What changed in this filing

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Item 1. Financial Statements

2022-08-04 compared with 2022-05-09 · 279 added, 145 removed, 743 unchanged (36% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

(In millions, except share and per share amounts)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Food and beverage

11 unchanged sentences

Operating loss

Other expense (income):

Other expense, net:

Other expense (income)

4 unchanged sentences

Equity in loss of non-consolidated entities

Investment income

Investment expense (income)

Total other expense, net

11 unchanged sentences

Three Months Ended

Six Months Ended

(In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Other comprehensive income (loss):

Unrealized foreign currency translation adjustments

Realized loss on foreign currency transactions reclassified into investment expense (income), net of tax

Pension adjustments:

Net gain arising during the period

Other comprehensive loss

Other comprehensive income (loss):

Total comprehensive loss

5 unchanged sentences

(In millions, except share data)

March 31, 2022

June 30, 2022

December 31, 2021

30 unchanged sentences

Class A common stock ($ .01 par value, 524,173,073 shares authorized;

516,820,595 shares issued and outstanding as of March 31, 2022;

516,820,595 shares issued and outstanding as of June 30, 2022;

513,979,100 shares issued and outstanding as of December 31, 2021)

7 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

Cash flows from operating activities:

4 unchanged sentences

Unrealized gain on investments in Hycroft

Unrealized loss (gain) on investments in NCM

Amortization of net discount (premium) on corporate borrowings to interest expense

3 unchanged sentences

Gain on disposition of assets

Gain on disposition of Baltics

Equity in loss from non-consolidated entities, net of distributions

9 unchanged sentences

Capital expenditures

Proceeds from disposition of Baltics, net of cash and transaction costs

Acquisition of theatre assets

Proceeds from disposition of long-term assets

Proceeds from sale of securities

Investments in non-consolidated entities, net

10 unchanged sentences

Premium paid to extinguish First Lien Toggle Notes due 2026

Repurchase of Second Lien Notes due 2026

Repayments under revolving credit facilities

1 unchanged sentence

Net proceeds from Class A common stock issuance

Net proceeds from Class A common stock issuance to Mudrick

Payments related to sale of noncontrolling interest

18 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2022

June 30, 2022

NOTE 1—BASIS OF PRESENTATION

3 unchanged sentences

Temporarily suspended or limited operations.

Total consolidated revenues increased $ 637.4 million for the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

The increase in total consolidated revenues was primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension of operations at the Company’s theatres in U.S.

markets and International markets.

Total consolidated revenues increased $ 1,359.1 million for the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

The increase in total consolidated revenues was primarily due to the reduced impact of the COVID-19 pandemic on the current year which resulted in increased operating capacity and increased availability of films with broad consumer appeal.

As of January 1, 2021 the Company operated at 394 domestic theatres, with limited seating capacities, representing approximately 67 % of its domestic theatres.

As of March 31, 2021, the Company operated at 585 domestic theatres, with limited seating capacities, representing approximately 99 % of its domestic theatres.

As of June 30, 2021, the Company operated at 593 domestic theatres, representing approximately 100 % of its domestic theatres with remaining seating capacity restrictions winding down throughout the quarter.

As of January 1, 2021, the Company operated at 109 International leased and partnership theatres, with limited seating capacities, representing approximately 30 % of our International theatres.

As of March 31, 2021, the Company operated at 97 international theatres, with limited seating capacities, representing approximately 27 % of its international theatres.

During the three months ended March 31, 2022, the Company operated substantially 100 % of its U.S.

As of June 30, 2021, the Company operated at 335 international theatres, with limited seating capacities, representing approximately 95 % of its international theatres.

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

During the six months ended June 30, 2022, the Company operated essentially 100 % of its U.S.

and International theatres.

As of March 31, 2022, the Company has cash and cash equivalents of approximately $ 1.2 billion.

As of June 30, 2022 there are no restrictions on operations in any of the U.S.

or International theatres.

As of June 30, 2022, the Company has cash and cash equivalents of approximately $ 965.2 million.

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

The Company is continuing to take measures to further strengthen its financial position and enhance its operations, by minimizing non-essential costs, including reductions to its variable costs and elements of its fixed cost structure, introducing new initiatives, and optimizing its theatrical footprint.

Additionally, the Company enhanced future liquidity through debt refinancing at lower interest rates.

Additionally, the Company enhanced future liquidity through debt refinancing at lower interest rates and repurchasing debt at 69 % of par value.

See Note 6 — Corporate Borrowings and Finance Lease Obligations for further information.

The table below summarizes net increase (decrease) in cash and cash equivalents and restricted cash by quarter for the year ended December 31, 2021:

Three Months Ended

September 30,

(In millions)

Cash flows from operating activities:

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash and cash equivalents and restricted cash

Net increase (decrease) in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents and restricted cash at end of period

The Company’s net cash used in operating activities improved by $ 79.1 million during the three months ended June 30, 2021 compared to the three months ended March 31, 2021, $ 119.9 million during the three months ended September 30, 2021 compared to the three months ended June 30, 2021, and $ 160.4 million during the three months ended December 31, 2021 compared to the three months ended September 30, 2021.

The table below summarizes net decrease in cash equivalents and restricted cash by quarter for the six months ended June 30, 2022:

Three Months Ended

Six Months Ended

(In millions)

Cash flows from operating activities:

Net cash used in operating activities

Cash flows from investing activities:

Net cash used in investing activities

Cash flows from financing activities:

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents and restricted cash

Net decrease in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents and restricted cash at end of period

The Company’s net cash provided by (used in) operating activities deteriorated by $ 341.5 million during the three months ended March 31, 2022 compared to the three months ended December 31, 2021 from $ 46.5 million to $( 295.0 ) million.

The decline in net cash provided by operating activities from the three months ended December 31, 2021 to the three months ended March 31, 2022 was primarily attributable to a decrease in attendance and increase in net loss and increases in seasonal working capital uses as the Company paid for the strong late fourth quarter 2021 results in early first quarter of 2022.

loss and increases in seasonal working capital uses as the Company paid for the strong late fourth quarter 2021 results in early first quarter of 2022.

The Company’s net cash used in operating activities improved by $ 218.4 million during the three months ended June 30, 2022 compared to the three months ended March 31, 2022 from $( 295.0 ) million to $( 76.6 ) million.

