as consequence of the COVID-19 pandemic, the increase in general and administrative expense:

other and the decrease in cash distributions from equity method investees, partially offset by decreases in operating expenses due to the decrease in attendance, rent, and increases in governmental assistance for COVID-19.

Adjusted EBITDA in International markets decreased $101.2 million primarily due to the decreases in attendance largely attributable to the limited or temporary suspension of operations as consequence of the COVID-19 pandemic, partially offset by decreases in operating expenses due to the decrease in attendance, decreases in rent, and increases in governmental assistance for COVID-19.

During the three months ended June 30, 2021, Adjusted EBITDA in the U.S.

markets was $(118.0) million compared to $(241.6) million during the three months ended June 30, 2020.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions and decreases in rent expense, partially offset by increases in operating expenses due to the increase in attendance and increases in general and administrative expense.

During the three months ended June 30, 2021, Adjusted EBITDA in the International markets was $(32.8) million compared to $(98.7) million during the three months ended June 30, 2020.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic, increases in governmental assistance for COVID-19, and decreases in rent, partially offset by increases in operating expenses due to the increase in attendance, increases in general and administrative expense and increases in foreign currency translation rates.

During the three months ended June 30, 2021, Adjusted EBITDA in the U.S.

markets and International markets was $(150.8) million compared to $(340.3) million during the three months ended June 30, 2020, driven by the aforementioned factors impacting Adjusted EBITDA.

During the six months ended June 30, 2021, Adjusted EBITDA in the U.S.

markets was $(318.4) million compared to $(245.4) million during the six months ended June 30, 2020.

The year-over-year decrease was primarily due to the decrease in attendance largely attributable to the limited or temporary suspension of operations as consequence of the COVID-19 pandemic, the increase in general and administrative expense and the decrease in cash distributions from equity method investees, partially offset by decreases in operating expenses due to the decrease in attendance, rent, and increases in governmental assistance for COVID-19.

During the six months ended June 30, 2021, Adjusted EBITDA in the International markets was $(127.1) million compared to $(91.8) million during the six months ended June 30, 2020.

The year-over-year decrease was primarily due to the decrease in attendance largely attributable to the limited or temporary suspension of operations as consequence of the COVID-19 pandemic and the increases in foreign currency translation rates, partially offset by decreases in operating expenses due to the decrease in attendance, decreases in rent, and increases in governmental assistance for COVID-19.

During the six months ended June 30, 2021, Adjusted EBITDA in the U.S.

markets and International markets was $(445.5) million compared to $(337.2) million during the six months ended June 30, 2020, 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, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

International markets

1 unchanged sentence

Three Months Ended

Six Months Ended

(In millions)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Income tax provision (benefit)

2 unchanged sentences

Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill (1)

Certain operating expense (2)

Certain operating expense (income) (2)

Equity in loss of non-consolidated entities

3 unchanged sentences

Other expense (income) (5)

Other non-cash rent expense (benefit) (6)

Other non-cash rent benefit (6)

General and administrative — unallocated:

2 unchanged sentences

Adjusted EBITDA

(1) During the three months ended March 31, 2020, we recorded non-cash impairment charges of $1,124.9 million and $619.4 million related to the enterprise fair values of our Domestic Theatres and International Theatres reporting units, respectively.

We recorded non-cash impairment charges related to our long-lived assets of $81.4 million on 57 theatres in the U.S.

markets with 658 screens which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $9.9 million on 23 theatres in the

International markets with 213 screens which were related to property, net and operating lease right-of-use assets, net, during the three months ended March 31, 2020.

We recorded non-cash impairment charges related to our indefinite-lived intangible assets of $5.9 million and $2.4 million related to the Odeon and Nordic trade names, respectively, during the three months ended March 31, 2020.

(1) During the six months ended June 30, 2020, we recorded non-cash impairment charges of $1,124.9 million and $619.4 million related to the enterprise fair values of our Domestic Theatres and International Theatres reporting units, respectively.

We recorded non-cash impairment charges during the six months ended June 30, 2020 related to our long-lived assets of $81.4 million on 57 theatres in the U.S.

markets with 658 screens, which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $9.9 million on 23 theatres in the International markets with 213 screens, which were related to property, net and operating lease right-of-use assets, net.

We also recorded non-cash impairment charges of $8.0 million related to our definite-lived intangible assets.

9 unchanged sentences

Three Months Ended

Six Months Ended

(In millions)

March 31, 2021

March 31, 2020

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Equity in loss of non-consolidated entities

1 unchanged sentence

Equity in loss of International theatre joint ventures

Income tax benefit

Income tax provision (benefit)

Investment income

Interest expense

Depreciation and amortization

1 unchanged sentence

Attributable EBITDA

(5) Other expense (income) for the three months ended March 31, 2021 included foreign currency transaction gains of $3.8 million and income related to contingent lease guarantees of $2.0 million, partially offset by financing fees of $1.0 million primarily related to deferred financing cost write-off for the Odeon revolving credit facility.

During the three months ended March 31, 2020, we recorded a loss of $20.1 million for the fair value adjustment of the derivative asset related to the Convertible Notes due 2026, credit losses related to contingent lease guarantees of $5.3 million, and foreign currency transaction losses of $2.0 million, partially offset by a gain of $0.5 million for the fair value adjustment of the derivative liability related to the Convertible Notes due 2026.

(5) Other expense (income) during the three months ended June 30, 2021, included income related to contingent lease guarantees of $(3.7) million, partially offset by foreign currency transaction losses of $3.4 million.

Other expense (income) during the three months ended June 30, 2020, included a gain of $(6.4) million for the fair value adjustment of the derivative asset related to the contingent call option related to the Class B common stock purchase and cancellation agreement and the foreign currency transaction gains of $(2.1) million, partially offset by credit losses related to contingent lease guarantees of $3.9 million and financing fees of $2.8 million related to debt modification.

During the six months ended June 30, 2021, other expense (income) primarily consisted of income related to contingent lease guarantees of $(5.7) million and foreign currency transaction gains of $(0.4) million, partially offset by financing fees of $1.0 million primarily related to deferred financing cost write-off for the Odeon revolving credit facility.

During the six months ended June 30, 2020, other expense (income) primarily related to a loss of $13.7 million for the fair value adjustment of the derivative asset related to the contingent call option related to the Class B common stock purchase and cancellation agreement, credit losses related to contingent lease guarantees of $9.2 million, and financing fees of $2.8 million related to debt modification, partially offset by a gain of $(0.5) million for the fair value adjustment of the derivative liability related to the Convertible Notes due 2026 and foreign currency transaction losses of approximately $(0.1) million.

(6) Reflects amortization expense for certain intangible assets reclassified from depreciation and amortization to rent expense due to the adoption of ASC 842, Leases and deferred rent benefit related to the impairment of right-of-use operating lease assets.

12 unchanged sentences

Segment Information

Our historical results of operations for the three months ended March 31, 2021 and March 31, 2020 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, 2021 and June 30, 2020 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, 2021 Compared to the Three Months Ended March 31, 2020

Results of Operations— For the Three Months Ended June 30, 2021 Compared to the Three Months Ended June 30, 2020

Condensed Consolidated Results of Operations

Total revenues decreased 84.2%, or $793.2 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Admissions revenues decreased 87.8%, or $498.5 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to an 88.8% decrease in attendance, partially offset by an 8.9% increase in average ticket price.

The decrease in attendance was primarily due to the COVID-19 pandemic which prompted film distributors to delay or alternatively distribute films, deterred customers from attending our theatres and resulted in the temporary suspension of operations at our theatres in U.S.

markets and International markets.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year, an increase in foreign currency translation rates and lower frequency on our A-List subscription program, partially offset by decreases in attendance for 3D premium content.

Food and beverage revenues decreased 82.6%, or $238.0 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to the decrease in attendance.

Total revenues increased $425.8 million from $18.9 million to $444.7 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Admissions revenues increased $232.1 million from $0.9 million to $233.0 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to an increase in attendance from 0.1 million patrons to 22.1 million patrons.

The increase in attendance was primarily due to the fact that operations at all of our theatres in U.S.

markets and International markets were temporarily suspended during nearly all of the second quarter of 2020 as a result of the COVID-19 pandemic.

As discussed above, by the start of the second quarter of 2021, we had resumed operations at nearly all of our domestic theatres and at certain of our International theatres, and during the second quarter of 2021, seating capacity restrictions continued to be lifted at U.S.

theatre locations and we continued to resume operations at International theatre locations.

Food and beverage revenues increased $161.1 million from $0.4 million to $161.5 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance.

Total other theatre revenues increased $32.6 million from $17.6 million to $50.2 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance and by increases in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $250.8 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance and an increase in average screens operated and an increase in foreign currency translation rates.

Film exhibition costs increased $98.7 million from $0.2 million to $98.9 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 42.4% for the three months ended June 30, 2021 and not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs increased $21.8 million from $4.5 million to $26.3 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

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 16.3% for the three months ended June 30, 2021 and were not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs included $4.5 million of charges for obsolete inventory during the three months ended June 30, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was not meaningful during the three months ended June 30, 2020 and 2021 due to the low levels of attendance in each period.

Rent expense decreased 8.3%, or $18.6 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $420.6 million that have been deferred to the second half of 2021 and future years as of June 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $4.3 million during the three

months ended June 30, 2021 compared to $1.8 million during the three months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 114.2% or $29.0 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense due to improvements in expected annual performance compared to annual targets, increases in professional fees and insurance costs and the increase in foreign currency translation rates.

