What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-04 compared with 2022-05-09 · 470 added, 186 removed, 416 unchanged (61% of the section changed)

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● the risks and uncertainties relating to the sufficiency of our existing cash and cash equivalents and available borrowing capacity to comply with minimum liquidity and financial requirements under our debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility, fund operations, and satisfy obligations including cash outflows for deferred rent and planned capital expenditures currently and through the next twelve months.

In order to achieve net positive operating cash flows and long-term profitability, the Company will need to continue to increase attendance levels significantly compared to aggregate 2021 and the first quarter of 2022.

Domestic industry box office grosses increased significantly to approximately $1.4 billion during the first quarter of 2022, compared to the first quarter of 2021 of $0.3 billion, and were approximately 58% of domestic box office grosses of $2.4 billion during the first quarter of 2019.

In order to achieve net

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

Domestic industry box office grosses increased significantly to approximately $3.7 billion during the first six months of 2022, compared to the first six months of 2021 of $1.1 billion, and were approximately 66% of domestic box office grosses of $5.6 billion during the first six months of 2019.

The Company believes 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’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 levels, 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 and consumer behavior.

However, there remain significant risks that may negatively impact attendance levels, 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 and consumer behavior.

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

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

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

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

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

● shrinking exclusive theatrical release windows or release of movies to theatrical exhibition and streaming platforms on the same date;

● shrinking exclusive theatrical release windows or release of movies to theatrical exhibition and streaming platforms on the same date, and the theatrical release of fewer movies;

● increased use of alternative film delivery methods including premium video on demand or other forms of entertainment;

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● limitations on the availability of capital or poor financial results may prevent us from deploying strategic initiatives;

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

● an issuance of preferred stock, including the Preferred Equity Units, could dilute the voting power of the common stockholders and adversely affect the market value of our Common Stock and Preferred Equity Units;

● limitations on the authorized number of Common Stock shares prevents us from raising additional capital through Common Stock issuances;

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● supply chain disruptions may negatively impact our operating results;

● the dilution caused by recent and potential future sales of our Common Stock could adversely affect the market price of the Common Stock;

● the market price and trading volume of our shares of Common Stock has been and may continue to be volatile, and purchasers of our securities could incur substantial losses;

● future offerings of debt, which would be senior to our Common Stock for purposes of distributions or upon liquidation, could adversely affect the market price of our Common Stock;

● the geopolitical events, including the threat of political, social, or economic unrest, terrorism, hostilities, cyber-attacks, war, including the conflict between Russia and Ukraine and that Sweden and Finland (countries where we operate approximately 100 theatres) have recently agreed to submit simultaneous applications to the NATO alliance as early as May 2022, which could cause a deterioration in the relationship each country has with Russia, or widespread health emergencies, such as the COVID-19 or other pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance;

● the dilution caused by recent and potential future sales of our Common Stock and Preferred Equity Units could adversely affect the market price of the Common Stock and Preferred Equity Units;

● the market price and trading volume of our shares of Common Stock has been and may continue to be volatile and such volatility may also apply to our Preferred Equity Units, and purchasers of our securities could incur substantial losses;

● future offerings of debt, which would be senior to our Common Stock and Preferred Equity Units for purposes of distributions or upon liquidation, could adversely affect the market price of our Common Stock and Preferred Equity Units;

● the potential for political, social, or economic unrest, terrorism, hostilities, cyber-attacks or war, including the conflict between Russia and Ukraine and that Sweden and Finland (countries where we operate approximately 100 theatres) completed accession talks at NATO headquarters in Brussels on July 4, 2022 and NATO ambassadors signed the accession protocols on July 5, 2022, which could cause a deterioration in the relationship each country has with Russia, and the potential impact of financial and economic sanctions on the regional and global economy, or widespread health emergencies, such as COVID-19 or

other pandemics or epidemics, causing people to avoid our theatres or other public places where large crowds are in attendance;

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

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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 our theatres in U.S.

markets and International markets.

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

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

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

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

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

As of March 31, 2021, 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 essentially 100% of its U.S.

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

Our average consolidated screens operated during the three months ended 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 June 30, 2022 there are no restrictions on operations in any of the U.S.

or International theatres.

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

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Our theatrical exhibition revenues are generated primarily from box office admissions and theatre food and beverage sales.

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

As of March 31, 2022, we owned, operated or had interests in 938 theatres and 10,493 screens.

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

As of June 30, 2022, we owned, operated or had interests in 947 theatres and 10,552 screens.

Box Office Admissions and Film Content

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

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

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

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

As a result of the reduction in theatrical film releases in 2021, we licensed and exhibited a larger number of previously released films that had lower film rental terms during the three months ended March 31, 2021.

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 and also the first quarter of 2022.

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 and all of 2022.

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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Number of Screens

March 31, 2022

March 31, 2021

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Dolby Cinema TM

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We believe that maximizing comfort and convenience for our customers will be increasingly necessary to maintain and improve our relevance.

These renovations, in conjunction with capital contributions from our landlords, involve stripping theatres to their basic structure in order to replace finishes throughout, upgrading the sight and sound experience, installing modernized points of sale and, most importantly, replacing traditional theatre seats with plush, electric recliners that allow customers to deploy a leg rest and fully recline at the push of a button.

deploy a leg rest and fully recline at the push of a button.

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.

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

As of March 31, 2022, in our U.S.

As of June 30, 2022, in our U.S.

markets, we featured recliner seating in approximately 357 U.S.

theatres, including Dine-in Theatres, totaling approximately 3,461 screens and representing 44.7% of total U.S.

In our International markets, as of March 31, 2022, we had recliner seating in approximately 90 International theatres, totaling approximately 579 screens and representing 20.8% of total International screens.

Open-source internet ticketing makes our AMC seats (approximately 1.1 million as of March 31, 2022) in all our U.S.

In our International markets, as of June 30, 2022, we had recliner seating in approximately 93 International theatres, totaling approximately 591 screens and representing 21.1% of total International screens.

Open-source internet ticketing makes our AMC seats (approximately 1.1 million as of June 30, 2022) in all our U.S.

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

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

As of March 31, 2022, we offer alcohol in approximately 350 AMC theatres in the U.S.

As of June 30, 2022, we offer alcohol in approximately 351 AMC theatres in the U.S.

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

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The program’s annual membership fee is allocated to the material rights for discounted or free products and services and is initially deferred, net of estimated refunds, and recorded as the rights are redeemed based on estimated utilization, over the one-year membership period in admissions, food and beverage, and other revenues.

portion of the revenues related to a material right are deferred as a virtual rewards performance obligation using the relative standalone selling price method and are recorded as the rights are redeemed or expire.

A portion of the revenues related to a material right are deferred as a virtual rewards performance obligation using the relative standalone selling price method and are recorded as the rights are redeemed or expire.