The improvement in net cash used in operating activities from the three months ended March 31, 2022 to the three months ended June 30, 2022 was primarily attributable to an increase in attendance and decrease in net loss and decreases in seasonal working capital uses as we will pay for the strong second quarter 2022 results in early third quarter of 2022.

The Company has also continued to repay rent amounts that were deferred during the COVID-19 pandemic, which increases its cash outflows from operating activities.

See Note 2—Leases for a summary of the estimated future repayment terms for the remaining $ 218.9 million of rentals that were deferred during the COVID-19 pandemic.

The Company’s net cash used in investing activities of $ 54.9 million included $ 34.8 million of capital expenditures and $ 27.9 million of investments in non-consolidated entities, partially offset by proceeds from the disposition of long-term assets of $ 7.2 million during the three months ended March 31, 2022.

The Company’s net cash used in financing activities of $ 76.3 million included principal and premium payments of $ 955.7 million, taxes paid for restricted unit withholdings of $ 52.2 million, and cash used to pay for deferred financing costs of $ 17.7 million, partially offset by proceeds from the Company’s debt issuance of $ 950.0 million, during the three months ended March 31, 2022.

The Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations, satisfy its obligations, including cash outflows for increased rent and planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under its debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility for at

least the next 12 months.

In order to achieve net positive operating cash flows and long-term profitability, the Company believes it will need to increase attendance levels significantly compared to 2021 and achieve levels in line with pre COVID-19 attendance.

The Company’s net cash used in investing activities included:

● $ 34.8 million of capital expenditures and $ 27.9 million of investments in non-consolidated entities, partially offset by proceeds from the disposition of long-term assets of $ 7.2 million during the three months ended March 31, 2022.

● $ 40.4 million of capital expenditures, $ 17.8 million for the acquisition of theatres, partially offset by proceeds of $ 11.4 million from the sale of securities in conjunction with the liquidation of a non-qualified deferred compensation plan during the three months ended June 30, 2022.

The Company’s net cash used in financing activities included:

● $ 955.7 million of principal and premium payments of, $ 52.2 million of taxes paid for restricted unit withholdings, and $ 17.7 million of cash used to pay for deferred financing costs, partially offset by proceeds from the Company’s debt issuance of $ 950.0 million, during the three months ended March 31, 2022.

● $ 57.9 million of principal and premium payments, $ 1.8 million of cash used to pay for deferred financing costs during the three months ended June 30, 2022.

The Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations, satisfy its obligations, including cash outflows to repay rent amounts that were deferred during the COVID-19 pandemic and planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under its debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility for at least the next 12 months.

In order to achieve net positive operating cash flows and long-term profitability, the Company believes that box office revenues will need to increase significantly compared to 2021 and the combined first and second quarter of 2022 to levels in line with pre COVID-19 box office revenues.

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

The Company believes that the sequential increases in attendance experienced each quarter of 2021 are positive signs of continued demand for the moviegoing experience.

The Company believes that recent attendance levels are positive signs of continued demand for the moviegoing experience.

For the six months ended June 30, 2022 attendance was 98.2 million patrons, a 69.3 million patron increase from the approximately 28.9 million patrons for the six months ended June 30, 2021.

The Company’s business is seasonal, with higher attendance and revenues generally occurring during the summer months and holiday seasons.

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 the COVID-19 variant strains, movie studios release schedules and direct to streaming or other changing movie studio practices.

However, there remain significant risks that may negatively impact attendance, including a potential 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, the production and theatrical release of fewer films compared to levels before the onset of the COVID-19 pandemic, and direct to streaming or other changing movie studio practices.

The Company entered the Ninth Amendment to the Credit Agreement, dated as of March 8, 2021, pursuant to which the requisite revolving lenders party thereto agreed to extend the suspension period for the financial covenant (the secured leverage ratio) applicable to the Senior Secured Revolving Credit Facility from March 31, 2021 to March 31, 2022, which was further extended from March 31, 2022 to March 31, 2023 by the Eleventh Amendment, dated as of December 20, 2021, as described, and on the terms and conditions specified, therein.

The Company is currently subject to minimum liquidity requirements of approximately $ 139.5 million, of which $ 100 million is required under the conditions for the Extended Covenant Suspension Period, as amended, under the Senior Secured Revolving Credit Facility, and £ 32.5 million (approximately $ 39.5 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.

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.

The Company currently expects it will be able to comply with this financial covenant;

however, the Company does not anticipate the need to borrow under the Senior Secured Revolving Credit Facility during the next twelve months.

The Company received rent concessions provided by the lessors that aided in mitigating the economic effects of COVID-19 during the pandemic during the years 2021 and 2020.

The 11.25 % Odeon Term Loan due 2023 matures on August 19, 2023 during the third fiscal quarter of the Company’s next calendar year.

The Company is currently negotiating terms of new debt intended to refinance the existing £ 147.6 million and € 312.2 million aggregate principal amounts of Odeon Term Loan due 2023.

While the Company intends to fully refinance the 11.25 % Odeon Term Loan due 2023 and extend current maturity dates, there are no assurances that the Company will be able to do so.

If the Company is unable to refinance these amounts, the principal amounts will be reported as current maturities which may increase uncertainty regarding its ability to meet future commitments.

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

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

The amounts involved may be material.

The Company 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 $ 271.7 million as of March 31, 2022.

The Company’s cash expenditures for rent increased significantly during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

As a result, deferred lease amounts were approximately $ 218.9 million as of June 30, 2022.

The Company’s cash expenditures for rent increased significantly during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

See Note 2—Leases for a summary of the estimated future repayment terms for the deferred lease amounts due to COVID-19.

9 unchanged sentences

All significant intercompany balances and transactions have been eliminated in consolidation.

Due to the seasonal nature of the Company’s business and the recovery of the industry from the global COVID-19 pandemic, results for the three months ended March 31, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022.

Due to the seasonal nature of the Company’s business and the recovery of the industry from the global COVID-19 pandemic, results for the six months ended June 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022.

The Company manages its business under two reportable segments for its theatrical exhibition operations, U.S.

1 unchanged sentence

Cash and equivalents.

At March 31, 2022, cash and cash equivalents for the U.S.

At June 30, 2022, cash and cash equivalents for the U.S.

markets and International markets were $ 812.8 million and $ 152.4 million respectively, and at December 31, 2021, cash and cash equivalents were $ 1,311.4 million and $ 281.1 million, respectively.

1 unchanged sentence

Restricted cash is cash held in the Company’s bank accounts in International markets as a guarantee for certain landlords.

