What changed in this filing

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Item 1. Business

2022-03-01 compared with 2021-03-12 · 211 added, 253 removed, 324 unchanged (59% of the section changed)

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and its subsidiaries, (collectively with Holdings, unless the context otherwise requires, the “Company” or “AMC”), is principally involved in the theatrical exhibition business and owns, operates or has interests in theatres primarily located in the United States and Europe.

As of December 31, 2020, Dalian Wanda Group Co., Ltd.

(“Wanda”), a Chinese private conglomerate, owned approximately 23.08% of Holdings’ outstanding common stock and 47.37% of the combined voting power of Holdings’ outstanding common stock and had significant influence over Holdings’ affairs and policies, including with respect to the election of directors (and, through the election of directors, the appointment of management), entering into of mergers, sales of substantially all of our assets and other extraordinary transactions.

On February 1, 2021, Wanda exercised their right to convert all outstanding Class B common stock to Class A common stock resulting in ownership in Holdings’ outstanding common stock and voting power of Holdings’ outstanding common stock of approximately 9.8% as of March 3, 2021.

Our business was founded in Kansas City, Missouri in 1920.

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In March 2020, the World Health Organization declared the novel coronavirus (“COVID-19”) to be a pandemic.

The COVID-19 pandemic has disrupted and is expected to continue to disrupt our business, which has and could continue to materially affect our operating results, cash flows and/or financial condition for an extended period of time.

The COVID-19 pandemic has disrupted and could continue to materially affect our operating results, cash flows and/or financial condition for an extended period of time.

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

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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.

local, state, and federal governmental restrictions and temporary International market operation suspensions remained in place for much of the first quarter of 2021, but the limited seat restrictions were substantially removed and the International market operations restored by the end of the second quarter of 2021.

The North American and International industry box offices have also been significantly impacted by the COVID-19 pandemic, and in response to the suspension of theatre operations by AMC and other theatre exhibitors and the COVID-19 related suspension of new movie production, studios have postponed new film releases beyond 2021 or moved them to the home video market, streaming, or premium video on demand (“PVOD”) platforms.

As a result of the suspended operations and limited new film content, our revenues and expenses for the year ended December 31, 2020 were significantly lower than the revenues and expenses for the year ended December 31, 2019.

Effective vaccines against COVID-19, which are expected to become widely available during 2021, together with the currently scheduled release later this year of major movie titles that have so far been delayed, are expected to have a material positive impact on our industry and have generated optimism that movie theatre attendance levels ultimately will rebound from current levels.

In the meantime, however, a continued high level of COVID-19 cases, together with continuing delays of major movie releases and the direct or simultaneous release of movie titles to the home video or streaming markets in lieu of theatre exhibition, have led to theatre closures, prevented the opening of theatres in major markets and have had, and are expected to continue to have in the future, a material adverse impact on theatre attendance levels and our business.

● As of March 5, 2021, we were operating at 527 of our 589 U.S.

theatres, with limited seating capacities and during limited opening hours.

Some of our major markets in the U.S., such as New York City and California,

remain partially closed for theatrical exhibition.

During the fourth quarter of 2020, we experienced an overall attendance decline in the U.S.

of approximately 92.3% compared to the same period a year ago.

● As of March 5, 2021, we were operating at 78 of our 356 leased and partnership International theatres, with limited seating capacities and during limited opening hours.

During the fourth quarter of 2020, we experienced an overall attendance decline in our International theatres of approximately 89.2% compared to the same period a year ago.

In response to the COVID-19 pandemic, we have adjusted certain elements of our business strategy and have taken 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 marketing & promotional and travel and entertainment expenses;

and where possible, utilities and reduced essential operating expenditures to minimum levels necessary while theatres are operating for limited hours or 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;

● 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 when compared to the first quarter of 2019.

The cash savings as a result of the prior decrease and current prohibition on making dividend payments was $77.6 million during the year ended December 31, 2020 in comparison to the year ended December 31, 2019;

● 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 we 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 a result of the suspended operations and limited new film content in 2020, our revenues and expenses for the year ended December 31, 2021 were higher than the revenues and expenses for the year ended December 31, 2020, but continued U.S.

governmental restrictions, International market operation suspensions and limited new film content in 2021 resulted in significantly lower revenues and expenses for the year ended December 31, 2021 compared to the year ended December 31, 2019, prior to the COVID-19 pandemic.

The COVID-19 vaccines became widely available during 2021 and the number of previously delayed major movie title releases increased significantly in the second half of 2021, which had a material positive impact on our industry.

However, the COVID-19 Delta variant generated a new surge in cases in the third quarter of 2021 and the COVID-19 Omicron variant has been generating infections since late November 2021.

Overall for 2021, the industry box office remained considerably lower than the 2019 pre COVID-19 levels.

A more robust slate of major movie releases is expected during 2022, which has generated optimism that movie theatre attendance levels will continue to improve gradually as we experienced in 2021.

However, box office performance in 2022 could be impacted by the ongoing impact of COVID-19 which could lead to a return to social distancing restrictions or theatre operation suspensions, which together with direct or simultaneous release of movie titles to the home video or streaming markets in lieu of theatre exhibition, could have a material adverse impact on theatre attendance levels and our business.

● As of February 24, 2022, we were operating all of our 587 U.S.

Some of our major markets in the U.S., such as Chicago, New York City, Los Angeles, San Francisco, and Seattle require proof of vaccination for guests to be able to attend.

At the beginning of March 2022, we expect the proof of vaccination requirement will expire in Chicago and Seattle.

During the fourth quarter of 2021, we experienced an overall attendance increase in the U.S.

of approximately 35,544,000, or 737.4%, compared

to the same period a year ago, and a decline of approximately 21,955,000, or 35.2%, compared to the fourth quarter of 2019.

● As of February 24, 2022, we were operating all of our 351 International theatres, with certain countries having limited seating capacities during limited opening hours.

Spain, Italy, and Germany require proof of vaccination, or in certain locations a negative test is required, for guests to be able to attend.

During the fourth quarter of 2021, we experienced an overall attendance increase in our International theatres of approximately 16,046,000, or 490.4%, compared to the same period a year ago, and a decline of approximately 10,926,000, or 36.1%, compared to the fourth quarter of 2019.

As of December 31, 2021, we had cash and cash equivalents of approximately $1.6 billion.

In response to the COVID-19 pandemic, we adjusted certain elements of our business strategy and took significant steps to preserve cash.

We are continuing to take significant measures to further strengthen our financial position and enhance our operations, by eliminating non-essential costs, including reductions to our variable costs and elements of our fixed cost structure, introducing new initiatives, and optimizing our theatrical footprint.

Additionally, we enhanced liquidity through debt issuances, debt exchanges and equity sales.

See Note 8 — Corporate Borrowings and Finance Lease Obligations, Note 9 — Stockholders’ Equity, and Note 16—Subsequent Events in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for further information.