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

Depreciation and amortization.

Depreciation and amortization decreased 11.7% or $14.0 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020, partially offset by the increase in foreign currency translation rates.

Other expense (income).

Other income of $42.7 million during the three months ended June 30, 2021 was primarily due to $42.2 million in government assistance related to COVID-19 and estimated credit income of $3.7 million related to contingent lease guarantees, partially offset by foreign currency transaction losses of $3.4 million.

Other income of $6.6 million during the three months ended June 30, 2020 was primarily due to the increase in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $6.4 million, international government assistance related to COVID-19 of $4.4 million and $2.1 million of international foreign currency transaction gains, partially offset by estimated credit losses related to contingent lease guarantees of $3.9 million and $2.8 million of third party financing costs related to an ongoing debt restructuring.

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.

Interest expense.

Interest expense increased $7.7 million to $98.9 million for the three months ended June 30, 2021 compared to $91.2 million during the three months ended June 30, 2020 primarily due to:

● the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;

● the issuance of $300 million of 10.5% First Lien Notes due 2026 on July 31, 2020;

● the issuance of $100 million of 15%/17% Cash/PIK/Toggle First Lien Notes due 2026 on January 15, 2021;

● the issuance of £140.0 million and €296.0 million 10.75%/11.25% Cash/PIK Term Loans due 2023 on February 19, 2021,

partially offset by:

● a reduction in the effective interest rate from 6.37% to 4.46% on $2,017.5 million aggregate principal amount of our senior subordinated notes exchanged for $1,462.3 million aggregate principal amount of second lien notes on July 31, 2020;

● the extinguishment of $104.5 million of Second Lien Notes due 2026 on December 14, 2020 in exchange for common shares;

● the conversion of $600.0 million 2.95% Convertible Notes due 2026 to 44,422,860 Class A common shares on January 27, 2021;

● the borrowings under revolving credit facilities of approximately $325.1 million during the three months ended June 30, 2020 that remained outstanding until February and March 2021;

● the repayment of £89.7 million and €12.8 million outstanding amounts under the Odeon revolver on February 19, 2021;

● a decline in interest rates related to borrowings under the Senior Secured Term Loan due 2026;

● the repayment in March 2021 of $212.2 million under the Senior Secured Revolving Credit Facility.

See Note 6—Corporate Borrowings and Finance Lease Obligations 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.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $2.7 million for the three months ended June 30, 2021 compared to $12.4 million for the three months ended June 30, 2020.

decrease in equity in loss of $9.7 million was primarily due to decreases in equity in losses from DCIP of $9.7 million.

Investment income.

Investment income was $6.3 million for the three months ended June 30, 2021 compared to investment income of $1.3 million for the three months ended June 30, 2020.

Investment income includes a gain on sale of the Baltics of $5.5 million during the three months ended June 30, 2021.

Income tax benefit.

The income tax benefit was $5.2 million and $6.1 million for the three months ended June 30, 2021 and June 30, 2020, 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 $344.0 million and $561.2 million during the three months ended June 30, 2021 and June 30, 2020, respectively.

Net loss during the three months ended June 30, 2021 compared to net loss for the three months ended June 30, 2020 was positively impacted by the increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, lower amounts of rent expense, decreases in depreciation and amortization expense, increases in other income, increases in investment income, and decreases in equity losses in non-consolidated entities, partially offset by higher interest expense and general and administrative costs, and increases in foreign currency translation rates.

Theatrical Exhibition–U.S.

Total revenues increased $359.1 million from $15.7 million to $374.8 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Admissions revenues increased $194.1 million from $0.0 million to $194.1 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to an increase in attendance from 0.0 million patrons to 17.8 million patrons.

The increase in attendance was due to the fact that operations at all of our theatres in U.S.

markets were temporarily suspended during the second quarter of 2020 as a result of the COVID-19 pandemic.

As discussed above, by the start of the second quarter of 2021, we had resumed operations at nearly all of our domestic theatres, and during the second quarter of 2021, seating capacity restrictions continued to be lifted at U.S.

theatre locations.

Food and beverage revenues increased $140.8 million from $0.0 million to $140.8 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance.

Total other theatre revenues increased $24.2 million from $15.7 million to $39.9 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance.

Operating costs and expenses.

Operating costs and expenses increased $215.1 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance and an increase in average screens operated.

Film exhibition costs increased $84.4 million from ($0.2) million to $84.2 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 43.4% for the three months ended June 30, 2021 and not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs increased $17.0 million from $3.3 million to $20.3 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

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 14.4% for the three months ended June 30, 2021 and were not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs included $3.3 million of charges for obsolete inventory during the three months ended June 30, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was not meaningful during the three months ended June 30, 2020 and 2021 due to the low levels of attendance in each period.

Rent expense decreased 5.9%, or $9.8 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $327.8 million that have been deferred to the second half of 2021 and

future years as of June 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $3.5 million during the three months ended June 30, 2021 compared to $1.7 million during the three months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 189.9% or $26.2 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense due to improvements in expected annual performance compared to annual targets, and increases in professional fees and insurance costs.

Depreciation and amortization.

Depreciation and amortization decreased 13.4% or $12.2 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020.

Other expense (income).

Other expense was $0.1 million during the three months ended June 30, 2021 and June 30, 2020.

Interest expense.

Interest expense decreased $9.3 million to $79.3 million for the three months ended June 30, 2021 compared to $88.6 million during the three months ended June 30, 2020, primarily due to:

● the extinguishment of $104.5 million of Second Lien Notes due 2026 on December 14, 2020 in exchange for common shares;

● the conversion of $600.0 million 2.95% Convertible Notes due 2026 to 44,422,860 Class A common shares on January 27, 2021;

● the borrowings under revolving credit facilities of approximately $212.1 million during the three months ended June 30, 2020 that remained outstanding until March 2021;

● a decline in interest rates related to borrowings under the Senior Secured Term Loan due 2026;

● the repayment in March 2021 of $212.2 million under the Senior Secured Revolving Credit Facility,

partially offset by:

● the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;

● the issuance of $300 million of 10.5% First Lien Notes due 2026 on July 31, 2020;

● the issuance of $100 million of 15%/17% Cash/PIK/Toggle First Lien Notes due 2026 on January 15, 2021.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $0.3 million for the three months ended June 30, 2021 compared to $11.4 million for the three months ended June 30, 2020.

The decrease in equity in loss of $11.1 million was primarily due to decreases in equity in losses from DCIP of $9.7 million.

Investment income.

Investment income was $0.8 million for the three months ended June 30, 2021 compared to investment income of $1.2 million for the three months ended June 30, 2020.

Income tax provision (benefit).

The income tax provision (benefit) was ($3.4) million and $4.4 million for the three months ended June 30, 2021 and June 30, 2020, 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 $269.6 million and $441.4 million during the three months ended June 30, 2021 and June 30, 2020, respectively.

Net loss during the three months ended June 30, 2021 compared to net loss for the three

months ended June 30, 2020 was positively impacted by the increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, lower amounts of rent expense, decreases in depreciation and amortization expense, decreases in equity losses in non-consolidated entities, decreases in interest expense and increases in income tax benefit, partially offset by higher general and administrative costs and lower amounts of investment income.

Theatrical Exhibition - International Markets

Total revenues increased $66.7 million from $3.2 million to $69.9 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

Admissions revenues increased $38.0 million from $0.9 million to $38.9 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to an increase in attendance from 0.1 million patrons to 4.3 million patrons.

The increase in attendance was primarily due to the fact that operations at all of our theatres in International markets were temporarily suspended during nearly all of the second quarter of 2020 as a result of the COVID-19 pandemic.

As discussed above, by the start of the second quarter of 2021, we had resumed operations at certain of our International theatres, and during the second quarter of 2021, we continued to resume operations at International theatre locations.

Food and beverage revenues increased $20.3 million from $0.4 million to $20.7 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance.

Total other theatre revenues increased $8.4 million from $1.9 million to $10.3 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance and by increases in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $35.7 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in attendance and an increase in average screens operated and an increase in foreign currency translation rates.

Film exhibition costs increased $14.3 million from $0.4 million to $14.7 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to the increase in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 37.8% for the three months ended June 30, 2021 and not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs increased $4.8 million from $1.2 million to $6.0 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020.

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 29.0% for the three months ended June 30, 2021 and were not meaningful during the three months ended June 30, 2020 due to the low levels of attendance.

Food and beverage costs included $1.2 million of charges for obsolete inventory during the three months ended June 30, 2020, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was not meaningful during the three months ended June 30, 2020 and 2021 due to the low levels of attendance in each period.

Rent expense decreased 14.8%, or $8.8 million, during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $92.8 million that have been deferred to the second half of 2021 and future years as of June 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $0.8 million during the three months ended June 30, 2021 compared to $0.1 million during the three months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 24.1% or $2.8 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense due to improvements in expected annual performance compared to annual targets and the increase in foreign currency translation rates.

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

stock-based compensation expense.

Depreciation and amortization.

Depreciation and amortization decreased 6.3% or $1.8 million during the three months ended June 30, 2021 compared to the three months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020, partially offset by the increase in foreign currency translation rates.

Other expense (income).

Other income of $42.8 million during the three months ended June 30, 2021 was primarily due to $42.2 million in government assistance related to COVID-19 and estimated credit income of $4.0 million related to contingent lease guarantees, partially offset by foreign currency transaction losses of $3.4 million.

