5 unchanged sentences
The Company has experienced a significant decrease in its revenues, earnings, and cash flows due to the COVID-19 global pandemic and its business, financial condition and results of operations may continue to be significantly harmed in future reporting periods.
−Removed: In late January 2020, in response to the public health risks associated with COVID-19, the Chinese government directed exhibitors in China to temporarily close more than 70,000 movie theaters, including all of the approximately 700 IMAX theaters in mainland China.
−Removed: On March 11, 2020, due to the worsening public health crisis associated with the novel coronavirus, COVID-19 was characterized as a pandemic by the World Health Organization, and in the following weeks, local, state and national governments instituted stay-at-home orders and restrictions on large public gatherings, which caused movie theaters in countries around the world to temporarily close, including substantially all of the IMAX theaters in those countries.
+Added: The impact of the COVID-19 pandemic is complex and continuously evolving, resulting in significant disruption to the Company’s business and the global economy.
+Added: The pandemic has led authorities around the world to impose measures intended to control the spread of COVID-19, including stay-at-home orders and restrictions on large public gatherings, which caused movie theaters in countries around the world to temporarily close, including the IMAX theaters in those countries.
As a result of the theater closures, movie studios postponed the theatrical release of most films originally scheduled for release in 2020 and early 2021 , including many scheduled to be shown in IMAX theaters , while several other films were released directly or concurrently to streaming platforms .
−Removed: More recently, stay-at-home orders have been lifted in many countries and movie theaters throughout the IMAX network gradually reopened in the third quarter of 2020 with reduced capacities, physical distancing requirements, and other safety measures.
−Removed: As of March 31, 2021, 77% of the theaters in the IMAX commercial multiplex network were open, spanning 41 countries.
−Removed: This included 66% of the theaters in Domestic (i.e., United States and Canada) locations, 97% of the theaters in Greater China and 52% of the theaters in Rest of World markets.
−Removed: In many parts of Asia, audiences have returned to theaters, particularly IMAX theaters, in numbers approximating pre-pandemic attendance levels despite the continued delay of Hollywood theatrical releases, which typically account for 70% of box office ticket sales in those regions.
−Removed: However, ticket sales have been significantly lower than normal levels in theaters outside of Asia due in significant part to continued delays in the Hollywood theatrical release schedule.
−Removed: As a result, certain theater chains have remained closed or have reduced their operating hours.
−Removed: The impact of the COVID-19 global pandemic has resulted in a significantly lower levels of the Company’s revenues, earnings, and operating cash flows during 2020 and through the end of the first quarter of 2021, when compared to periods prior to the onset of the pandemic, as GBO results from the Company’s theater customers declined significantly, the installation of certain theater systems was delayed, and maintenance services were generally suspended for theaters that were closed .
−Removed: Even as the pandemic has receded in many markets around the world, there continues to be few new films released by Hollywood movie studios and a significant number of theaters in the IMAX network remain either closed or operating with capacity restrictions.
−Removed: As a result, the Company continues to experience significant declines in earnings and operating cash flows as it is generating lower than normal levels of GBO-based revenue from its joint revenue sharing arrangements and digital remastering services, it is unable to provide normal maintenance services to any of the theaters that remain closed, and while some installation activity is continuing, certain theater system installations have been, and may continue to be delayed.
+Added: More recently, stay-at-home orders and capacity restrictions have been lifted in many key markets and, beginning in the third quarter of 2020, movie theaters throughout the IMAX network gradually reopened.
+Added: However, there is no assurance that movie theaters will remain open or continue to reopen given a resurgence in COVID-19 cases in certain jurisdictions.
+Added: As of June 30, 2021 , 89% of the theaters in the IMAX commercial multiplex network were open, spanning 62 countries.
+Added: This included 93% of Domestic theaters (i.e., in the United States and Canada), 90% of the global theaters in Greater China and 75% of the theaters in Rest of World markets.
+Added: The impact of the COVID-19 pandemic has resulted in significantly lower levels of the Company’s revenues, earnings, and operating cash flows for the Company during 2020 and through the end of the second quarter of 2021, when compared to periods prior to the onset of the pandemic, as GBO results from the Company’s theater customers declined significantly, the installation of certain theater systems was delayed, and maintenance services were generally suspended for theaters that were closed .
+Added: Even as the pandemic has receded in many markets around the world, through the end of the second quarter of 2021, there continued to be few new films released by Hollywood movie studios and a significant number of theaters in the IMAX network remain either closed or operating with capacity restrictions.