● The April 2020 issuance of $500 million of 10.5% first lien notes due 2025 (the “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 10%/12% Cash/PIK Toggle Second Lien Subordinated Secured Notes due 2026 (the

“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 10.5% first lien secured notes due 2026 (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 AMC 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 approximately 187.0 million shares, generating $596.9 million in gross proceeds and paid fees to sales agents of $14.9 million.

● 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 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 .

The temporary theatre closures and the reduced operating hours and reduced attendance at the reopened theatres have caused a substantial decline in our sales in the most recently completed fiscal year.

In light of the challenges posed by the COVID-19 pandemic, we are focused on maximizing our attendance capacity as permitted by the jurisdictions where we operate, continuing to provide a safe environment for our guests and employees, maintaining our operational efficiencies as much as possible and preserving our liquidity.

As a result of the COVID-19 pandemic, we have reduced capital expenditures significantly to maintenance levels and with the exception of prior commitments, have eliminated growth capital expenditures at this time.

The future attendance and sales levels of our theatres and our ability to implement our growth strategy remain highly uncertain, as the full impact and duration of the COVID-19 pandemic continues to evolve as of the date of this Annual Report on Form 10-K.

The ongoing impact of the COVID-19 pandemic on our long-term operational and financial performance will depend on future developments, many of which are outside of our control, and all of which are highly uncertain and cannot be predicted.

Please see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations of Part II thereof for additional information.

If attendance levels increase consistent with our assumptions described below, we currently estimate that our existing cash and cash equivalents, net proceeds from the completed issuances of debt and common stock in January 2021 and borrowings under the Odeon Term Loan Facility in February 2021 will be sufficient to comply with minimum liquidity requirements under our debt covenants to fund operations, and satisfy obligations including cash outflows for increased rent and planned capital expenditures currently and through at least March 31, 2022.

This requires that we achieve significant increases in attendance levels beginning in the third quarter of 2021 and ultimately reaching 90% of pre COVID-19 attendance levels by the fourth quarter of 2021 and through the first quarter of 2022 as the vaccine rollout continues and more Hollywood product is released in our theatres.

We entered into the Ninth Amendment (as defined below) to the Credit Agreement (as defined below), pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant applicable to the Revolving Credit Facility (as defined below) 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.

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, which is essential to our long-term viability, including:

● Additional equity financing.

We may continue to pursue equity issuances that include our remaining authorized shares.

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 total approximately $450.0 million as of December 31, 2020.

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

In connection with these negotiations, we have ceased to make rent payments under a portion of our leases and have received notices of default, the result of which may permit landlords to threaten or seek a variety of remedies.

We continue to renegotiate leases with landlords to attain additional concessions and address any instances of default.

To 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, 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-19 pandemic 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, potentially in connection with converting debt to equity, which would help manage our leverage but would be dilutive to holders of our common stock.

We expect we will continue to receive from and discuss proposals with all classes of creditors.

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

● Covenant Suspension.

We entered into 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 applicable to the Revolving Credit Facility from March 31, 2021 to March 31, 2022, as described, and on the terms and conditions specified, therein.

See Note 17 — Subsequent Events of the Notes to the Consolidated Financial Statements under Part II, Item 8 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 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 twelve months.

In order to achieve net positive operating cash flows and long-term profitability, we believe we will need to continue to increase attendance levels significantly compared to 2021 and 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 result in increased attendance levels.

We believe that the sequential increases in attendance experienced each quarter as 2021 progressed are positive signs of continued demand for the movie going experience.

However, there remain significant risks that may negatively impact attendance, including a resurgence of COVID-19 related restrictions, potential movie-goer reluctance to attend theatres due to concerns about COVID-19 variant strains, movie studios release schedules and direct to streaming or other changing movie studio practices.

We entered the Ninth Amendment (as defined in Note 8 — Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof) pursuant to which the requisite revolving lenders party thereto agreed to extend the fixed date for the termination of the suspension period for the financial covenant (the secured leverage ratio) applicable to the Senior Secured Revolving Credit Facility (as defined in Note 8 — Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof) from March 31, 2021 to March 31, 2022, which was further extended by the Eleventh Amendment (as defined in Note 8 — Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof) from March 31, 2022 to March 31, 2023, as described, and on the terms and conditions specified, therein.

We are currently subject to minimum liquidity requirements of approximately $144 million, of which $100 million is required under the conditions for the Extended Covenant Suspension Period ending March 31, 2023, as amended, under the Senior Secured Revolving Credit Facility, and £32.5 million (approximately $44 million) of which is required under the Odeon Term Loan Facility.

Following the expiration of the Extended Covenant Suspension Period ending March 31, 2023, the Company will be subject to the financial covenant under the Senior Secured Revolving Credit Facility as of the last day of each quarter on which the aggregate principal amount of revolving loans, and letters of credit (excluding letters of credit that are cash collateralized) in excess of $25 million, outstanding under the Senior Secured Revolving Credit Facility exceeds 35% of the principal amount of commitments under the Senior Secured Revolving Credit Facility then in effect, beginning with the quarter ending June 30, 2023.

We currently expect we will be able to comply with this financial covenant, however, we do not anticipate the need to borrow under the Senior Secured Revolving Credit Facility during the next twelve months.

See Note 8 — Corporate Borrowings and Finance Lease Obligations in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for further information.

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

Our cash expenditures for rent increased significantly in the second, third, and fourth quarters of 2021 as previously deferred rent payments and landlord concessions started to become current obligations.

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, deferred lease amounts were approximately $315.1 million as of December 31, 2021.

See Note 3 — Leases in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof, for a summary of the estimated future repayment terms for the deferred lease amounts due to COVID-19.

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

Depending on the Company’s assumptions regarding the timing and ability to achieve more normalized levels of operating revenue, the estimates of amounts of required liquidity vary significantly.

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.

Further, we cannot 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 of Warner Bros.’s announcement that it is releasing its entire 2021 slate of movies on HBO Max at the same time as the movies debut in theatres or any similar announcements regarding the release of movie titles concurrently to the home video or streaming markets, as those arrangements will be subject to negotiations that have not yet taken place.

We estimate future attendance levels and other assumptions to predict our liquidity requirements and future cash burn but our ability to accurately predict our liquidity and cash burn is uncertain due to the unknown magnitude and duration of the COVID-19 pandemic.

Further, there can be no assurances that the Company will be successful in generating the

additional liquidity necessary to meet its obligations beyond twelve months from the issuance of these financial statements on terms acceptable to the Company or at all.

If the Company is unable to maintain or renegotiate its minimum liquidity covenant requirements, it could have a significant adverse effect on the Company’s business, financial condition and operating results.

We also realized significant cancellation of debt income (“CODI”) in connection with our debt restructuring.

As a result of such CODI, we estimate a significant portion of our net operating losses will be eliminated as a result of tax attribute reductions.

Any loss of tax attributes as a result of such CODI may adversely affect our cash flows and therefore our ability to service our indebtedness.

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

Similarly, it is very difficult to predict when theatre attendance levels will return to pre COVID-19 levels, which we expect will depend on the continued widespread availability and use of effective vaccines for the coronavirus, and eventual abatement of more virulent strains of the virus, related government mandates on social distancing and mask use, and the supply of movie titles for theatrical exhibition.