Other income of $6.7 million during the three months ended June 30, 2020 was primarily due to international government assistance related to COVID-19 of $4.4 million and $2.1 million of international foreign currency transaction gains.

Interest expense.

Interest expense increased $17.0 million to $19.6 million for the three months ended June 30, 2021 compared to $2.6 million during the three months ended June 30, 2020, primarily due to:

● the issuance of £140.0 million and €296.0 million 10.75%/11.25% Cash/PIK Term Loans due 2023 on February 19, 2021,

partially offset by:

● the repayment of £89.7 million and €12.8 million outstanding amounts under the Odeon revolver on February 19, 2021.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $2.4 million for the three months ended June 30, 2021 compared to $1.0 million for the three months ended June 30, 2020.

Investment income.

Investment income was $5.5 million for the three months ended June 30, 2021 compared to investment income of $0.1 million for the three months ended June 30, 2020.

Investment income includes a gain on sale of the Baltics of $5.5 million during the three months ended June 30, 2021.

Income tax benefit.

The income tax benefit was $1.8 million and $10.5 million for the three months ended June 30, 2021 and June 30, 2020, 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 $74.4 million and $119.8 million during the three months ended June 30, 2021 and June 30, 2020, respectively.

Net loss during the three months ended June 30, 2021 compared to net loss for the three months ended June 30, 2020 was positively impacted by the increase in attendance as a result of the reopening of theatres that had been temporarily closed due to the COVID-19 pandemic, lower amounts of rent expense, decreases in depreciation and amortization expense increases in other income, increases in investment income, and decreases in equity losses in non-consolidated entities, partially offset by higher interest expense and general and administrative costs, lower amounts of income tax benefit and increases in foreign currency translation rates.

Results of Operations— For the Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020

Condensed Consolidated Results of Operations

Total revenues decreased 38.3%, or $367.4 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

Admissions revenues decreased 46.8%, or $266.4 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to a 52.4% decrease in attendance, partially offset by an 11.6% increase in average ticket price.

The decrease in attendance was primarily due to the COVID-19 pandemic which resulted in the temporary suspension of operations at our theatres in U.S.

and International markets, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year, increases in IMAX and Premium content and an increase in foreign currency translation rates, partially offset by higher frequency on our A-List subscription program.

Food and beverage revenues decreased 26.7%, or $76.9 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in attendance.

Food and beverage per patron increased 54.0% from $4.76 to $7.33 due to several contributing factors including increases in units sold per transaction and increases in the percentage of patrons making purchases due to higher child percentages, private theatre rentals, an increase in dine-in percentages, mobile orders along with price increases, reduced loyalty program penetration and the increase in foreign currency translation rates.

Total other theatre revenues decreased 66.4%, or $56.7 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to decreases in ticket fees, income from gift cards and package tickets and screen advertising due to the decrease in attendance, partially offset by increases in foreign currency translation rates.

Total other theatre revenues decreased 23.4%, or $24.1 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to decreases in ticket fees, income from gift cards and package tickets and screen advertising due to the decrease in attendance, partially offset by increases in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses decreased $2,351.5 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 primarily due to declines in the impairment of long-lived assets of $1,851.9 million and declines in operating expenses due to the decrease in attendance and a decrease in average screens operated, partially offset by an increase in foreign currency translation rates.

Film exhibition costs decreased 91.9%, or $249.7 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to the decrease in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 31.7% for the three months ended March 31, 2021 and 47.8% for the three months ended March 31, 2020.

Operating costs and expenses decreased $2,100.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020 primarily due to the $1,851.9 million impairment of long-lived assets charge recorded during the six months ended June 30, 2020 and year-over-year declines in operating expenses due to the decrease in attendance, partially offset by an increase in foreign currency translation rates.

Film exhibition costs decreased 55.5%, or $151.0 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 40.0% for the six months ended June 30, 2021 and 47.8% for the six months ended June 30, 2020.

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 and library content.

Food and beverage costs decreased 81.8%, or $43.7 million, during the three months ended March 31, 2021

compared to the three months ended March 31, 2020.

Food and beverage costs decreased 37.8%, or $21.9 million, during the six months ended June 30, 2021

compared to the six months ended June 30, 2020.

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 19.4% for the three months ended March 31, 2021 and 18.5% for the three months ended March 31, 2020.

Food and beverage costs included $1.3 million and $2.7 million of charges for obsolete inventory during the three months ended March 31, 2021 and 2020 respectively, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 121.2% for the three months ended March 31, 2021 and 37.9% for the three months ended March 31, 2020.

Rent expense decreased 19.2%, or $45.7 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $473 million that have been deferred to 2021 and future years as of March 31, 2021.

As a percentage of food and beverage revenues, food and beverage costs were 17.0% for the six months ended June 30, 2021 and 20.1% for the six months ended June 30, 2020.

Food and beverage costs included $7.2 million of charges for obsolete inventory during the six months ended June 30, 2020 due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 71.8% for the six months ended June 30, 2021 and 49.1% for the six months ended June 30, 2020.

Rent expense decreased 13.9%, or $64.3 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $6.7 million during the three months ended March 31, 2021 compared to $0.2 million during the three months ended March 31, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 56.0% or $18.6 million during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to increases in bonus expense, stock-based compensation expense as a result of the modification and acceleration of vesting of awards during the current and prior year and increases in non-qualified deferred compensation expense due to increases in the fair values of related investments.

Merger, acquisition and other costs were $11.0 million during the six months ended June 30, 2021 compared to $2.0 million during the six months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 81.2% or $47.6 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense as a result of improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year and increases in insurance costs and professional expenses.

Depreciation and amortization.

Depreciation and amortization decreased 6.9% or $8.4 million during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020, partially offset by the increase in foreign currency translation rates.

Impairment of long-lived assets, indefinite-lived intangible assets and goodwill.

During the three months ended March 31, 2020, we recognized non-cash impairment losses of $81.4 million on 57 theatres in the U.S.

Depreciation and amortization decreased 9.2% or $22.4 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020, partially offset by the increase in foreign currency translation

Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill.

During the six months ended June 30, 2020, we recognized non-cash impairment losses of $81.4 million on 57 theatres in the U.S.

markets with 658 screens (in Alabama, Arkansas, California, District of Columbia, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Michigan, Minnesota, Missouri, Montana, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas, Washington, Wisconsin and Wyoming) which were related to property, net, operating lease right-of-use assets, net and other long-term assets and $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, Sweden, and UK), which were related to property, net and operating lease right-of-use assets, net.

No non-cash impairment charges of long-lived assets were recorded during the three months ended March 31, 2021.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets as of March 31, 2020 related to the AMC, Odeon and Nordic trade names and recorded impairment charges of $8.3 million related to the Odeon and Nordic trade names during the three months ended March 31, 2020.

In addition, we performed quantitative impairment evaluations of our definite-lived intangible assets as of March 31, 2020 and recorded impairment charges of $8.0 million in U.S.

No impairment charges related to our indefinite-lived intangible assets were recorded during the three months ended March 31, 2021.

We performed quantitative impairment evaluations of our goodwill as of March 31, 2020 and recorded impairment charges of $1,124.9 million and $619.4 million during the three months ended March 31, 2020 for our Domestic Theatres and International Theatres reporting units, respectively.

No goodwill impairment charges were recorded during the three months ended March 31, 2021.

No non-cash impairment charges of long-lived assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets as of June 30, 2020 related to the AMC, Odeon and Nordic trade names and recorded impairment charges of $8.3 million related to the Odeon and Nordic trade names during the six months ended June 30, 2020.

In addition, we performed quantitative impairment evaluations of our definite-lived intangible assets as of June 30, 2020 and recorded impairment charges of $8.0 million in U.S.

No impairment charges related to our indefinite-lived intangible assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our goodwill as of June 30, 2020 and recorded impairment charges of $1,124.9 million and $619.4 million during the six months ended June 30, 2020 for our Domestic Theatres and International Theatres reporting units, respectively.

No goodwill impairment charges were recorded during the six months ended June 30, 2021.

Other expense (income).

Other income of $17.4 million during the three months ended March 31, 2021 was primarily due to $12.4 million in government assistance related to COVID-19, foreign currency transaction gains of $3.8 million, and estimated credit income of $2.0 million related to contingent lease guarantees, partially offset by $1.0 million of financing fees related to the write-off of unamortized deferred charges on the Odeon revolver.

Other expense of $26.9 million during the three months ended March 31, 2020 was primarily due to the decrease in fair value of our

derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $20.1 million and estimated credit losses related to contingent lease guarantees of $5.3 million, partially offset by income due to a decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $0.5 million.

Other income of $60.1 million during the six months ended June 30, 2021 was primarily due to $54.6 million in government assistance related to COVID-19, foreign currency transaction gains of $0.4 million, and estimated credit income of $5.7 million related to contingent lease guarantees, partially offset by $1.0 million of financing fees related to the write-off of unamortized deferred charges on the Odeon revolver.

Other expense of $20.3 million during the six months ended June 30, 2020 was primarily due to the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $13.7 million and estimated credit losses related to contingent lease guarantees of $9.2 million, partially offset by income due to a decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $0.5 million and $4.4 million of government assistance related to COVID-19.

Interest expense.