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

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

Upon the temporary suspension of theatre operations due to the COVID-19 pandemic, all monthly A-List subscription charges were put on hold.

Upon the temporary suspension of theatre operations due to the COVID-19

pandemic, all monthly A-List subscription charges were put on hold.

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

As of March 31, 2022, we had more than 25,700,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined.

Our AMC Stubs® members represented approximately 41% of AMC U.S.

markets attendance during the three months ended March 31, 2022.

As of June 30, 2022, we had more than 26,400,000 member households enrolled in AMC Stubs® A-List, AMC Stubs Premiere™ and AMC Stubs Insider™ programs, combined.

During the three and six months ended June 30, 2022 our AMC Stubs® members represented approximately 42.1% and 41.7% of AMC U.S.

markets attendance, respectively.

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

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The units were priced at $1.193 per unit.

We elected the fair value option in accordance with ASC 825-10, and therefore, the fair value of the investment in common stock of Hycroft is remeasured at each subsequent reporting period and unrealized gains and losses are reported in investment income.

During the three months ended March 31, 2022, we recorded appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft of $35.1 million in investment income following ASC 815, which fall under Level 3 within the fair value measurement hierarchy and appreciation in estimated fair value of our investment in common shares of Hycroft of $28.8 million in investment income, which fall under Level 1 within the fair value measurement hierarchy.

During the three months ended June 30, 2022, we recorded deterioration in estimated fair value of our investment in warrants to purchase common shares of Hycroft of $20.0 million and deterioration in estimated fair value of our investment in common shares of Hycroft of $27.8 million.

During the six months ended June 30, 2022, we recorded appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft of $(15.1) million in investment expense (income) following ASC 815, which fall under Level 3 within the fair value measurement hierarchy and appreciation in estimated fair value of our investment in common shares of Hycroft of $(1.0) million in investment expense (income), which fall under Level 1 within the fair value measurement hierarchy.

Critical estimates.

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For a discussion of our critical accounting policies and the means by which we develop estimates therefore, see “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Annual

Report on Form 10-K.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2021 Annual Report on Form 10-K.

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

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Investment in Hycroft.

On March 14, 2022, we purchased 23.4 million units of Hycroft Mining Holding Corporation (NASDAQ:

On March 14, 2022, we purchased 23.4 million units of Hycroft Mining Holding

Corporation (NASDAQ:

HYMC) (“Hycroft”) for $27.9 million, with each unit consisting of one common share of Hycroft and one common share purchase warrant.

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Accordingly, the fair value of the investments in Hycroft are remeasured at each subsequent reporting period and unrealized gains and losses are reported in investment income.

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.

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

See Note 9 — Fair Value Measurements in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I in this Form 10-Q for further information.

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We 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 our 10.5% First Lien Notes due 2025 (“First Lien Notes due 2025”), the then outstanding $300 million aggregate principal amount of our 10.5% First Lien Notes due 2026 (“First Lien Notes due 2026”), and the then outstanding $73.5 million aggregate principal amount of our 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.

We 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.

We recorded a loss on debt extinguishment related to this transaction of $135.0 million in other expense, during the six months ended June 30, 2022.

Second Lien Notes due 2026.

During the three months ended June 30, 2022, we 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.

Operating Results

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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

Food and beverage

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Equity in loss of non-consolidated entities

Investment income

Investment expense (income)

Total other expense, net

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Three Months Ended

Six Months Ended

Operating Data:

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Operating costs and expenses

Operating loss

Operating income (loss)

Other expense (income):

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Equity in loss of non-consolidated entities

Investment income

Investment expense (income)

Total other expense (income), net

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

International Markets

Six Months Ended

(In millions)

Food and beverage

Other theatre

Total revenues

Operating Costs and Expenses

Film exhibition costs

Food and beverage costs

Operating expense

General and administrative expense:

Merger, acquisition and other costs

Depreciation and amortization

Operating costs and expenses

Operating loss

Other expense (income):

Other expense (income)

Interest expense:

Corporate borrowings

Finance lease obligations

Non-cash NCM exhibitor service agreement

Equity in (earnings) loss of non-consolidated entities (1)

Investment expense (income)

Total other expense (income), net

Net loss before income taxes

Income tax provision (benefit)

net loss attributable to noncontrolling interests

Net loss attributable to AMC Entertainment Holdings, Inc.

International Markets

Six Months Ended

Segment Operating Data:

Screen additions

Screen acquisitions

Screen dispositions

Construction openings (closures), net

Average screens (1)

Number of screens operated

Number of theatres operated

Total number of circuit screens

Total number of circuit theatres

Screens per theatre

Attendance (in thousands) (1)

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

Adjusted EBITDA

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Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

During the three months ended March 31, 2022, Adjusted EBITDA in the U.S.

markets was $(43.4) million compared to $(200.4) million during the three months ended March 31, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension of operations at our theatres, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films and lifting of seat restrictions, decreases in general and administrative expenses excluding stock-based compensation, and increased cash distributions from AC JV, partially offset by increases in operating costs due to the increase in attendance, increases in rent expense and decreases in government assistance.

During the three months ended March 31, 2022, Adjusted EBITDA in the International markets was $(18.3) million compared to $(94.3) million during the three months ended March 31, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year and lifting of seat restrictions, and decreases in general and administrative expenses excluding stock-based compensation, partially offset by increases in operating costs due to the increase in attendance, increases in rent expense, and decreases in government assistance.

During the three months ended March 31, 2022, Adjusted EBITDA in the U.S.

markets and International markets was $(61.7) million compared to $(294.7) million during the three months ended March 31, 2021, driven by the aforementioned factors impacting Adjusted EBITDA.

During the three months ended June 30, 2022, Adjusted EBITDA in the U.S.

markets was $94.4 million compared to $(118.0) million during the three months ended June 30, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension or limited operations at our theatres, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films and lifting of seat restrictions, increases in cash distributions from non-consolidated entities, partially offset by increases in operating costs due to the increase in attendance and increases in rent expense.

During the three months ended June 30, 2022, Adjusted EBITDA in the International markets was $12.3 million compared to $(32.8) million during the three months ended June 30, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year and lifting of seat restrictions, partially offset by increases in operating costs due to the increase in attendance, decreases in government assistance, increases in rent expense, increases in general and administrative expenses excluding stock-based compensation and decreases in attributable EBITDA from non-consolidated entities.

During the three months ended June 30, 2022, Adjusted EBITDA in the U.S.

markets and International markets was $106.7 million compared to $(150.8) million during the three months ended June 30, 2021, driven by the aforementioned factors impacting Adjusted EBITDA.