+Added: As a result, for the three and six months ended June 30, 2021, the Company continued to experience a significantly lower level of earnings and operating cash flows as it generated lower than normal levels of GBO-based revenue from its joint revenue sharing arrangements and digital remastering services, it was unable to provide normal maintenance services to any of the theaters that remained closed, and while some installation activity continued, certain theater system installations were, and may continue to be delayed.
Moreover, given the uncertainty around when movie-going will return to historical levels, there is no guarantee that the effects of the COVID-19 global pandemic will end even after theaters are reopened.
1 unchanged sentence
The timing and extent of a recovery of consumer behavior and willingness to spend discretionary income on movie-going may delay the Company’s ability to generate significant GBO-based revenue until consumer behavior normalizes and consumer spending recovers.
−Removed: In response to uncertainties associated with the COVID-19 global pandemic, in the first quarter of 2021, the Company continue d to take significant steps to preserve cash by eliminating non-essential costs, keeping certain employees on a temporary furlough, reducing the working hours of other employees and reducing all non-essential capital expenditures to minimum levels.
−Removed: The Company has also implemented an active cash management process, which, among other things, requires senior management approval of all outgoing payments.
−Removed: In addition, in the first quarter of 2020, the Company drew down $280.0 million in remaining available borrowing capacity under its C redit F acility, which was then amended in June 2020 to, among other things, suspend the Senior Secured Net Leverage Ratio financial covenant in the underlying credit agreement through the first quarter of 2021 and substitute quarterly EBITDA from the third and fourth quarters of 2019 in lieu of the EBITDA for the corresponding quarters of 2020 to meet the original s enior s ecured n et l everage r atio financial covenant.
−Removed: On March 15, 2021, the Company entered into a S econd A mendment to the C redit F acility to suspend the Senior Secured Net Leverage Ratio financial covenant through the first quarter of 2022 and to substitute quarterly EBITDA from the third and fourth quarters of 2019 in lieu of the EBITDA for the corresponding quarters of 2021.
−Removed: Furthermore, the S econd A mendment extend ed the application of the $75 .0 million minimum liquidity covenant through the end of 2022.
−Removed: On March 19, 2021, the Company sold and issued $230 .0 million aggregate principal amount of the Convertible Notes.
−Removed: The net proceeds from the offering of the Convertible N otes w ere approximately $22 3.7 million .
−Removed: The Company repaid $ 255.0 million of Credit Facility borrowings using cash on hand following the issuance of Convertible Notes.
−Removed: As of March 31, 2021, the Company has $ 45.0 million outstanding under the C redit F acility.
−Removed: As of March 31, 2021, the Company was in compliance with all of its requirements under the Credit Agreement, as amended.
−Removed: Once the Senior Secured Net Leverage Ratio is re-established, the Company’s continued compliance with the requirements of the Credit Agreement will depend on the Company’s ability to generate sufficient EBITDA to ensure compliance with the Senior Secured Net Leverage Ratio covenant.
−Removed: A violation of this covenant would represent an event of default under the terms of the Credit Agreement, allowing lenders to declare the principal and interest on all outstanding Credit Facility indebtedness due or payable immediately.
+Added: In response to uncertainties associated with the COVID-19 global pandemic, the Company took significant steps to preserve cash by eliminating non-essential costs, temporarily furloughing certain employees, reducing the working hours of other employees and reducing all non-essential capital expenditures to minimum levels.
+Added: The Company also implemented an active cash management process, which, among other things, required senior management approval of all outgoing payments.
+Added: There can, however, be no guarantees that the steps the Company has taken to preserve cash and manage its expenditures will result in the cost savings the Company anticipates.
The Company has applied for and received wage subsidies, tax credits and other financial support under COVID-19 relief legislation that has been enacted in the countries in which it operates.
−Removed: There can, however, be no guarantees that the steps the Company has taken and continues to take to preserve cash and manage its expenditures will result in the cost savings the Company anticipates.
−Removed: There can also be no guarantees that any wage subsidies, tax credits and other financial support or any other governmental benefits and support for which the Company is eligible will materialize in the amounts expected.
−Removed: The Company cannot predict the manner in which such benefits will be allocated or administered, and the Company cannot guarantee that it will be able to access such benefits in a timely manner or at all.
There are no guarantees that the Company will apply for or receive such benefits in the future or that the Company will receive any additional material financial support through these or other programs that may be created, expanded, or implemented by governments in the countries in which the Company operates.