Interest expense increased $80.0 million to $162.8 million for the three months ended March 31, 2021 compared to $82.8 million during the three months ended March 31, 2020 primarily due to:

Interest expense increased $87.7 million to $261.7 million for the six months ended June 30, 2021 compared to $174.0 million during the six months ended June 30, 2020, primarily due to:

● the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;

● borrowings under revolving credit facilities of approximately $325.1 million during the three months ended March 31, 2020 that remained outstanding until February and March 2021;

● the issuance of $300 million of 10.5% First Lien Notes due 2026 on July 31, 2020;

1 unchanged sentence

● the conversion of $600.0 million 2.95% Convertible Notes due 2026 to 44,422,860 Class A common shares on January 27, 2021 that resulted in the write-off to interest expense of $70.0 million of unamortized discount and deferred charges at the date of conversion following the guidance in ASC 815-15-40-1;

● the issuance of £140.0 million and €296.0 million 10.75%/11.25%/PIK Term Loans due 2023 on February 19, 2021,

● the issuance of £140.0 million and €296.0 million 10.75%/11.25% Cash/PIK Term Loans due 2023 on February 19, 2021,

partially offset by:

1 unchanged sentence

● the extinguishment of $104.5 million of Second Lien Notes due 2026 on December 14, 2020 in exchange for common shares;

● borrowings under revolving credit facilities of approximately $325.1 million during the six months ended June 30, 2020 that remained outstanding until February and March 2021;

● the repayment of £89.7 million and €12.8 million outstanding amounts under the Odeon revolver on February 19, 2021;

3 unchanged sentences

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $2.8 million for the three months ended March 31, 2021 compared to $2.9 million for the three months ended March 31, 2020.

Equity in loss of non-consolidated entities was $5.5 million for the six months ended June 30, 2021 compared to $15.3 million for the six months ended June 30, 2020.

The decrease in equity in loss of $9.8 million was primarily due to decreases in equity in losses from DCIP of $11.6 million, partially offset by increases in equity losses on other investments of $1.8 million.

Investment (income) expense.

Investment income was ($2.0) million for the three months ended March 31, 2021 compared to investment expense of $9.4 million for the three months ended March 31, 2020.

Investment income includes increases in our non-qualified deferred compensation plan investments during the three months ended March 31, 2021.

Investment expense includes impairment charges of $7.2 million related to investments and declines in our non-qualified deferred compensation plan investments during the three months ended March 31, 2020.

Investment income was ($8.3) million for the six months ended June 30, 2021 compared to investment expense of $8.1 million for the six months ended June 30, 2020.

Investment income includes a gain on sale of the Baltics of $5.5 million during the six months ended June 30, 2021.

Investment expense includes impairment charges of $7.2 million related to investments and declines in our non-qualified deferred compensation plan investments during the six months ended June 30, 2020.

Income tax provision (benefit).

The income tax provision (benefit) was ($6.8) million and $68.2 million for the three months ended March 31, 2021 and March 31, 2020, respectively.

The decrease in income tax expense is primarily due to the recording of International valuation allowances against deferred tax assets held in Spain of $40.1 million and Germany of $33.1 million during the three months ended March 31, 2020.

The income tax provision (benefit) was ($12.0) million and $62.1 million for the six months ended June 30, 2021 and June 30, 2020, 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 $567.2 million and $2,176.3 million during the three months ended March 31, 2021 and

March 31, 2020, respectively.

Net loss during the three months ended March 31, 2021 compared to net loss for the three months ended March 31, 2020 was positively impacted by the decline in impairment charges related to long-lived assets, definite and indefinite-lived intangible assets and goodwill, decreased depreciation expense, lower amounts of rent expense, increases in other income, increases in investment income and decreases in income tax provision, partially offset by the decrease in attendance as a result of the COVID-19 pandemic, higher interest expense and general and administrative costs, and increases in foreign currency translation rates.

Net loss was $911.2 million and $2,737.5 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

Net loss during the six months ended June 30, 2021 compared to net loss for the six months ended June 30, 2020 was positively impacted by the decline in impairment charges related to long-lived assets, definite and indefinite-lived intangible assets and goodwill, decreased depreciation expense, lower amounts of rent expense, increases in other income, increases in investment income and decreases in income tax provision, partially offset by the decrease in attendance as a result of the COVID-19 pandemic, higher interest expense and general and administrative costs, and increases in foreign currency translation rates.

Theatrical Exhibition–U.S.

Total revenues decreased 79.3%, or $524.1 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Admissions revenues decreased 83.3%, or $324.2 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to an 84.3% decrease in attendance, partially offset by a 6.0% increase in average ticket price.

Our average screens operated during the three months ended March 31, 2021 declined by 4.1% from the prior year.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year and lower frequency on our A-List subscription program, partially offset by decreases in attendance for 3D premium content.

Food and beverage revenues decreased 78.0%, or $169.0 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to the decrease in attendance.

Total revenues decreased 24.4%, or $165.0 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

Admissions revenues decreased 33.4%, or $130.1 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to a 39.4% decrease in attendance, partially offset by a 9.8% increase in average ticket price.

The decrease in attendance was primarily due to the COVID-19 pandemic which resulted in the temporary suspension of operations at our theatres in U.S.

markets, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year and increases in IMAX and Premium content, partially offset by higher frequency on our A-List subscription program.

Food and beverage revenues decreased 13.0%, or $28.2 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in attendance.

Food and beverage per patron increased 43.6% from $5.46 to $7.84 due to several contributing factors including increases in units sold per transaction and increases in the percentage of patrons making purchases due to higher child percentages, private theatre rentals, an increase in dine-in percentages, mobile orders along with price increases and reduced loyalty program penetration.

Total other theatre revenues decreased 55.6%, or $30.9 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to decreases in ticket fees, income from gift cards and package tickets and screen advertising due to the decrease in attendance.

Total other theatre revenues decreased 9.4%, or $6.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to decreases in ticket fees, income from gift cards and package tickets and screen advertising due to the decrease in attendance.

Operating costs and expenses.

Operating costs and expenses decreased $1,551.1 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 primarily due to declines in the impairment of long-lived assets of $1,214.3 million and declines in operating expenses due to the decrease in attendance and a decrease in average screens operated.

Film exhibition costs decreased 89.8%, or $178.7 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to the decrease in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 31.1% for the three months ended March 31, 2021 and 51.1% for the three months ended March 31, 2020.

Operating costs and expenses decreased $1,336.0 million, during the six

months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the $1,214.3 million impairment of long-lived assets charge recorded during the six months ended June 30, 2020 and year-over-year declines in operating expenses due to the decrease in attendance.

Film exhibition costs decreased 47.5%, or $94.3 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 40.3% for the six months ended June 30, 2021 and 51.1% for the six months ended June 30, 2020.

Food and beverage costs decreased 75.6%, or $26.4 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Food and beverage costs decreased 24.6%, or $9.4 million, during the six months ended June 30, 2021

compared to the six months ended June 30, 2020.

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 three months ended March 31, 2021 and 16.1% for the three months ended March 31, 2020.

Food and beverage costs included $0.5 million and $0.7 million of charges for obsolete inventory during the three months ended March 31, 2021 and 2020 respectively, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 103.5% for the three months ended March 31, 2021 and 38.1% for the three months ended March 31, 2020.

Rent expense decreased 21.7%, or $37.9 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020 and theatre closures.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $370 million that have been deferred to 2021 and future years as of March 31, 2021.

As a percentage of food and beverage revenues, food and beverage costs were 15.3% for the six months ended June 30, 2021 and 17.6% for the six months ended June 30, 2020.

Food and beverage costs included $4.0 million of charges for obsolete inventory during the six months ended June 30, 2020 due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 64.3% for the six months ended June 30, 2021 and 48.9% for the six months ended June 30, 2020.

Rent expense decreased 14.1%, or $47.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $327.8 million that have been deferred to the second half of 2021 and future years as of June 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $3.7 million during the three months ended March 31, 2021 compared to $0.3 million during the three months ended March 31, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased $18.7 million during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to increases in bonus expense, stock-based compensation expense as a result of the modification and acceleration of vesting of awards during the current and prior year and increases in non-qualified deferred compensation expense due to increases in the fair values of related investments.

Merger, acquisition and other costs were $7.2 million during the six months ended June 30, 2021 compared to $2.0 million during the six months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 144.4% or $44.9 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense as a result of improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year and increases in insurance costs and professional expenses.

Depreciation and amortization.

Depreciation and amortization decreased 6.5% or $6.0 million during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020.

Impairment of long-lived assets, indefinite-lived intangible assets and goodwill.

During the three months ended March 31, 2020, we recognized non-cash impairment losses of $81.4 million on 57 theatres in the U.S.

Depreciation and amortization decreased 9.9% or $18.2 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020.

Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill.

During the six months ended June 30, 2020, we recognized non-cash impairment losses of $81.4 million on 57 theatres in the U.S.

We performed quantitative impairment evaluations of our definite-lived intangible assets as of March 31, 2020 and recorded impairment charges of $8.0 million in U.S.

We performed quantitative impairment evaluations of our goodwill as of March 31, 2020 and recorded impairment charges of $1,124.9 million during the three months ended March 31, 2020 for our Domestic Theatres reporting unit.

No non-cash impairment charges of long-lived assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets as of June 30, 2020 related to the AMC trade name and recorded no impairment charges to the AMC trade names during the six months ended June 30, 2020.

In addition, we performed quantitative impairment evaluations of our definite-lived intangible assets as of June 30, 2020 and recorded impairment charges of $8.0 million in U.S.