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 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.

There can be no assurance that the attendance levels and other assumptions used to estimate our liquidity requirements and future cash burn rates will be correct, and our ability to be predictive is uncertain due to the unknown magnitude and duration of the COVID-19 pandemic.

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

If we are unable to maintain or renegotiate our minimum liquidity covenant requirements, it could have a significant adverse effect on our business, financial condition and operating results.

Please see “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations of Part II thereof for additional information.

We realized $1.2 billion of cancellation of debt income (“CODI”) in connection with our 2020 debt restructuring.

As a result, $1.2 billion of our federal net operating losses were eliminated due to tax attribute reduction to offset the CODI.

The loss of these attributes may adversely affect our cash flows and therefore our ability to service our indebtedness.

Narrative Description of Business

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

Over the course of our nearly 100-year history, we have pioneered many of the theatrical exhibition industry’s most important innovations.

Over the course of our 100+ year history, we have pioneered many of the theatrical exhibition industry’s most important innovations.

We introduced Multiplex theatres in the 1960s and the North American stadium-seated Megaplex theatre format in the 1990s.

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subscription loyalty tier, AMC Stubs ® A-List.

Our growth has been driven by a combination of organic growth through reinvestment in our existing assets and through the acquisition of some of the most respected companies in the theatrical exhibition industry.

Our growth has been driven by a combination of organic growth through reinvestment in our existing assets and through the acquisition of some of the most significant companies in the theatrical exhibition industry.

Our business is operated in two Theatrical Exhibition reportable segments, U.S.

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Prior to 2016, we primarily operated in the United States.

Our international operations are largely a result of our acquisition of Odeon and UCI Cinemas Holdings Limited (“Odeon”) in November of 2016 and Nordic Cinemas Group Holding AB (“Nordic”) in March of 2017.

Our international operations are largely a result of our acquisition of Odeon and UCI Cinemas Holdings Limited (“Odeon”) in November of 2016 and Nordic Cinema Group Holding AB (“Nordic”) in March of 2017.

Today, AMC is the largest theatre operator in the world.

As of December 31, 2021, we owned, leased or operated 946 theatres and 10,562 screens in 12 countries, including 593 theatres with a total of 7,755 screens in the United States and 353 theatres and 2,807 screens in European markets and Saudi Arabia.

During the year ended December 31, 2020, we sold our theatre operations in Latvia and divested of 49% of our interest in Lithuania operations.

As of December 31, 2019, prior to the effects of the COVID-19 pandemic on our business, we were the market leader in the United States and Europe including in Italy, Spain, Sweden, Norway, Finland, Latvia and Lithuania;

During the year ended December 31, 2020, we sold 100% of our theatre operations in Latvia and divested of 49% of our interest in Lithuania and Estonia operations.

During the year ended December 31, 2021, we sold the remaining 51% equity interest in Estonia and Lithuania.

As of December 31, 2021, we were the market leader in the United States and Europe including in Italy,

Spain, Sweden, Norway, and Finland;

and a leading theatre operator in the United Kingdom, Ireland, Portugal and Germany.

We have operations in four of the world’s ten largest economies, including four of the five largest European economies (the United Kingdom, Spain, Italy and Germany) as of December 31, 2019.

Analysis of market share data in 2020 is not meaningful given the effects of the COVID-19 pandemic on the theatrical exhibition industry.

We have operations in four of the world’s 10 largest economies, including four of the six largest European economies (the United Kingdom, Spain, Italy and Germany) as of December 31, 2021.

As of December 31, 2021, in the U.S.

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We have a diversified footprint with complementary global geographic and guest demographic profiles, which we believe gives our circuit a unique profile and offers us strategic and operational advantages while providing our studio partners with a large and diverse distribution channel.

As of December 31, 2019, prior to the COVID-19 pandemic, we operated some of the most productive theaters in the top markets in the United States and were the market leader in the top two markets:

As of December 31, 2021, we operated some of the most productive theatres in the top markets in the United States and were the market leader in the top two markets:

New York and Los Angeles.

As of December 31, 2019, our top five markets, in each of which we held the #1 share position, are New York, Los Angeles, Chicago, Atlanta and Washington, D.C., according to data provided by Comscore.

Analysis of market share data in 2020 is not meaningful given the effects of the COVID-19 pandemic on the theatrical exhibition industry.

As of December 31, 2020, in the International markets, we owned, leased or operated theatres in 12 European countries and in Saudi Arabia through our Kingdom of Saudi Arabia partnership.

As of December 31, 2021, our top five markets, in each of which we held the #1 share position, are Los Angeles, New York, Chicago, Atlanta and Philadelphia, according to data provided by Comscore.

As of December 31, 2021, in the International markets, we owned, leased or operated theatres in 10 European countries and in Saudi Arabia through Saudi Cinema Company, LLC, our joint venture with Saudi Entertainment Ventures.

In all of these 11 countries, we operate productive assets in each of the country’s capitals.

As of December 31, 2019, prior to the effects of the COVID-19 pandemic, about a third of our international recliner renovations occurred in London, Berlin and Madrid;

As of December 31, 2021, about a third of our international recliner renovations occurred in London, Berlin and Madrid;

three of the largest Western European Capitals.

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screen in a less populated market.

With the exception of the Baltics and Portugal, as of December 31, 2019, we had a combined 15 IMAX ® screens in all of our territories’ capitals.

The following table provides detail with respect to the geographic location of our theatrical exhibition circuit as of December 31, 2021:

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(1) Included in the above table are 74 theatres and 392 screens that we manage or in which we have a partial ownership interest.

markets segment, we manage or have a partial interest in seven theatres and

markets segment, we manage or have a partial interest in seven theatres and 85 screens.

In the International markets segment, we manage or have a partial interest in 67 theatres and 307 screens.

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We are committed to maintaining a leadership position in the exhibition industry by focusing on forward-thinking initiatives for the benefit of our guests.

We do this through a combination of unique marketing outreach, seamless digital technology and innovative theatre amenities designed to 1) transform AMC into a world class leader in customer engagement, 2) deliver the best in-person experience while at AMC theatres and 3) selectively adjust our footprint through expansion in certain markets and strategic closure of underperforming theatres.

We do this through a combination of unique marketing outreach, seamless digital technology and innovative theatre amenities designed to 1) transform AMC into a world-class leader in customer engagement, 2) deliver the best in-person experience while at AMC theatres, 3) selectively adjust our footprint through expansion in certain markets and strategic closure of underperforming theatres, 4) pursue adjacent opportunities that extend the AMC brand, and 5) explore attractive acquisitions leveraging our existing capabilities and core competencies.

Consistent with our history and culture of innovation, we believe our vision and relentless focus on these key elements, which apply strategic and marketing components to traditional theatrical exhibition, will drive our future success.

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We have also taken and continue to take significant steps to preserve cash by eliminating non-essential costs.

As a result of these steps, and as further discussed below, certain aspects of our longer-term strategy, such as growth capital expenditures with the exception of prior commitments have been suspended at this time.