Accumulated other comprehensive income (loss).

The following table presents the change in accumulated other comprehensive income (loss) by component:

Accumulated other comprehensive loss.

The following table presents the change in accumulated other comprehensive loss by component:

(In millions)

2 unchanged sentences

Other comprehensive income (loss)

Balance March 31, 2022

Balance June 30, 2022

Accumulated depreciation and amortization.

Accumulated depreciation was $ 2,642.9 million and $ 2,583.4 million at March 31, 2022 and December 31, 2021, respectively, related to property.

Accumulated amortization of intangible assets was $ 41.9 million and $ 41.2 million at March 31, 2022 and December 31, 2021, respectively.

Accumulated depreciation was $ 2,680.0 million and $ 2,583.4 million at June 30, 2022 and December 31, 2021, respectively, related to property.

Accumulated amortization of intangible assets was $ 42.0 million and $ 41.2 million at June 30, 2022 and December 31, 2021, respectively.

Other expense (income).

1 unchanged sentence

Three Months Ended

Six Months Ended

(In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Decreases related to contingent lease guarantees

3 unchanged sentences

Non-operating components of net periodic benefit income

Loss on extinguishment of debt

(Gain) Loss on extinguishment of debt

Financing fees related to modification of debt agreements

9 unchanged sentences

Lease terms vary but generally the leases provide for fixed and escalating rentals, contingent escalating rentals based on the Consumer Price Index and other indexes not to exceed certain specified amounts and variable rentals based on a percentage of revenues.

The Company often receives contributions from landlords for renovations at existing locations.

The Company often receives

contributions from landlords for renovations at existing locations.

The Company records the amounts received from landlords as an adjustment to the right-of-use asset and amortizes the balance as a reduction to rent expense over the base term of the lease agreement.

Equipment leases primarily consist of food and beverage equipment.

The Company received rent concessions provided by the lessors that aided in mitigating the economic effects of

COVID-19 during the pandemic.

The Company received rent concessions from 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.

13 unchanged sentences

Total deferred lease amounts

(1) During the three months ended March 31, 2022, the decrease in fixed operating lease deferred amounts includes $ 37.9 million of decreases in the deferred balances as of December 31, 2021 related to payments and abatements.

(1) During the six months ended June 30, 2022, the decrease in fixed operating lease deferred amounts includes $ 79.4 million of decreases in the deferred balances as of December 31, 2021 related to payments and abatements.

The following table reflects the lease costs for the periods presented:

Three Months Ended

Six Months Ended

(In millions)

3 unchanged sentences

Theatre properties

Operating expense

Operating expense (income)

Operating expense

11 unchanged sentences

Cash flow and supplemental information is presented below:

Three Months Ended

Six Months Ended

(In millions)

8 unchanged sentences

(1) Includes lease extensions and option exercises.

The following table represents the weighted-average remaining lease term and discount rate as of March 31, 2022:

As of March 31, 2022

The following table represents the weighted-average remaining lease term and discount rate as of June 30, 2022:

As of June 30, 2022

Weighted Average

4 unchanged sentences

Finance leases

Minimum annual payments, including deferred lease payments less contractual rent amounts due and not paid that were recorded in accounts payable, that are recorded as operating and finance lease liabilities and the net present value thereof as of March 31, 2022 are as follows:

Operating Lease

1 unchanged sentence

(In millions)

Nine months ending December 31, 2022 (1)

Six months ending December 31, 2022 (1)

Total lease payments

5 unchanged sentences

Lease Payments

Three months ended June 30, 2022

Three months ended September 30, 2022

6 unchanged sentences

(In millions)

Three months ended June 30, 2022

Three months ended September 30, 2022

1 unchanged sentence

Total deferred lease amounts

As of March 31, 2022, the Company had signed additional operating lease agreements for 5 theatres that have not yet commenced of approximately $ 99.5 million, which are expected to commence between years 2022 and 2024 and carry lease terms ranging from 5 to 20 years .

As of June 30, 2022, the Company had signed additional operating lease agreements for three theatres that have not yet commenced with minimum annual payments of approximately $ 68.9 million, which are expected to commence between years 2022 and 2024 and carry lease terms ranging from 11 to 20 years .

The timing of lease commencement is dependent on the landlord providing the Company with control and access to the related facility.

3 unchanged sentences

Three Months Ended

Six Months Ended

(In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Major revenue types

5 unchanged sentences

Three Months Ended

Six Months Ended

(In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Timing of revenue recognition

5 unchanged sentences

(In millions)

March 31, 2022

June 30, 2022

December 31, 2021

4 unchanged sentences

(In millions)

March 31, 2022

June 30, 2022

December 31, 2021

19 unchanged sentences

Foreign currency translation adjustment

Balance March 31, 2022

Balance June 30, 2022

(1) Includes movie tickets, food and beverage, gift cards, exchange tickets, and AMC Stubs® loyalty membership fees.

9 unchanged sentences

Reclassification of portion of the beginning balance to other theatre revenue, as the result of performance obligations satisfied

Balance March 31, 2022

Balance June 30, 2022

(1) Represents the carrying amount of the National CineMedia, LLC (“NCM”) common units that were previously received under the annual Common Unit Adjustment (“CUA”).

1 unchanged sentence

Gift cards and exchange tickets.

The total amount of non-redeemed gift cards and exchange tickets included in deferred revenues and income in the condensed consolidated balance sheet as of March 31, 2022 was $ 295.3 million.

The total amount of non-redeemed gift cards and exchange tickets included in deferred revenues and income in the condensed consolidated balance sheet as of June 30, 2022 was $ 274.0 million.

This will be recognized as revenues as the gift cards and exchange tickets are redeemed or as the non-redeemed gift card and exchange ticket revenues are recognized in proportion to the pattern of actual redemptions, which is estimated to occur over the next 24 months .

Loyalty programs.

As of March 31, 2022, the amount of deferred revenues allocated to the loyalty programs

included in deferred revenues and income in the condensed consolidated balance sheet was $ 64.4 million.

As of June 30, 2022, the amount of deferred revenues allocated to the loyalty programs included in deferred revenues and income in the condensed consolidated balance sheet was $ 66.7 million.

The earned points will be recognized as revenue as the points are redeemed, which is estimated to occur over the next 24 months .