During the six months ended June 30, 2022, Adjusted EBITDA in the U.S.

markets was $51.0 million compared to $(318.4) million during the six months ended June 30, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension or limited operations at our theatres, deterred customers from attending our theatres when we resumed operations, and prompted film distributors to delay or alternatively distribute films and lifting of seat restrictions, decreases in general and administrative expenses excluding stock-based compensation, and increased cash distributions from non-consolidated entities, partially offset by increases in operating costs due to the increase in attendance, increases in rent expense and decreases in government assistance.

During the six months ended June 30, 2022, Adjusted EBITDA in the International markets was $(6.0) million compared to $(127.1) million during the six months ended June 30, 2021.

The year-over-year improvement was primarily due to the decreased net loss driven by an increase in attendance primarily due to the COVID-19 pandemic impact on the prior year and lifting of seat restrictions, partially offset by increases in operating costs due to the increase in attendance, decreases in government assistance, increases in rent expense, and increases in general and administrative expenses excluding stock-based compensation.

During the six months ended June 30, 2022, Adjusted EBITDA in the U.S.

markets and International markets was $45.0 million compared to $(445.5) million during the six months ended June 30, 2021, driven by the aforementioned factors impacting Adjusted EBITDA.

The following tables set forth our Adjusted EBITDA by reportable operating segment and our reconciliation of Adjusted EBITDA:

Three Months Ended

Six Months Ended

Adjusted EBITDA (In millions)

March 31, 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

(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 our equity in (earnings) loss of non-consolidated entities to attributable EBITDA.

See below for a reconciliation of our equity in loss of non-consolidated entities to attributable EBITDA.

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

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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 our investment in common shares of Hycroft Mining Holding Corporation of $28.8 million and appreciation in estimated fair value of our 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, includes 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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Segment Information

Our historical results of operations for the three months ended March 31, 2022 and March 31, 2021 reflect the results of operations for our two theatrical exhibition reportable segments, U.S.

Our historical results of operations for the three and six months ended June 30, 2022 and June 30, 2021 reflect the results of operations for our two theatrical exhibition reportable segments, U.S.

markets and International markets.

Results of Operations— For the Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021

Results of Operations— For the Three Months ended June 30, 2022 Compared to the Three Months ended June 30, 2021

Condensed Consolidated Results of Operations

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

Admissions revenues increased $374.3 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to an increase in attendance from 6.8 million patrons to 39.1 million patrons and a 11.1% increase in average ticket price.

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

Total revenues increased $721.7 million, during the three months ended June 30, 2022, compared

to the three months ended June 30, 2021.

Admissions revenues increased $418.0 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to an increase in attendance from 22.1 million patrons to 59.1 million patrons and a 4.3% increase in average ticket price.

The increase in attendance was primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension or limited operations at our theatres in U.S.

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

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

Food and beverage revenues increased $202.4 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 12.3% from $7.37 to $6.46 due primarily to an increase in revenues in International markets as a percentage of consolidated revenues from 5% during the three months ended March 31, 2021 to 23.2% during the three months ended March 31, 2022.

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

Food and beverage revenues increased $235.2 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 8.3% from $7.32 to $6.71 due primarily to an increase in revenues in International markets as a percentage of consolidated revenues from 12.8% during the three months ended June 30, 2021 to 17.5% during the three months ended June 30, 2022.

Food and beverage per patron in International markets is much lower in our International markets than in our U.S.

markets and this change in the mix of revenues resulted in a decline in consolidated food and beverage per patron along with a decrease in foreign currency translation rates.

Additionally, we experienced decreases in the percentage of patrons making purchases due to attendance increases and a decrease in units sold per transaction due to the decline in private theatre rentals from the prior year.

The higher number of private theatre rentals in the prior year resulted in larger party sizes and larger individual orders.

Total other theatre revenues increased $60.7 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance, partially offset by the decrease in foreign currency translation rates.

Total other theatre revenues increased $68.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen and other advertising due to the increase in attendance, partially offset by the decrease in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $376.5 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Film exhibition costs increased $167.8 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 42.8% for the three months ended March 31, 2022, compared to 31.7% for the three months ended March 31, 2021.

The increase in film exhibition cost percentage is primarily due to the concentration of box office revenues in higher grossing films in the current year and higher amounts of library content in the prior year, which typically results in higher film exhibition costs.

Operating costs and expenses increased $441.2 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Film exhibition costs increased $229.8 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 50.5% for the three months ended June 30, 2022, compared to 42.4% for the three months ended June 30, 2021.

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

Additionally, lower film exhibition costs were paid on films with shorter exclusive theatrical windows in the prior year.

Food and beverage costs increased $32.9 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Food and beverage costs increased $38.3 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

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

As a percentage of food and beverage revenues, food and beverage costs were 16.9% for the three months ended March 31, 2022 and 19.4% for the three months ended March 31, 2021.

Food and beverage

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

As a percentage of revenues, operating expense was 43.9% for the three months ended March 31, 2022, and was not meaningful for the three months ended March 31, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 16.2%, or $31.1 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by theatre closures and the decrease in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $271.7 million that have been deferred to future years as of March 31, 2022.

As a percentage of food and beverage revenues, food and beverage costs were 16.3% for the three months ended June 30, 2022 and 2021.

As a percentage of revenues, operating expense was 34.5% for the three months ended June 30, 2022, and 55.4% for the three months ended June 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 8.2%, or $16.9 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by theatre closures and the decrease in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $218.9 million that have been deferred to future years as of June 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.4 million during the three months ended March 31, 2022, compared to $6.7 million during the three months ended March 31, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 2.5%, or $1.3 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Merger, acquisition, and other costs were $(0.3) million during the three months ended June 30, 2022, compared to $4.3 million during the three months ended June 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 24.1%, or $13.1 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower

expense for SPSUs that fully vested in 2021, and annual incentive plans based on the improvement in operating performance.

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

Depreciation and amortization.

Depreciation and amortization decreased 13.5%, or $15.4 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Depreciation and amortization decreased 7.9%, or $8.3 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Other income.

Other income of $43.7 million during the three months ended June 30, 2022 was primarily due to a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026, $8.5 million in government assistance related to COVID-19 and partially offset by $3.6 million of foreign currency transaction losses.

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

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

Interest expense.

Interest expense decreased $8.6 million to $90.3 million for the three months ended June 30, 2022 compared to $98.9 million during the three months ended June 30, 2021 primarily due to:

● the extinguishment of $500.0 million of 10.5% First Lien Notes due 2025 on February 14, 2022;

● the extinguishment of $300.0 million of 10.5% First Lien Notes due 2026 on February 14, 2022;

● the extinguishment of $73.5 million of 15%/17% Cash/PIK/Toggle Second Lien Notes due 2026;

● the decline in foreign currency translation rates,

partially offset by:

● the issuance of $950.0 million of 7.5% First Lien Senior Secured Notes due 2029 on February 14, 2022;

● increases in interest rates on the Senior Secured Credit Facility Term Loan due 2026 .