Going forward our capital allocation strategy will be driven by the cash generation of our business and will be contingent on a continued required return threshold.

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

Our capital allocation strategy will be driven by the cash generation of our business and will be contingent on maintaining adequate liquidity as well as a required return threshold.

markets, in response to the COVID-19 pandemic and under advisement of current & former faculty of Harvard University’s School of Public Health as well as the Clorox Company, we developed a comprehensive set of cleaning and operational protocols branded “AMC Safe and Clean” which have been implemented at every one of our U.S.

AMC Safe & Clean protocols include significant reductions in the maximum tickets available for each showtime and seat blocking in reserved seating auditoriums to allow for appropriate social distancing between parties, enhanced cleaning procedures that include extra time between showtimes to allow for a full, thorough cleaning and nightly disinfecting, use of high-tech high-efficiency particulate air vacuums, upgraded air filtration efforts including the use of minimum efficiency reporting value-13 filters wherever possible, new guest and employee safety protocols that include mandatory mask wearing by all guests and employees, employee health checks, hand sanitizing stations throughout the theatre and the availability to guests of disinfectant wipes.

The Company has also introduced AMC Private Screening, which allows movie goers to reserve a separate AMC Safe & Clean TM auditorium for a private screening for up to 20 people, starting at $99 plus tax.

AMC Safe & Clean protocols include enhanced cleaning procedures that include extra time between showtimes to allow for a full, thorough cleaning and nightly disinfecting, use of high-tech high-efficiency particulate air vacuums, upgraded air filtration efforts including the use of minimum efficiency reporting value-13 filters wherever possible, hand sanitizing stations throughout the theatre and the availability to guests of disinfectant wipes.

In the International markets, in response to the COVID-19 pandemic, we developed a comprehensive set of cleaning and operational protocols branded “We Are Safer Cinema” which have been implemented across our European theatres.

Protocols include significant reductions in the maximum tickets available for each showtime and seat blocking in reserved seating auditoriums to allow for appropriate social distancing between parties and enhanced cleaning procedures that include extra time between showtimes to allow for thorough cleaning.

New guest and employee safety protocols include mandatory mask wearing by all guests and employees where directed by government guidelines, one-way guest flow systems in theatres where practical and hand sanitizing stations throughout the theatre.

Protocols include enhanced cleaning procedures and hand sanitizing stations throughout the theatre.

We strictly follow local guidelines in regard to guest and staff masking and vaccination policies.

1) Transform AMC into a World-Class Leader in Customer Engagement

AMC engages movie-goers through advances in technology and marketing activities to strengthen the bonds with our current guests and create new connections with potential customers that drive both growth and loyalty.

AMC serves our guests, end-to-end, from before they enter our theatres, through their enjoyment of a comprehensive spectrum

of film content while at our theatres and then again after the movie when they’ve left the theatre and are deciding what film to see the next time they visit.

AMC serves our guests, end-to-end, from before they enter our theatres, through their enjoyment of a comprehensive spectrum of film content while at our theatres and then again after the movie when they’ve left the theatre and are deciding what film to see the next time they visit.

markets, we begin the process of engagement with AMC Stubs ® , our customer loyalty program, which allows members to earn rewards, receive discounts and participate in exclusive members-only offerings and services.

It features a traditional paid tier called AMC Stubs Premiere™ for a $15 annual membership fee and a non-paid tier called AMC Stubs Insider™.

It features a paid tier called AMC Stubs Premiere™ for a flat annual membership fee and a non-paid tier called AMC Stubs Insider™.

Both programs reward loyal guests for their patronage of AMC theatres.

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AMC Stubs ® A-List is our monthly subscription-based tier of our AMC Stubs ® loyalty program.

This program offers guests admission to movies at AMC up to three times per week including multiple movies per day and repeat visits to already seen movies for $19.95 and $23.95 per month depending upon geographic market.

AMC Stubs ® A-List also includes premium offerings including IMAX ® , Dolby Cinema™ at AMC, RealD, Prime and other proprietary PLF brands.

This program offers guests admission to movies at AMC up to three times per week, including multiple movies per day and repeat visits to already seen movies from $19.95 and $23.95 per month depending upon the geographic market.

A-List also includes premium offerings including IMAX ® , Dolby Cinema™ at AMC, RealD, Prime and other proprietary PLF brands.

AMC Stubs ® A-List members can book tickets online in advance and select specific seats at AMC Theatres with reserved seating.

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As of December 31, 2021, we had more than 25,300,000 member households enrolled in AMC Stubs ® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs on a combined basis.

Our AMC Stubs ® members represented approximately 45% of AMC U.S.

markets attendance during the year ended December 31, 2020.

Our AMC Stubs ® members represented approximately 40% of AMC’s U.S.

market attendance during the year ended December 31, 2021.

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

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We continue to evaluate the Odeon loyalty programs to determine how best to reward our European movie-goers and heighten guest loyalty to drive additional attendance to Odeon theatres.

Our marketing efforts are not limited to our loyalty program as we continue to improve our customer connections through our website and mobile apps and expand our online and movie offerings.

We continued to roll out our upgraded mobile applications across the U.S.

Our marketing efforts are not limited to our loyalty program.

We continue to improve our customer connections through our website and mobile apps and expand our online and movie offerings.

We upgraded our mobile applications across the U.S.

circuit with the ability to order food and beverage offerings via our mobile applications while ordering tickets ahead of scheduled showtimes.

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Online and mobile platforms are also available in our International markets.

In June 2021, the Company launched AMC Investor Connect (“AIC”), an innovative new communication initiative to engage directly with its sizable retail shareholder base and convert shareholders into AMC consumers.

AIC allows AMC shareholders to self-identify through the AMC website and receive AMC special offers and important Company updates.

As part of AIC, members must sign up for an AMC Stubs account and provide additional personalized data that allows AMC to more precisely engage with our investor consumers.

As of February 24, 2022, there were 613,807 global self-identified AMC shareholder members of AIC, which is comprised of both registered and beneficial shareholders.

During September 2021, we launched a multi-media global advertising campaign to engage customers and raise awareness about movie theatres’ unique experiences and how important theatrical exhibition is to the cultural fabric of society the world over.

The multi-media campaign is anchored by a television commercial starring Oscar Winner Nicole Kidman, was directed by two-time Academy Award nominee Jeff Cronenweth and Tim Cronenweth, and was written by Academy Award screenwriter nominee Billy Ray.

The campaign reinforces the communal and multi-sensory experience that can only be found in a movie theatre and introduces our new axiom:

“AMC Theatres.

We Make Movies Better.” This messaging will also be used in nine European countries by Odeon Cinema Group.

During the fourth quarter of 2021, we partnered with Sony Pictures to become the first theatrical exhibition company to offer AMC Stubs members a limited number of exclusive Spider-Man:

No Way Home non-fungible tokens (“NFTs”) based on a ticket purchase and redemption of a Spider-Man ticket on the opening night of the film.

Some 86,000 exclusive and limited edition NFTs offer guests a tradeable collectible commemorating the most successful film of 2021.