2 unchanged sentences

NOTE 4—GOODWILL

The following table summarizes the changes in goodwill by reporting unit for the three months ended March 31, 2022:

The following table summarizes the changes in goodwill by reporting unit for the six months ended June 30, 2022:

(In millions)

3 unchanged sentences

Currency translation adjustment

Balance March 31, 2022

Balance June 30, 2022

NOTE 5—INVESTMENTS

Investments in non-consolidated affiliates and certain other investments accounted for under the equity method generally include all entities in which the Company or its subsidiaries have significant influence, but not more than 50% voting control, and are recorded in the condensed consolidated balance sheets in other long-term assets.

Investments in non-consolidated affiliates as of March 31, 2022 include interests in Digital Cinema Implementation Partners, LLC (“DCIP”) of 29.0 %, Digital Cinema Distribution Coalition, LLC (“DCDC”) of 14.6 %, AC JV, LLC (“AC JV”), owner of Fathom Events, of 32.0 %, SV Holdco LLC (“SV Holdco”), owner of Screenvision, of 18.4 %, Digital Cinema Media Ltd.

Investments in non-consolidated affiliates as of June 30, 2022 include interests in Digital Cinema Implementation Partners, LLC (“DCIP”) of 29.0 %, Digital Cinema Distribution Coalition, LLC (“DCDC”) of 14.6 %, AC JV, LLC (“AC JV”), owner of Fathom Events, of 32.0 %, SV Holdco LLC (“SV Holdco”), owner of Screenvision, of 18.4 %, Digital Cinema Media Ltd.

(“DCM”) of 50.0 %, and Saudi Cinema Company LLC (“SCC”) of 10.0 %.

2 unchanged sentences

Indebtedness held by equity method investees is non-recourse to the Company.

During the three months ended March 31, 2022 and March 31, 2021, the Company recorded equity in loss of non-consolidated entities of $ 5.1 million and $ 2.8 million, respectively.

During the three months ended June 30, 2022 and June 30, 2021, the Company recorded equity in loss of non-consolidated entities of $ 1.0 million and $ 2.7 million, respectively.

During the six months ended June 30, 2022 and June 30, 2021, the Company recorded equity in loss of non-consolidated entities of $ 6.1 million and $ 5.5 million, respectively.

Related party transactions with equity method investees.

At March 31, 2022 and December 31, 2021, the Company recorded net receivable amounts due from equity method investees of $ 4.1 million and $ 2.6 million, respectively, primarily related to on-screen advertising revenue, projector warranty expenditures and other transactions.

The Company recorded related party transactions with equity method investees in other revenues, film exhibition costs, and operating expenses of $ 5.5 million, $ 1.4 million, and $ 0 million, respectively, during the three months ended March 31, 2022, and $ 0.6 million, $ 0.3 million, and $ 0.4 million, respectively, during the three months ended March 31, 2021.

At June 30, 2022 and December 31, 2021, the Company recorded net receivable amounts due from equity method investees of $ 5.5 million and $ 2.6 million, respectively, primarily related to on-screen advertising revenue, projector warranty expenditures and other transactions.

The Company recorded related party transactions with equity method investees in other revenues, film exhibition costs, and operating expenses (income) of $ 6.5 million, $ 2.3 million and $ 0 million, respectively, during the three months ended June 30, 2022, and $ 1.2 million, $ 0.4 million, and $( 0.3 ) million, respectively, during the three months ended June 30, 2021.

The Company recorded related party transactions with equity method investees in other revenues, film exhibition costs, and operating expenses of $ 12.0 million, $ 3.4 million, and $ 0 million, respectively, during the six months ended June 30, 2022, and $ 1.8 million, $ 0.7 million, and $ 0.1 million, respectively, during the six months ended June 30, 2021.

Investment in Hycroft

3 unchanged sentences

Each warrant is exercisable for one common share of Hycroft at a price of $ 1.068 per share over a 5-year term through March 2027.

Hycroft filed a resale registration statement to register the common shares and warrant shares for sale under the Securities Act on April 14, 2022.

Hycroft filed a resale registration statement to register the common shares and warrant shares for sale under the Securities Act on April 14, 2022 which became effective on June 2, 2022.

The Company accounts for the common shares of Hycroft under the equity method and has elected the fair value option in accordance with ASC 825-10.

2 unchanged sentences

The Company believes the fair value option to be the most appropriate election for this equity method investment as the Company is not entering the mining business.

During the three months ended March 31, 2022, the Company recorded unrealized gains related to the investment in Hycroft of $ 63.9 million in investment income.

Hycroft has outstanding warrants with other investors that could dilute the Company’s share of earnings.

During the three and six months ended June 30, 2022, the Company recorded unrealized (losses) and gains in investment income of $( 47.8 ) million and $ 16.1 million, respectively.

See Note 9 — Fair Value Measurements for fair value information and Note 13 — Supplemental Balance Sheet Information for the asset value for investments in Hycroft measured under the fair value option as well as the total asset value for other equity method investments.

5 unchanged sentences

(“NCM, Inc.”) of $ 2.52 on March 30, 2022.

See Note 9 — Fair Value Measurements for information regarding the fair value measurement on March 31, 2022.

During the three and six months ended June 30, 2022, the Company recorded unrealized losses in investment expense of $ 9.6 million and $ 9.5 million, respectively.

See Note 9 — Fair Value Measurements for information regarding the fair value measurement on June 30, 2022.

NOTE 6—CORPORATE BORROWINGS AND FINANCE LEASE OBLIGATIONS

1 unchanged sentence

(In millions)

March 31, 2022

June 30, 2022

December 31, 2021

First Lien Secured Debt:

Senior Secured Credit Facility-Term Loan due 2026 ( 3.352 % as of March 31, 2022)

10.75 % in Year 1, 11.25 % thereafter Cash/PIK Odeon Term Loan Facility due 2023 (£ 147.6 million and € 312.2 million par value as of March 31, 2022)

Senior Secured Credit Facility-Term Loan due 2026 ( 4.199 % as of June 30, 2022)

10.75 % in Year 1, 11.25 % thereafter Cash/PIK Odeon Term Loan Facility due 2023 (£ 147.6 million and € 312.2 million par value as of June 30, 2022)

7.5 % First Lien Notes due 2029

5 unchanged sentences

Subordinated Debt:

6.375 % Senior Subordinated Notes due 2024 (£ 4.0 million par value as of March 31, 2022)

6.375 % Senior Subordinated Notes due 2024 (£ 4.0 million par value as of June 30, 2022)