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $1.0 million for the three months ended June 30, 2022, compared to $2.7 million for the three months ended June 30, 2021.

Investment expense (income).

Investment expense was $57.3 million for the three months ended June 30, 2022, compared to investment income of $(6.3) million for the three months ended June 30, 2021.

Investment expense in the current year includes $27.8 million of decline in estimated fair value of our investment in common shares of Hycroft Mining Holding Corporation, $20.0 million of decline in estimated fair value of our investment in warrants to purchase common shares of Hycroft Mining Holding Corporation and $9.6 million decline in estimated fair value of our investment in NCM common units.

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

Income tax provision (benefit).

The income tax provision (benefit) was $0.6 million and $(5.2) million for the three months ended June 30, 2022 and June 30, 2021, respectively.

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

Net loss was $121.6 million and $344.0 million during the three months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the three months ended June 30, 2022 compared to net loss for the three months ended June 30, 2021 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed or limited operationally due to the COVID-19 pandemic and lifting of seating restrictions, decreases in depreciation and amortization expense, decreases in interest expense, increases in other income and decreases in foreign currency translation rates, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in investment income and a decrease in income tax benefit.

Theatrical Exhibition–U.S.

Total revenues increased $533.1 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Admissions revenues increased $307.1 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to an increase in attendance from 17.8 million patrons to 43.5 million patrons and a 5.7% increase in average ticket price.

The increase in attendance was primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension or limited operations at our theatres in U.S.

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

The increase in average ticket price was primarily due to increases in 3D, IMAX and Premium content and lower frequency on our A-List subscription program and strategic pricing initiatives put in place over the prior year.

Food and beverage revenues increased $186.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance and partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 4.9% from $7.91 to $7.52 due primarily to decreases in the percentage of patrons making purchases as attendance increases and a decrease in units sold per transaction due to the decline in private theatre rentals from the prior year.

The higher number of private theatre rentals in the prior year resulted in larger party sizes and larger individual orders.

Total other theatre revenues increased $39.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen and other advertising due to the increase in attendance.

Operating costs and expenses.

Operating costs and expenses increased $336.3 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Film exhibition costs increased $184.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 53.6% for the three months ended June 30, 2022 and 43.4% for the three months ended June 30, 2021.

Additionally, lower film exhibition costs were paid on films with shorter exclusive theatrical windows in the prior year.

Food and beverage costs increased $27.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

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

As a percentage of food and beverage revenues, food and beverage costs were 14.6% for the three months ended June 30, 2022, compared to 14.4% for the three months ended June 30, 2021.

As a percentage of revenues, operating expense was 32.5% for the three months ended June 30, 2022 and 49.9% for the three months ended June 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 7.8%, or $12.1 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by theatre closures.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $188.3 million that have been deferred to future years as of June 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.4 million during the three months ended June 30, 2022, compared to $3.5 million during the three months ended June 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 23.8%, or $9.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021, and annual incentive plans based on the improvement in operating performance.

Depreciation and amortization.

Depreciation and amortization decreased 3.2%, or $2.5 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to lower

depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021.

Other expense (income).

Other expense of $136.3 million during the three months ended March 31, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, and the $73.5 million aggregate principal amount of the First Lien Toggle Notes due 2026.

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

Other income of $(38.8) million during the three months ended June 30, 2022 was primarily due to a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026.

Interest expense.

Interest expense decreased $70.4 million to $92.4 million for the three months ended March 31, 2022 compared to $162.8 million during the three months ended March 31, 2021 primarily due to:

Interest expense decreased $7.7 million to $71.6 million for the three months ended June 30, 2022 compared to $79.3 million during the three months ended June 30, 2021, primarily due to:

● the extinguishment of $500.0 million of 10.5% First Lien Notes due 2025 on February 14, 2022;

● the extinguishment of $300.0 million of 10.5% First Lien Notes due 2026 on February 14, 2022;

● the extinguishment of $73.5 million of 15%/17% Cash/PIK/Toggle Second Lien Notes due 2026;

partially offset by:

● the issuance of $950.0 million of 7.5% First Lien Senior Secured Notes due 2029 on February 14, 2022;

● increases in interest rates on the Senior Secured Credit Facility Term Loan due 2026.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated was $0.5 million for the three months ended June 30, 2022, compared to $0.3 million for the three months ended June 30, 2021.

Investment expense (income).

Investment expense was $57.3 million for the three months ended June 30, 2022, compared to investment income of $(0.8) million for the three months ended June 30, 2021.

Income tax provision (benefit).

The income tax provision (benefit) was $0.2 million and $(3.4) million for the three months ended June 30, 2022 and June 30, 2021, respectively.

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

Net loss was $88.1 million and $269.6 million during the three months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the three months ended June 30, 2022 compared to net loss for the three months ended June 30, 2021 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed or limited operationally due to the COVID-19 pandemic and lifting of seating restrictions, decreases in depreciation and amortization expense, decreases in interest expense and increases in other income, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in investment income and a decrease in income tax benefit.

Theatrical Exhibition - International Markets

Total revenues increased $188.6 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Admissions revenues increased $110.9 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to an increase in attendance from 4.3 million patrons to 15.6 million patrons and a 5.2% increase in average ticket price.

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

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year, partially offset by a decrease in foreign currency translation rates.

Food and beverage revenues increased $48.7 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 8.5% from $4.85 to $4.44 due primarily to decreases in foreign currency translation rates.

Total other theatre revenues increased $29.0 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance, partially offset by the decrease in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $104.9 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

Film exhibition costs increased $45.3 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 40.1% for the three months ended June 30, 2022, compared to 37.8% for the three months ended June 30, 2021.

Food and beverage costs increased $10.8 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021.

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

As a percentage of food and beverage revenues, food and beverage costs were 24.2% for the three months ended June 30, 2022, compared to 29.0% for the three months ended June 30, 2021.

As a percentage of revenues, operating expense was 41.3% for the three months ended June 30, 2022, and 84.5% for the three months ended June 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 9.5%, or $4.8 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by theatre closures and the decrease in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $30.6 million that have been deferred to future years as of June 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $(0.7) million during the three months ended June 30, 2022, compared to $0.8 million during the three months ended June 30, 2021, primarily due to legal and professional costs related to strategic contingency planning in the prior year.

Other general and administrative expense increased 25.0%, or $3.6 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021, and annual incentive plans based on the improvement in operating performance.

Depreciation and amortization.

Depreciation and amortization decreased 21.6%, or $5.8 million, during the three months ended June 30, 2022, compared to the three months ended June 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Other income.

Other income of $4.9 million during the three months ended June 30, 2022 was primarily due to $8.5 million in government assistance related to COVID-19 and partially offset by $3.6 million of foreign currency transaction losses.