This NFT is tradeable and in the future will offer discounts or other benefits to the then-current holders to generate future attendance.

We will continue to implement innovative NFT offers to further engage and build loyalty with our guests.

2) Deliver the best in-person experience while at AMC theatres

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As of December 31, 2019, prior to the COVID-19 pandemic, the quality improvement in the customer experience could drive a 33% increase in attendance, on average, at these locations in their first-year post renovation.

These increases will only continue post-

COVID-19 pandemic if attendance returns to normalized pre-COVID-19 levels.

These increases will only continue post-COVID-19 pandemic if attendance returns to normalized pre COVID-19 levels.

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

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For the year ended December 31, 2021, approximately 67% of our tickets were purchased online in the U.S., with approximately 80% of total online tickets being purchased through AMC.

Traditional payment sources are evolving rapidly around the globe as the use of cryptocurrencies become more popular and convenient.

In response, during the fourth quarter of 2021, we introduced the ability for consumers to pay for tickets, food and beverage items and associated gifts cards with cryptocurrencies in the U.S.

markets, including Bitcoin, Ethereum, Litecoin and Bitcoin Cash.

The acceptance of cryptocurrency is designed to offer guests greater flexibility and convenience, which we believe will increase attendance.

Imaginative Food and Beverage Initiatives.

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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 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.

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 and we have expanded the capabilities of our online and mobile apps to include the ability to pre-order food and beverages when advanced tickets are purchased.

Guests are able to order food and beverage items when buying tickets in advance and have the items ready upon arrival and available at dedicated pick-up areas or delivered to seat at select theatres.

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

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PLF auditoriums generate our highest customer satisfaction scores, and we believe the investment in premium formats increases the value of the movie-going experience for our guests, ultimately leading to additional ticket revenue.

To that end we are committed to investing in and expanding our offerings of the best sight and sound experiences through a combination of our partnerships with IMAX ® and Dolby Cinema™ and the further development of our own proprietary PLF offering, AMC Prime.

To that end, we are committed to investing in and expanding our

offerings of the best sight and sound experiences through a combination of our partnerships with IMAX ® and Dolby Cinema™ and the further development of our own proprietary PLF offering, AMC Prime.

IMAX ® is one of the world’s leading entertainment technology companies, specializing in motion picture technologies and presentations.

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and a leading IMAX ® exhibitor in the United Kingdom and Europe.

During the year ended December 31, 2020, we closed four IMAX screens related to U.S.

theatres that were permanently closed and opened one new IMAX screen.

● Dolby Cinema™.

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As of December 31, 2021, we operated 154 Dolby Cinema™ at AMC auditoriums in the U.S.

In December 2018, we introduced the first United Kingdom Dolby Cinema Auditorium in our iconic Leicester Square theatre in the heart of London, ending 2020 with six Dolby Cinema™ Auditoriums in Europe.

In December 2018, we introduced the first United Kingdom Dolby Cinema Auditorium in our iconic Leicester Square theatre in the heart of London, ending 2021 with eight Dolby Cinema™ Auditoriums in the International markets.

We expect to expand the deployment of our innovative Dolby Cinema™ auditoriums in both our U.S.

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We also offer our private label PLF experience at many of our locations, with superior sight and sound technology and enhanced seating as contrasted with our traditional auditoriums.

These proprietary PLF auditoriums offers an enhanced theatrical experience for movie-goers beyond our current core theatres, at a lower price premium than IMAX ® or Dolby Cinema™.

These proprietary PLF auditoriums offer an enhanced theatrical experience for movie-goers beyond our current core theatres, at a lower price premium than IMAX ® or Dolby Cinema™.

Therefore, it may be especially relevant in smaller or more price-sensitive markets.

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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 PLF screens, enhanced food and beverage offerings and our premium seating as deployed throughout our circuit on December 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:

International Markets

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The additional scale achieved through new-build theatres and acquisitions also serves to benefit AMC through global procurement savings and increased overhead efficiencies.

We believe that expansion offers us additional opportunities to introduce our proven guest-focused strategies to new movie-goers and will generate meaningful benefits to guests, employees, studio partners and our shareholders.

During the year ended December 31, 2020, we reopened 18 screens to implement our strategy to install consumer experience upgrades.

As a result of the COVID-19 pandemic, we have reduced capital expenditures significantly to maintenance levels and with the exception of prior commitments (which included the 18 screens noted above), have eliminated growth capital expenditures at this time.

We cannot currently determine when we will be able to resume our growth strategy.

We believe that expansion offers us additional opportunities to introduce our proven guest-focused strategies to movie-goers and will generate meaningful benefits to guests, employees, studio partners and our shareholders.

During the year ended December 31, 2021, we acquired 11 theatres with 140 screens, reopened one theatre with eight screens and built and opened 10 new theatres with 82 screens to implement our strategy to install consumer experience upgrades.

Our long-term strategy also includes strategically closing underperforming theatres.

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Calendar 2021

4) Pursue Adjacent Opportunities that Extend the AMC Brand

We believe there is considerable opportunity to extend and monetize the AMC brand outside of our movie theatre auditoriums.

We plan to pursue opportunities that capitalize on our attractive customer base, our leading brand, our 100+ years of food and beverage expertise, and technology capabilities.

As part of that strategy, in the fourth quarter of 2021, we announced we would be expanding our food and beverage business beyond theatrical exhibition and enter the multi-billion dollar popcorn industry with the launch of AMC Theatres Perfectly Popcorn in the U.S.

● Beginning in 2022, we will sell freshly made AMC Theatres Perfectly Popcorn at select mall retail locations around the country.

Kiosks, counters, and stores will feature real AMC movie theatre popcorn and other AMC movie theatre treats.

● Additionally, we also plan to make our AMC Theatres Perfectly Popcorn, freshly popped in nearby theatres, available through food delivery-to-home services.

In this way, consumers will be able to enjoy a slice of the AMC experience when being entertained at home.

● We will sell “To Go” packages at our theatres of freshly popped popcorn for takeout and/or pickup.

● Also coming later in 2022, we plan to offer prepackaged and ready-to-pop microwaveable AMC Theatres Perfectly Popcorn, which will become available for purchase in supermarkets and convenience stores around the country.

AMC Theatres Perfectly Popcorn is an opportunity to diversify our business and to create a new food and beverage revenue stream for the Company.

5) Explore Attractive Acquisitions Leveraging Our Existing Capabilities and Core Competencies

As part of our plans to pursue value-enhancing initiatives that lead to diversification of our business, we will consider attractive and opportunistic acquisitions inside and outside the Exhibition industry that leverage AMC’s footprint and capabilities as well as the core competencies and experiences of AMC’s management team.

Our Competitive Strengths

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Leading Market Share in Important, Affluent and Diverse Markets.

As of December 31, 2019, prior to the COVID-19 pandemic, across our three biggest metropolitan markets in the United States—New York, Los Angeles and Chicago, representing 17% of the country’s total box office—we held a 39% combined market share.