No impairment charges related to our indefinite-lived intangible assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our goodwill as of June 30, 2020 and recorded impairment charges of $1,124.9 million during the six months ended June 30, 2020 for our Domestic Theatres reporting unit.

No goodwill impairment charges were recorded during the six months ended June 30, 2021.

Other expense (income).

Other income of $3.5 million during the three months ended March 31, 2021 was primarily due to $4.2 million in government assistance related to COVID-19 and foreign currency transaction loss of $0.9 million.

Other expense of $25.5 million during the three months ended March 31, 2020 was primarily due to the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $20.1 million and estimated credit losses related to contingent lease guarantees of $5.3 million, partially offset by income due to a decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $0.5 million.

Other income of $3.4 million during the six months ended June 30, 2021 was

primarily due to $4.2 million in government assistance related to COVID-19.

Other expense of $25.6 million during the six months ended June 30, 2020 was primarily due to the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $13.7 million and estimated credit losses related to contingent lease guarantees of $9.2 million, partially offset by income due to a decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $0.5 million.

Interest expense.

Interest expense increased $72.3 million to $153.1 million for the three months ended March 31, 2021 compared to $80.8 million during the three months ended March 31, 2020 primarily due to:

Interest expense increased $63.0 million to $232.4 million for the six months ended June 30, 2021 compared to $169.4 million during the six months ended June 30, 2020, primarily due to:

● the issuance of $500 million of 10.5% First Lien Notes due 2025 on April 24, 2020;

● borrowings under revolving credit facilities of approximately $212.2 million during the three months ended March 31, 2020 that remained outstanding until February and March 2021;

● the issuance of $300 million of 10.5% First Lien Notes due 2026 on July 31, 2020;

4 unchanged sentences

● the extinguishment of $104.5 million of Second Lien Notes due 2026 on December 14, 2020 in exchange for common shares;

● borrowings under revolving credit facilities of approximately $212.2 million during the six months ended June 30, 2020 that remained outstanding until March 2021;

● a decline in interest rates related to borrowings under the Senior Secured Term Loan due 2026;

2 unchanged sentences

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $0.9 million for the three months ended March 31, 2021 compared to $1.9 million for the three months ended March 31, 2020.

The decrease in equity in loss of 1.0 million was primarily due to decreases in equity in losses from DCIP of $1.9 million partially offset by increases in equity losses on other investments of $0.9 million.

Equity in loss of non-consolidated entities was $1.2 million for the six months ended June 30, 2021 compared to $13.3 million for the six months ended June 30, 2020.

The decrease in equity in loss of $12.1 million was primarily due to decreases in equity in losses from DCIP of $11.6 million and decreases in equity losses on other investments of $0.5 million.

Investment (income) expense.

Investment income was $2.0 million for the three months ended March 31, 2021 compared to investment expense of $9.4 million for the three months ended March 31, 2020.

Investment income includes increases in our non-qualified deferred compensation plan investments during the three months ended March 31, 2021.

Income tax benefit.

The income tax (benefit) was $(4.5) million and $(2.9) million for the three months ended March 31, 2021 and March 31, 2020, respectively.

Investment income was ($2.8) million for the six months ended June 30, 2021 compared to investment expense of $8.2 million for the six months ended June 30, 2020.

Income tax provision (benefit).

The income tax provision (benefit) was ($7.9) million and $1.5 million for the six months ended June 30, 2021 and June 30, 2020, 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 $440.1 million and $1,437.8 million during the three months ended March 31, 2021 and March 31, 2020, respectively.

Net loss during the three months ended March 31, 2021 compared to net loss for the three months ended March 31, 2020 was positively impacted by the decline in impairment charges related to long-lived assets, definite and indefinite-lived intangible assets and goodwill, decreased depreciation expense, lower amounts of rent expense, increases in other income, increases in investment income and increases in income tax benefit, partially offset by the decrease in attendance as a result of the COVID-19 pandemic and higher interest expense and general and administrative costs.

Net loss was $709.7 million and $1,879.2 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

Theatrical Exhibition - International Markets

Total revenues decreased 96.0%, or $269.1 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Admissions revenues decreased 97.4%, or $174.3 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to a 97.3% decrease in attendance and a 4.1% decrease in average ticket price.

Our average screens operated during the three months ended March 31, 2021 declined by 84.9% from the prior year.

The decrease in average ticket price includes the impact of an increase in foreign currency translation rates and reflects minimal volumes of attendance.

Food and beverage revenues decreased 96.5%, or $69.0 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to the decrease in attendance.

Food and beverage per patron increased 30.6% from $3.43 to $4.48 due to minimal volumes of attendance and the increase in foreign currency translation rates.

Total other theatre revenues decreased 86.6%, or $25.8 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to decreases in ticket fees, income from gift cards and package tickets and screen advertising due to the decrease in attendance, partially offset by increases in foreign currency translation rates.

Total revenues decreased 71.4%, or $202.4 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020.

Admissions revenues decreased 75.8%, or $136.3 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to a 76.9% decrease in attendance, partially offset by an 4.9% increase in average ticket price.

The decrease in attendance was primarily due to the COVID-19 pandemic which resulted in the temporary suspension of operations at our theatres in International markets, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films.

The increase in average ticket price includes the impact of an increase in foreign currency translation rates and reflects minimal volumes of attendance.

Food and beverage revenues decreased 67.7%, or $48.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in attendance.

Food and beverage per patron increased 39.8% from $3.44 to $4.81 due to the minimal volumes of attendance year-over-year reflecting an increase in average purchase per patron and the increase in foreign currency translation rates.

Total other theatre revenues decreased 54.9%, or $17.4 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to decreases in ticket fees, income from gift cards and package tickets and screen advertising due to the decrease in attendance, partially offset by increases in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses decreased $800.4 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 primarily due to declines in the impairment of long-lived assets of $637.6 million and declines in operating expenses due to the decrease in attendance and a decrease in average screens operated, partially offset by an increase in foreign currency translation rates.

Film exhibition costs decreased 97.5%, or $71.0 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to the decrease in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 39.1% for the three months ended March 31, 2021 and 40.7% for the three months ended March 31, 2020.

Food and beverage costs decreased 93.5%, or $17.3 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Operating costs and expenses decreased $764.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to $637.6 million impairment of long-lived assets charge recorded during the six months ended June 30, 2021 and year-over-year declines in operating expenses due to the decrease in attendance, partially offset by an increase in foreign currency translation rates.

Film exhibition costs decreased 77.5%, or $56.7 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to the decrease in admissions revenues.

As a percentage of admissions revenues, film exhibition costs were 37.9% for the six months ended June 30, 2021 and 40.7% for the six months ended June 30, 2020.

Food and beverage costs decreased 63.5%, or $12.5 million, during the six months ended June 30, 2021

compared to the six months ended June 30, 2020.

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 48.0% for the three months ended March 31, 2021 and 25.9% for the three months ended March 31, 2020.

Food and beverage costs included $0.8 million and $2.0 million of charges for obsolete inventory during the three months ended March 31, 2021 and 2020 respectively, due to the suspension of theatre operations.

As a percentage of revenues, operating expense was not meaningful for the three months ended March 31, 2021 due to the low levels of revenues and 37.5% for the three months ended March 31, 2020.

Rent expense decreased 12.3%, or $7.8 million, during the three months ended March 31, 2021 compared to the three months ended March 31, 2020 due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $103 million that have been deferred to 2021 and future years as of March 31, 2021.

As a percentage of food and beverage revenues, food and beverage costs were 31.0% for the six months ended June 30, 2021 and 27.4% for the six months ended June 30, 2020.

Food and beverage costs included $3.2 million of charges for obsolete inventory during the six months ended June 30, 2020 due to the suspension of theatre operations.

As a percentage of revenues, operating expense was 119.5% for the six months ended June 30, 2021 and 49.5% for the six months ended June 30, 2020.

Rent expense decreased 13.5%, or $16.6 million, during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, due primarily to cash rent abatements from landlords, declines in deferred rent expense due to the impairment of right-of-use assets in calendar 2019 and 2020, and theatre closures, partially offset by the increase in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $92.8 million that have been deferred to the second half of 2021 and future years as of June 30, 2021.

Merger, acquisition and other costs.

Merger, acquisition and other costs were $3.0 million during the three months ended March 31, 2021 compared to ($0.1) million during the three months ended March 31, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense decreased 0.6% or $0.1 million during the three months ended March 31, 2021 compared to the three months ended March 31, 2020.

Merger, acquisition and other costs were $3.8 million during the six months ended June 30, 2021 compared to $0.0 million during the six months ended June 30, 2020, primarily due to increases in legal and professional costs related to strategic contingent planning.

Other general and administrative expense increased 9.8% or $2.7 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to increases in bonus expense and stock-based compensation expense as a result of improvements in expected annual performance compared to annual targets and the modification and acceleration of vesting of awards during the current and prior year and increases in foreign currency translation rates.

Depreciation and amortization.

Depreciation and amortization decreased 8.0% or $2.4 million during the three months ended March 31, 2021 compared to the three months ended March 31, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020 partially offset by the increase in foreign currency translation rates.

Impairment of long-lived assets, indefinite-lived intangible assets and goodwill.

During the three months ended March 31, 2020, we recognized non-cash impairment losses of $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, Sweden, and UK), which were related to property, net and operating lease right-of-use assets, net.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets as of March 31, 2020 related to the Odeon and Nordic trade names and recorded impairment charges of $8.3 million related to the Odeon and Nordic trade names during the three months ended March 31, 2020.