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

Interest expense.

Interest expense decreased $0.9 million to $18.7 million for the three months ended June 30, 2022 compared to $19.6 million during the three months ended June 30, 2021, primarily due to:

● the decline in foreign currency translation rates.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $0.5 million for the three months ended June 30, 2022, compared to $2.4 million for the three months ended June 30, 2021.

Investment income .

Investment income was $0.0 million for the three months ended June 30, 2022, compared

to investment income of $5.5 million for the three months ended June 30, 2021.

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

Income tax provision (benefit).

The income tax provision (benefit) was $0.4 million and $(1.8) million for the three months ended June 30, 2022 and June 30, 2021, respectively.

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

Net loss was $33.5 million and $74.4 million during the three months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the three months ended June 30, 2022 compared to net loss for the three months ended June 30, 2021 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in depreciation and amortization expense, decreases in interest expense, and decreases in foreign currency translation rates, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in other income, decreases in investment income and a decrease in income tax benefit.

Results of Operations— For the Six Months ended June 30, 2022 Compared to the Six Months ended June 30, 2021

Condensed Consolidated Results of Operations

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

Admissions revenues increased $792.3 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to an increase in attendance from 28.9 million patrons to 98.2 million patrons and a 6.4% increase in average ticket price.

The increase in attendance was primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension or limited operations at our theatres in U.S.

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

Food and beverage revenues increased $437.6 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 9.8% from $7.33 to $6.61 due primarily to an increase in revenues in International markets as a percentage of consolidated revenues from 11.0% during the six months ended June 30, 2021 to 19.7% during the six months ended June 30, 2022.

Food and beverage per patron in International markets is much lower in our International markets than in our U.S.

markets and this change in the mix of revenues resulted in a decline in consolidated food and beverage per patron along with a decrease in foreign currency translation rates.

Additionally, we experienced a decrease in units sold per transaction due to the decline in private theatre rentals from the prior year and a decrease in the percentage of patrons making purchases due to attendance increases.

The higher number of private theatre rentals in the prior year resulted in larger party sizes and larger individual orders.

Total other theatre revenues increased $129.2 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen and other advertising due to the increase in attendance, partially offset by the decrease in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $817.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Film exhibition costs increased $397.6 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 47.4% for the six months ended June 30, 2022, compared to 40.0% for the six months ended June 30, 2021.

The increase in film exhibition cost percentage is primarily due to the concentration of box office revenues in higher grossing films in the current year,

which typically results in higher film exhibition costs.

Additionally, lower film exhibition costs were paid on films with shorter exclusive theatrical windows in the prior year.

Food and beverage costs increased $71.2 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

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

As a percentage of food and beverage revenues, food and beverage costs were 16.5% for the six months ended June 30, 2022 and 17.0% for the six months ended June 30, 2021.

As a percentage of revenues, operating expense was 38.3% for the six months ended June 30, 2022, and 71.8% for the six months ended June 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 12.1%, or $48.0 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by theatre closures and the decrease in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $218.9 million that have been deferred to future years as of June 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.1 million during the six months ended June 30, 2022, compared to $11.0 million during the six months ended June 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 13.6%, or $14.4 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021 and annual incentive plans based on the improvement in operating performance.

Depreciation and amortization.

Depreciation and amortization decreased 10.8%, or $23.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Other expense (income).

Other expense of $92.6 million during the six months ended June 30, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, and the $73.5 million aggregate principal amount of the First Lien Toggle Notes due 2026 and $8.4 million of foreign currency transaction expense, partially offset by a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026 and $10.8 million in government assistance related to COVID-19.

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

Interest expense.

Interest expense decreased $79.0 million to $182.7 million for the six months ended June 30, 2022 compared to $261.7 million during the six months ended June 30, 2021 primarily due to:

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

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partially offset by:

● increases in interest rates on the Senior Secured Credit Facility Term Loan due 2026;

● the issuance of $950.0 million of 7.5% First Lien Senior Secured Notes due 2029 on February 14, 2022;

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Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $5.1 million for the three months ended March 31, 2022, compared to $2.8 million for the three months ended March 31, 2021.

The increase in equity in loss of $2.3 million was primarily due to increases in equity in losses from Saudi Cinema Company, LLC of $4.2 million.

Equity in loss of non-consolidated entities was $6.1 million for the six months ended June 30, 2022, compared to $5.5 million for the six months ended June 30, 2021.

Investment income.

Investment income was $63.4 million for the three months ended March 31, 2022, compared to investment income of $2.0 million for the three months ended March 31, 2021.

Investment income in the current year includes $28.8 million of appreciation in estimated fair value of our investment in common shares of Hycroft Mining Holding Corporation and $35.1 million of appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft Mining Holding Corporation.

Investment income was $6.1 million for the six months ended June 30, 2022, compared to investment income of $8.3 million for the six months ended June 30, 2021.

Investment income in the current year includes $1.0 million of appreciation in estimated fair value of our investment in common shares of Hycroft Mining Holding Corporation and $15.1 million of appreciation in estimated fair value of our investment in warrants to purchase common shares of Hycroft Mining Holding Corporation and a $9.5 million decline in estimated fair value of our investment in NCM common units.

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

Income tax provision (benefit).

The income tax provision (benefit) was $0.1 million and $(6.8) million for the three months ended March 31, 2022 and March 31, 2021, respectively.

The income tax provision (benefit) was $0.7 million and $(12.0) million for the six months ended June 30, 2022 and June 30, 2021, respectively.

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

Net loss was $337.4 million and $567.2 million during the three months ended March 31, 2022 and March 31, 2021, respectively.

Net loss during the three months ended March 31, 2022 compared to net loss for the three months ended March 31, 2021 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in general and administrative expenses, decreases in depreciation and amortization expense, decreases in interest expense, increases in investment income and decreases in foreign currency translation rates, partially offset by increases in rent expense, increases in other expense, and a decrease in income tax benefit.

Net loss was $459.0 million and $911.2 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the six months ended June 30, 2022 compared to net loss for the six months ended June 30, 2021 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed or limited operationally due to the COVID-19 pandemic and lifting of seating restrictions, decreases in depreciation and amortization expense, decreases in interest expense, and decreases in foreign currency translation rates, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in other income, decreases in investment income and a decrease in income tax benefit.

Theatrical Exhibition–U.S.

Total revenues increased $425.9 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Admissions revenues increased $245.9 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to an increase in attendance from 6.2 million patrons to 25.8 million patrons and a 15.8% increase in average ticket price.

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

Total revenues increased $959.0 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Admissions revenues increased $553.0 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to an increase in attendance from 24.0 million patrons to 69.3 million patrons and an 8.8% increase in average ticket price.

The increase in attendance was primarily due to the COVID-19 pandemic impact on the prior year which resulted in the temporary suspension or limited operations at our theatres in U.S.

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

Food and beverage revenues increased $146.4 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to the increase in attendance and partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 1.4% from $7.63 to $7.52 due primarily to decreases in units sold per transaction due to the decline in private theatre rentals from the prior year, partially offset by the percentage of patrons making purchases, a shift toward larger sizes and higher priced items, and reduced loyalty program penetration.

Food and beverage revenues increased $332.9 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance and partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 4.1% from $7.84 to $7.52 due primarily to a decrease in units sold per transaction due to the decline in private theatre rentals from the prior year and a decrease in the percentage of patrons making purchases due to attendance increases.

The higher number of private theatre rentals in the prior year resulted in larger party sizes and larger individual orders.

Total other theatre revenues increased $33.6 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance.

Total other theatre revenues increased $73.1 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen and other advertising due to the increase in attendance.

Operating costs and expenses.

Operating costs and expenses increased $252.4 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Film exhibition costs increased $118.5 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 44.6% for the three months ended March 31, 2022 and 31.1% for the three months ended March 31, 2021.

Operating costs and expenses increased $588.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Film exhibition costs increased $303.0 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 50.2% for the six months

ended June 30, 2022 and 40.3% for the six months ended June 30, 2021.

Additionally, lower film exhibition costs were paid on films with shorter exclusive theatrical windows in the prior year.

Food and beverage costs increased $20.2 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Food and beverage costs increased $47.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

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

As a percentage of food and beverage revenues, food and beverage costs were 14.8% for the three months ended March 31, 2022, compared to 17.9% for the three months ended March 31, 2021.

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

As a percentage of revenues, operating expense was 42.8% for the three months ended March 31, 2022 and was not meaningful for the three months ended March 31, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 21.8%, or $29.8 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by theatre closures.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $221.5 million that have been deferred to future years as of March 31, 2022.

As a percentage of food and beverage revenues, food and beverage costs were 14.7% for the six months ended June 30, 2022, compared to 15.3% for the six months ended June 30, 2021.

As a percentage of revenues, operating expense was 36.5% for the six months ended June 30, 2022 and 64.3% for the six months ended June 30, 2021 due to the low levels of attendance in the prior year.

Rent expense increased 14.4%, or $41.9 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by theatre closures.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $188.3 million that have been deferred to future years as of June 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.2 million during the three months ended March 31, 2022, compared to $3.7 million during the three months ended March 31, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense decreased 2.2%, or $0.8 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Merger, acquisition, and other costs were $0.6 million during the six months ended June 30, 2022, compared to $7.2 million during the six months ended June 30, 2021, primarily due to higher legal and professional costs in the prior year.

Other general and administrative expense increased 11.4%, or $8.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021, and annual incentive plans based on the improvement in operating performance.

Depreciation and amortization.

Depreciation and amortization decreased 12.5%, or $10.8 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021.

Depreciation and amortization decreased 8.1%, or $13.3 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021.

Other expense (income).

Other expense of $133.7 million during the three months ended March 31, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, and the $73.5 million aggregate principal amount of the First Lien Toggle Notes due 2026.

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

Other expense of $94.9 million during the six months ended June 30, 2022 was primarily due to a loss on extinguishment of debt of $135.0 million related to the full redemption of the $500 million aggregate principal amount of the First Lien Notes due 2025, the $300 million aggregate principal amount of the First Lien Notes due 2026, and the $73.5 million aggregate principal amount of the First Lien Toggle Notes due 2026, partially offset by a gain on extinguishment of debt of $38.6 million related to the redemption of $72.5 million of aggregate principal amount of the Second Lien Notes due 2026.

Other income during the six months ended June 30, 2021 was primarily related to $4.2 million in government assistance related to COVID-19.

Interest expense.

Interest expense decreased $80.6 million to $72.5 million for the three months ended March 31, 2022 compared to $153.1 million during the three months ended March 31, 2021, primarily due to:

Interest expense decreased $88.3 million to $144.1 million for the six months ended June 30, 2022 compared to $232.4 million during the six months ended June 30, 2021, primarily due to:

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partially offset by:

● increases in interest rates on the Senior Secured Credit Facility Term Loan due 2026;

● the issuance of $950.0 million of 7.5% First Lien Senior Secured Notes due 2029 on February 14, 2022.

Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $0.3 million for the three months ended March 31, 2022, compared to $0.9 million for the three months ended March 31, 2021.

Equity in loss of non-consolidated entities was $0.8 million for the six months ended June 30, 2022, compared to $1.2 million for the six months ended June 30, 2021.

Investment income.

Investment income was $63.4 million for the three months ended March 31, 2022, compared to investment income of $2.0 million for the three months ended March 31, 2021.

Investment income was $6.1 million for the six months ended June 30, 2022, compared to investment income of $2.8 million for the six months ended June 30, 2021.

Income tax provision (benefit).

The income tax provision (benefit) was $0.1 million and $(4.5) million for the three months ended March 31, 2022 and March 31, 2021, respectively.

The income tax provision (benefit) was $0.3 million and $(7.9) million for the six months ended June 30, 2022 and June 30, 2021, respectively.

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

Net loss was $265.8 million and $440.1 million during the three months ended March 31, 2022 and March 31, 2021, respectively.

Net loss during the three months ended March 31, 2022 compared to net loss for the three

months ended March 31, 2021 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in general and administrative expenses, decreases in depreciation and amortization expense, decreases in interest expense and increases in investment income, partially offset by increases in rent expense, increases in other expense, and a decrease in income tax benefit.

Net loss was $353.9 million and $709.7 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the six months ended June 30, 2022 compared to net loss for the six months ended June 30, 2021 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in depreciation and amortization expense, decreases in interest expense and increases in investment income, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in other income and a decrease in income tax benefit.

Theatrical Exhibition - International Markets

Total revenues increased $211.5 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Admissions revenues increased $128.4 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to an increase in attendance from 0.6 million patrons to 13.3 million patrons and a 21.5% increase in average ticket price.

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

Total revenues increased $400.1 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Admissions revenues increased $239.3 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to an increase in attendance from 4.8 million patrons to 28.9 million patrons and an 8.4% increase in average ticket price.

The increase in average ticket price was primarily due to strategic pricing initiatives put in place over the prior year, partially offset by a decrease in foreign currency translation rates.

Food and beverage revenues increased $56.0 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage revenues increased $104.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance, partially offset by the decrease in food and beverage per patron.

Food and beverage per patron decreased 8.1% from $4.81 to $4.42 due primarily to decreases in foreign currency translation rates.

Total other theatre revenues increased $27.1 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance, partially offset by the decrease in foreign currency translation rates.

Total other theatre revenues increased $56.1 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to increases in ticket fees, income from gift cards and package tickets and screen advertising due to the increase in attendance, partially offset by the decrease in foreign currency translation rates.

Operating costs and expenses.

Operating costs and expenses increased $124.1 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Film exhibition costs increased $49.3 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 38.4% for the three months ended March 31, 2022, compared to 39.1% for the three months ended March 31, 2021.

Food and beverage costs increased $12.7 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Operating costs and expenses increased $229.0 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

Film exhibition costs increased $94.6 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to the increase in attendance.

As a percentage of admissions revenues, film exhibition costs were 39.3% for the six months ended June 30, 2022, compared to 37.9% for the six months ended June 30, 2021.

Food and beverage costs increased $23.5 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021.

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

As a percentage of food and beverage revenues, food and beverage costs were 23.8% for the three months ended March 31, 2022, compared to 48.0% for the three months ended March 31, 2021.

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

As a percentage of revenues, operating expense was 46.6% for the three months ended March 31, 2022, and was not meaningful for the three months ended March 31, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 2.3%, or $1.3 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially offset by theatre closures and the decrease in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $50.2 million that have been deferred to future years as of March 31, 2022.

As a percentage of food and beverage revenues, food and beverage costs were 24.0% for the six months ended June 30, 2022, compared to 31.0% for the six months ended June 30, 2021.

As a percentage of revenues, operating expense was 43.8% for the six months ended June 30, 2022, and 119.5% for the six months ended June 30, 2021 due to the very low levels of attendance in the prior year.

Rent expense increased 5.7%, or $6.1 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, due primarily to cash rent abatements from landlords in the prior year and the opening of new theatres, partially

offset by theatre closures and the decrease in foreign currency translation rates.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements under Item 1 of Part I of this Form 10-Q for further information on the impact of COVID-19 on leases and rent obligations of approximately $30.6 million that have been deferred to future years as of June 30, 2022.

Merger, acquisition, and other costs.

Merger, acquisition, and other costs were $0.2 million during the three months ended March 31, 2022, compared to $3.0 million during the three months ended March 31, 2021, primarily due to legal and professional costs related to strategic contingency planning in the prior year.

Other general and administrative expense increased 13.3%, or $2.1 million, during the three months ended March 31, 2022, compared to the three months ended March 31, 2021.

Merger, acquisition, and other costs were $(0.5) million during the six months ended June 30, 2022, compared to $3.8 million during the six months ended June 30, 2021, primarily due to legal and professional costs related to strategic contingency planning in the prior year.

Other general and administrative expense increased 18.9%, or $5.7 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021 due primarily to higher amounts of expense for stock-based compensation expense due primarily to an increase in grant date fair values for 2020 and 2021 PSU awards for the 2022 Tranche Year, partially offset by lower expectations for performance based vesting and lower expense for SPSUs that fully vested in 2021, and annual incentive plans based on the improvement in operating performance.

Depreciation and amortization.

Depreciation and amortization decreased 16.6%, or $4.6 million, during the

three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Other expense (income).

Other expense of $2.6 million during the three months ended March 31, 2022 was primarily due to $4.8 million of foreign currency transaction losses, partially offset by $2.3 million in government assistance.

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

Depreciation and amortization decreased 19.0%, or $10.4 million, during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to lower depreciation expense on theatres impaired during years ended December 31, 2020 and December 31, 2021 and the decrease in foreign currency translation rates.

Other income.

Other income of $2.3 million during the six months ended June 30, 2022 was primarily due to $10.8 million in government assistance related to COVID-19 and partially offset by $8.4 million of foreign currency transaction losses.

Other income of $56.7 million during the six months ended June 30, 2021 was primarily due to $50.4 million in government assistance related to COVID-19 and estimated credit income of $6.0 million related to decreases in contingent lease guarantees.

Interest expense.

Interest expense increased $10.2 million to $19.9 million for the three months ended March 31, 2022 compared to $9.7 million during the three months ended March 31, 2021, primarily due to:

Interest expense increased $9.3 million to $38.6 million for the six months ended June 30, 2022 compared to $29.3 million during the six months ended June 30, 2021, primarily due to:

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

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Equity in loss of non-consolidated entities.

Equity in loss of non-consolidated entities was $4.8 million for the three months ended March 31, 2022, compared to $1.9 million for the three months ended March 31, 2021.

The increase in equity in loss of $2.9 million was primarily due to increases in equity in losses from Saudi Cinema Company, LLC of $4.2 million.

Equity in loss of non-consolidated entities was $5.3 million for the six months ended June 30, 2022, compared to $4.3 million for the six months ended June 30, 2021.

Investment income .

Investment income was $0.0 million for the six months ended June 30, 2022, compared to investment income of $5.5 million for the six months ended June 30, 2021.

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

Income tax provision (benefit).

The income tax provision (benefit) was $0.0 million and $(2.3) million for the three months ended March 31, 2022 and March 31, 2021, respectively.

The income tax provision (benefit) was $0.4 million and $(4.1) million for the six months ended June 30, 2022 and June 30, 2021, respectively.

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

Net loss was $71.6 million and $127.1 million during the three months ended March 31, 2022 and March 31, 2021, respectively.

Net loss during the three months ended March 31, 2022 compared to net loss for the three months ended March 31, 2021 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in general and administrative expenses, decreases in depreciation and amortization expense and decreases in foreign currency translation rates, partially offset by increases in rent expense, increases in other expense, increases in interest expense and a decrease in income tax benefit.

Net loss was $105.1 million and $201.5 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Net loss during the six months ended June 30, 2022 compared to net loss for the six months ended June 30, 2021 was positively impacted by the increase in attendance as a result of an increase in new film releases in connection with the reopening of theatres in the current year that had been temporarily closed due to the COVID-19 pandemic and lifting of seating restrictions, decreases in depreciation and amortization expense, and decreases in foreign currency translation rates, partially offset by increases in rent expense, increases in general and administrative expenses, decreases in other income, increases in interest expense, decreases in investment income and a decrease in income tax benefit.

LIQUIDITY AND CAPITAL RESOURCES

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Consequently, we typically generate higher revenues during such periods.

We had working capital surplus (deficit) (excluding restricted cash) as of March 31, 2022 and December 31, 2021 of $(285.0) million and $54.6 million, respectively.

As of March 31, 2022 and December 31, 2021, working capital included operating lease liabilities of $597.1 million and $605.2 million, respectively, and deferred revenues of $379.8 million and $408.6 million, respectively.

As of March 31, 2022, we had $211.1 million unused borrowing capacity, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility.

We had working capital surplus (deficit) (excluding restricted cash) as of June 30, 2022 and December 31, 2021 of $(428.0) million and $54.6 million, respectively.

As of June 30, 2022 and December 31, 2021, working capital included operating lease liabilities of $582.2 million and $605.2 million, respectively, and deferred revenues of $373.1 million and $408.6 million, respectively.

As of June 30, 2022, we had $211.1 million unused borrowing capacity, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility.

As of December 31, 2021, we had $209.1 million unused borrowing capacity, net of letters of credit, under our $225.0 million Senior Secured Revolving Credit Facility.

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

As of March 31, 2022, we had cash and cash equivalents of approximately $1.2 billion.

As of June 30, 2022, we had cash and cash equivalents of approximately $1.0 billion.

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

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

Our 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 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

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

Our 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 we paid for the strong late fourth quarter 2021 results in early first quarter of 2022.

We will also continue to repay rent amounts that were deferred during the COVID-19 pandemic, which will increase our cash outflows from operating activities.

See Note 2—Leases in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I in this Form 10-Q for a summary of the estimated future repayment terms for the remaining $271.7 million of rentals that were deferred during the COVID-19 pandemic.

Our 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.

Our 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 our debt issuance of $950.0 million, during the three months ended March 31, 2022.

We believe our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund our operations, satisfy our obligations, including cash outflows for increased rent and planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under our debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility for at least the next 12 months.

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

Our 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.

We have 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.

Our 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.

Our net cash used in financing activities included:

● $955.7 million of principal and premium payments, $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 our debt issuance of $950.0 million, during the three months ended March 31, 2022.

● $57.9 million of principal and premium payments of, and $1.8 million of cash used to pay for

deferred financing costs during the three months ended June 30, 2022.

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 to repay rent amounts that were deferred during the COVID-19 pandemic planned capital expenditures, and comply with minimum liquidity and financial covenant requirements under our debt covenants related to borrowings pursuant to the Senior Secured Revolving Credit Facility and Odeon Term Loan Facility for at least the next 12 months.

In order to achieve net positive operating cash flows and long-term profitability, we believe 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.

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

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

We believe 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.

Our 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 the 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.

We 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.

We are 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, we 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.

We 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 our next calendar year.

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

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

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

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

The amounts involved may be material.

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 $271.7 million as of March 31, 2022.

Our 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.

Our 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 in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I in this Form 10-Q for a summary of the estimated future repayment terms for the deferred lease amounts due to COVID-19, and also a summary of the estimated future repayment terms for the minimum operating lease and finance lease amounts.

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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.

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

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Cash Flows from Operating Activities

Cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $295.0 million and $312.9 million during the three months ended March 31, 2022 and March 31, 2021, respectively.

The decrease in cash flows used in operating activities was primarily due to the increase in attendance and decrease in net loss, partially offset by increased working capital used during the three months ended March 31, 2022 compared to the three months ended March 31, 2021 and an increase in cash paid for interest.

We will also continue to repay rent amounts that were deferred during the COVID-19 pandemic, which will increase cash outflows from operating activities.

Cash flows used in operating activities, as reflected in the condensed consolidated statements of cash flows, were $371.6 million and $546.7 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

The decrease in cash flows used in operating activities was primarily due to the increase in attendance and decrease in net loss, partially offset by increased working capital used during the six months ended June 30, 2022 compared to the six months ended June 30, 2021 and an increase in cash paid for interest.

We will also continue to repay rent amounts that were deferred during the COVID-19 pandemic, which increase cash outflows from operating activities.

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

Cash Flows from Investing Activities

Cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $54.9 million and $16.0 million during the three months ended March 31, 2022 and March 31, 2021, respectively.

Cash outflows from investing activities include capital expenditures of $34.8 million and $11.9 million during the three months ended March 31, 2022 and March 31, 2021, respectively.

During the three months ended March 31, 2022, cash flows used in investing activities included investment in Hycroft common stock for $25.0 million, investment in Hycroft warrants for $2.9 million, and proceeds from the disposition of long-term assets of $7.2 million related to one property and other assets.

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

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

Cash flows used in investing activities, as reflected in the condensed consolidated statements of cash flows, were $102.9 million and $2.5 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Cash outflows from investing activities include capital expenditures of $75.2 million and $29.8 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

During the six months ended June 30, 2022, cash flows used in investing activities included investment in Hycroft common stock for $25.0 million, investment in Hycroft warrants for $2.9 million, acquisition of theatre assets for $17.8 million and proceeds from the disposition of long-term assets of $7.2 million related to one property and other assets as well as proceeds of $11.4 million from the sale of securities in conjunction with the liquidation of a non-qualified deferred compensation plan.

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

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

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

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Cash Flows from Financing Activities

Cash flows provided by (used in) financing activities, as reflected in the condensed consolidated statements of cash flows, were $(76.3) million and $854.7 million during the three months ended March 31, 2022 and March 31, 2021, respectively.

Cash flows from financing activities during the three months ended March 31, 2022 was primarily due to principal and premium payments under the First Lien Notes due 2025 of $534.5 million, principal and premium payments under the First Lien Notes due 2026 of $325.6 million, principal and premium payments under the First Lien Toggle Notes due 2026 of $88.1 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 the issuance of the First Lien Notes due 2029 of $950.0 million.

See Note 6—Corporate Borrowings and Finance Lease Obligations in the Notes to the Condensed Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q for further information, including a summary of principal payments required and maturities of corporate borrowings as of March 31, 2022.

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

Cash flows provided by (used in) financing activities, as reflected in the condensed consolidated statements of cash flows, were $(136.0) million and $2,066.9 million during the six months ended June 30, 2022 and June 30, 2021, respectively.

Cash flows from financing activities during the six months ended June 30, 2022 was primarily due to principal and premium payments under the First Lien Notes due 2025 of $534.5 million, principal and premium payments under the First Lien Notes due 2026 of $325.6 million, principal and premium payments under the First Lien Toggle Notes due 2026 of $88.1 million, taxes paid for restricted unit withholdings of $52.2 million, repurchase of Second Lien Notes due 2026 of $50.0 million, and cash used to pay for deferred financing costs of $19.5 million, partially offset by the issuance of the First Lien Notes due 2029 of $950.0 million.

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

First Lien Notes due 2029.

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We 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 our 10.5% First Lien Notes due 2025, the then outstanding $300 million aggregate principal amount of our 10.5% First Lien Notes due 2026, and the then outstanding $73.5 million aggregate principal amount of our 15%/17% Cash/PIK Toggle First Lien Secured Notes due 2026 and to pay related accrued interest, fees, costs, premiums and expenses.

We 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.

We recorded a loss on debt extinguishment related to this transaction of $135.0 million in other expense, during the six months ended June 30, 2022.

The First Lien Notes due 2029 bear cash interest at a rate of 7.5% per annum payable semi-annually in arrears on February 15 and August 15, beginning on August 15, 2022.

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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-Q

Item 2. Management’s Discussion and Analysis