As of December 31, 2021, across our three biggest metropolitan markets in the United States—New York, Los Angeles and Chicago, representing 19% of the country’s total box office—we held a 44% combined market share.

We had theatres located in the top 25 U.S.

markets, holding the #1 or #2 position in 19 of those 25 markets based on box office revenue.

During the year ended December 31, 2020, we sold our theatre operations in Latvia and divested of 49% of our interest in Lithuania operations.

We are also the #1 theatre operator in Italy, Sweden, Norway, Finland, and Spain;

the #2 operator in the United Kingdom, Ireland, and Portugal;

and the #4 operator in Germany as of December 31, 2019, prior to the COVID-19 pandemic.

Analysis of market share data in 2020 is not meaningful given the effects of the COVID-19 pandemic on the theatrical exhibition industry.

the #2 operator in the United Kingdom and Ireland;

the #3 operator in Portugal;

and the #4 operator in Germany as of December 31, 2021.

We believe our strong presence in these top markets makes our theatres highly visible and therefore strategically more important to content providers, who rely on the large audiences and marketing momentum provided by major markets to drive opinion-making and deliver a movie’s overall box office results.

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Our location strategy, combined with our strong major market presence, enable us to deliver industry-leading theatre-level productivity.

During the year ended December 31, 2019, prior to the COVID-19 pandemic, nine of the ten highest grossing theatres in the U.S.

During the year ended December 31, 2021, eight of the 10 highest grossing theatres in the U.S.

were AMC theatres, according to data provided by Comscore.

Analysis of market share data in 2020 is not meaningful given the effects of the COVID-19 pandemic on the theatrical exhibition industry.

During the same period, AMC’s U.S.

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Sources of Revenue

Film Content.

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 industry box office has been significantly impacted by the COVID-19 pandemic during the year ended December 31, 2020.

Although certain states authorized the reopening of theatres as early as June 2020, with limited seating capacities and social distancing guidelines, some states, including California and New York, remain partially or entirely closed for theatrical exhibition as of December 31, 2020.

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 PVOD platforms 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 year ended December 31, 2020 compared to the year ended December 31, 2019.

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.

Subsequently, Universal revised their plans to extend the theatrical exhibition window to 31 days for films that generate opening weekend box office in the U.S.

and Canada of greater than $50 million.

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.

During the 2020 calendar year, films licensed from our six largest distributors based on revenues accounted for approximately 80% of our U.S.

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 office have been significantly impacted by the COVID-19 pandemic.

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

Theatrical releases may continue to be postponed and windows shortened or disregarded 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

We have made adjustments to theatre operating hours to align screen availability and associated theatre operating costs with attendance levels for each theatre.

As we continue our recovery from the impacts of the COVID-19 pandemic on our business, our aggregate attendance levels remain significantly behind pre-pandemic levels.

However, for the first time since 2019, substantially all of our worldwide theatres were open for the entirety of the third and fourth quarters of 2021.

During the year ended December 31, 2021, films licensed from our six largest movie studio distributors based on revenues accounted for approximately 87% of our U.S.

admissions revenues, which consisted of Sony, Disney, Universal, Warner Bros., Paramount, and Lionsgate.

In Europe, approximately 75% of our box office revenue came from films attributed to our three largest distributor groups;

which consisted of Warner Bros., Disney, and various independent distributors as a whole (with each independent distributor representing 10% or less).

In Europe, approximately 77% of our box office revenue came from films attributed to our four largest movie distributor groups;

which consisted of Universal, Disney, Sony, and Warner Bros.

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.

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

Food and beverage items traditionally include popcorn, soft drinks, candy and hot dogs.

Different varieties of food and beverage items are offered at our theatres based on preferences in the particular geographic region.

We design our theatres to have more food and beverage capacity to make it easier to serve larger numbers of customers.

Strategic placement of large food and beverage operations within theatres increases their visibility, aids in reducing the length of lines, allows flexibility to introduce new concepts and improves traffic flow around the food and beverage stands.

Prior to the COVID-19 pandemic, to address recent consumer trends, we expanded our menu of enhanced food and beverage products to include made-to-order drinks and meals, customized coffee, healthy snacks, premium beers, wine and mixed drinks, and other gourmet products.

Our long-term growth strategy includes continued 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.

The costs of these conversions in some cases are partially covered by investments from the theatre landlord.

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 touchpoints between guests and employees.

We have also upgraded our Coca-Cola Freestyle beverage software to allow guests to dispense drinks without the need to utilize the machine’s touch screen using the Coca-Cola Freestyle app.

We currently operate 51 Dine-In Theatres in the U.S.

and two Dine-In Theatres in Europe that deliver chef-inspired menus with seat-side or delivery service to luxury recliners with tables.

and three Dine-In Theatres in Europe that deliver chef-inspired menus with seat-side or delivery service to luxury recliners with tables.

Our recent Dine-In Theatre concepts are designed to capitalize on the latest food service trend, the fast and casual eating experience.

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.

AMC Human Capital Resources

AMC associates are core to our commitment to delivering the best theatrical experience in the world.

They uphold AMC’s mission of focusing on the guest experience in our theatres, an experience in which excellent customer service is complemented with amazing food and beverage, comfort and premium sight and sound.

COVID-19 Pandemic Impacts.

The pandemic has had enormous impacts on our industry, guests and associates and has resulted in material variances in our associate metrics in calendar 2020 compared to prior years.

As of December 31, 2020, we employed a total of approximately 25,019 employees, including part-time and furloughed employees, consisting of approximately 3,449 full-time and approximately 21,570 part-time employees, down from an aggregate of approximately 38,872 employees consisting of approximately 3,952 full-time and approximately 34,920 part-time employees as of December 31, 2019.

Due to COVID-19 pandemic and the resulting temporary theatre closures for part of the year 2020, 100% of our full-time and part-time corporate and theatre associates eligible under the law were partially or fully furloughed.

Despite the challenges presented by the pandemic, our associates have been instrumental in delivering AMC’s Safe & Clean program which launched upon the reopening of our theatres in the fall of 2020.

Safe & Clean is a set of cleaning protocols and measures that we have implemented to protect the health and safety of our guests and associates.

Our new policies and procedures are advised by faculty members at Harvard School of Public Health and have been developed with the Clorox Company.

Talent Acquisition, Development and Retention.

Critical to our operations is the hiring, developing and retaining of employees who support our guest-focused mission in our theatres.

Acquiring the right talent at speed and scale is a core capability that we regularly monitor and manage, given the need to rapidly staff our frontline operations.

Once hired, we focus on the development of our associates, creating experiences and programs that promote performance, growth and career opportunities for those who are life-long passionate about our business.

We sponsor numerous training, education and leadership development programs for associates at all levels, from hourly associates to executive officers.

These programs are designed to enhance leadership and managerial capability, ensure quality execution of our programs, drive client satisfaction and increase return on investment.

Diversity and Inclusion.

Our goal is to create a workforce as diverse as the guests we serve and the movies we show on our screens.

As such, Diversity and Inclusion are fundamental to our culture and critical to our success.

In support of this goal, AMC established four councils in support of Women, Latinos, African American and LGBTQ+ associates in year 2020.