5.75 % Senior Subordinated Notes due 2025

15 unchanged sentences

6.375 % Senior Subordinated Notes due 2024

The following table provides the principal payments required and maturities of corporate borrowing as of March 31, 2022:

The following table provides the principal payments required and maturities of corporate borrowing as of June 30, 2022:

(In millions)

Nine months ended December 31, 2022

Six months ended December 31, 2022

First Lien Notes due 2029

2 unchanged sentences

The Company used the net proceeds from the sale of the notes, and cash on hand, to fund the full redemption of the then outstanding $ 500 million aggregate principal amount of the Company’s 10.5 % First Lien Notes due 2025 (“First Lien Notes due 2025”), the then outstanding $ 300 million aggregate principal amount of the Company’s 10.5 % First Lien Notes due 2026 (“First Lien Notes due 2026”), and the then outstanding $ 73.5 million aggregate principal amount of the Company’s 15 %/ 17 % Cash/PIK Toggle First Lien Secured Notes due 2026 (“First Lien Toggle Notes due 2026”) and to pay related accrued interest, fees, costs, premiums and expenses.

The Company recorded a loss on debt extinguishment related to this transaction of $ 135.0 million in other expense, during the three months ended March 31, 2022.

The Company recorded a loss on debt extinguishment related to this transaction of $ 0 million and $ 135.0 million, respectively, in other expense, during the three and six months ended June 30, 2022.

The deferred charges will be amortized to interest expense over the term of the First Lien Notes due 2029 using the effective interest method.

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The indentures governing the First Lien Notes due 2029 also provides for events of default, which, if any occur, would permit or require the principal, interest and any other monetary obligations on all the then outstanding notes to be due and payable immediately.

Second Lien Notes due 2026

During the three months ended June 30, 2022, the Company repurchased $ 72.5 million aggregate principal amounts of the Second Lien Notes due 2026 for $ 50.0 million and recorded a gain on extinguishment of $ 38.6 million in other expense (income).

Accrued interest of $ 3.1 million was paid in connection with the repurchases.

Odeon Term Loan due 2023

The 11.25 % Odeon Term Loan due 2023 matures on August 19, 2023 during the third fiscal quarter of the Company’s next calendar year.

The Company is currently negotiating terms of new debt intended to refinance the existing £ 147.6 million and € 312.2 million aggregate principal amounts of Odeon Term Loan due 2023.

While the Company intends to fully refinance the 11.25 % Odeon Term Loan due 2023 and extend current maturity dates, there are no assurances that the Company will be able to do so.

If the Company is unable to refinance these amounts, the principal amounts will be reported as current maturities which may increase uncertainty regarding its ability to meet future commitments.

Financial Covenants

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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.

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.

The Company currently expects it will be able to comply with this financial covenant;

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Three Months Ended

Six Months Ended

(In millions)

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Total stock-based compensation expense

As of March 31, 2022, the estimated remaining unrecognized compensation cost related to stock-based compensation arrangements was approximately $ 52.5 million, which reflects assumptions related to attainment of performance targets based on the scales as described below.

As of June 30, 2022, the estimated remaining unrecognized compensation cost related to stock-based compensation arrangements was approximately $ 50.6 million, which reflects assumptions related to attainment of performance targets based on the scales as described below.

The weighted average period over which this remaining compensation expense is expected to be recognized is approximately 0.9 years.

Awards Granted in 2022

During the three months ended March 31, 2022, AMC’s Board of Directors approved awards of stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan.

The grant date fair value of these awards during the three months ended March 31, 2022 was based on the closing price of AMC’s Class A common stock (“Common Stock” or “Common Shares”) on February 16, 2022 of $ 19.67 per share and on March 7, 2022 of $ 15.21 per share.

During the six months ended June 30, 2022, AMC’s Board of Directors approved awards of stock, restricted stock units (“RSUs”), and performance stock units (“PSUs”) to certain of the Company’s employees and directors under the 2013 Equity Incentive Plan.

The grant date fair value of these awards during the six months ended June 30, 2022 was based on the closing price of AMC’s Class A common stock (“Common Stock” or “Common Shares”) on February 16, 2022 of $ 19.67 per share, March 7, 2022 of $ 15.21 per share, and May 3, 2022 of $ 15.51 per share.

Each RSU and PSU held by a participant as of a dividend record date is entitled to a dividend equivalent equal to the amount paid with respect to one share of Common Stock underlying the unit.

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● Stock Award Agreement:

During the three months ended March 31, 2022, the Company granted awards of 41,650 fully vested shares of Common Stock to its independent members of AMC’s Board of Directors with a grant date fair value of $ 0.8 million.

During the six months ended June 30, 2022, the Company granted awards of 41,650 fully vested shares of Common Stock to its independent members of AMC’s Board of Directors with a grant date fair value of $ 0.8 million.

● Restricted Stock Unit Award Agreement:

During the three months ended March 31, 2022, the Company granted RSU awards of 688,269 to certain members of management with a grant date fair value of $ 13.4 million.

During the six months ended June 30, 2022, the Company granted RSU awards of 697,135 to certain members of management with a grant date fair value of $ 13.6 million.

The Company records stock-based compensation expense on a straight-line recognition method over the requisite vesting period.

Each RSU represents the right to receive one share of Common Stock at a future date.

The RSUs vest over three years , with 1/3 vesting in each year.

The RSUs vest over three years , with one-third vesting in each year.

These RSUs will be settled within 30 days of vesting.

● Performance Stock Unit Award Agreement:

During the three months ended March 31, 2022, total PSUs of 688,269 were awarded (“2022 PSU award”) to certain members of management and executive officers, with the total PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year within the performance period (“Tranche Year”).

During the six months ended June 30, 2022, total PSUs of 697,135 were awarded (“2022 PSU award”) to certain members of management and executive officers, with the total PSUs divided into three separate year tranches, with each tranche allocated to a fiscal year within the performance period (“Tranche Year”).

The PSUs within each Tranche Year are further divided between two performance targets;

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Therefore, the grant date (and fair value measurement date) for each Tranche Year is the date at the beginning of each year when a mutual understanding of the key terms and conditions are reached per ASC 718, Compensation – Stock compensation.

During the three months ended March 31, 2022, the 2022 PSU award grant date fair value for the 2022 Tranche Year award of 229,316 units was approximately $ 4.5

million and the 2021 PSU award grant date fair value for the 2022 Tranche Year award of 878,540 units was approximately $ 17.3 million, measured using performance targets at 100 %.