−Removed: In addition, as a result of the financial difficulties faced by certain of the Company’s exhibition customers as a result of theater closures during the pandemic, the Company has experienced and may continue to experience delays in collecting payments due under existing theater sale or lease arrangements.
+Added: In addition, as a result of the financial difficulties faced by certain of the Company’s exhibition customers arising out of pandemic related closures, the Company has experienced and may continue to experience delays in collecting payments due under existing theater sale or lease arrangements.
+Added: The Company has provided temporary relief to certain exhibitor customers by waiving or reducing maintenance fees during periods when theaters are closed or operating with reduced capacities and, in certain situations, by providing extended payment terms on annual minimum payment obligations in exchange for a corresponding or longer extension of the term of the underlying sale or lease arrangement.
Certain of the Company’s exhibitor partners that had reopened theaters have temporarily suspended operations of their theater network in certain jurisdictions and other exhibitor partners have reduced their theaters’ operating hours, which may exacerbate existing financial difficulties.
−Removed: Other exhibitor partners in the future may make similar decisions to close all or part of their global theater networks or to reduce their operating hours if the COVID-19 pandemic continues and Hollywood movie studios continue to delay the release of new films, or for other reasons, which would further increase the risks associated with payments under existing agreements with the Company.
+Added: Our exhibitor partners may continue to experience operational and/or financial difficulties if the COVID-19 pandemic continues and Hollywood movie studios continue to delay the release of new films, or for other reasons, which would further increase the risks associated with payments under existing agreements with the Company.
The ability of such partners to make payments cannot be guaranteed and is subject to changing economic circumstances.
−Removed: Such theater closures and other challenges in the theatrical industry may force some of the Company’s exhibitor partners into bankruptcy proceedings.
−Removed: In such cases, local laws governing restructurings would apply, and there can be no guarantees of the Company’s success in obtaining complete or partial payments owed to it by the applicable exhibitor partners.
Further, the Company has had to delay movie theater installations from backlog and may be required to further delay or cancel such installations in the future.
1 unchanged sentence
Given the dynamic nature of the circumstances, while the Company has been negatively impacted as of the date of filing of this report, it is difficult to predict the full extent of such adverse impact of the COVID-19 global pandemic on the Company’s financial condition, liquidity, business and results of operations in future reporting periods.
−Removed: The extent and duration of such impact on the Company will depend on future developments, including, but not limited to, the timing of reopening of movie theaters worldwide and their return to historical levels of attendance, the timing of when new films are released, consumer behavior and general economic conditions, the solvency of the Company’s exhibitor partners, their ability to make timely payments and any potential construction or installation delays involving our exhibitor partners.
+Added: The extent and duration of such impact on the Company will depend on future developments, including, but not limited to, the duration and scope of the pandemic, the emergence of variants of the virus, the progress made on administering vaccines, the timing of reopening of movie theaters worldwide and their return to historical levels of attendance, the timing of when new films are released, consumer behavior, the solvency of the Company’s exhibitor partners, their ability to make timely payments, any potential construction or installation delays involving our exhibitor partners, the continuing impact of the pandemic on global economic conditions and ongoing government responses to the pandemic.
Such events are highly uncertain and cannot be accurately forecast.
10 unchanged sentences
The Company’s indebtedness and liabilities could limit the cash flow available for its operations, expose the Company to risks that could adversely affect its business, financial condition and results of operations.
−Removed: As of March 31, 2021, the Company had approximately $403.4 million of consolidated indebtedness.
+Added: As of June 30, 2021 , the Company had approximately $347.8 million of consolidated indebtedness.
The Company may also incur additional indebtedness to meet future financing needs.
16 unchanged sentences
The Company is subject to counterparty risk with respect to the Capped Call Transactions, and the capped call may not operate as planned.
−Removed: In connection with the issuance of the Convertible Notes, the Company entered into privately negotiated capped call transactions with the option counterparties.
+Added: In connection with the issuance of the Convertible Notes, the Company entered into privately negotiated capped call transactions with option counterparties (the “Capped Call Transactions”).
The Capped Call Transactions are expected to reduce potential dilution resulting from the common shares the Company is required to issue and/or to offset any potential cash payments the Company is required to make in excess of the principal amount of the Convertible Notes in the event that the market price per share of the Company’s common shares is greater than the strike price of the Capped Call Transactions, with such reduction and/or offset subject to a cap.
11 unchanged sentences
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.