The purpose of these councils is to strengthen AMC’s culture by defining opportunities to embrace our diversity, lead with fairness and impartiality and create a more inclusive work environment by leveraging associate experiences.

The councils are supported by the diversity, equity, and inclusion (“DEI”) function under the guidance of the Chief Human Resources Officer.

This DEI focus ensures that all communities are represented in our long-term systemic approach.

Our work has been recognized externally:

AMC has received a perfect score for 13 consecutive years on the Human Rights Campaign Foundation’s Corporate Equality Index as one of the “Best Places to Work for LGBTQ Equality”;

and for six years running has been named one of the “Best Places to Work” for people with disabilities on the Disability Equality Index.

Compensation, Benefits, Safety and Wellness.

In addition to offering market competitive salaries and wages, we offer comprehensive health and retirement benefits to eligible employees.

Our health and welfare benefits are supplemented with specific programs to manage or improve common health conditions, a variety of voluntary benefits and paid time away from work programs.

We also provide a number of innovative programs designed to promote physical, emotional and financial well-being.

Our commitment to the safety and health of our associates continues to be a top priority.

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

As of December 31, 2021, we offer alcohol in approximately 349 AMC theatres in the U.S.

markets and 243 theatres in our International markets and continue to explore expansion globally.

Theatrical Exhibition Industry and Competition

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Whether through enhanced food and beverage options (Food and Beverage Kiosks, Marketplaces, Coca-Cola Freestyle, MacGuffins or Dine-in Theatres), more comfort and convenience (recliner seating, open-source internet ticketing, reserved seating), engagement and loyalty (AMC Stubs ® , mobile apps, social media) or sight and sound (digital projectors, 3D, Dolby Cinema™ at AMC, other PLF screens or IMAX ® ), it is the ease of use and the amenities that these innovations bring to customers that we believe will drive sustained profitability in the years ahead.

The following table represents information about the U.S./Canada exhibition industry obtained from the National Association of Theatre Owners:

The following table represents information about the U.S./Canada exhibition industry obtained from the National Association of Theatre Owners, with the exception of box office revenues for calendar years 2021 and 2020

obtained from Comscore.

See Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7 thereof for information regarding our operating data:

Calendar Year

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(in millions)

* Number of theatres and indoor screens information was not available for calendar year 2021 as of the date of this filing.

Based on information obtained from Comscore, we believe that the three largest exhibitors, in terms of U.S./Canada box office revenue (AMC, Regal Entertainment Group, and Cinemark Holdings, Inc.) generated approximately 54% of the box office revenues in 2021.

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films generate the majority of the box office in Europe, but movie-goers in specific geographies welcome locally produced films with local actors and familiar story lines which can mitigate film genre attendance fluctuations.

Going forward, we believe we will see positive growth in theatre attendance as we deploy our proven guest centered innovations like recliner seating, enhanced food and beverage offerings, and premium large

format experiences.

Going forward, we believe we will see positive growth in theatre attendance as we continue to deploy our proven guest-centered innovations like recliner seating, enhanced food and beverage offerings, and premium large format experiences.

Like the U.S., the international industry box office suffered from months of theatre closures, significantly fewer new films and reopening restrictions and generated far fewer sales than 2019.

The following table provides information about the exhibition industry attendance for the International markets where we operate obtained from Screen Digest as well as territory industry trade sources:

The following table provides information about the exhibition industry attendance for the International markets where we operate obtained from territory industry trade sources, see Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7 thereof for information regarding our operating data:

Calendar Year

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United Kingdom

(1) On August 28, 2020, the Company entered into an agreement to sell its equity interest in Forum Cinemas OU, which consists of nine theatres located in the Baltics region (Latvia, Lithuania and Estonia).

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

For further information see Note 1 — The Company and Significant Accounting Policies in the Notes to the Consolidated Financial Statements under Part II, Item 8 thereof.

Our theatres are subject to varying degrees of competition in the geographic areas in which they operate.

Competition is often intense with respect to attracting patrons, licensing motion pictures and finding new theatre sites.

Where real estate is readily available, it is easier to open a theatre near one of our theatres, which may adversely affect operations at our theatre.

Where real estate is readily available, it is easier to open a theatre near one of our theatres, which may adversely

affect operations at our theatre.

However, in certain of our densely populated major metropolitan markets, we believe a scarcity of attractive retail real estate opportunities enhances the strategic value of our existing theatres.

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Movie theatres currently garner a relatively small share of overall consumer entertainment time and spend, and our industry benefits from available capacity to satisfy additional consumer demand without capital investment.

Our revenues are dependent upon the timing of motion picture releases by distributors.

The most marketable motion pictures are usually released during the summer and the year-end holiday seasons.

Therefore, our business is seasonal, with higher attendance and revenues generally occurring during the summer months and holiday seasons.

During the COVID-19 pandemic, and in following periods, our business and results of operations have not and may continue to not experience our historically typical patterns of seasonality.

Regulatory Environment

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Our theatres in the United States must comply with Title III of the Americans with Disabilities Act, or ADA.

Compliance with the ADA requires that public accommodations, including websites and mobile apps for such accommodations, be accessible to individuals with disabilities and that new construction or alterations made to conform to accessibility guidelines.

Non-compliance with the ADA could result in the imposition of injunctive relief, fines, and awards of damages to private litigants and additional capital expenditures to remedy such noncompliance.

employer covered by the ADA, we must make reasonable accommodations to the limitations of employees and qualified applicants with disabilities, provided that such reasonable accommodations do not pose an undue hardship on the operation of our business.

As an employer covered by the ADA, we must make reasonable accommodations to the limitations of employees and qualified applicants with disabilities, provided that such reasonable accommodations do not pose an undue hardship on the operation of our business.

In addition, many of our employees are covered by various government employment regulations, including minimum wage, overtime and working conditions regulations.

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During the COVID-19 pandemic, our theatres have been subject to various governmental orders requiring us to take or refrain from certain activities including, but not limited to, suspending operations, reduction in seating capacities, enforcement of social distancing, establishment of enhanced cleaning protocols, restrictions on food and beverage sales, tracking the identity of guests, employee protection protocols, and limitation on operating hours.

Although the orders have been modified frequently, we believe our theatres have maintained material compliance with such orders.

Although the orders

have been modified frequently, we believe our theatres have maintained material compliance with such orders.

We currently cannot predict when or if COVID-19 related governmental orders will be fully terminated and whether similar orders will be utilized more frequently during future public health outbreaks.

Our revenues are dependent upon the timing of motion picture releases by distributors.

The most marketable motion pictures are usually released during the summer and the year-end holiday seasons.

Therefore, our business is seasonal, with higher attendance and revenues generally occurring during the summer months and holiday seasons.

During the COVID-19 pandemic, and in following periods, our business and results of operations have not and may continue to not experience our historically typical patterns of seasonality.

AMC Human Capital Resources

AMC associates are core to our commitment to delivering the best theatrical experience in the world.

COVID-19 Pandemic Impacts.