The 2020 PSU award for the 2022 Tranche Year was previously granted in year 2020, and was subsequently modified on October 30, 2020 where the grant date fair value was not determined until the three months ended March 31, 2022 when the performance targets were established.

The 2022 PSU award grant date fair value for the 2022 Tranche Year award of 232,270 units was approximately $ 4.5 million and the 2021 PSU award grant date fair value for the 2022 Tranche Year award of 878,540 units was approximately $ 17.3 million, measured using performance targets at 100 %.

The 2020 PSU award for the 2022 Tranche Year was previously granted in year 2020, and was subsequently modified on October 30, 2020 where the grant date fair value was not determined until February 16, 2022 when the performance targets were established.

As a result, the 2020 PSU award grant date fair value for the 2022 Tranche Year award of 429,683 units was approximately $ 8.5 million, measured using performance targets at 100 %.

The following table represents the nonvested RSU and PSU activity for the three months ended March 31, 2022:

At June 30, 2022, the Company estimated that 2022 Tranche Year target performance conditions for the annual Adjusted EBITDA and free cash flow are expected to be achieved at 200 % and 120 %, respectively.

The following table represents the nonvested RSU and PSU activity for the six months ended June 30, 2022:

Shares of RSU

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( 2,358,278 )

Nonvested at March 31, 2022 (3)

Nonvested at June 30, 2022

Tranche Years 2023 and 2024 awarded under the 2022 PSU award and Tranche Year 2023 awarded under the 2021 PSU award with grant date fair values to be determined in years 2023 and 2024, respectively

Total Nonvested at March 31, 2022

Total Nonvested at June 30, 2022

(1) Includes awards modified during 2020 where grant date fair value was not determined until 2022.

(2) Represents vested RSUs and PSUs surrendered in lieu of taxes and cancelled awards returned to the 2013 Equity Incentive plan.

As a result, the Company paid taxes for restricted unit withholdings of approximately $ 52.2 million during the three months ended March 31, 2022.

(3) The number of PSU shares granted under the Tranche Year 2022 assumes the Company will attain a performance target at 100 % for both the Adjusted EBITDA target and the free cash flow target.

(2) The number of PSU shares granted under the Tranche Year 2022 assumes the Company will attain a performance target at 200 % for the Adjusted EBITDA target and 120 % for the free cash flow target.

The PSUs vest ratably based on a scale ranging from 80 % to 120 % of the performance target with the vested amount ranging from 50 % to 200 % for Tranche Year 2022 awards granted under the 2022, 2021 and 2020 PSU awards.

(3) Represents vested RSUs and PSUs surrendered in lieu of taxes and cancelled awards returned to the 2013 Equity Incentive plan.

As a result, the Company paid taxes for restricted unit withholdings of approximately $ 52.2 million during the six months ended June 30, 2022.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Three Months Ended March 31, 2022

For the Six Months Ended June 30, 2022

Class A Voting

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Balances March 31, 2022

Other comprehensive income

Stock-based compensation

Balances June 30, 2022

(1) Includes 41,650 shares awarded to Board of Directors and 2,799,845 vested RSUs and PSUs.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Three Months Ended March 31, 2021

For the Six Months Ended June 30, 2021

Class A Voting

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Balances March 31, 2021

Other comprehensive income

100% liquidation of Baltics

Class A common stock, accrued dividend equivalent adjustment

Class A common stock issuance

( 3,732,625 )

Class A common stock issuance to Mudrick

Stock-based compensation

Balances June 30, 2021

NOTE 8—INCOME TAXES

The Company’s worldwide effective income tax rate is based on actual income (loss), statutory rates, valuation allowances against deferred tax assets and tax planning opportunities available in the various jurisdictions in which it operates.

The Company is using a discrete income tax calculation for the three months ended March 31, 2022 due to the lingering effects of the COVID-19 pandemic on the industry.

The Company is using a discrete income tax calculation for the three and six months ended June 30, 2022 due to the lingering effects of the COVID-19 pandemic on the industry.

Historically, for interim financial reporting, the Company estimated the worldwide annual income tax rate based on projected taxable income (loss) for the full year and recorded a quarterly income tax provision or benefit in accordance with the anticipated annual rate, adjusted for discrete items, if any.

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deferred tax assets and most of the Company’s international deferred tax assets as the Company has determined the realization of these assets does not meet the more likely than not criteria.

The effective tax rate for the three months ended March 31, 2022 reflects the impact of these valuation allowances against U.S.

and international deferred tax assets generated during the three-month period.

The actual effective rate for the three months ended March 31, 2022 was 0 %.

The Company’s consolidated tax rate for the three months ended March 31, 2022 differs from the U.S.

The effective tax rate for the six months ended June 30, 2022 reflects the impact of these valuation allowances against U.S.

and international deferred tax assets generated during the six-month period.

The actual effective rate for the six months ended June 30, 2022 was 0 %.

The Company’s consolidated tax rate for the six months ended June 30, 2022 differs from the U.S.

statutory tax rate primarily due to the valuation allowances in U.S.

and foreign jurisdictions, foreign tax rate differences, federal and state tax credits, permanent differences and other discrete items.

At March 31, 2022 and December 31, 2021, the Company has recorded net deferred tax liabilities of $ 30.5 million and $ 30.7 million, respectively.

At June 30, 2022 and December 31, 2021, the Company has recorded net deferred tax liabilities of $ 30.8 million and $ 30.7 million, respectively.

Utilization of the Company’s net operating loss carryforwards, disallowed business interest carryforwards and other tax attributes became subject to the Section 382 ownership change limitation due to changes in the Company’s stock ownership on January 27, 2021.

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Recurring Fair Value Measurements.

The following table summarizes the fair value hierarchy of the Company’s financial assets and liabilities carried at fair value on a recurring basis as of March 31, 2022:

Fair Value Measurements at March 31, 2022 Using

The following table summarizes the fair value hierarchy of the Company’s financial assets and liabilities carried at fair value on a recurring basis as of June 30, 2022:

Fair Value Measurements at June 30, 2022 Using

Total Carrying

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(In millions)

March 31, 2022

June 30, 2022

Other long-term assets:

Money market mutual funds

Investments measured at net asset value (1)

Investment in Hycroft Mining Holding Corporation warrants

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Total assets at fair value

(1) The investments relate to non-qualified deferred compensation arrangements on behalf of certain members of management.

The Company has an equivalent liability for this related-party transaction recorded in other long-term liabilities for the deferred compensation obligation.