We performed quantitative impairment evaluations of our goodwill as of March 31, 2020 and recorded impairment charges of $619.4 million during the three months ended March 31, 2020 for our International Theatres reporting unit.

Depreciation and amortization decreased 7.1% or $4.2 million during the six months ended June 30, 2021 compared to the six months ended June 30, 2020, primarily due to lower depreciation expense on theatres impaired in calendar 2019 and 2020, partially offset by the increase in foreign currency translation rates.

Impairment of long-lived assets, definite and indefinite-lived intangible assets and goodwill.

During the six months ended June 30, 2020, we recognized non-cash impairment losses of $9.9 million on 23 theatres in the International markets with 213 screens (in Germany, Italy, Spain, Sweden, and UK), which were related to property, net and operating lease right-of-use assets, net.

No non-cash impairment charges of long-lived assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our indefinite-lived intangible assets as of June 30, 2020 related to the Odeon and Nordic trade names and recorded impairment charges of $8.3 million related to the Odeon and Nordic trade names during the six months ended June 30, 2020.

In addition, we performed quantitative impairment evaluations of our definite-lived intangible assets as of June 30, 2020 and recorded impairment charges of $0.0 million in International markets.

No impairment charges related to our indefinite-lived intangible assets were recorded during the six months ended June 30, 2021.

We performed quantitative impairment evaluations of our goodwill as of June 30, 2020 and recorded impairment charges of $619.4 million during the six months ended June 30, 2020 for our International Theatres reporting unit.

No goodwill impairment charges were recorded during the six months ended June 30, 2021.

Other expense (income).

Other income of $13.9 million during the three months ended March 31, 2021 was primarily due to $8.2 million in government assistance related to COVID-19, foreign currency transaction gains of $4.7 million, and estimated credit income of $2.0 million related to contingent lease guarantees, partially offset by $1.0 million of financing fees related to the write-off of unamortized deferred charges on the Odeon revolver.

Other income of $56.7 million during the six months ended June 30, 2021 was primarily due to $50.4 million in government assistance related to COVID-19, foreign currency transaction gains of $0.4 million, and estimated credit income of $6.0 million related to contingent lease guarantees, partially offset by $1.0 million of financing fees related to the write-off of unamortized deferred charges on the Odeon revolver.

Other income of $5.3 million during the six months ended June 30, 2020 was primarily due to the decrease in fair value of our derivative asset for the contingent call option related to the Class B common stock purchase and cancellation agreement of $13.7 million and estimated credit losses related to contingent lease guarantees of $9.2 million, partially offset by income due to a decrease in fair value of our derivative liability for the embedded conversion feature in our Convertible Notes due 2024 of $0.5 million and $4.4 million of government assistance related to COVID-19.

Interest expense.

Interest expense increased $7.7 million to $9.7 million for the three months ended March 31, 2021 compared to $2.0 million during the three months ended March 31, 2020 primarily due to:

● the issuance of £140.0 million and €296.0 million 10.75%/11.25%/PIK Term Loans due 2023 on February 19, 2021,

Interest expense increased $24.7 million to $29.3 million for the six months ended June 30, 2021 compared to $4.6 million during the six months ended June 30, 2020, primarily due to:

● the issuance of £140.0 million and €296.0 million 10.75%/11.25% Cash/PIK Term Loans due 2023 on February 19, 2021,

partially offset by:

● the repayment of £89.7 million and €12.8 million outstanding amounts under the Odeon revolver on February 19, 2021.

indebtedness.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $1.9 million for the three months ended March 31, 2021 compared to $1.0 million for the three months ended March 31, 2020.

Equity in loss of non-consolidated entities was $4.3 million for the six months ended June 30, 2021 compared to $2.0 million for the six months ended June 30, 2020.

Investment (income) expense.

Investment income was $0 million for the three months ended March 31, 2021 and March 31, 2020.

Investment income was ($5.5) million for the six months ended June 30, 2021 compared to investment income of ($0.1) million for the six months ended June 30, 2020.

Investment income includes a gain on sale of the Baltics of $5.5 million during the six months ended June 30, 2021.

Income tax provision (benefit).

The income tax provision (benefit) was ($2.3) million and $71.1 million for the three months ended March 31, 2021 and March 31, 2020, respectively.

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

Net loss was $127.1 million and $738.5 million during the three months ended March 31, 2021 and March 31, 2020, respectively.

Net loss during the three months ended March 31, 2021 compared to net loss for the three months ended March 31, 2020 was positively impacted by the decline in impairment charges related to long-lived assets, definite and indefinite-lived intangible assets and goodwill, decreased depreciation expense, lower amounts of rent expense, increases in other income and decreases in income tax provision, partially offset by the decrease in attendance as a result of the COVID-19 pandemic, higher interest expense and general and administrative costs, and increases in foreign currency translation rates.

The income tax provision (benefit) was ($4.1) million and $60.6 million for the six months ended June 30, 2021 and June 30, 2020, 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 $201.5 million and $858.3 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

LIQUIDITY AND CAPITAL RESOURCES

2 unchanged sentences

This float existed because admissions revenues are received in cash, while exhibition costs (primarily film rentals) are ordinarily paid to distributors from 20 to 45 days following receipt of box office admissions revenues.

As operations are beginning to resume, we are starting to see this float resume.

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.

We had working capital deficits (excluding restricted cash) as of March 31, 2021 and December 31, 2020 of $597.5 million and $1,104.6 million, respectively.

As of March 31, 2021 and December 31, 2020, working capital included operating lease liabilities of $591.1 million and $583.6 million, respectively, and deferred revenues of $404.3 million and $405.4 million, respectively.

At March 31, 2021, we had $211.9 million available for borrowing, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility.

At December 31, 2020, we had borrowed all available amounts under our Senior Secured Revolving Credit Facility.

We had borrowed $212.2 million (the full availability net of standby letters of credit) under our $225.0 million Senior Secured Revolving Credit Facility as of December 31, 2020.

We had working capital surplus (deficit) (excluding restricted cash) as of June 30, 2021 and December 31, 2020 of $425.5 million and $(1,104.6) million, respectively.

As of June 30, 2021 and December 31, 2020, working capital included operating lease liabilities of $604.8 million and $583.6 million, respectively, and deferred revenues of $402.1 million and $405.4 million, respectively.

At June 30, 2021, we had $211.9 million unused borrowing capacity, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility.

As of December 31, 2020, we had borrowed $212.2 million (the full availability net of standby letters of credit) under our $225.0 million Senior Secured Revolving Credit Facility.

We also maintained a revolving credit facility due February 14, 2022 at our Odeon subsidiary (the “Odeon Revolver”).

2 unchanged sentences

As of December 31, 2020, we had borrowed $120.8 million (the full availability net of standby letters of credit) under our £100.0 million Odeon Revolver ($136.3 million based on the foreign currency translation rate of 1.3628 on December 31, 2020).

In response to the COVID-19 pandemic, we adjusted certain elements of our business strategy and took and continue to take significant steps to preserve cash by eliminating non-essential costs, including reductions to our variable costs and elements of our fixed cost structure, including, but not limited to:

● Suspended non-essential operating expenditures, including some marketing and promotional and travel and entertainment expenses, and where possible, utilities and reduced essential operating expenditures to minimum levels necessary while theatres are closed;

● Terminated or deferred all non-essential capital expenditures to minimum levels necessary while theatres are operating for limited hours or closed;

● Implemented measures to reduce corporate-level employment costs while closed, including full or partial furloughs of all corporate-level Company employees for a period of time, including senior executives, with individual work load and salary reductions ranging from 20% to 100%;

cancellation of pending annual merit

pay increases;

and elimination or reduction of non-healthcare benefits.

With the resumption of operations, we eliminated the full and partial furloughs and employment costs increased.

The increase in employment costs during the three months ended March 31, 2021 was primarily due to increases in bonus expense, stock-based compensation expense as a result of the modification and acceleration of vesting of awards during the current and prior year and increases in non-qualified deferred compensation expense due to increases in the fair values of related investments;

● All domestic theatre-level crew members were fully furloughed and theatre-level managements’ hours were reduced to the minimum levels necessary to begin resumption of operations when permitted.

Similar efforts to reduce theatre-level and corporate employment costs were undertaken internationally consistent with applicable laws across the jurisdictions in which we operate.

As we resumed limited operations, employment costs increased;

● Working with our landlords, vendors, and other business partners to manage, defer, and/or abate the related rent expenses and operating expenses;

● Introduced an active cash management process, which, among other things, requires senior management approval of all outgoing payments;

● Since April 24, 2020, we have been prohibited from making dividend payments in accordance with the covenant suspension conditions in our Senior Secured Credit Facility Agreement.

We had also previously elected to decrease the dividend paid in the first quarter of 2020 by $0.17 per share.

The cash savings as a result of the prior decrease and current prohibition on making dividend payments was $4.3 million during the three months ended March 31, 2021 in comparison to the three months ended March 31, 2020;

● We are prohibited from making purchases under our stock repurchase program in accordance with the covenant suspension conditions in our Senior Secured Credit Facility Agreement.

We intend to seek any available potential benefits, including loans, investments or guarantees, under future government programs for which we qualify domestically and internationally.

We have taken advantage of many forms of governmental assistance in the U.S.

and internationally including but not limited to revenue and fixed cost reimbursements, payroll subsidies, rent support programs, direct grants, and property tax holidays.