The pandemic has had enormous impacts on our industry, guests and associates and has resulted in material variances in our associate metrics in calendar 2021 compared to the 2019 pre COVID-19 years.

As of December 31, 2021, we employed a total of approximately 31,198 employees, including part-time employees, consisting of approximately 3,046 full-time and approximately 28,152 part-time employees, up from an aggregate of approximately 25,019 employees, including part-time and furloughed employees, consisting of approximately 3,449 full-time and approximately 21,570 part-time employees as of December 31, 2020, and down from an aggregate of approximately 38,872 employees consisting of approximately 3,952 full-time and approximately 34,920 part-time employees as of December 31, 2019.

Despite the challenges presented by the pandemic, our associates have been instrumental in delivering AMC’s Safe & Clean program, which launched upon the reopening of our theatres in the fall of 2020.

Safe & Clean is a set of cleaning protocols and measures that we have implemented to protect the health and safety of our guests and associates.

Our new policies and procedures are advised by faculty members at Harvard School of Public Health and have been developed with the Clorox Company.

Talent Acquisition, Development and Retention.

Critical to our operations is the hiring, developing and retaining of employees who support our guest-focused mission in our theatres.

Acquiring the right talent at speed and scale is a core capability that we regularly monitor and manage, given the need to rapidly staff our frontline operations.

We sponsor numerous training, education and leadership development programs for associates at all levels, from hourly associates to executive officers.

These programs are designed to enhance leadership and managerial capability, ensure quality execution of our programs, drive client satisfaction and increase return on investment.

Diversity , Equity and Inclusion.

Our goal is to create a workforce as diverse as the guests we serve and the movies we show on our screens.

As such, Diversity, Equity and Inclusion (“DEI”) are fundamental to our culture and critical to our success.

In support of this goal, AMC established four councils in support of Women, Latinx, African American and LGBTQ+ associates.

These councils are supported by the DEI function under the guidance of the Chief Human Resources Officer.

This DEI focus ensures that all communities are represented in our long-term systemic approach.

Our work has been recognized externally:

AMC has received a perfect score for 14 consecutive years on the Human Rights Campaign Foundation’s Corporate Equality Index as one of the “Best Places to Work for LGBTQ Equality”;

and for seven years running has been named one of the “Best Places to Work” for people with disabilities on the Disability Equality Index.

Compensation, Benefits, Safety and Wellness.

In addition to offering market competitive salaries and wages, we offer comprehensive health and retirement benefits to eligible employees.

Our health and welfare benefits are supplemented with specific programs to manage or improve common health conditions, a variety of voluntary benefits and paid time away from work programs.

We also provide a number of innovative programs designed to promote physical, emotional and financial well-being.

Our commitment to the safety and health of our associates continues to be a top priority.

Available Information

We make available free of charge on our website (www.amctheatres.com) under “Investor Relations” / Financial Performance”/ “SEC Filings,” annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy materials on Schedule 14A and amendments to those reports as soon as reasonably practicable after we electronically file or furnish such materials with the Securities and Exchange Commission.

we electronically file or furnish such materials with the Securities and Exchange Commission.

The contents of our Internet website are not incorporated into this report.

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Position(s) Held

Chief Executive Officer, President and Director

Executive Vice President and Chief Financial Officer

Chairman of the Board, Chief Executive Officer and President

Executive Vice President, Chief Financial Officer and Treasurer

Executive Vice President, U.S.

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There are no family relationships between or among any executive officers.

Adam Aron has served as Chief Executive Officer, President and Director of the Company since January 2016.

Adam Aron has served as Chief Executive Officer, President and Director of the Company since January 2016, and as Chairman of the Board of Directors since July 2021.

From February 2015 to December 2015, Mr.

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and HBSE, which owns the NHL’s New Jersey Devils and the NBA’s Philadelphia 76ers.

Aron served on the board of directors of Prestige Cruise Holdings Inc.

Aron briefly served on the board of directors of Centricus Acquisitions Corp.

He also served on the board of directors of Prestige Cruise Holdings Inc.

from 2007 to 2014.

Aron received a Master’s of Business Administration degree with distinction from the Harvard Business School and a Bachelor of Arts degree cum laude from Harvard College.

Goodman has served as AMC’s Executive Vice President since December 2, 2019 and Executive Vice President and Chief Financial Officer since February 28, 2020.

From July 2017 until November 2019, Mr.

Goodman has served as AMC’s Executive Vice President, Chief Financial Officer and Treasurer since January 2022, Executive Vice President and Chief Financial Officer from February 2020 to January 2022, and Executive Vice President Finance from December 2019 to February 2020.

Prior to joining AMC, Mr.

Goodman was the Chief Financial Officer of Asbury Automotive Group, Inc.

Prior to joining ABG, Mr.

Goodman served as the Chief Financial Officer and Chief Accounting Officer from January 2016 to June 2017 of Unifi, Inc.

Goodman also served as the Chief Financial Officer of the Americas region of Landis+Gyr, AG., from April 2011 to January 2016.

Prior to that, Mr.

Goodman served in various roles from February 2006 to April 2011 at The Home Depot, Inc.

(“ABG”) from July 2017 to November 2019.

Before to joining ABG, Mr.

Goodman served as the Chief Financial Officer of Unifi, Inc.

between January 2016 to June 2017.

Goodman also served as the Chief Financial Officer Americas for Landis+Gyr, AG., from April 2011 to January 2016.

Earlier in his career, Mr.

Goodman served in various roles with increasing responsibility at The Home Depot, Inc., from February 2006 to April 2011.

Goodman began his career as an investment banker with Morgan Stanley, Inc.

and in various consulting and accounting positions with Deloitte LLP.

Goodman is a certified public accountant and has a Bachelor of Business Science from the University of Cape Town in South Africa and an M.B.A.

from The Harvard Business School.

Goodman is a certified public accountant and has a Masters Degree in Business Administration from The Harvard Business School and a Bachelor of Business Science Degree (with honors) from the University of Cape Town in South Africa.

McDonald has served as Executive Vice President, U.S.

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Cox held various positions at PwC LLP.

Cox holds a Bachelor of Business Administration degree in Accounting and Finance from the University of Iowa.

Cox holds a Bachelor of Business Administration in Accounting and Finance degree from the University of Iowa.

Chavarria has served as Senior Vice President, Chief Human Resources Officer of AMC since January 2019 and Senior Vice President, Human Resources of AMC since January 2014.

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Chavarria’s prior experience includes human resources manager and director of employment practices.

Chavarria began her career at AMC in 1988 as a theatre manager in Philadelphia.

Chavarria serves as co-chair for the AMC Cares Invitational and is a member of the AMC Investment Committee.

She is formerly a board member for the Quality Hill Playhouse, Big Brothers Big Sisters of Kansas City, the Kansas City Zoo, Negro League Baseball Museum, the chair of Win Win, Visit KC, and the National YMCA.

She is currently a Board and Compensation Committee member of First Business Financial Services.

Chavarria has over 20 years of human resources experience.

Chavarria holds a B.S.

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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-K

Item 1. Business