The plan was terminated on May 3, 2021 and will be liquidated in May 2022.

Valuation Techniques.

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The equity method investment in Hycroft was measured at fair value using Hycroft’s stock price at the date of measurement.

The investment in NCM was measured at fair value using National CineMedia, Inc.’s underlying stock price at the date of measurement.

The investment in NCM was measured at fair value using NCM, Inc.’s underlying stock price at the date of measurement.

To estimate the fair value of the Company’s investment in Hycroft warrants, the Company valued the warrants using the Black Scholes pricing model.

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Other inputs included the term of 4.7 years, exercise price of $ 1.068 and Hycroft’s stock price at the date of measurement.

There is considerable management judgment with respect to the inputs used in determining fair value, and, according, actual results could vary significantly from such estimates, which fall under Level 3 within the fair value measurement hierarchy.

There is considerable management judgment with respect to the inputs used in determining fair value, and, accordingly, actual results could vary significantly from such estimates, which fall under Level 3 within the fair value measurement hierarchy.

See Note 5 — Investments for further information regarding the investments in Hycroft.

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The Company is required to disclose the fair value of financial instruments that are not recognized at fair value in the statement of financial position for which it is practicable to estimate that value:

Fair Value Measurements at March 31, 2022 Using

Fair Value Measurements at June 30, 2022 Using

Significant other

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(In millions)

March 31, 2022

June 30, 2022

Current maturities of corporate borrowings

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markets and International markets.

The International markets reportable segment has operations in or partial interest in theatres in the United Kingdom, Germany, Spain, Italy, Ireland, Portugal, Sweden, Finland, Norway, Denmark, and Saudi Arabia.

The International markets reportable segment has operations in or partial interest in theatres in the United Kingdom,

Germany, Spain, Italy, Ireland, Portugal, Sweden, Finland, Norway, Denmark, and Saudi Arabia.

Each segment’s revenue is derived from admissions, food and beverage sales and other ancillary revenues, primarily screen advertising, AMC Stubs® membership fees and other loyalty programs, ticket sales, gift card income and exchange ticket income.

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Three Months Ended

Six Months Ended

Revenues (In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

International markets

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Three Months Ended

Six Months Ended

Adjusted EBITDA (In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

International markets

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Three Months Ended

Six Months Ended

Capital Expenditures (In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

International markets

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Long-term assets, net (In millions)

March 31, 2022

June 30, 2022

December 31, 2021

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Income tax provision (benefit)

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Attributable EBITDA (3)

Investment income (4)

Investment expense (income) (4)

Other expense (income) (5)

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(3) Attributable EBITDA includes the EBITDA from equity investments in theatre operators in certain International markets.

See below for a reconciliation of the Company’s equity in (earnings) loss of non-consolidated entities to attributable EBITDA.

See below for a reconciliation of the Company’s equity in loss of non-consolidated entities to attributable EBITDA.

Because these equity investments are in theatre operators in regions where the Company holds a significant market share, the Company believes attributable EBITDA is more indicative of the performance of these equity investments and management uses this measure to monitor and evaluate these equity investments.

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Equity in loss of non-consolidated entities

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Income tax benefit

Investment income

Interest expense

Impairment of long-lived assets

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Attributable EBITDA

(4) Investment income during the three months ended March 31, 2022 includes appreciation in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $ 28.8 million and appreciation in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft Mining Holdings corporation of $ 35.1 million.

(5) Other expense during the three months ended March 31, 2022, included loss on debt extinguishment of $ 135.0 million and foreign currency transaction losses of $ 4.8 million.

During the three months ended March 31, 2021, other expense (income) included foreign currency transaction gains of $ 3.8 million and estimated credit income of $ 2.0 million related to decreases in contingent lease guarantees, partially offset by financing

fees of $ 1.0 million primarily related to deferred financing cost write-off for the Odeon revolving credit facility.

(4) Investment expense (income) during the three months ended June 30, 2022 includes deterioration in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $ 27.8 million and deterioration in estimated fair value of the Company’s investment in warrants to purchase

common shares of Hycroft Mining Holding Corporation of $ 20.0 million.

During the three months ended June 30, 2022 investment expense (income) includes deterioration in estimated fair value of the Company’s investment in NCM of $ 9.6 million.

Investment expense (income) during the six months ended June 30, 2022 includes appreciation in estimated fair value of the Company’s investment in common shares of Hycroft Mining Holding Corporation of $( 1.0 ) million and appreciation in estimated fair value of the Company’s investment in warrants to purchase common shares of Hycroft Mining Holding corporation of $( 15.1 ) million.

During the six months ended June 30, 2022, investment expense (income) includes deterioration in estimated fair value of the Company’s investment in NCM of $ 9.5 million.

(5) Other expense (income) during the three months ended June 30, 2022, included gain on debt extinguishment of $( 38.6 ) million and foreign currency transaction losses of $ 3.6 million.

During the three months ended June 30, 2021, other expense (income) included estimated credit income of $( 3.7 ) million related to decreases in contingent lease guarantees, partially offset by foreign currency transaction losses of $ 3.4 million.

Other expense (income) during the six months ended June 30, 2022, included loss on debt extinguishment of $ 96.4 million and foreign currency transaction losses of $ 8.4 million.

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

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

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On September 2, 2021, the parties reached an agreement in principle to resolve the Actions for $ 18.0 million.

The Company agreed to the settlement and the payment of the settlement amount to eliminate the distraction, burden, expense, and uncertainty of further litigation.

The Company agreed to the settlement and the payment of the settlement amount

to eliminate the distraction, burden, expense, and uncertainty of further litigation.

The Company and the other defendants continue to expressly deny any liability or wrongdoing with respect to the matters alleged in the Actions.

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Aron , et al., Case No.

09148-AJN (the “Kenna Action”), was filed in the U.S.

1:19-cv-09148-AJN (the “Kenna Action”), was filed in the U.S.

District Court for the Southern District of New York.

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2019-0303-JRS (the “Lao Action”), was filed against certain of the Company’s directors, Wanda, two of Wanda’s affiliates, Silver Lake, and one of Silver Lake’s affiliates in the Delaware Court of Chancery.

The Lao Action asserts claims directly, on behalf of a putative class of Company stockholders, and derivatively, on behalf of the Company, for breaches of fiduciary duty and aiding and abetting breaches of fiduciary duty with respect to transactions that the Company entered into with affiliates of Wanda and Silver Lake on September 14, 2018, and the special cash dividend of $ 1.55 per share of common stock that was payable on September 28, 2018 to the Company’s stockholders of record as of September 25, 2018.