We cannot predict the manner in which such benefits will be allocated or administered, and we cannot assure that it will be able to access such benefits in a timely manner or at all.

In addition to preserving cash, we enhanced liquidity through debt issuances, debt exchanges and equity sales as follows.

As of June 30, 2021, we had cash and cash equivalents of approximately $1.8 billion.

In response to the COVID-19 pandemic, we adjusted certain elements of our business strategy and took significant steps to preserve cash and we are continuing to take significant steps to preserve cash, by eliminating non-essential costs, including reductions to our variable costs and elements of our fixed cost structure.

In addition to preserving cash, we enhanced liquidity through debt issuances, debt exchanges and equity sales as previously reported in our Annual Report on Form 10-K for the year ended December 31, 2020 and in our Quarterly Report on Form 10-Q for the three months ended March 31, 2021.

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

● The April 2020 issuance of $500 million of First Lien Notes due 2025.

● The July 2020 completion of a debt exchange offer in which we issued approximately $1.46 billion aggregate principal amount of Second Lien Notes due 2026 in exchange for approximately $2.02 billion principal amount of our senior subordinated notes, reducing the principal amounts of our debt by approximately $555 million and extending maturities on approximately $1.7 billion of debt to 2026, most of which was maturing in 2024 and 2025 previously.

Interest on the Second Lien Notes due 2026 for the first three six-month interest periods after the issue date is expected to be paid all or in part on an in-kind basis pursuant to the terms of the Second Lien Notes due 2026.

● The July 2020 issuance of the First Lien Notes due 2026 in which we received proceeds of $270.0 million, net of discounts and deferred charges.

● The launch of several “at-the-market” equity offerings to raise capital through the sale of our Class A common stock.

During the year ended December 31, 2020, we sold 91.0 million shares, generating $272.8 million in gross proceeds and paid fees to sales agents of $6.8 million.

In January 2021, we sold 187.1 million shares, generating $596.9 million in gross proceeds and paid fees to sales agents of $14.9 million and other fees of $0.4 million.

See Note 13 — Subsequent Event in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for information regarding the additional at-the-market offerings of 43 million shares related to our remaining authorized shares of Class A common stock.

● The December 2020 issuance of 21,978,022 shares of Class A common stock to Mudrick Capital Management, LP (“Mudrick”) in exchange for $104.5 million aggregate principal amount of the Second Lien Notes due 2026 and a commitment from Mudrick to purchase $100 million aggregate principal amount of 15%/17%

Cash/PIK Toggle First Lien Secured Notes due 2026 (“First Lien Toggle Notes due 2026”) which we issued to Mudrick in January 2021 for cash.

● The January 2021 conversion by holders of all $600 million of our 2.95% Convertible Senior Secured Notes due 2026 into shares of our Class A common stock at a conversion price of $13.51 which resulted in the issuance of 44,422,860 shares of our Class A Common Stock and reduced annual cash interest expense by $17.7 million.

● The February 2021 entry into a new £140.0 million and €296.0 million term loan facility agreement (the “Odeon Term Loan Facility”) by Odeon Cinemas Group Limited (“Odeon”).

Approximately £89.7 million and €12.8 million of the net proceeds from the Odeon Term Loan Facility was used to repay in full Odeon’s obligations (including principal, interest, fees and cash collateralized letters of credit) under our existing revolving credit facility and the remaining net proceeds will be used for general corporate purposes .

If attendance levels increase consistent with our assumptions described below, we currently estimate that our existing cash and cash equivalents will be sufficient to comply with minimum liquidity requirements under our debt covenants, fund operations, and satisfy obligations including cash outflows for increased rent and planned capital expenditures currently and through early May of 2022.

This requires that we achieve significant increases in attendance levels beginning in the third quarter of 2021 and ultimately reaching 85% of pre COVID-19 attendance levels by the fourth quarter of 2021 and through the first and second quarters of 2022 as the vaccine rollout continues and more Hollywood product is released in our theatres.

We entered into the Ninth Amendment, pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant applicable to the Senior Secured Revolving Credit Facility from March 31, 2021 to March 31, 2022, as described, and on the terms and conditions specified, therein.

As a result, we will be subject to the financial covenant beginning with the quarter ending June 30, 2022.

We are subject to minimum liquidity requirements of approximately $145 million of which $100 million is required under the conditions for the Extended Covenant Suspension Period under the Senior Secured Revolving Credit Facility during the Extended Covenant Suspension Period, as amended, and £32.5 million (approximately $45 million) required under the Odeon Term Loan Facility.

Recent updates to our liquidity enhancement initiatives are as follows:

● The launch of two additional “at-the-market” equity offerings to raise capital through the sale of our Class A common stock.

During April and May of 2021, we sold 43.0 million shares, generating $427.5 million in gross proceeds and paid fees to sales agents of $10.7 million.

In June of 2021, we sold 11.55 million shares, generating $587.4 million in gross proceeds and paid fees to sales agents of $14.7 million and other fees of $0.3 million.

● The June 2021 issuance of 8.5 million shares of Class A common stock to Mudrick Capital Management, LP (“Mudrick”) in a private placement for $230.5 million in gross proceeds and paid fees of approximately $0.1 million related to this transaction.

We believe our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund our operations, satisfy our obligations, including cash outflows for increased rent and planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under our debt covenants

related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility for at least the next 12 months.

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

We believe the global re-opening of our theatres, the anticipated volume of titles available for theatrical release, and the anticipated broad appeal of many of those titles will support increased attendance levels.

We entered the Ninth Amendment to the Credit Agreement pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant (a secured leverage ratio) applicable to the Senior Secured Revolving Credit Facility from March 31, 2021 to March 31, 2022, (the Extended Covenant Suspension Period), as described, and on the terms and conditions specified, therein.

We are currently subject to minimum liquidity requirements of approximately $145 million, of which $100 million is required under the conditions for the Extended Covenant Suspension Period, as amended, under the Senior Secured Revolving Credit Facility, and £32.5 million (approximately $45 million) of which is required under the Odeon Term Loan Facility.

Following the expiration of the Extended Covenant Suspension Period, we will be subject to the financial covenant under the Senior Secured Revolving Credit Facility, beginning with the quarter ending June 30, 2022.

If the attendance levels increase consistent with our assumptions described above, we currently expect we will be able to comply with the financial covenant.

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

Our liquidity needs thereafter will depend, among other things, on the timing of a full resumption of operations, the timing of movie releases and our ability to generate cash from operations.

We continue to explore potential sources of additional liquidity, including:

● Additional equity financing.

On April 27, 2021, the Board of Directors (the “Board”) determined not to seek stockholder approval of the proposal to approve an amendment to our Third Amended and Restated Certificate of Incorporation to increase the total number of shares of Class A common stock (par value $0.01 per share) we shall have the authority to issue by 500,000,000 shares to a total of 1,024,173,073 shares of Class A common stock (“Proposal 1”), and has withdrawn Proposal 1 from the agenda for the 2021 annual meeting of stockholders (the “Annual Meeting”).

The Board reserves the right to propose an amendment of the Certificate of Incorporation to increase the authorized shares or for other items at any point in the future.

We plan to pursue equity issuances for our remaining authorized shares.

See Note 13 — Subsequent Event in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for information regarding the additional at-the-market offerings of 43 million shares related to our remaining authorized shares of Class A common stock.

The amount of liquidity we might generate will primarily depend on the market price of our Class A common stock, trading volumes, which impact the number of shares we are able to sell, and the available periods during which sales may be made.

Because our market price and trading volumes are volatile, there is no guarantee as to the amounts of liquidity we might generate or that our prior experience accurately predicts the results we will achieve.

● Landlord negotiations .

Commencing in 2021, our cash expenditures for rent are scheduled to increase significantly as a result of rent obligations that had been deferred to 2021 and future years that were approximately $473.0 million as of March 31, 2021.

In light of our liquidity challenges, and in order to establish our long-term viability, we believe we must continue to reach accommodations with our landlords to abate or defer a substantial portion of our rent obligations, in addition to generating sufficient amounts of liquidity through equity issuances and the other potential financing arrangements discussed below.

Accordingly, we entered into additional landlord negotiations to seek material reductions, abatements and deferrals in our rent obligations.

In connection with these negotiations, we have finalized agreements or agreements in principle with the landlords for a majority of leases where we have entered into negotiations.

the extent we achieve substantial deferrals but not abatements, our cash requirements will increase substantially in the future.

● Other creditor discussions .

While the liquidity we have raised has substantially extended our liquidity runway, the new debt we have issued or that has been committed, together with the higher interest rate payments that will be required in the future but have largely been deferred, will substantially increase our leverage and future cash requirements.

These future cash requirements, like our deferred rent obligations, will present a challenge to our long-term viability if our operating income does not return to pre-COVID levels.

Even then, we believe we will need to engage in discussions with our creditors to substantially reduce our leverage.

We expect to continue to explore alternatives that include new-money financing and may involve converting debt to equity, which would help manage our leverage but could be dilutive to holders of our common stock.

These discussions may not result in any agreement on commercially acceptable terms.

● Covenant suspension.

See Note 6 — Corporate Borrowings and Finance Lease Obligations in the Notes to the Condensed Consolidated Financial Statements under Item 1 of the Part I thereof for further information.

● Joint-venture or other arrangements with existing business partners and minority investments in our capital stock.

We continue to explore other potential arrangements, including equity investments, to generate additional liquidity.

We received rent concessions provided by the lessors that aided in mitigating the economic effects of COVID-19 during the pandemic.

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

As a result of the deferral of rent payments of approximately $420.6 million as of June 30, 2021, our cash expenditures for rent are scheduled to increase significantly in the second half of 2021 and future years.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements thereof under Item 1 of Part I of this Form 10-Q for further information.

It is very difficult to estimate our liquidity requirements, future cash burn rates and future attendance levels.

1 unchanged sentence

Similarly, it is very difficult to predict when theatre attendance levels will normalize, which we expect will depend on the widespread availability and use of effective vaccines for the coronavirus.

However, our current cash burn rates are not sustainable.

While our current cash burn rates have improved, these levels are not sustainable.

Further, we cannot accurately predict what future changes may occur to the supply or release date of movie titles available for theatrical exhibition once moviegoers are prepared to return in large numbers.

Nor can we know with certainty the impact on consumer movie-going behavior of Warner Bros.’s decision to release its entire 2021 slate of movies on HBO Max at the same time as the movies debut in theatres, or the potential attendance impact of other studio decisions to accelerate in home availability of their theatrical movies.

Nor can we know with certainty the impact on consumer movie-going behavior of studios who release movies to theatrical exhibition and their streaming platforms on the same date (“day and date”), or the potential attendance impact of other studio decisions to accelerate in home availability of their theatrical movies.

Studio negotiations regarding evolving theatrical release models and film licensing terms are ongoing.

6 unchanged sentences

Cash Flows from Operating Activities

Cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $312.9 million and $184.0 million during the three months ended March 31, 2021 and March 31, 2020, respectively.

The increase in cash flows used in operating activities was primarily due to decreased attendance levels and temporary suspension of operations at all of our theatres on or before March 17, 2020, which resulted in lower operating results during the three months ended March 31, 2021.

Cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $546.7 million and $415.9 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

The increase in cash flows used in operating activities was primarily due to decreased attendance levels and temporary

suspension of operations at all of our theatres on or before March 17, 2020, which resulted in lower operating results during the six months ended June 30, 2021.

Cash Flows from Investing Activities

Cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $16.0 million and $87.4 million during the three months ended March 31, 2020 and March 31, 2020, respectively.

Cash outflows from investing activities include capital expenditures of $11.9 million and $91.7 million during the three months ended March 31, 2021 and March 31, 2020, respectively.

In 2020, as a result of the COVID-19 pandemic, we

significantly reduced capital expenditures to maintenance levels and with the exception of prior commitments, have temporarily suspended growth capital expenditures at this time.

During the three months ended March 31, 2021, cash flows used in investing activities included proceeds from the disposition of assets of $5.2 million, primarily related to the sale of our remaining interest in one of the Baltic’s theatres located in Estonia of $3.8 million and proceeds received from the disposition of one property of $1.4 million.

During the three months ended March 31, 2021, we made an additional investment of $9.3 million in Saudi Cinema Company LLC.

During the three months ended March 31, 2020, cash flows used in investing activities included the proceeds from the disposition of long-term assets of $3.4 million related to one property.

Cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $2.5 million and $131.5 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

Cash outflows from investing activities include capital expenditures of $29.8 million and $126.7 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

In 2020, as a result of the COVID-19 pandemic, we significantly reduced capital expenditures to maintenance levels.

During the six months ended June 30, 2021, cash flows used in investing activities included proceeds from the disposition of assets primarily related to proceeds of $35.2 million from the sale of our remaining equity interest in Lithuania and eliminated our noncontrolling interest in Forum Cinemas OU and proceeds received from the disposition of one property of $1.4 million.

During the six months ended June 30, 2021, we made an additional investment of $9.3 million in Saudi Cinema Company LLC.

During the six months ended June 30, 2020, cash flows used in investing activities included an additional investment in Saudi Cinema Company LLC of $9.3 million and proceeds from the disposition of long-term assets of $3.7 million primarily related to three properties.

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.

2 unchanged sentences

Cash Flows from Financing Activities

Cash flows provided by financing activities, as reflected in the condensed consolidated statements of cash flows, were $854.7 million and $312.4 million during the three months ended March 31, 2021 and March 31, 2020, respectively.

The increase in cash flows from financing activities during the three months ended March 31, 2021 was primarily due to the borrowings under the Odeon Term Loan Facility of $534.3 million, the issuance of First Lien Toggle Notes due 2026 of $100.0 million, and net proceeds from the sale of Class A common stock of $581.6 million, partially offset by the repayments under the revolving credit facilities of $335.0 million, payment for deferred financing costs of $19.0 million, and principal payments under the Term Loan due 2026 of $5.0 million.

During the three months ended March 31, 2020, cash inflows from financing activities included borrowings under our revolving credit facilities were $325.1 million, partially offset by principal payments under the Term Loan due 2026 of $5.0 million.

During the three months ended March 31, 2020, we paid dividends and dividend equivalents of $4.3 million.

Cash flows provided by financing activities, as reflected in the condensed consolidated statements of cash flows, were $2,066.9 million and $785.9 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

The increase in cash flows from financing activities during the six months ended June 30, 2021 was primarily due to the borrowings under the Odeon Term Loan Facility of $534.3 million, the issuance of First Lien Toggle Notes due 2026 of $100.0 million, net proceeds from the sale of Class A common stock of $1,570.8 million, and net proceeds from Class A common stock issuance to Mudrick of $230.4 million, partially offset by the repayments under the revolving credit facilities of $335.0 million, payment for deferred financing costs of $19.3 million, and principal payments under the Term Loan due 2026 of $10.0 million.

During the six months ended June 30, 2020, cash inflows from financing activities included borrowings under our First Lien Notes due 2025 and revolving credit facilities were $490.0 and $322.8 million, respectively, partially offset by principal payments under the Term Loan due 2026 of $10.0 million and deferred financing costs of $9.3 million.

During the six months ended June 30, 2020, we paid dividends and dividend equivalents of $4.3 million.

The following is a summary of dividends declared to stockholders:

5 unchanged sentences

Senior Secured Credit Facilities (Senior Secured Revolving Credit Facility and Senior Secured Term Loan due 2026).

On March 8, 2021, we entered into the Ninth Amendment, pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant under our Credit Agreement from a period ending on March 31, 2021 to a period ending on March 31, 2022 (the “Extended Covenant Suspension Period”).

On March 8, 2021, we entered the Ninth Amendment, pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant under our Credit Agreement from a period ending on March 31, 2021 to a period ending on March 31, 2022 (the “Extended Covenant Suspension Period”).

As an ongoing condition to the suspension of the financial covenant, we also agreed to (i) a minimum liquidity test of $100 million, (ii) an anti-cash hoarding test at any time Revolving Loans are outstanding and (iii) additional reporting obligations.

On March 8, 2021, we entered into the Tenth Amendment, pursuant to which we agreed not to consent to certain modifications to the Credit Agreement described in the Tenth Amendment without the consent of the majority of the revolving lenders party to the Tenth Amendment.

On March 8, 2021, we entered into the Tenth Amendment, pursuant to which we agreed that certain modifications to the Credit Agreement described in the Tenth Amendment require the consent of the majority of the revolving lenders party to the Tenth Amendment.

Odeon Term Loan Facility.

On February 15, 2021, Odeon Cinemas Group Limited (“Odeon”), a wholly-owned subsidiary of the Company entered into a new £140.0 million and €296.0 million term loan facility agreement (the “Odeon Term Loan Facility”), by and among Odeon, the subsidiaries of Odeon party thereto, the lenders and other loan parties thereto and Lucid Agency Services Limited as agent and Lucid Trustee Services Limited as security agent.

On February 15, 2021, Odeon Cinemas Group Limited (“Odeon”), a wholly-owned subsidiary of the Company entered into a new £140.0 million and €296.0 million term loan facility agreement

(the “Odeon Term Loan Facility”), by and among Odeon, the subsidiaries of Odeon party thereto, the lenders and other loan parties thereto and Lucid Agency Services Limited as agent and Lucid Trustee Services Limited as security agent.

Approximately £89.7 million and €12.8 million of the net proceeds from the Odeon Term Loan Facility were used to repay in full Odeon’s obligations (including principal, interest, fees and cash collateralized letters of credit) under its existing revolving credit facility and the remaining net proceeds will be used for general corporate purposes.

23 unchanged sentences

We borrowed under our Odeon Term Loan Facility, issued First Lien Toggle Notes due 2026, and Silver Lake and certain co-investors elected to convert all of our Convertible Notes due 2026 into shares of our Class A common stock.

See Note 6—Corporate Borrowings and Finance Lease Obligations 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 table that provides the principal payments required and maturities of corporate borrowings as of March 31, 2021.

We received rent concessions provided by the lessors that aided or will aid, in mitigating the economic effects of COVID-19.

These concessions primarily consist of deferral of rent payments and rent abatements.

See Note 2—Leases 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 table of the minimum annual payments required under existing operating and finance lease liabilities (net present value thereof) as of March 31, 2021.

Depending on the trading prices of our Class A common stock, we may have a significant cash tax liability to cover withholding obligations upon vesting of awards under our Equity Incentive Plan with approximately 3,300,000 shares expected to vest over the next twelve months and an estimated blended tax withholding rate of 45%.

We expect to withhold shares based on historical elections by participants under the terms of the plan, equivalent to the cash tax

requirements for federal, state and local withholdings, pay the required tax obligation and return the withheld shares to the Equity Incentive Plan.

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