The Lao Action asserts claims directly, on behalf of a putative class of Company stockholders, and

derivatively, on behalf of the Company, for breaches of fiduciary duty and aiding and abetting breaches of fiduciary duty with respect to transactions that the Company entered into with affiliates of Wanda and Silver Lake on September 14, 2018, and the special cash dividend of $ 1.55 per share of common stock that was payable on September 28, 2018 to the Company’s stockholders of record as of September 25, 2018.

On July 18, 2019, the Company’s Board of Directors formed a Special Litigation Committee to investigate and evaluate the claims and allegations asserted in the Lao Action and make a determination as to how the Company should proceed with respect to the Lao Action.

On January 8, 2021, the Special Litigation Committee filed a report with the court recommending that the court dismiss all of the claims asserted in the Lao Action, and moved to dismiss all of the claims in the Lao Action.

On June 6, 2022, the parties signed a stipulation of settlement to resolve the Lao Action for $ 17,375,000 (the “Settlement Amount”).

The settlement is subject to court approval.

Plaintiff’s counsel intends to apply to the court for a fee and expense award, and any amount awarded by the court will be paid out of the Settlement Amount.

The remainder of the Settlement Amount, less any taxes and tax related expenses, will be paid to the Company.

Defendants agreed to the settlement and the payment of the Settlement Amount solely to eliminate the burden, expense, and uncertainty of further litigation, and continue to expressly deny any liability or wrongdoing with respect to the matters alleged in the Lao Action.

On June 24, 2022, the court scheduled a hearing for September 15, 2022, to, amount other things, consider whether to approve the proposed settlement.

NOTE 12—LOSS PER SHARE

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Three Months Ended

Six Months Ended

(In millions)

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Net loss for basic loss per share attributable to AMC Entertainment Holdings, Inc.

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Vested RSUs, PSUs, and special performance stock units (“SPSUs”) have dividend rights identical to the Company’s Common Stock and are treated as outstanding shares for purposes of computing basic and diluted earnings per share.

For the three months ended March 31, 2022 and March 31, 2021, unvested RSUs of 2,807,026 and 3,812,964 , respectively, were not included in the computation of diluted loss per share because they would be anti-dilutive.

Unvested RSUs of 2,727,867 for the three and six months ended June 30, 2022 and unvested RSUs of 3,812,964 for the three and six months ended June 30, 2021 were not included in the computation of diluted loss per share because they would be anti-dilutive.

Unvested PSUs and SPSUs are subject to performance and market conditions, respectively, and are included in diluted earnings per share, if dilutive, based on the number of shares, if any, that would be issuable under the terms of the Company’s 2013 Equity Incentive Plan if the end of the reporting period were the end of the contingency period.

Unvested PSUs of 1,476,989 and 2,161,337 at 100% performance targets for the three months ended March 31, 2022 and March 31, 2021, respectively, and unvested SPSUs of 1,156,656 at the minimum market condition for the three months ended March 31, 2021, were not included in the computation of diluted loss per share because they would not be issuable if the end of the reporting period were the end of the contingency period or they would be anti-dilutive.

Unvested PSUs of 1,426,728 at certain performance targets for the three and six months ended June 30, 2022, unvested PSUs of 2,161,222 at certain performance targets for the three and six months ended June 30, 2021, and unvested SPSUs of 1,156,656 at the minimum market condition for the three and six months ended June 30, 2021, were not included in the computation of diluted loss per share because they would not be issuable if the end of the reporting period were the end of the contingency period or they would be anti-dilutive.

NOTE 13—SUPPLEMENTAL BALANCE SHEET INFORMATION

1 unchanged sentence

(In millions)

March 31, 2022

June 30, 2022

December 31, 2021

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See Note 5 — Investments and Note 9 — Fair Value Measurements for further information regarding the investment in Hycroft .

NOTE 14—SUBSEQUENT EVENTS

On August 4, 2022, the Company announced that its Board of Directors declared a special dividend of one AMC Preferred Equity Unit (a “AMC Preferred Equity Unit”) for each share of Common Stock outstanding at the close of business on August 15, 2022.

The special dividend is expected to be paid at the close of business on August 19, 2022.

Each AMC Preferred Equity Unit is a depositary share and represents an interest in one one-hundredth (1/100th) of a share of Series A Convertible Participating Preferred Stock, par value $ 0.01 (the “Preferred Stock”).

Each AMC Preferred Equity Unit is designed to have the same economic and voting rights as a share of Common Stock.

The AMC Preferred Equity Units will be evidenced by a depositary receipt pursuant to a Deposit Agreement (the “Deposit Agreement”) among the Company, Computershare Inc.

and Computershare Trust Company, N.A., collectively acting as depositary and conversion agent (together, the “Depositary”).

The Company will deposit the underlying shares of the Preferred Stock with the Depositary pursuant to the Deposit Agreement.

Subject to the terms of the Deposit Agreement, the AMC Preferred Equity Units will be entitled to all the rights and preferences of the Preferred Stock, as applicable, in proportion to the fraction of a share of Preferred Stock the AMC Preferred Equity Units represent.

As a consequence of the special dividend of AMC Preferred Equity Units, in accordance with the terms of the Company's 2013 Equity Incentive Plan, and effective upon payment of the dividend the Company will adjust the terms of outstanding awards issued pursuant to the 2013 Equity Incentive Plan to add one AMC Preferred Equity Unit to each share of Common Stock subject to the outstanding awards (approximately 5,422,554 AMC Preferred Equity Units in aggregate).

In addition, for each share of Common Stock available and held in reserve for future awards (currently approximately 1,883,800 shares in aggregate), the Company will reserve an equal number of AMC Preferred Equity Units to be issued in connection with such future awards (such that when combined with the AMC Preferred Equity Units subject to outstanding awards, the adjusted reserve will reflect approximately 7,306,354 AMC Preferred Equity Units in the aggregate).

To provide for the issuance of the Preferred Stock underlying the AMC Preferred Equity Units, on August 4, 2022, the Company filed a Certificate of Designations (the “Certificate of Designations”) with the Secretary of State of the State of Delaware, to designate 10,000,000 shares of the Company’s authorized preferred stock as the Preferred Stock with the preferences, limitations, voting powers and relative rights as set forth in the Certificate of Designations.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements